Fighting to Preserve Liberty in America
Progressives are a funny group when it comes to investing, and I mean real investing, not the phony code word for spending. If they’re the ones controlling the money and especially if the money is not theirs, then investing is fine. If it will compete with one of their sacred social programs and you will directly benefit from it, then bar the door it’s an out of control casino.
George Demos has announced that he is running for the Republican nomination to challenge Tim Bishop in the First Congressional District in New York. He will be trying once again to beat Randy Altschuler for the nomination. Last time around he finished a distant second. The question is why is he running?
It wasn’t long after the Paul Ryan budget was released that the disinformation Democrats began trumpeting seniors being starved, being unable to afford health care, and the usual demogogic scare tactics. But doctors are dropping coverage, the key slices of the pie above are growing much faster than inflation, and the Democrats have no plan other than the age old cut benefits (reimburse doctors less) and increase taxes, just enough to kick the can down the road for someone else to deal with. Congressman Ryan had the guts to come up with a plan to actually fix the system by giving seniors a choice and they seem to like the idea. Why?
Trailing his two challengers for the Republican nomination for Congress in New York’s First Congressional district, George Demos appeared to have scored a major coup by landing the endorsement of Rush Limbaugh. As Demos puts it in a last minute letter, “I am so humbled that Rush Limbaugh, our nation’s leading Conservative voice, has endorsed our campaign.”
When I got the robo-call, I was stunned by the endorsement and went to Demos’ website to see or hear it firsthand. I found a five minute clip of Rush and although he talks about George Demos, the word “endorse” never crosses his lips. So who is George Demos?
George Demos was one of the first candidates to challenge the incumbent, Democrat Tim Bishop. But after a few early television ads, his campaign seemed to go quiet. A new entrant, Randy Altschuler, hit the airwaves with a number of ads tying Bishop and his voting record to Nancy Pelosi’s. Altschuler ran an issues based campaign and was soon endorsed by the Conservative Party of New York State. He is pro-life and has the support of former NYS Right-to-Life Director Bill Doyle. He also signed the American’s for Tax Reform, “Taxpayer Protection Pledge.”
Also in the campaign is the grandson of Richard Nixon, Christopher Cox, and it seemed like the battle was between Cox and Altschuler. As the primary day neared Demos came back into the fight. Oddly, considering today’s economic climate, Demos’ returning campaign theme seemed to be, “I’m pro-life and they’re not.”
On his website, Demos touts his experience as an SEC enforcement attorney, fighting white collar crime and Rush mentions that in his video clip. The odd thing is that Demos mentions being on the Bernie Madoff prosecution team, at the SEC. It was the SEC that refused to believe it when Harry Markopolos tried for nine years to convince them that Bernie Madoff’s filings with the SEC were mathematically impossible, but he was ignored. It’s not as if Demos cracked the case. Demos later came under investigation for violating SEC rules for outing a whistleblower and resigned from the SEC shortly thereafter.
The issues section of his campaign website are lightweight. Here is a sampling of his position on cutting wasteful spending, “The government continues to spend taxpayer money on bloated projects and wasteful new programs. Congress promised the “stimulus” bill would create millions of new jobs, but now all we have are higher taxes, more unemployment, and mountains of debt.” Both Altschuler and Cox have signed the Contract from America, while Demos has not.
So, where’s the endorsement? In the video, Rush reads a letter that Demos wrote to him in 1995 and referred to Demos, proudly, as a real “Rush baby.” It was a flattering letter about what a great job Rush did in helping the Republicans take control of Congress in 1994. He mentions that Demos is opposed to the Ground Zero mosque, but he goes on to say that the “DC GOP sent a bunch of people in to run against him.” The interesting thing is that Randy Altschuler is the only one of the three candidates who lives in the First Congressional District. He has lived in his current house since early 2009 where he moved to from a nearby town, so it is an odd characterization from Rush that they “sent in” the only guy that already lived there. Demos lives on the border of the district and Cox lives in Manhattan.
So what does Demos do? He takes this video from Rush on the eve of the weekend of 9/11 and turns it into an endorsement and then queues up robo-calls announcing the endorsement, to blast out over the weekend and the day before the primary to try to overtake the leaders. I don’t know how well Rush checked out Demos’ story or if he was just so taken with a “Rush baby” running for Congress that was hoping it was all true and that Rush could give him a lift, but it seems as if Mr. Demos is trying a primary eve Hail Mary.
It was like the movie Rocky the Democrats (Rocky) were getting pounded left and right over their heavy handed tactics. They crammed through a health care bill that an overwhelming majority of the country opposed. They moved on to financial reform and they still couldn’t get any traction. Their poll numbers continued to drop and it was looking like a dismal election coming up in the fall.
And then, just like in the movie Rocky swings from his heels and connects knocking the champ to the canvas. In this case it was the SEC charging Goldman Sachs with fraud. Now they could fire a full fusillade of class warfare at the Republicans and either get Republicans to help pass the financial reform bill or be tarred as the party of the evil bankers and greedy Wall Street robber barons. But unlike the movie, right after knocking the opponent down, when the referee sends Rocky back to a neutral corner he slips in his own sweat, flips on his back and knocks himself out. By that I mean the news came out that employees of the SEC spent an inordinate amount of their time watching porn instead of the financial markets. How do you expand the role of government on the heels of that disclosure?
Trying to Make Up for Bernie Madoff?
When Bernie Madoff’s ponzi scheme was in full swing, Harry Markopolos brought the scam to the SEC practically tied in a bow. The SEC did not respond. Perhaps they were too busy…, well never mind.
With the Democrats trusty weapon, class warfare, holstered it’s time to delve more deeply into this financial reform legislation.
In a letter to Senate majority leader Harry Reid and minority leader Mitch McConnell, luminaries including former SEC Chief Accountant Lynn Turner, former Labor Secretary Robert Reich, hedge fund owner Jim Chanos, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, Barry Eichengreen and others pointed out that Dodd’s proposed financial reform legislation wouldn’t have prevented the current crisis … and won’t prevent the next crisis.
So tell me again why we are doing this? It’s all about more government control and more power in Washington, not about fixing any real problem. Where are Fannie Mae and Freddie Mac in this bill? They were at the very core of the financial meltdown. In other words it’s all politics and it’s all straight out of the Saul Alinsky tome Rules for Radicals:
Rule No. 13. Pick the target, freeze it, personalize it, and polarize it. In conflict tactics there are certain rules that [should be regarded] as universalities. One is that the opposition must be singled out as the target and ‘frozen.’…
“…any target can always say, ‘Why do you center on me when there are others to blame as well?’ When your ‘freeze the target,’ you disregard these [rational but distracting] arguments…. Then, as you zero in and freeze your target and carry out your attack, all the ‘others’ come out of the woodwork very soon. They become visible by their support of the target…’
“One acts decisively only in the conviction that all the angels are on one side and all the devils on the other.” (pps.127-134)
The target in this case, is Wall Street and the Banks. Demonize them. When the “others”, meaning the Republicans, come out to challenge the ineffectiveness of the bill, then they can be attacked as being for the fat cats and against the little guys; class warfare at its ugliest.
Follow the Money
But who is really in bed with the fat cats? The Political Action Committees (PACs), employees, families of employees and other associates of Goldman Sachs gave almost $1 million in campaign contributions to Obama. In this legislation, the concept of too big to fail remains untouched. There will be a $50 billion fund created with money from the top banks to standby if needed for a bailout, but this also gives the impression that the largest banks are now safer because of this fund and therefore can get a lower interest rate on their borrowings compared to smaller banks.
Democratic Congressman Brad Sherman said:
“The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for. The bill contains permanent, unlimited bailout authority.”
Why ask for it when the Obama administration will give it to you. All you have to do is let them smack you around a bit to prime the class warfare pump, and you’re all set.
If you are backstopped by unlimited executive bailout, go ahead, take bigger and bigger risks. The government will step in if you fail. So here we have yet another fat cat (Wall Street/Big Banks) wolf dressed in sheep’s clothing (the little guy; Main Street).
If you want real financial reform, then in the name of capitalism, the big banks and Wall Street have to learn to play with their own money. If they hit a home run, good for them. If they strikeout, they should lose their own money and if they don’t have enough to cover their losses, goodbye. They should not be allowed to take huge risks and if they pay off, everybody there gets a new mansion in the Hamptons, but if they go bust, hand the bill to us. Fannie Mae and Freddie Mac, we were told were private entities, not part of the government, but wink, wink, nudge, nudge, everyone knew the federal government was standing behind them and would not let them go bust. So they too, got the kind of interest rates, half a point lower than their competitors, based on this implied backing not based on the strength of their balance sheet.
We have to fight this one too. This is just more smoke and mirrors from the Obama administration. Another power grab without any substantive benefit to the American people.
Democrats think they have a winner. They want to lather on some more financial regulations because regulators dropped the ball on enforcing what already exists. So as conservatives point out that what they are proposing is unnecessary or won’t work, they can gleefully say, “Republicans are for the fat cats, while we’re for the little guy.”
Broken Regulations
Harry Markopolos recognized within “minutes” that Bernie Madoff was a fraud. He took his case to the SEC and was promptly ignored. He took it to Forbes magazine…not interested. Bernie Madoff himself was surprised how long it took to be found out.
So what does the SEC do now? It initiates a case against Goldman Sachs where professionals on both sides of a transaction knew what they were getting into. One side bet on housing prices continuing to rise, the other betting the bubble would burst. The decision on pursuing this was voted 3-2, with three Democrats voting in favor of pursuing the case, and two Republicans voting against. It must be the Democrats looking out for the little guys and the Republicans looking out for evil Wall Street, right?
John Paulson is the investor who allegedly played unfairly by being able to choose the securities that went into the investment that Goldman Sachs allegedly didn’t disclose to the other party. Mr. Paulson hasn’t been charged with anything. Mr. Paulson also contributed $30,400 to the Democratic Senatorial Campaign Committee last June. If you recall Jon Corzine, former Democratic Senator and Governor of New Jersey, used to be the chairman of Goldman Sachs. The new head of the SEC enforcement division in the Obama Administration, Adam Storch, is a former Goldman Sachs Vice President. So who’s in bed with Wall Street?
Democrats Need a Diversion
With almost every measure of public opinion on government appointment sinking to all time lows, the Democrats need to ramp up the class warfare machine to find anything that will gain traction with the public. They know they can’t fight on the facts so they have to start the fog machine. Typical Saul Alinsky’s Rules for Radicals stuff.
Conservatives must focus the debate on the issues and not shrink from the fight. It is far too easy to show that Big Government (Obama) and Big Business (GE, et al) are really partners in dividing up the spoils amongst themselves and telling the rest of us how to live our lives.
Remembering Reagan
Ronald Reagan famously said that the statists believe:
“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
There is currently no more telling example of this than Senator Chuck Schumer bloviating about Spirit Air Lines charging passengers for carry on baggage. He wants to introduce legislation prohibiting this. Hey, Chuck, if you don’t like Spirit charging you for your carryon bags, pick another airline! That’s how markets work. But the genius that is Washington is, NO we have to regulate that! So the idiots would pass a law prohibiting charging for carryon bags and the airlines will respond by raising ALL ticket prices to compensate. So instead of my having a choice of carrying a bag on board or saving the money, or choosing another airline altogether, the government will make everything equal and more expensive.
So, Chuck, how are you and your pals doing as far as growing the economy and getting the unemployment rate down? Maybe you should spend some time on that, no?
We heard President Obama say pretty starkly that the enormous Wall Street bonuses were outrageous. While I stop short of government dictating compensation to private businesses, I do put the Wall Street clowns in the same category of the Big Three auto CEOs flying to Washington in their private jets looking for handouts. Very bad form.
The more I pondered the idea of salary caps, whether they were fair or not, whether it was government taking away another liberty, it finally hit me, that this just might work. So I now propose a salary cap, on the FEDERAL GOVERNMENT. And why not?
Who Got Us Into This Mess?
It was the housing bubble that triggered the financial debacle. What drove the housing bubble? Let’s start with Fannie and Freddie. They were created by Congress. Next came the Community Reinvestment Act that forced banks to make riskier housing loans. Next the Clinton Administration under the direction of Janet Reno, drove the banks harder to make more housing loans to people who couldn’t afford them. Then was the Federal Reserve that kept interest rates too low for too long. And right up until the end we had Barney Frank and Christopher Dodd saying all was well with Fannie and Freddie.
We have Charlie Rangel, chairman of the House Ways and Means Committee, the committee responsible for writing the tax laws, cheats on his income taxes.
Bernie Madoff runs a Ponzi scheme that bilks people out of $50 billion while a guy named Markopolis figured the whole thing out in five minutes and spent the last nine years trying to get someone in government to care.
The government imposes CAFE standards on the auto industry and drives them to the brink of bankruptcy and then says we have to bail them out.
Now they are proposing a “stimulus” package that is just a bunch of pork.
Solution
So I propose that we, their employers, cap their salaries at $100,000 (from their current $162,500) until such time as they fix this mess. I further propose that if a congressman/woman can prove that they didn’t vote for any of the crap that got us into this mess, that they be exempt from the cap.
What say you?
