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The Audacity Of Memory

Big Frick — Fri, 19 Feb 2010 02:58:29 +0000

It really is getting harder and harder to maintain at least a modicum of decorum in these essays.

Just how long this White House thinks they can continue to blame the Bush administration and get away with it remains to be seen. It has become apparent that passing the buck is in fact the only thing the Obama administration has been successful at through its first year in power.

In a letter to Congress that was designed far more for the national media than for his minions on Capitol Hill, the president said of his economic agenda “I can report that over the past year, this work has begun. In the coming year this work continues.” The president then went on to say “But to understand where we must go in the next year and beyond, it is important to remember where we began one year ago.”

The latter quote was a none-too subtle attempt to snipe at the previous administration, but if you take the words at their face value, I actually agree. It is indeed important to remember where we were one year ago.

One year ago our national debt was 300% less than it is today. Our unemployment was 35% less and well under today’s 10% mark, a mark that candidate Obama ominously warned would be the ruin of the country and only occur if John McCain was elected. A year ago it was all about his plan and how wrong the Bush administration was, a year and nothing but negative results later, it’s still about his plan and how wrong the Bush administration was.

Speaking personally, I have far less money than I did a year ago. The manufacturing sector, which has supported me and my family for over 30 years, is far more depleted than it was a year ago. And I feel far less secure than I did a year ago both financially and physically.

A year ago the Obama administration dropped the use of the term “War on Terror”, but the terrorists never really cared what we called it anyway and have continued their mission of death and destruction. We changed the way we referred to them, but “Death to America” is still the phrase they use to refer to us.

A year ago consumers weren’t spending out of fear. Today consumers aren’t spending out of increased fear. American consumers are saving their money at a consistently higher rate than they were a year ago. Estimates are that American’s are now saving at between 5 and 7 percent. That’s not a prudent savings for a rainy day, that’s a panicked savings for a coming tsunami.

A year ago bank credit was tight. Today bank credit is even tighter and getting to the point of strangling the economy. And what is the plan to help ease this massive retraction in lending? Charging unconstitutional federal fees to a handpicked group of 15 banks. This will only cause these 15 banks to pull back their lending even further to insure proper capital reserves and cause the others to do the same out of fear of who’s next on the presidential hit list.

A year ago the Big Three Automakers were in shambles. A year later only one of the fabled three has been able to pull itself out of the death spiral and actually make money. Which one was able to do this seemingly impossible feat? Ford Motor Company. The one that thanks to the leadership of CEO Alan Mulally decided not to sell its soul to the devil and took no federal bailout money. Mulally saw firsthand from his time as executive vice-president of Boeing just what a bad business partner the federal government can be. Ford won by passing on the Obama plan, the other two were not as insightful and are still paying the price.

A year ago Obama was just making up imaginary numbers to support his plan.

A year later…well…I guess some things will never change.

Of Special Interest

Big Frick — Tue, 26 Jan 2010 21:57:33 +0000

I’m all for free speech as long as I can control what you’re saying.

That seems to be the message the Democrats are sending after the Supreme Court dismantled rules in place for a hundred years restricting corporate spending on political ads. The court’s edict officially reinstated the constitutional right to freedom of speech for America’s corporate voice which has been unjustly stifled for over a century.

The Democrats are crying foul and warning that this ruling will allow a huge influx of “special interest money” into the political process. I have a news flash for all the whining Dem’s who are once again attempting to mislead the American voters with deceptive and ominous sounding verbiage; all money spent on or donated to a political campaign is special interest money. Every single dollar and cent, and in the case of Barack Obama, riyal, halalah, euro and peso.

It seems unconscionable that a president who raised nearly $1 billion in campaign funds would now claim to be worried about special interest money. After making a solemn promise to fund his campaign the way every other presidential candidate has done by using matching public funds Barack Obama pulled out a little of that CHANGE he promised early and decided he could do much better without the restrictions that come with public funding. Acting as if the country has forgotten that little sleight of hand trick he now insists that expanding participation to privately owned American corporations is tantamount to vote fixing.

The problem the Democrats are now facing is that they have spent years demonizing corporate America. They have pushed, poked, slapped and slugged companies and entire industries to the point of near nationalized government takeover. The last thing Democrats want at this point is for these corporations to have a strong vocal platform from which to fight back.

A perfect example is Democrat Congresswoman Maxine Waters, who once again made the Citizens for Responsibility and Ethics in Washington’s (CREW) 2009 list of the 15 most corrupt members of congress. She was also prominent on the list in 2005 and 2006. It was Waters who told Shell Oil president John Hofmeister that she is “all about” instituting a complete government takeover of the oil industry. Do you think Congresswoman Waters wants Shell and other oil companies to have the right to speak out against her in her next campaign?

Congresswoman Waters and a host of other Democrat House and Senate members have made a career out of inflicting corporate pain for political gain. Their leader, Barack Obama, has just recently announced his plan to unconstitutionally single out financial institutions to hit with a special tax. Under the old rules financial institutions were powerless to get their message out to the voting public during the campaign season. Do you think perhaps Democrats may now be more than a little worried about the push back to come from these and other major American corporations?

Democrats have been successful at demonizing corporations as cold, uncaring entities when in fact they are nothing more than groups of people. Successful, profitable companies grow and employ more people. But Democrats want the government, not industry, to dictate who wins and loses in the game of business. Democrats have already announced plans to override the Supreme Court decision with new laws and restrictions. They will also come to depend heavily on their friends at the major networks to do their dirty work for them, as was done by NBC and ABC’s refusal to air commercials opposing the ObamaCare debacle. The networks are already decrying the ruling as being dangerous. ABC’s Diane Sawyer echoed most of the major networks when she warned that the ruling would open the “floodgates for companies and unions to spend all the money they want attacking political candidates." Their immediate reaction certainly gives one reason to assume the networks will do everything within their power to avoid compliance.

But the Supreme Court was fairly clear in their ruling and any attempt, either by politicians, political parties or the major networks, to stifle corporate America’s newfound right to free speech should be met with immediate and vigorous legal challenges. How much the networks are willing to spend to defend themselves remains to be seen.

If corporations, unions and industry groups are afforded the same rights to free speech as individuals Democrats will have a whole new populist movement to deal with.

What scares the hell out of them is that they see how well that worked for them in Massachusetts.

Socialist Salvation

Big Frick — Thu, 14 May 2009 23:52:00 +0000

Your lips say no no but your eyes say……………………….Well, actually your lips say no no and yes yes at the same time.

Less than one month ago President Barack Obama stood behind the podium at a prime time televised White House press conference and bemoaned the work load of his 100 day old presidential stint like a beleaguered laborer given yet another task by the boss. “I don’t want to run auto companies and I don’t want to run banks” he said. “I’ve got two wars I’ve got to run already. I’ve got more than enough to do.”

The president was referring to the impending Fiat/Chrysler partnership which eventually turned into a bankruptcy and the presidentially mandated removal of General Motors CEO Ken Wagoner and a GM business reorganization, which will eventually turn into a bankruptcy as well. Both auto companies received a considerable taxpayer funded bailout to help keep them in operation prior to their inevitable filings. He was also referring to the banks that received billions in taxpayer dollars through the TARP program to help insure their continued solvency.

But now, only a few weeks later, the Obama administration is not only remaining intimately involved in the workings of companies that took taxpayer dollars, they are looking at imposing their distorted view of “best practices” into the inner workings of financial companies that received no federal TARP money.

The intent in this latest chapter of “Obama Knows Best” is clear. Take control of private industry and socialistically dictate profitability. The implications of this level of nationalization is stunning.

It is particularly troubling in light of the recent revelation that several of the banks that took TARP money did so because they had no choice. Minutes from an October 2008 meeting with then Treasury Secretary Henry Paulson revealed that 9 banks were instructed that they would be taking TARP money whether they wanted it or not. The justification given by Paulson for this approach was that any confirmation of weakness in the banks that actually needed the money to survive could lead to a complete collapse in faith for the entire banking system leaving even those healthier banks vulnerable. The upside to this revelation is that at least some of the banks were savvy enough to foretell the consequences of this handout.

The demands on financial institutions that took TARP funds are easy to politically justify. Congress has gone to great lengths to portray these major banks and their CEO’s and directors as uncaring, greedy risk takers that were all too willing to use taxpayer dollars to buy fancy new office furniture and pay for lavish bonuses and entertainment. The obedient media has been gleefully willing to join in this sensationalized and fallacious character assassination.

The purpose of this portrayal is simple. It allows the beltway bozos to insist that the banks are incapable of being responsible and therefore congress must act to protect the American public from their rampant greed. It is as if bank directors, whose very livelihood depends on sound financial decisions, are unable or unwilling to identify and enact “best practices” in running their businesses.

To compound the potential for the disaster Representative Barney Frank as Chairman of the House Financial Services Committee is proceeding with his attempt at legislation that would strengthen the governments control over compensation at financial institutions based solely on what the government feels is appropriate at the time.

Frank’s consistent and proven financial mismanagement skills and the resulting collapse of world-wide credit markets has reached legendary status. As a controlling interest in the political debacle that put Fannie Mae and Freddie Mac into a financial death spiral that destroyed American property values and placed the entire world’s financial system in serious peril. His continuing and unwavering political gamesmanship prevented the necessary oversight that could have abated the eventual ruinous implosion. With his indefensible record of financial ineptness Frank would have a hard time getting a job as a bank teller at most of the financial institutions he is now looking to impose control over.

Putting this Democrat Congress in charge of making business decisions for banks is like taking the captain of the Titanic and making him the pilot of your plane.

stop, Stop, STOP!

Big Frick — Thu, 05 Mar 2009 22:10:00 +0000

Well dip my hair in Clorox bleach and call me Susan Powter but would somebody please STOP THE INSANITY !!!!!

You can’t swing a cat in Washington DC these days without hitting a politician holding a media rich press conference damning some financial institution. I fully expect the next piece of legislation proposed on the floor of Congress will mandate that all bank presidents must grow a long black mustache and spend at least half their day twisting it at the ends while chanting “You must pay the rent”.

Throughout history there have been numerous occasions where the “money lenders” have been fallaciously vilified in order to deflect negative public sentiment away from governmental shortcomings and onto an easy target group. For those not familiar with history let me assure you that this tactic has never ended well for anyone concerned.

The insanity of this constant fatuous objurgating of any and all things financial is not only doing great harm to the American banking system, but it is doing great harm to the American psyche as well. If people are convinced that banks and greedy bankers are the source of all their pain how likely are they to spend or invest? How likely are we to pull ourselves out of this housing slump if the house buying public is afraid of the mortgage providing banks? How likely are we to pull ourselves out if this economic collapse if people are afraid to spend for fear that banks will come in the dead of night and repo all their stuff. This incessant haranguing is not being done to support small businesses or even large businesses. Businesses understand that they operate on profits not charity. It is being done to influence the public mind set and create a negative, victimized group conscious. Democrats are following their play book to the letter by making victims of the public at the expense of the banks who themselves are actually victims of governmental fiduciary mismanagement through Fannie Mae and Freddie Mac.

The poster boy for the Democrats small business victims is Joe Zucchero, or better known in Chicago as Mr. Beef. Zucchero has been serving the Chicago staple Italian beef sandwich for 30 years from his now yuppie filled River North location. Friends and patrons to Mr. Beef have been rallying in support of the beef stand and using it as an example of nasty banks not loaning money to worthy small businessmen. A neighbor of Mr. Beef even created a supportive video of the owner and his business which has been drawing huge attention on the internet and cable news stations.

One of Mr. Beef’s faithful supporters is the querulous US Congressman Luis Gutierrez who invited Zucchero to Capitol Hill to testify how his malevolent bank was forcing him into bankruptcy. The bank being pilloried by Gutierrez is Midwest Bank who received $85 million in TARP funds last November. According to Gutierrez this bank is a prime example of how banks who received TARP funds are still refusing to extend credit to their victimized clients. “Even if you have a business that makes money, they will not extend you credit” said the Congressman. He also talked at length about Mr. Beef being a “humble establishment” with lines of hungry diners going out the door.

But the story goes much deeper than a poor beef stand guy getting screwed over by a big bad bank. Zucchero already has three loans totaling more than $650,000, and while Mr. Beef claimed in his congressional testimony that he has never defaulted on a payment, documentation shows that he and his business partner defaulted on both their October and November loan payments. It was this default that caused the bank to begin foreclosure proceedings and refusal to renegotiate the debt. It also turns out that Mr. Beef and his business partner are in default of an additional $300.000 loan they used to open a new beef stand location last March. While this new loan is not with Midwest Bank, anyone with the slightest understanding of credit risk can see why it would be viewed as a negative for extending them more credit.

Is Congressman Gutierrez really proposing that because Midwest Bank received TARP funds from the government they are now obliged to extend credit to a guy that owns a beef stand and is already in default for just shy of a million dollars in loans? This Democrat poster boy of victimization does nothing but prove that Democrats simply refuse to accept or acknowledge that it was poorly conceived loans to poor credit risks in the housing market that got us in this credit crisis in the first place.

As somewhat of an Italian beef aficionado myself I can understand Congressman Gutierrez desire to help Mr. Beef. A good beef sandwich is a thing of beauty. But even with my limited math skills, I can figure out that you would have to sell a whole bunch of them to pay back a million bucks in bank loans and I can certainly understand how a bank could come to that same conclusion.

And how is Mr. Beef celebrating his public admission of being a loan repayment deadbeat? Well he’s giving away free beef sandwiches of course.

Honest to God, you can’t make stuff like this up.

The One Term Proposition

Big Frick — Tue, 03 Feb 2009 05:05:00 +0000

“Those who cannot remember the past are condemned to repeat it.” – George Santayana, The Life of Reason or The Phases of Human Progress: Reason in Common Sense

In his recent interview on NBC, President Obama seemed to come to terms with the fact that for the first time in his life he will be judged by results rather than rhetoric. In discussing the gloomy economic forecast as it relates to his maintaining residence at 1600 Pennsylvania Avenue the president stated that “I will be held accountable. I’ve got four years and ……A year from now, I think people are going to see that we’re starting to make some progress, but there is still going to be some pain out there……If I don’t have this done in three years, then there’s going to be a one term proposition.”

This hardly sounds like the same self-confident campaigner who only a few months ago seemed to have all the answers, now stating “there are no silver bullets to this”.

Of course he is correct in his admission that there will still be some very trying days, weeks and months ahead as the economy continues to ebb and flow in a spastic seizure. But the disturbing insight into his grasp of economic reality came when the president went on to say that the reason banks are in the condition they are in is because they are still suffering from a “hangover” brought about by a “binge” of risk as if this binge was of their own design.

What the president failed to mention was that this “binge” of risk was sanctioned and instituted by the Democrats during the Clinton administration. In 1999 Fannie May was directed to begin a pilot program to increase mortgages held by higher risk minorities and low income consumers.
”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, then Fannie Mae’s chairman and CEO. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Even the news print media arm of the Democratic Party The New York Times reported on September 30, 1999 that “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”

Let us put aside the fact that it was Democrats led by Barney Frank that effectively tabled legislation that would have required oversight into the now infamous book cooking done by Mr. Raines at Fannie May, calling it a “solution in search of a problem”. But it was the congressionally directed infecting of the credit markets that has led banks into crisis and in some cases to the point of no return.

I have yet to see any economic authority that is looking at this recession lasting three years. In their recent report asserting the likely ineffectiveness of the currently proposed trillion dollar economic stimulus package, the nonpartisan Congressional Budget Office stated that their forecast was to see improvement prior to the 18 months, calling into question the fact that most of this package would be spent after that. Yet this president, after only 10 days in office, chooses to make his benchmark three years and blame banks for the credit crisis that we are now going to have to “dig ourselves out of”. I doubt he could have set the bar any lower.

Blaming banks for “mismanagement and huge risk taking” as he did during his interview was catchy banter for the campaign trail, but it is a very inaccurate and misguided perception to be avowing as president. Unless this administration is willing to recognize how we got here they will have very little hope of finding their way back to a sound economy, even in three years. Repeating the same mistakes will not lead to recovery. It will only increase the number of non-issues that Democrats will attempt to blame.

“Insanity: doing the same thing over and over again and expecting different results.” – Albert Einstein.

I couldn’t have said it better myself.