Lyin' and Legislatin'

Trusting a politician tell you what is and is not in bill - or what the bill will do - is the equivalent of trusting a used car salesman when he hands you a pen and tells you there's no reason to read the contract. Understand that a court asked to interpret legislation looks to the plain language in the bill and, if the language is clear, than nothing else matters. The bottom line, what a politician tells you about legislation in a speech on t.v. is utterly meaningless. You have to read the bill to determine whether it does or does not do what the politician claims.

With that in mind, here is a bit of late blogging on two lyin' legislators - Congressman Jim Obertar and our President, Obama. Both are spinning utter fantasy for the public and lying through their teeth in the process.

Congressman Obertar is first up. He wants to modify the Clean Water Act by changing the jurisdiction of the federal government from all "navigable waters" in the U.S. to all "waters." Oberatar claims that this will not act to fundamentally alter the reach of the government. Anyone who believes that is an utter fool. It would be harder to imagine a more extensive power grab. It would erase federalism and give the federal government stand alone power to regulate the vast majority of the land mass of the U.S. This from the panel at Fox News:



(H/T Hot Air)

Then there is Obama, telling the nation that anyone who claims that his proposed financial regulations contain virtually unlimited bailout authority is lying. Actually, the plain language of the bill clearly contains provision that do precisely that. It allows Treasury to act unilaterally to nationalize any business it sees fit and take over their debts, bypassing Congress and the bankruptcy courts. This marks a major change to our regulatory structure, it give the federal government permanent bailout authority, and when Obama demagouges the issue, he is lying through his teeth.



(H/T Hot Air)

When you look at things like this, it is hard to believe that the polls show that the number of people who trust our politicians today stands at 22%. I don't know who makes up that 22%, but they are kool-aide drinkers indeed.

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Utterly Shameless - & Fraudulent

You might have caught this bit of seemingly good news today if you saw this commercial . . .



Or you might have heard the news from an ecstatic White House. This from CBS News:

No one was cheering louder than the White House about General Motors' repayment of $6.7 billion in loans from the federal government.

First thing this morning, Press Secretary Robert Gibbs alerted his 56,000 followers on Twitter of "BIG NEWS."

"GM pays back US $6.7 billion used to save jobs," Gibbs exulted. But he had more.

"BIGGER NEWS," he trumpeted. "Payment was 5 years ahead of schedule."

. . . Later at his daily press briefing, Gibbs didn't wait for a reporter to ask him about the GM payback. He portrayed it as a vindication of President Obama's decision to provide a federal bailout to GM and Chrysler . . .

The amount repaid by GM is less than 13 percent of the $52 billion in federal bailout funds provided to the automaker. The remainder of the bailout was converted into stock, which GM still intends to pay off. Gibbs concedes, "obviously, we're not out of the woods by any stretch of the imagination." But he thinks the payback demonstrates that GM is on a path to renewal. . . .

Vice President Biden added his voice to the White House chorus, hailing the GM payback as a "huge accomplishment."

"The President of the United States took a lot of heat for that effort," said Biden of the GM bailout, saying it kept the company alive while it was transitioning.

"And I would just like to point out that I am proud to be associated with the guy who saw the necessity to do this," boasted the VP about his constitutional boss.

Biden said the rapid GM payback "exceeded our expectations."

White House economic advisor Lawrence Summers came closest to telling the critics of the bailout "we told you so," without actually using those words.

"This turnaround wasn't an accident of history," said Summers in a blog on the White House website. "It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler - and indeed the auto industry - a lifeline, if they could demonstrate the will to reshape their businesses and chart a path toward long-term viability without ongoing government assistance."

But the payback also gives the White House ammunition in defense of future government bailouts, should they be needed. Gibbs said it's the White House hope they won't be.

Great news for Obama and GM indeed - until you get the rest of the story. This, courtesy of Jamie Dupree via Q&O:

The issue came up yesterday at a hearing with the special watchdog on the Wall Street Bailout, Neil Barofsky, who was asked several times about the GM repayment by Sen. Tom Carper (D-DE), who was looking for answers on how much money the feds might make from the controversial Wall Street Bailout.

“It’s good news in that they’re reducing their debt,” Barofsky said of the accelerated GM payments, “but they’re doing it by taking other available TARP money.”

In other words, GM is taking money from the Wall Street Bailout – the TARP money – and using that to pay off their loans ahead of schedule.

“It sounds like it’s kind of like taking money out of one pocket and putting in the other,” said Carper, who got a nod of agreement from Barofsky.

“The way that payment is going to be made is by drawing down on an equity facility of other TARP money.”

Translated – they are using bailout funds from the feds to pay off their loans.

This is absolutely unreal. This is nothing more than a shell game with taxpayer money, yet it is being presented as if GM is actually becoming a profitable organization again. Its been a long time since I looked at securities law, but I would be willing to bet this incredibly bit of misleading news from GM and its primary stockholder, the Obama administration, easily crosses those regulatory lines that define fraud under SEC regs. This is GM and the Obama Administration colluding to perpetrate a massive fraud on the American people.

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Financial Panic

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity. . . .

- - From The Second Coming by William Butler Yeats

The contagion in the world's economy is the credit crunch brought about in reaction to the subprime crisis. The stock markets have been infected and are tanking as investor's flee. For the first time in four years, the DOW has fallen below 10,000. Markets in Asia and Europe are tumbling while the EU nations scratch about for some sort of response. Coming on the heels of the U.S. bailout, while this is not the sealing of economic doom, it is a measure of how dire this crisis has become. I will update stories below the fold as they become available.

Panic Engulfs Global Stock Market - "World markets suffered massive losses Monday, striking four-year lows, as panic-stricken investors doubted whether a Wall Street bailout package would stem the global financial crisis."

Euro-markets tumble while the EU searches for a response - "Investors will learn today whether the Paulson bail-out - fattened to $850bn (£480bn) by Congress - can begin to halt the death spiral in the credit system. So far, the response looks terrible."

CNBC's Jim Cramer of "Mad Money" is saying now is the time to get out of the stock market. He predicts a 20% drop in value for stocks in the near term.

The Lamps Are Going Out - "Today, prominent members of the political, financial, and journalistic establishment are warning of a Depression, and those of us who resist their panic solutions are accused of being crackpots or lunatics."

Speaking Ex Venalicium - "Pope Benedict XVI today said that the global credit crisis shows that the world's financial systems are "built on sand" and that only the works of God have "solid reality"."



The full text of William Butler Yeats's poem, The Second Coming:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight; somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

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Nancy Pelosi Leads The Way To Defeat Of The Bailout (Updated)

The bomb-throwing Speaker of the House, Nancy Pelosi, has led the way to a failure of the bailout legislation in the House. Her speech today, blaming the supbrime crisis on Republicans, coupled with her failure to bring her own party in sufficient numbers to vote yes, has done the trick. Ninety-four members of her own party voted no. Republicans note that they thought they had 12 more votes in their own party until Nancy Pelosi - the leader of the party that owns the subprime crisis - blamed it all on Republicans. This woman is a clear and present danger to our nation.

I have written twenty-six posts on the origins of the subprime crisis, tracing it from . . .

the Clinton administrations regulatory changes to force the lowering of lending standards, to . . .

the Clinton Administration using the Community Reinvestment Act and Fannie/Freddie to drive an explosion of subprime lending, to . . .

Bush administration to reign in Freddie Mac begining in 2003 when the Enron style accounting scandal at Fannie Mae was exposed, to . . .

Democrats line in the sand defense against any tightening of standards or increased regulation, to . . .

Democrats, including Barney Frank, Chris Dodd, Chuck Schumer and Harry Reid, repeated denials that there was any danger in this subprime lending, to . . .

the failure in markets to adequately assess the risk of the subprime loans and related securities, to . . .

McCain's co-sponsor of legislation in 2005 to reign in Fannie and Freddie, warning of the dire consequences to our economy if it did not occur, to . . .

Sen. Chris Dodd and the Democrats killing of that legislation, to . . .

last summer, with Fannie and Freddie failing due to the subprime swamp, Sen. Dodd and Sen. Schumer wanted legislation to allow them to vastly expand their subprime holdings, hoping that would stabilize the market, to . . .

word now that Obama's time as a community organizer was spent assisting ACORN and other far left groups in their mission to force expansion of subprime lending in Chicago, to . . .

word now that the second largest recipient of campaign contributions from Fannie Mae was Obama.

With all of this in mind, see if yu can figure out why at least twelve Republicans who do not support this bailout legislation to begin with decided to cast a no vote after listening to this from Pelosi:



What needs to happen is every Republican House member needs to take the floor and find a microphone and start screaming about the subprime crisis from the rooftops. This is a crisis wholly created by the left's socialist intervention in the free market to begin with.

Other posts related to Subprime Crisis (from oldest to newest):

1. McCain, The Fannie and Freddie Crisis, and Obamafuscation - Obama and the entire Democratic Party are trying to blame Republicans for the subprime crisis. But this crisis was created by Bill Clinton and protected against Republican efforts to reign it in over a decade – until it failed, nearly pulling out entire economic system into a depression.

2. A Washington Post Front Page Hack Job - The Washington Post does a hit job on McCain, grossly distorting his record on regulatory matters and ignoring his cosponsoring of legislation to establish much stronger regulation of Fannie Mae and Freddie Mac.

3. Dodging a Depression - The NYT and WSJ document just how serious is the subprime crisis. Quite literally it brought us to the point of a complete and catastrophic stoppage of our financial systems. This was not a stock market crash, it was a lending and credit crash. The WSJ describes the events of the week leading up to the crisis point.

4. Obama & The "Family" Of Fannie Mae - Documenting Obama’s relationship to Fannie Mae.

5. The Origins – And Foreseeability – Of the Subprime Crisis - A 1999 article in the NYT describes the Clinton Administration forcing subprime loans onto America and also forecasts that this will create a house of cards that will fall apart in a down market.

6. Covering The Left’s Fannie - The NYT tries to play up old ties of a McCain campaign worker with Fannie Mae while minimizing the fact that McCain himself, in 2005, co-sponsored legislation that may well have prevented the fiscal crisis we are in now.

7. The Left’s Subprime Meltdown - A post by the Anchoress discusses this subprime crisis as a creation of the left and a system that was protected to the end by the left. She adds additional sites, quotes and links to explain the mosaic.

8. Fannie & Freddie, McCain & Obama, Subprime & Wall St.The WSJ discusses both how the subprime loan market came about and how Democrats, including Obama, were both the cause of the problem and the roadblock to a solution that would have averted this catastrophe. Dafydd at Big Lizard's explains how Mortgage Backed Securities worked on Wall Street.

9. A Doddering Fool & Charlatan - Chris Dodd is up to his ears in the subprime crisis. With our economy teetering on an actual depression due to the Fannie/Freddie/subprime loan crisis, it was not merely surreal to watch Senator Chris Dodd chair an emergency hearing of the Senate Banking Committee to evaluate the Treasury's proposed rescue plan, it was obscene.

10. Finally – Oversight - The FBI has finally announced criminal investigations at Fannie and Freddie.

11. When Will They File As A 527 – The NYT continues its wholly biased reporting on the subprime crisis, refusing to report on the genesis of the crisis and instead, reporting on the relationship between Fannie Mae and Rick Davis of McCain’s campaign team.

12. McCain The Chessmaster - Opining on the potential risks and rewards of McCain's decision to cancel campaigning, return to Washington to take part in negotiations over a response to the subprime crisis, and tentatively cancel the Friday debate.

13. The President Addresses The Nation - Bush explains the stakes involved for America with the subprime crisis.

14. McCain The Chessmaster Part II - McCain was responding to a 3 a.m. phone call in returning to Washington. He is given political cover and support by Bill Clinton.

15. A Spotlight On The Left's Subprime Crisis - A video summary of the origins of the subprime crisis with lots of footage of Rep. Barney Frank and others protecting Fannie Mae from regulation by the Bush Administration and McCain.

16. WaMu Swallowed Up In The Left's Subprime Swamp - Washington Mutual goes under because of toxic mortgage debt.

17. Great Moments In Leadership - Obama phones it in on the subprime crisis.

18. The "No Deal" - McCain Responds - The left is blaiming McCain for failure of a deal on the subprime crisis. McCain answers in a memo.

19. Dodd, ACORN, and the Penultimate Screwing of the Taxpayers - The left, the people responsible for the subprime crisis, proposed a deal that would have used the return on rehabilitated investments not for the benefit of taxpayers but to fund progressive advocacy organizations that are fundamentally corrupt.

20. Krauthammer On The Subprime Crisis: Time For A Return To Public Executions - America is livid over this fiscal crisis and wants a pound of flesh to satiate its cravings before beginning the job of putting our financial house back in order. Krauthammer things we should give it to them and suggests a return to the auto de fe, this time as a reality show.

21. The Subprime Crisis, Dems, Obama & McCain - a great video giving the history of the subprime crisis.

22. Subprime Crisis: Spin versus C-Span - a video of 2004 hearings in which the House Democrats heaped scorn on the idea that Fannie Mae and Freddie Mac were a disaster waiting to happen and fighting tooth and nail to preven any further regulation of Fannie and Freddie.

23. Thomas Sowell On The Subprime Crisis & Proposed Bailout - Economist Thomas Sowell weighs in on the need for the proposed bailout to stabilize the market and the politics at the root of this fiscal crisis.

24. Resolution of the Initial Subprime Crisis - Time For Investigation - A first look at the draft legislation and an outline of what else needs to happen to resolve this crisis.

25. The Treasury Dept. - Anerica's Newest Subprime Lender - The legislation to solve the subprime crisis is only aimed at part in shoring up financial markets. A large part of the bill requires that the Treasury Dept. act as the subprime lender of last resort.

26. The Subprime Crisis, ACORN & Obama, The Community Organizer - Obama's time as a community organizer was very much involved with ACORN's efforts to force subprime lending upon the financial institutions in Chicago.

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The Treasury Dept - America's Newest Subprime Mortgage Broker

You can find the draft legislation of the subprime bailout bill here. I just paroused it. It could not be any worse and still stand a chance of passing. It will be voted on today in the House. This is my analysis of the bill.

This legislation is far more than a stop gap to the financial system. It is a massive give-away to those who borrowed too much and are now in trouble. This legislation does not give a bankruptcy judge the power to change the terms of the contract and devalue assets. It's worse. It requires the Treasury Dept. do it. This is a travesty. It injects a whole new version of government intervention in the marketplace. Bottom line, this legislation is far less about taking care of Main Street than it is about insuring the votes of those on Easy Street.

There are several good points to this legislation. The good is that:

1. In the short term, this legislation might reopen the credit arteries of our nation and settle the markets. With most of the poison pills removed, that really is the alpha and omega.

2. The limitations on executive compensation and golden parachutes in Section 111 are far less onerous than they might have been. They are carefully circumscribed and limited in time. I cannot see them driving financial institutions out of the U.S.

3. I appreciate the market transparency required by Sec. 114 of placing all transactions on the web accessible to the public. It certainly will be a major step towards minimizing fraud and providing public accountability.

4. By Sec. 117, The Comptroller General is required to do a "study to determine the extent to which leverage and sudden deleveraging of financial institutions was a factor behind the current financial crisis." This is actually far too limited in scope, but it is all we will get out of Congress.

5. Possibly the best thing to come out of this legislation is found in Sections 132 and 133, suspending the year old Mark to Market accounting rules that have contributed so heavilly to the current fiscal crisis. These sections also direct a study of the impact of the Mark to Market accounting rule.

Now for the bad - and it is bad:

As a threshold matter, this legislation should be designed simply to purchase distressed assets, get them off of the books, establish a value for them, and then resell them, all with the intent of protect the financial health of our nation with, in the end, as little harm to the taxpayers as possible. This legilation goes far beyond that. If you are a subprime borrower and Treasury purchased your loan - hey, its Christams time.

SEC. 109. FORECLOSURE MITIGATION EFFORTS.

(a) RESIDENTIAL MORTGAGE LOAN SERVICING STANDARDS.— To the extent that the Secretary acquires mortgages, mortgage backed securities, . . . the Secretary shall implement a plan that seeks to maximize assistance for homeowners and use the authority of the Secretary to encourage the servicers of the underlying mortgages, considering net present value to the taxpayer, to take advantage of the HOPE for Home
owners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures. In addition, the Secretary may use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable foreclosures.
. . . .
(c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.— Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.

(emphasis added)

This is nothing more than one more massive Democratic giveaway to buy their constituency. Allowing Treasury to work with existing homeowners on the margins is one thing. Making allowances for actual cases of fraud is one thing. Directing Treasury to become a super-subprime mortgage broker of the first resort is quite another. At best, this will cost the taxpayers dearly and further skew the housing market, lengthening the crisis and the shakeout from the housing bubble. At worst, this could become another economy threatening beast all on its own, though it would be with printed money and thus threaten inflation more than anything.

In case you do not understand where Democratic priorities lie from the above provisions, you can also take note of the Oversight provisions at Section 116. The first thing to which the Comptroller General is directed to examine in its inspection of the Treasury program is "foreclosure mitigation."

Section 125 might be entitled the Protect Democrats Act, the legislation establishes a Congressional Oversight Panel with unequal, weighted representation towards majority party. Thus we will have the same people who brought us the subprime debacle overseeing this massive program. Worse, the legislation authorizes the Democratic controlled panel to make recommendations for large scale reform of the regulatory system. These are the same people who refused to regulate Fannie Mae because they did not want to disturb "affordable housing," regardless of the cost. And as the above should make clear, their priorities have not changed.

Section 134 is the baby of Speaker Nancy Pelosi. Thus, not surprisingly, it is an abortion. It provides that, if in five years all funds are not recouped by the Treasury for this bailout, then the President "shall" submit legislation providing for a tax on the financial services industry. Its hard to enumerate all of the facets of the glaring stupidity of this one. For a start, it punishes the entire financial sector - who will merely pass through the taxes to any taxpayers foolish enought to use such arcane things as banks, S&L's, or have 401k's, etc. Two, how much of the shortfall will be due to the insane insistence of the left of preventing foreclosures on subprime loans. All of the taxpayers get our pockets picked a second time to cover Democratic largesse to their base. And three, this interjects uncertainty into the U.S. financial system both today - when we need it the least - and in the long term. This Pelosi abortion will assuredly effect foreign investment in our financial sector.

Would I vote for this bill if I were in Congress? Probably, because I believe the markets will fail without it. That said, I would get every one of my objections on record before taking that vote. Then, with the better part of a fifth of Wild Turkey coursing through my veins, . . . .

That said, this legislation goes nowhere near far enough. I will repeat the recommendations that I made in an earlier post:

I. We need a true non-partisan, non-Congressional commission to investigate the causes of this meltdown. This crisis begins and ends with the socialist left in Congress. In the middle are mortgage brokers and Wall St. The story needs to be told from beginning to end. It will not happen under Congress, but there is nothing stopping President Bush from appointing such a commission the day after the above legislation is passed.

This is a crisis that, on a fiscal scale, dwarfs 9-11. And it exposes fundamental problems in both our political and financial worlds that we fail to identify at our own peril. How our best financial minds ended up purchasing this toxic debt needs to be thoroughly investigated. The system used by Wall St. to analyze and value the now worthless securities needs to be pulled apart with the detail a post mortem. And our regulatory scheme needs to be overhauled. Treasury Secretary Henry Paulson has been calling for this for some time. Now seems an opportune moment to redo and streamline a regulatory system built for the last century. I have no faith, however, in the current Democratic Congress to carry this out in good faith.

II. The Community Reinvestment Act and all Clinton-era rules relating to subprime borrowing need to be revised to end government mandates for this scourge. There is nothing wrong with a government program to work with low and middle income folks to repair any credit problems. And I would support a program for such people to invest in a tax free fund in order to build up funds for a down payment. That is a market based approach. We know how the socialist approach works.

III. Fannie Mae, Freddie Mac, and indeed, the whole concept of Government Sponsored Enterprises (GSE's) that so distort the marketplace need to be scrapped.

IV. There needs to be criminal investigations of those involved in the Fannie Mae, Freddie Mac fiasco. This has begun - years too late. Nothing is clearer than the individuals who ran these institutions cooked the books. Franklin Raines should still be in jail following his conviction in 2004. His cell mates should be Chris Dodd, Janet Reno and Jamie Goerlock.

V. And lastly, I think that we really should seriously consider Charles Krauthammer's suggestion of public executions as regards this subprime crisis.

Other posts related to Subprime Crisis (from oldest to newest):

1. McCain, The Fannie and Freddie Crisis, and Obamafuscation - Obama and the entire Democratic Party are trying to blame Republicans for the subprime crisis. But this crisis was created by Bill Clinton and protected against Republican efforts to reign it in over a decade – until it failed, nearly pulling out entire economic system into a depression.

2. A Washington Post Front Page Hack Job - The Washington Post does a hit job on McCain, grossly distorting his record on regulatory matters and ignoring his cosponsoring of legislation to establish much stronger regulation of Fannie Mae and Freddie Mac.

3. Dodging a Depression - The NYT and WSJ document just how serious is the subprime crisis. Quite literally it brought us to the point of a complete and catastrophic stoppage of our financial systems. This was not a stock market crash, it was a lending and credit crash. The WSJ describes the events of the week leading up to the crisis point.

4. Obama & The "Family" Of Fannie Mae - Documenting Obama’s relationship to Fannie Mae.

5. The Origins – And Foreseeability – Of the Subprime Crisis - A 1999 article in the NYT describes the Clinton Administration forcing subprime loans onto America and also forecasts that this will create a house of cards that will fall apart in a down market.

6. Covering The Left’s Fannie - The NYT tries to play up old ties of a McCain campaign worker with Fannie Mae while minimizing the fact that McCain himself, in 2005, co-sponsored legislation that may well have prevented the fiscal crisis we are in now.

7. The Left’s Subprime Meltdown - A post by the Anchoress discusses this subprime crisis as a creation of the left and a system that was protected to the end by the left. She adds additional sites, quotes and links to explain the mosaic.

8. Fannie & Freddie, McCain & Obama, Subprime & Wall St.The WSJ discusses both how the subprime loan market came about and how Democrats, including Obama, were both the cause of the problem and the roadblock to a solution that would have averted this catastrophe. Dafydd at Big Lizard's explains how Mortgage Backed Securities worked on Wall Street.

9. A Doddering Fool & Charlatan - Chris Dodd is up to his ears in the subprime crisis. With our economy teetering on an actual depression due to the Fannie/Freddie/subprime loan crisis, it was not merely surreal to watch Senator Chris Dodd chair an emergency hearing of the Senate Banking Committee to evaluate the Treasury's proposed rescue plan, it was obscene.

10. Finally – Oversight - The FBI has finally announced criminal investigations at Fannie and Freddie.

11. When Will They File As A 527 – The NYT continues its wholly biased reporting on the subprime crisis, refusing to report on the genesis of the crisis and instead, reporting on the relationship between Fannie Mae and Rick Davis of McCain’s campaign team.

12. McCain The Chessmaster - Opining on the potential risks and rewards of McCain's decision to cancel campaigning, return to Washington to take part in negotiations over a response to the subprime crisis, and tentatively cancel the Friday debate.

13. The President Addresses The Nation - Bush explains the stakes involved for America with the subprime crisis.

14. McCain The Chessmaster Part II - McCain was responding to a 3 a.m. phone call in returning to Washington. He is given political cover and support by Bill Clinton.

15. A Spotlight On The Left's Subprime Crisis - A video summary of the origins of the subprime crisis with lots of footage of Rep. Barney Frank and others protecting Fannie Mae from regulation by the Bush Administration and McCain.

16. WaMu Swallowed Up In The Left's Subprime Swamp - Washington Mutual goes under because of toxic mortgage debt.

17. Great Moments In Leadership - Obama phones it in on the subprime crisis.

18. The "No Deal" - McCain Responds - The left is blaiming McCain for failure of a deal on the subprime crisis. McCain answers in a memo.

19. Dodd, ACORN, and the Penultimate Screwing of the Taxpayers - The left, the people responsible for the subprime crisis, proposed a deal that would have used the return on rehabilitated investments not for the benefit of taxpayers but to fund progressive advocacy organizations that are fundamentally corrupt.

20. Krauthammer On The Subprime Crisis: Time For A Return To Public Executions - America is livid over this fiscal crisis and wants a pound of flesh to satiate its cravings before beginning the job of putting our financial house back in order. Krauthammer things we should give it to them and suggests a return to the auto de fe, this time as a reality show.

21. The Subprime Crisis, Dems, Obama & McCain - a great video giving the history of the subprime crisis.

22. Subprime Crisis: Spin versus C-Span - a video of 2004 hearings in which the House Democrats heaped scorn on the idea that Fannie Mae and Freddie Mac were a disaster waiting to happen and fighting tooth and nail to preven any further regulation of Fannie and Freddie.

23. Thomas Sowell On The Subprime Crisis & Proposed Bailout - Economist Thomas Sowell weighs in on the need for the proposed bailout to stabilize the market and the politics at the root of this fiscal crisis.

24. Resolution of the Initial Subprime Crisis - Time For Investigation - A first look at the draft legislation and an outline of what else needs to happen to resolve this crisis.

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Resolution Of The Initial Problems Caused By The Subprime Crisis - Time For Investigation & Resolution

If you hear any of the above individuals utter the words "affordable housing" or "Democrats bear no responsibility" or "Democrats have cleaned up the mess," should a brick you are carrying mysteriously leave your hand and, guided by mystical forces, become lodged in the mouth of the speaker, pray that I am on your jury. You can be assured that you will not be convicted.

The Rogues Gallery pictured above is from the NYT front page story announcing an agreement on the main points of a bailout plan. While the individuals pictured above, Nancy Pelosi, Barney Frank, Chris Dodd and Harry Reid, appear happy and smug, there is not a single taxpayer who should feel anything but all consuming anger and a desire for 700 billion pounds of flesh.

From the few details of the bailout plan that are leaking out, this deal still appears problematic. Some of the provisions may well have longterm, unintended consequences. Or they may in fact be reasonable, we will have to wait for the final legislation and read it line by line. At least most of the poison pill provisions added by the left to benefit their far left constituency have apparently been removed thanks to House Republicans. Regardless, this is just a first step. There are many things missing from the above plan that are desperately needed in the wake of this crisis.

This from the NYT:

Congressional leaders and the Bush administration reached a tentative agreement early Sunday on what may become the largest financial bailout in American history, authorizing the Treasury to purchase $700 billion in troubled debt from ailing firms in an extraordinary intervention to prevent widespread economic collapse.

Officials said that Congressional staff members would work through the night to finalize the language of the agreement and draft a bill, and that the bill would be brought to the House floor for a vote on Monday.

The bill includes pay limits for some executives whose firms seek help, aides said. And it requires the government to use its new role as owner of distressed mortgage-backed securities to make more aggressive efforts to prevent home foreclosures.

In some cases, the government would receive an equity stake in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the private firms flourish in the months and years ahead.

The White House also agreed to strict oversight of the program by a Congressional panel and conflict-of-interest rules for firms hired by the Treasury to help run the program. . . .

There is more detailed information at the WSJ:

1. The first $250 billion will be available immediately with other funds being made available as needed based on Congressional authorization.

2. The legislation "will expand the range of firms that can sell troubled assets to the government to include pension plans, local governments and community banks serving 'low- and middle-income families.'"

3. The government "would be able to receive warrants it could hold until maturity from financial firms on assets received either through auctions or through direct purchases."

4. The legislation "would institute new executive compensation requirements for participating companies, including "no multi-million dollar golden parachutes," limits on compensation generally, and the ability to recover "bonuses paid based on promised gains that later turn out to be false or inaccurate."" This could be problematic indeed. Punishing Wall St. seems to me something that could have many undesirable unintended consequences, from keeping firms from participating to driving financial services overseas.

5. The plan provides for "the federal government to recoup money for taxpayers if the asset-purchase program isn't making money after a certain amount of time. A House leadership aide said early Sunday morning that details were not immediately available. But the general concept was to provide Congress with a mechanism that would be triggered perhaps within five years to allow lawmakers to offset some, if not all, of the bailout costs." While I am all for repayment of taxpayer funds, I wonder how much uncertainty this will cause, either now or in five years. Further, I would like to see funds recouped from those who violated laws and regulations at all levels rather than a general plan to target the market as a whole.

6. Democrats have agreed "to drop a proposal to devote 20% of potential profits to an affordable housing fund . . ." This was the far left organization/ACORN full employment plan. It was - and should have been - a deal killer.

7. The legislation includes "requirements that Treasury seek to mitigate and reduce foreclosures where possible. . . [T]he legislation would allow the Treasury to work with cash-strapped homeowners whose mortgages are purchased by the federal government to refinance into a more affordable mortgage." I have real problems with this. This has the potential to be another boondoggle and redistribution program, particularly with Chris Dodd and Barney Frank riding herd on oversight. I want to see how this is written into the legislation.

8. "Other foreclosure-prevention measures include an extension of the tax holiday for homeowners who face foreclosure, as well as a tax break for community banks that held shares of Fannie Mae and Freddie Mac. The rescue plan will allow affected banks to take an immediate tax deduction on losses from investments in the two firms, which were taken over by the federal government earlier this month." This sounds palatable.

9. "It also includes a bipartisan oversight board appointed by members of both parties in Congress, an inspector general to monitor Treasury decisions, and regular audits from the Government Accountability Office. Treasury will also have to post publicly and online transactions made through the troubled asset program." I appreciate the transparency provision. I have real problems with an oversight board that will no doubt be populated by the same Democrats whose economic ignorance and desire to redistribute wealth got us into this mess in the first place. If the board provides for proportional representation rather than equal representation, it should be a non-starter.

10. "[T]he tentative agreement reached Saturday allows for judicial review of Treasury decisions." This sounds like a bone to the plaintiff's bar. This is an invitation to add billions to the costs of this program and to slow down its complete implementation by years.

Hot Air informs us that the far left's attempt to load up the bill with goodies for their constituencies - beyond the ACORN Lifetime Funding provision discussed above - have also been removed from the bill:

- Provision to provide unions and other activist groups with proxy access for corporate boards

- Provision to mandate shareholder votes on compensation issues (union priority)

- A provision to allow trial judges to arbitrarily adjust mortgages, creating bonanza for trial lawyers

- A provision to require the government to sell to state and local governments at a discount homes the government acquires as a result of foreclosure

Perhaps most importantly, Hot Air tells us that the new legislation "also suspends mark-to-market rules and requires a study on their effects on the collapse."

This from the AJC:

“Mark to market” is an accounting measure that took effect last year, which forces companies to disclose information about the immediate market value of their assets. Gingrich says it has forced a “spiral” of devaluation; supporters of the practice say that it forces businesses to reveal poor investments, and is a mere scapegoat in the current debate.

You can find a detailed explanation of the accounting rule and the problems it has created in a tightening and risk averse market at the Washington Post. Changing this accounting rule might, by itself, radically effect the current subprime crisis.

All of these are but a single step along a long road. There needs to be much more.

I. We need a true non-partisan, non-Congressional commission to investigate the causes of this meltdown. This crisis begins and ends with the socialist left in Congress. In the middle are mortgage brokers and Wall St. The story needs to be told from beginning to end. It will not happen under Congress, but there is nothing stopping President Bush from appointing such a commission the day after the above legislation is passed.

This is a crisis that, on a fiscal scale, dwarfs 9-11. And it exposes fundamental problems in both our political and financial worlds that we fail to identify at our own peril. How our best financial minds ended up purchasing this toxic debt needs to be thoroughly investigated. The system used by Wall St. to analyze and value the now worthless securities needs to be pulled apart with the detail a post mortem. And our regulatory scheme needs to be overhauled. Treasury Secretary Henry Paulson has been calling for this for some time. Now seems an opportune moment to redo and streamline a regulatory system built for the last century. I have no faith, however, in the current Democratic Congress to carry this out in good faith.

II. The Community Reinvestment Act and all Clinton-era rules relating to subprime borrowing need to be revised to end government mandates for this scourge. There is nothing wrong with a government program to work with low and middle income folks to repair any credit problems. And I would support a program for such people to invest in a tax free fund in order to build up funds for a down payment. That is a market based approach. We know how the socialist approach works.

III. Fannie Mae, Freddie Mac, and indeed, the whole concept of Government Sponsored Enterprises (GSE's) that so distort the marketplace need to be scrapped.

IV. There needs to be criminal investigations of those involved in the Fannie Mae, Freddie Mac fiasco. This has begun - years too late. Nothing is clearer than the individuals who ran these institutions cooked the books. Franklin Raines should still be in jail following his conviction in 2004. His cell mates should be Chris Dodd, Janet Reno and Jamie Goerlock.

V. And lastly, I think that we really should seriously consider Charles Krauthammer's suggestion of public executions as regards this subprime crisis.

Other posts related to Subprime Crisis (from oldest to newest):

1. McCain, The Fannie and Freddie Crisis, and Obamafuscation - Obama and the entire Democratic Party are trying to blame Republicans for the subprime crisis. But this crisis was created by Bill Clinton and protected against Republican efforts to reign it in over a decade – until it failed, nearly pulling out entire economic system into a depression.

2. A Washington Post Front Page Hack Job - The Washington Post does a hit job on McCain, grossly distorting his record on regulatory matters and ignoring his cosponsoring of legislation to establish much stronger regulation of Fannie Mae and Freddie Mac.

3. Dodging a Depression - The NYT and WSJ document just how serious is the subprime crisis. Quite literally it brought us to the point of a complete and catastrophic stoppage of our financial systems. This was not a stock market crash, it was a lending and credit crash. The WSJ describes the events of the week leading up to the crisis point.

4. Obama & The "Family" Of Fannie Mae - Documenting Obama’s relationship to Fannie Mae.

5. The Origins – And Foreseeability – Of the Subprime Crisis - A 1999 article in the NYT describes the Clinton Administration forcing subprime loans onto America and also forecasts that this will create a house of cards that will fall apart in a down market.

6. Covering The Left’s Fannie - The NYT tries to play up old ties of a McCain campaign worker with Fannie Mae while minimizing the fact that McCain himself, in 2005, co-sponsored legislation that may well have prevented the fiscal crisis we are in now.

7. The Left’s Subprime Meltdown - A post by the Anchoress discusses this subprime crisis as a creation of the left and a system that was protected to the end by the left. She adds additional sites, quotes and links to explain the mosaic.

8. Fannie & Freddie, McCain & Obama, Subprime & Wall St.The WSJ discusses both how the subprime loan market came about and how Democrats, including Obama, were both the cause of the problem and the roadblock to a solution that would have averted this catastrophe. Dafydd at Big Lizard's explains how Mortgage Backed Securities worked on Wall Street.

9. A Doddering Fool & Charlatan - Chris Dodd is up to his ears in the subprime crisis. With our economy teetering on an actual depression due to the Fannie/Freddie/subprime loan crisis, it was not merely surreal to watch Senator Chris Dodd chair an emergency hearing of the Senate Banking Committee to evaluate the Treasury's proposed rescue plan, it was obscene.

10. Finally – Oversight - The FBI has finally announced criminal investigations at Fannie and Freddie.

11. When Will They File As A 527 – The NYT continues its wholly biased reporting on the subprime crisis, refusing to report on the genesis of the crisis and instead, reporting on the relationship between Fannie Mae and Rick Davis of McCain’s campaign team.

12. McCain The Chessmaster - Opining on the potential risks and rewards of McCain's decision to cancel campaigning, return to Washington to take part in negotiations over a response to the subprime crisis, and tentatively cancel the Friday debate.

13. The President Addresses The Nation - Bush explains the stakes involved for America with the subprime crisis.

14. McCain The Chessmaster Part II - McCain was responding to a 3 a.m. phone call in returning to Washington. He is given political cover and support by Bill Clinton.

15. A Spotlight On The Left's Subprime Crisis - A video summary of the origins of the subprime crisis with lots of footage of Rep. Barney Frank and others protecting Fannie Mae from regulation by the Bush Administration and McCain.

16. WaMu Swallowed Up In The Left's Subprime Swamp - Washington Mutual goes under because of toxic mortgage debt.

17. Great Moments In Leadership - Obama phones it in on the subprime crisis.

18. The "No Deal" - McCain Responds - The left is blaiming McCain for failure of a deal on the subprime crisis. McCain answers in a memo.

19. Dodd, ACORN, and the Penultimate Screwing of the Taxpayers - The left, the people responsible for the subprime crisis, proposed a deal that would have used the return on rehabilitated investments not for the benefit of taxpayers but to fund progressive advocacy organizations that are fundamentally corrupt.

20. Krauthammer On The Subprime Crisis: Time For A Return To Public Executions - America is livid over this fiscal crisis and wants a pound of flesh to satiate its cravings before beginning the job of putting our financial house back in order. Krauthammer things we should give it to them and suggests a return to the auto de fe, this time as a reality show.

21. The Subprime Crisis, Dems, Obama & McCain - a great video giving the history of the subprime crisis.

22. Subprime Crisis: Spin versus C-Span - a video of 2004 hearings in which the House Democrats heaped scorn on the idea that Fannie Mae and Freddie Mac were a disaster waiting to happen and fighting tooth and nail to preven any further regulation of Fannie and Freddie.

23. Thomas Sowell On The Subprime Crisis & Proposed Bailout - Economist Thomas Sowell weighs in on the need for the proposed bailout to stabilize the market and the politics at the root of this fiscal crisis.

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