Here’s a decent wrap-up of the bailout news from D.C. for this week. Of course, Keith is advocating throwing the money at the auto industry instead of the banks.

The discussion in the news seems to focus around, “Who should get this money?” In my opinion, the real discussion should have been, “Why did we agree to give up $700 billion of our taxpayer money in the first place?”

Of course, the American people did not agree to this theft. Our leaders in Congress and the White House acted unilaterally on this decision. Hail to the thieves.

There’s a pretty hard-hitting opinion piece by Devvy Kidd over at NewsWithViews.com that goes into morbid detail about all of the evil schemes being concocted by the D.C. crowd.

Rape is an ugly word usually attributed to an attack on a woman. It also means an act of plunder, violent seizure, or abuse; despoliation; violation: the rape of the countryside.

There is no other word to describe what has been happening in Washington, DC., for the past two and a half months. The so-called bail out of lending institutions and banks has turned into a free for all that is mind boggling, already running in the TRILLIONS with no end in sight. As the layers have been unfolding over the past few weeks, only someone in complete denial can say with a straight face that this unconstitutional looting of the people’s labor has been anything but mass rape.

Read the full article here. Thank you, Devvy, for speaking up against this tyranny and not being afraid the challenge the status quo.

… Now that the Treasury has abandoned its plan to buy the toxic assets of banks, other companies, including insurers and student loan companies, are lining up too. Many on Wall Street say they believe that the cost of the rescue is certain to exceed the $700 billion that was originally designated for it.

Let’s be realistic, $700 billion is not enough, H. Rodgin Cohen, the chairman of Sullivan & Cromwell and one of the pre-eminent lawyers for Wall Street firms, said at a conference hosted by The Deal magazine on Wednesday. I think it’s the T-word, he said, referring to $1 trillion.

(Full New York Times article here)

With some companies using their bailout cash to throw executive parties and others still failing despite the money, it’s pretty brave to suggest that the taxpayer continue to fund this failing plan. If $700 billion didn’t cut it, why should we believe that a few trillion would?

Sadly, 87% of incumbents in Congress were re-elected. Personally, I had hoped that people would have paid more attention. If we can spread the word that we, the public, refuse to support these corporate handouts, perhaps things will start to change in our favor.

Sign up for our newsletter for calls to action and further updates regarding this corporate welfare mentality that has infected our politicians.

Despite this site’s opinion that the government bailout plan was an improper way to go about restoring the economy, it is hard to challenge the fact that some form of legislative action needed to be taken. What many economists saw, and even a good majority of the population could assume is that the funds provided to the banking world would not be used to help the common person. We chose to give some of the – and this is my personal opinion only – greediest people in the world free money and expected them to use the funds to help the general populous. This is not happening and at least some people in Congress are starting to questions that.

Banks are failing to use public funds to make credit more available and to help troubled homeowners, said Sen. Christopher Dodd, D-Conn. Congress did not pass the bailout plan so banks could hoard the money or use it to scoop up faltering rivals, he said.  Source

Hopefully Senator Dodd will back up his words with actions and hold these banks accountable for misuse of our tax money.

Looks like our friends to the north are taking the approach that the U.S. has just given up on:

The Canadian government will buy up C$50 billion ($40 billion) more in insured mortgages from banks as part of a series of steps announced on Wednesday to improve the availability of long-term credit.

The move came as U.S. Treasury Secretary Henry Paulson said he was backing away from buying troubled mortgage assets using a $700 billion bailout fund. Canadian officials said the key difference between the two approaches is that Canadian mortgages are not in distress.

Other measures taken by Ottawa included making it cheaper to use government insurance to guarantee bank borrowing, loosening regulations for banks to allow them more sources of funding, and boosting the borrowing authority of the government’s Business Development Bank by C$1.8 billion.

(Full article at Reuters)

Canada certainly considers themselves to be a socialist country in many regards, so this action is not without precedent. However, socialism these days is simply a relative term. Basically, every country on earth has participated in some form of socialism, it’s just a question of which industries are receiving the bulk of the “benefits”.

With U.S. Treasury Secretary Henry Paulson declaring that he will no longer be purchasing mortgage-backed securities with the $700 billion, it’s interesting to see that Canada is continuing down that path. Even with the famous capitalist Donald Trump stating that the bailout has failed (at least in its original form), Canada has apparently not gotten that memo.

All I can say is, good luck, Canada… You’re going to need it…

American Express Co. which is being hit by slowing consumer spending and rising defaults, is seeking roughly $3.5 billion in taxpayer-funded capital from the federal government, according to people familiar with the situation.

Courtesy of the WSJ.

It did not take a giant leap in logic to see that was inevitable. If the laws are lax enough that the bailout money can be easily exploited by any financial institution that sees it as an easy pay day, that is what is going to happen. American Express has no stake in current mortgage crisis. It exist as a credit card lending business only.

I have no doubt Amex is experiencing a higher than normal rate of defaults on their credit accounts, but they have the power to help themselves more so than mortgage lenders. All credit card companies have a clause in their customer contracts that stipulates that the interest rate on your card can be adjusted by the issuer for numerous reason. Amex needs to understand that it could probably help its self by interpreting that clause not as a way to raise rates, but as a way to help their struggling customers and actually lower rates. Perhaps the person who stopped paying their 22% interest payment would appreciate a drop to 7% for a year or so. Maybe so many accounts wouldn’t be in default then.

No, no that’s crazy talk. Sorry I’ll just go back to eating my Ramen, keeping my heat set at 58 degrees, and paying my taxes so there is enough money for American Express to weather the storm.

U.S. Treasury Secretary Henry Paulson sold Congress on the idea of buying mortgage-backed securities which were the “core problem” at the time. However, now he wants to expand the uses of the money to invest in credit card companies and other industries. He held a press conference today explaining that his plan is an “investment plan, not a bailout plan”. He explained that he had the broad authority to essentially use his newfound powers however he saw fit.

When asked if he saw any limits to his power to the bill, he replied, “It’s very important for me to live within the intent of the bill rather than try to find loopholes” explained Paulson. He then went on to explain that he “will never apologize for changing the strategy when the facts change” and that he has “broad authority”.

So, Mr. Paulson, when you pitch to someone that you are selling them a new house, but instead you slash the tires on their car, you have commited fraud. Typically, people are prosecuted for this type of behavior. Luckily for you, the bailout bill includes a provision that makes you 100% NOT LIABLE:

SEC. 1513. <> LIABILITY PROVISIONS.

The Secretary, any State official or agency, any Federal banking agency … shall not be subject to any civil action or proceeding for monetary damages by reason of the good faith action … while acting within the scope of office or employment.

Oh yeah… The application for requesting a TARP investment is only 2 pages long. Click here to apply for a few billion dollars.

Texas Congressman Ron Paul lays out his argument against further regulation falling out from this financial situation. Find out more about Ron Paul and his views at CampaignForLiberty.com.

The Moral Hazard of Regulation

by Ron Paul

Since the bailout bill passed, I have been frequently disturbed to hear “experts” wrongly blaming the free market for our recent economic problems and calling for more regulation. In fact, further regulation can only make things worse.

It is important to understand that regulators are not omniscient. It is not feasible for them to anticipate every possible thing that could go wrong with whatever industry or activity they are regulating. They are making their best guesses when formulating rules. It is often difficult for those being regulated to understand the many complex rules they are expected to follow. Very wealthy corporations hire attorneys who may discover a myriad of loopholes to exploit and render the spirit of the regulations null and void. For this reason, heavy regulation favors big business against those small businesses who cannot afford high-priced attorneys.

The other problem is the trust that people blindly put in regulations, and the moral hazard this creates. Too many people trust government regulators so completely that they abdicate their own common sense to these government bureaucrats. They trust that if something violates no law, it must be safe. How many scams have “It’s perfectly legal” as a hypnotic selling point, luring in the gullible?

Many people did not understand the financial house of cards that are derivatives, but since they were legal and promised a great return, people invested. It is much the same in any area rife with government involvement. Many feel that just because their children are getting good grades at a government school, they are getting a good education. After all, they are passing the government-mandated litmus test. But, this does not guarantee educational excellence. Neither is it always the case that a child who does NOT achieve good marks in school is going to be unsuccessful in life.

Is your drinking water safe, just because the government says it is? Is the internet going to magically become safer for your children if the government approves regulations on it? I would caution any parent against believing this would be the case. Nothing should take the place of your own common sense and due diligence.

These principles explain why the free market works so much better than a centrally planned economy. With central planning, everything shifts from one’s own judgment about safety, wisdom and relative benefits of a behavior, to the discretion of government bureaucrats. The question then becomes “what can I get away with,” and there will always be advantages for those who can afford lawyers to find the loopholes. The result then is that bad behavior, that would quickly fail under the free market, is propped up, protected and perpetuated, and sometimes good behavior is actually discouraged.

Regulation can actually benefit big business and corporate greed, while simultaneously killing small businesses that are the backbone of our now faltering economy. This is why I get so upset every time someone claims regulation can resolve the crisis that we are in. Rather, it will only exacerbate it.

Originally posted at RonPaul.com

Also, be sure to check out his latest book:

This is pretty good:

Click Here for Monopoly, Subprime Mortgage Edition

One of the best cards: “All of your money was in AIG and Bear Stearns stock. Lose $200″.

Thanks to one of our readers, Rick, for sending this to us.

Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week.

Reporters for abc15.com (KNXV) caught the AIG executives on hidden cameras poolside and leaving the spa at the Pointe Hilton Squaw Peak Resort, despite apparent efforts by the company to disguise its involvement.

AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property,” KNXV reported.

Check out ABC News for the video and complete story.

Why not give them another $40,000,000,000? They are obviously spending it wisely.