Opinion 1.0
After a humiliating defeat in Massachusetts on Tuesday which happened to be President Obama's Inauguration anniversary, Mr. Obama doubles down and attempts to take the spotlight off his failures and go after the banks. His didactic demonization of the banking industry is as long as I can remember. I'm almost positive he gave back all of the bank's campaign contributions since those banks are the anti Christ. LOL! I think Obama needs a populistic crusade to take the sting out of the senate election, Pelosi announcing she didn't have the votes to pass healthcare and the withdrawal of his pick for head of TSA. That is all in a week! And he isn't on suicide watch. The President wants to tax the largest banks (more than $50B in assets) for "simply meeting their responsibilities." This could cost the banks anywhere between 10 and 20% of 2010 earnings. Then he should pay back the American people for wasting the stimulus money and using it for a democrat slush fund to bribe House members and Senators to go along with the Obamacare Obamination. Why is it only the banks? Why isn't Fannie Mae, Freddie Mac, AIG or GM participating in the governmental grand larceny. Let's take a look at the root of this last meltdown. Why doesn't anyone mention the CRA (Community Revitalization Act, compliments of Jimmy "Peanut" Carter) government and activist groups (ACORN) forcing lending institutions to lend money to people who were not a good credit risk. I don't think banks are totally innocent because some of them deserved what they got. But, being forced to lend to bad credit risk, and just a short time ago, Hank Paulson (acting on Bernanke's orders) strongarmed the major banks, Bank of America, JP Morgan Chase, Citigroup and others to take TARP monies, even if they didn't want it or need it. When Ken Lewis, CEO of Bank of America, was ready to walk away from the Merrill Lynch deal, Paulson threatened to replace Lewis and the board if he did. Wasn't there a Mafia movie similiar to this scenario? I love the corrupt Chicago political machine in sixth gear, gone nationwide. The government has been involved and at the forefront of so many shady deals and the "anointed one" has the audacity to point his bony index finger at the financial institutions. The American people are very tired of the lies, spin and double speak coming out of Washington. They regulate businesses and when it doesn't work out, the government minions make the "demons of the day" look like mafioso. Mr. President, when you point your finger, you have four fingers pointing back at youself. There is talk of the major banks has hired a top attorney to fight this lame legislation. I believe this will scare the congress just a little and possibly kill this tentative bill in the senate. It seems that the only people who don't know the real roots of the financial meltdown is the democrats. Barney Frank, Chris Dodd defend themselves adamantly because they know the potential opening of a can of worms. Why isn't Franklin Raines or Jamie Gorelick in front of a congressional hearing? They were complicite in the balance sheet debacle in which they cooked the books at Fannie Mae, so they could pay themselves millions of dollars in bonuses. Franklin Raines had to pay back $22M out of the 52+M he paid himself in Taxpayer fund bonuses. Unfortunately, he didn't get any prison time because he is a close friend of Obama and Clinton. In conclusion, do a little research and you will find a plethora of incriminating evidence on a bunch of friends of democrats. "People who live in glass houses shouldn't throw stones."
David Axelrod in the White House last night:
Study Finds 'Extensive' Fraud at Fannie Mae
Bonuses Allegedly Drove the Scheme
By Kathleen Day
Washington Post Staff Writer
Wednesday, May 24, 2006
Fannie Mae engaged in "extensive financial fraud" over six years by doctoring earnings so executives could collect hundreds of millions of dollars in bonuses, federal officials said yesterday in a report that portrayed a company determined to play by its own rules.
Regulators at the Securities and Exchange Commission and the Office of Federal Housing Enterprise Oversight, in announcing a settlement with Fannie Mae that includes $400 million in penalties, provided the most detailed picture yet of what went wrong at the congressionally chartered firm.
They portray the District-based mortgage funding giant -- a linchpin of the nation's housing market -- as governed by a weak board of directors, which failed to install basic internal controls and instead let itself be dominated and left uninformed by chief executive Franklin Raines and Chief Financial Officer J. Timothy Howard, who both were later ousted.
The result was a company whose managers engaged in one questionable maneuver after another, including two transactions with investment banking firm Goldman Sachs Group Inc. that improperly pushed $107 million of Fannie Mae earnings into future years. The aim, OFHEO said, was always the same: To shape the company's books, not in response to accepted accounting rules but in a way that made it appear that the company had reached earnings targets, thus triggering the maximum possible payout for executives including Raines, Howard and others.
The settlement closes regulators' civil probe into Fannie Mae's accounting scandal, the result of the company's misstating earnings by about $10.6 billion from 1998 through 2004.
SEC Chairman Christopher Cox and acting OFHEO director James B. Lockhart III said they now will turn their focus to individuals, including Raines and Howard, to determine what role former and current executives played in the accounting fraud and if they should be forced to forfeit millions of dollars in what the regulators called "ill-gotten" compensation. They said the Justice Department is continuing a criminal probe.
"Fraudulent financial reporting cheats investors of their savings," Cox said. "Those whose actions led to the accounting fraud you've heard described today will be vigorously pursued."
Lockhart agreed. "You could argue none of it was deserved," he said in response to a question on how much of $52.8 million in bonuses Raines received during the six years might have been linked to improper accounting manipulation. As the settlement was announced, OFHEO released a 340-page report summarizing what it found in its nearly three-year probe of the company.
"The conduct of Mr. Raines, CFO Timothy Howard, and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability, and integrity," the report said. "Those individuals engaged in improper earnings management in order to generate unjustified levels of compensation for themselves and other executives."
Raines's lawyer Robert Barnett said in a prepared statement that Raines "has repeatedly stated that he never authorized, encouraged, or was aware of violations" of accounting rules. Even so, Raines "strongly believes that, as the leader of Fannie Mae, he should be accountable for what happened within the organization, regardless of personal involvement or fault."
Howard's lawyer had no comment.
Fannie Mae agreed to the settlement with the SEC and OFHEO without admitting or denying guilt. The company is in the midst of trying to create accurate accounting records for the years in question, an undertaking that is costing it hundreds of millions of dollars.
The agreement requires the company to invest in up-to-date computer technology and human expertise. It bars the company from growing one of its most profitable but risky business lines, that of buying and holding home loans for its own investment portfolio.
It also requires Fannie Mae to review the conduct of former and current executives. That includes its current chief executive, Daniel H. Mudd, and current Chairman Stephen B. Ashley. Both were on the board of the company during the six years when the accounting problems occurred.
And the company must specifically consider retroactively firing Raines and Howard, a change in status that would deprive them of millions of dollars in compensation. At the end of 2004, in the wake of an embarrassing SEC ruling that Fannie Mae's accounting was wrong, the board pressured Raines and Howard to leave. Raines was allowed to retire and Howard to resign, preserving severance packages for the two.
The OFHEO report is the second in recent months to criticize the company's management, but it goes substantially beyond the first study, which was commissioned by the board of directors, which hired Warren B. Rudman, a former Republican senator from New Hampshire, to write it. Where Rudman, applying a stricter legal standard, found only one year in which earnings were manipulated to trigger bonuses, OFHEO, using a looser burden of proof, concluded that the company consistently arranged its books to hit earnings-per-share targets almost to the penny.
The company's consistent performance was not an "uncanny coincidence," investigators wrote, but a product of executives willing to dip into "cookie jar" reserves to make up a shortfall, then push excess earnings off into the future as a cushion for the next bonus cycle.
The Rudman report essentially absolved the board from blame, saying most directors relied on lawyers and accountants who misled them. In contrast, OFHEO's report says the board was responsible for creating a system that allowed them to be misled by giving Raines and Howard too much power.
Rudman said OFHEO's report and his agree on the facts. "Their comments on the tone at the top, the arrogance of the corporation, tracks with what we said," Rudman said. "The two reports don't disagree that the board was at times misled, either intentionally or unintentionally, and was given bad information."
OFHEO concludes that the board actually helped create the problems by failing to act independently of Raines and Howard and by failing to correct accounting and internal control problems even after similar problems emerged in 2003 at Freddie Mac, which eventually paid $125 million in penalties to OFHEO to settle charges of accounting fraud.
The report cites example after example of transactions that it says Fannie Mae made solely to push earnings up or down to meet profit targets expected by Wall Street. The two transactions with Goldman Sachs in 2001 and 2002, for example, had no economic purpose beyond manipulating earnings and that purpose was not clearly articulated to investors, the report said. In a prepared statement, a Goldman Sachs spokesman disagreed with that conclusion.
Mudd said yesterday that in retrospect he should have done some things differently but that in general he felt he acted appropriately. Ashley, in a conference call with investment banking analysts, said the board supports Mudd.
Thomas P. Gerrity, a Fannie Mae director and chairman of its audit committee for the past seven years, last week said he would step down from the board at year's end.
The OFHEO report also included a new, detailed account of the actions taken by Raines and other insiders, including current chief executive Mudd, to thwart OFHEO's investigation. For example, Fannie Mae tried to insert language into an appropriations bill to cut the agency's budget until then-OFHEO Director Armando Falcon Jr. was replaced, it said.
Mudd, who was promoted to chief executive after Raines resigned in 2004, was criticized in the report for not taking more steps to address internal control problems when he became aware of them.
"This report . . . is strong medicine," Mudd said yesterday. "It is what Fannie Mae needed, and strong medicine is certainly what we received today."
Staff writers Annys Shin and Terence O'Hara contributed to this report.
Mr. Turbotax:
Johnny Depp as "Barack Obama, Public Enemy #1:
Welcome statement of the day:
“I don’t see the votes for it at this time,” Pelosi told reporters in a briefing. CHECKMATE!
Democrats propose $1.9T increase in debt limit
By ANDREW TAYLOR, Associated Press Writer
Wed Jan 20, 6:39 pm ET
WASHINGTON – Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.
The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.
It's hardly the debate Democrats want or need in the wake of Sen.-elect Scott Brown's victory in Massachusetts. Arguing over the debt limit provides a forum for Republicans to blame Democrats for rising deficits and spiraling debt, even though responsibility for the government's financial straits can be shared by both political parties.
The measure came to the floor under rules requiring 60 votes to pass. That's an unprecedented step that could mean that every Democrat, no matter how politically endangered, may have to vote for it next week before Brown takes office and Democrats lose their 60-vote majority.
Democratic leaders are also worried that Sen. Evan Bayh, D-Ind., who opposed the debt limit increase approved last month, will vote against the measure.
The record increase in the so-called debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress. Last year's deficit hit a phenomenal $1.4 trillion, and the current year's deficit promises to be as high or higher.
Congress has never failed to increase the borrowing limit.
We have gone to the restaurant. We have eaten the meal. Now the only question is whether we will pay the check," said Finance Committee Chairman Max Baucus, D-Mont. "We simply must do so."
A White House policy statement said the increase "is critically important to make sure that financing of federal government operations can continue without interruption and that the creditworthiness of the United States is not called into question."
Less than a decade ago, $1.9 trillion would have been enough to finance the operations and programs of the federal government for an entire year. Now, it's only enough to make sure Democrats can avoid another vote before Election Day.
Republican Sen. John Thune of South Dakota immediately offered an amendment to end the bank and Wall Street bailout, officially known as the Troubled Asset Relief Program, or TARP. Thune would prohibit further expenditure of TARP funds and would require that all funds paid back be used to retire debt.
The latest increase comes on top of a stopgap $290 billion measure that cleared the Senate on Christmas Eve. Given the country's finances, that measure would last only about six weeks, lawmakers said, requiring the far larger measure that's pending.
Quote du jour:
"The ultimate result of shielding men from the effects of folly is to fill the world with fools."
Herbert Spencer
The Same Subject Continued: Concerning Dangers from Foreign Force and Influence
For the Independent Journal.
To the People of the State of New York:
MY LAST paper assigned several reasons why the safety of the people would be best secured by union against the danger it may be exposed to by JUST causes of war given to other nations; and those reasons show that such causes would not only be more rarely given, but would also be more easily accommodated, by a national government than either by the State governments or the proposed little confederacies.
But the safety of the people of America against dangers from FOREIGN force depends not only on their forbearing to give JUST causes of war to other nations, but also on their placing and continuing themselves in such a situation as not to INVITE hostility or insult; for it need not be observed that there are PRETENDED as well as just causes of war.
It is too true, however disgraceful it may be to human nature, that nations in general will make war whenever they have a prospect of getting anything by it; nay, absolute monarchs will often make war when their nations are to get nothing by it, but for the purposes and objects merely personal, such as thirst for military glory, revenge for personal affronts, ambition, or private compacts to aggrandize or support their particular families or partisans. These and a variety of other motives, which affect only the mind of the sovereign, often lead him to engage in wars not sanctified by justice or the voice and interests of his people. But, independent of these inducements to war, which are more prevalent in absolute monarchies, but which well deserve our attention, there are others which affect nations as often as kings; and some of them will on examination be found to grow out of our relative situation and circumstances.
With France and with Britain we are rivals in the fisheries, and can supply their markets cheaper than they can themselves, notwithstanding any efforts to prevent it by bounties on their own or duties on foreign fish.
With them and with most other European nations we are rivals in navigation and the carrying trade; and we shall deceive ourselves if we suppose that any of them will rejoice to see it flourish; for, as our carrying trade cannot increase without in some degree diminishing theirs, it is more their interest, and will be more their policy, to restrain than to promote it.
In the trade to China and India, we interfere with more than one nation, inasmuch as it enables us to partake in advantages which they had in a manner monopolized, and as we thereby supply ourselves with commodities which we used to purchase from them.
The extension of our own commerce in our own vessels cannot give pleasure to any nations who possess territories on or near this continent, because the cheapness and excellence of our productions, added to the circumstance of vicinity, and the enterprise and address of our merchants and navigators, will give us a greater share in the advantages which those territories afford, than consists with the wishes or policy of their respective sovereigns.
Spain thinks it convenient to shut the Mississippi against us on the one side, and Britain excludes us from the Saint Lawrence on the other; nor will either of them permit the other waters which are between them and us to become the means of mutual intercourse and traffic.
From these and such like considerations, which might, if consistent with prudence, be more amplified and detailed, it is easy to see that jealousies and uneasinesses may gradually slide into the minds and cabinets of other nations, and that we are not to expect that they should regard our advancement in union, in power and consequence by land and by sea, with an eye of indifference and composure.
The people of America are aware that inducements to war may arise out of these circumstances, as well as from others not so obvious at present, and that whenever such inducements may find fit time and opportunity for operation, pretenses to color and justify them will not be wanting. Wisely, therefore, do they consider union and a good national government as necessary to put and keep them in SUCH A SITUATION as, instead of INVITING war, will tend to repress and discourage it. That situation consists in the best possible state of defense, and necessarily depends on the government, the arms, and the resources of the country.
As the safety of the whole is the interest of the whole, and cannot be provided for without government, either one or more or many, let us inquire whether one good government is not, relative to the object in question, more competent than any other given number whatever.
One government can collect and avail itself of the talents and experience of the ablest men, in whatever part of the Union they may be found. It can move on uniform principles of policy. It can harmonize, assimilate, and protect the several parts and members, and extend the benefit of its foresight and precautions to each. In the formation of treaties, it will regard the interest of the whole, and the particular interests of the parts as connected with that of the whole. It can apply the resources and power of the whole to the defense of any particular part, and that more easily and expeditiously than State governments or separate confederacies can possibly do, for want of concert and unity of system. It can place the militia under one plan of discipline, and, by putting their officers in a proper line of subordination to the Chief Magistrate, will, as it were, consolidate them into one corps, and thereby render them more efficient than if divided into thirteen or into three or four distinct independent companies.
What would the militia of Britain be if the English militia obeyed the government of England, if the Scotch militia obeyed the government of Scotland, and if the Welsh militia obeyed the government of Wales? Suppose an invasion; would those three governments (if they agreed at all) be able, with all their respective forces, to operate against the enemy so effectually as the single government of Great Britain would?
We have heard much of the fleets of Britain, and the time may come, if we are wise, when the fleets of America may engage attention. But if one national government, had not so regulated the navigation of Britain as to make it a nursery for seamen--if one national government had not called forth all the national means and materials for forming fleets, their prowess and their thunder would never have been celebrated. Let England have its navigation and fleet--let Scotland have its navigation and fleet--let Wales have its navigation and fleet--let Ireland have its navigation and fleet--let those four of the constituent parts of the British empire be be under four independent governments, and it is easy to perceive how soon they would each dwindle into comparative insignificance.
Apply these facts to our own case. Leave America divided into thirteen or, if you please, into three or four independent governments--what armies could they raise and pay--what fleets could they ever hope to have? If one was attacked, would the others fly to its succor, and spend their blood and money in its defense? Would there be no danger of their being flattered into neutrality by its specious promises, or seduced by a too great fondness for peace to decline hazarding their tranquillity and present safety for the sake of neighbors, of whom perhaps they have been jealous, and whose importance they are content to see diminished? Although such conduct would not be wise, it would, nevertheless, be natural. The history of the states of Greece, and of other countries, abounds with such instances, and it is not improbable that what has so often happened would, under similar circumstances, happen again.
But admit that they might be willing to help the invaded State or confederacy. How, and when, and in what proportion shall aids of men and money be afforded? Who shall command the allied armies, and from which of them shall he receive his orders? Who shall settle the terms of peace, and in case of disputes what umpire shall decide between them and compel acquiescence? Various difficulties and inconveniences would be inseparable from such a situation; whereas one government, watching over the general and common interests, and combining and directing the powers and resources of the whole, would be free from all these embarrassments, and conduce far more to the safety of the people.
But whatever may be our situation, whether firmly united under one national government, or split into a number of confederacies, certain it is, that foreign nations will know and view it exactly as it is; and they will act toward us accordingly. If they see that our national government is efficient and well administered, our trade prudently regulated, our militia properly organized and disciplined, our resources and finances discreetly managed, our credit re-established, our people free, contented, and united, they will be much more disposed to cultivate our friendship than provoke our resentment. If, on the other hand, they find us either destitute of an effectual government (each State doing right or wrong, as to its rulers may seem convenient), or split into three or four independent and probably discordant republics or confederacies, one inclining to Britain, another to France, and a third to Spain, and perhaps played off against each other by the three, what a poor, pitiful figure will America make in their eyes! How liable would she become not only to their contempt but to their outrage, and how soon would dear-bought experience proclaim that when a people or family so divide, it never fails to be against themselves.
PUBLIUS.
References:
http://www.hotair.com/
http://www.wnd.com/
http://www.youtube/
Kathleen Day
Washington Post
http://www.quotationspage.com/
http://www.drudgereport.com/
http://www.politico.com/
Business Week
Bloomberg
Andrew Taylor
AP
Library of Congress/Federalist's Papers
David Axelrod in the White House last night:
Study Finds 'Extensive' Fraud at Fannie Mae
Bonuses Allegedly Drove the Scheme
By Kathleen Day
Washington Post Staff Writer
Wednesday, May 24, 2006
Fannie Mae engaged in "extensive financial fraud" over six years by doctoring earnings so executives could collect hundreds of millions of dollars in bonuses, federal officials said yesterday in a report that portrayed a company determined to play by its own rules.
Regulators at the Securities and Exchange Commission and the Office of Federal Housing Enterprise Oversight, in announcing a settlement with Fannie Mae that includes $400 million in penalties, provided the most detailed picture yet of what went wrong at the congressionally chartered firm.
They portray the District-based mortgage funding giant -- a linchpin of the nation's housing market -- as governed by a weak board of directors, which failed to install basic internal controls and instead let itself be dominated and left uninformed by chief executive Franklin Raines and Chief Financial Officer J. Timothy Howard, who both were later ousted.
The result was a company whose managers engaged in one questionable maneuver after another, including two transactions with investment banking firm Goldman Sachs Group Inc. that improperly pushed $107 million of Fannie Mae earnings into future years. The aim, OFHEO said, was always the same: To shape the company's books, not in response to accepted accounting rules but in a way that made it appear that the company had reached earnings targets, thus triggering the maximum possible payout for executives including Raines, Howard and others.
The settlement closes regulators' civil probe into Fannie Mae's accounting scandal, the result of the company's misstating earnings by about $10.6 billion from 1998 through 2004.
SEC Chairman Christopher Cox and acting OFHEO director James B. Lockhart III said they now will turn their focus to individuals, including Raines and Howard, to determine what role former and current executives played in the accounting fraud and if they should be forced to forfeit millions of dollars in what the regulators called "ill-gotten" compensation. They said the Justice Department is continuing a criminal probe.
"Fraudulent financial reporting cheats investors of their savings," Cox said. "Those whose actions led to the accounting fraud you've heard described today will be vigorously pursued."
Lockhart agreed. "You could argue none of it was deserved," he said in response to a question on how much of $52.8 million in bonuses Raines received during the six years might have been linked to improper accounting manipulation. As the settlement was announced, OFHEO released a 340-page report summarizing what it found in its nearly three-year probe of the company.
"The conduct of Mr. Raines, CFO Timothy Howard, and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability, and integrity," the report said. "Those individuals engaged in improper earnings management in order to generate unjustified levels of compensation for themselves and other executives."
Raines's lawyer Robert Barnett said in a prepared statement that Raines "has repeatedly stated that he never authorized, encouraged, or was aware of violations" of accounting rules. Even so, Raines "strongly believes that, as the leader of Fannie Mae, he should be accountable for what happened within the organization, regardless of personal involvement or fault."
Howard's lawyer had no comment.
Fannie Mae agreed to the settlement with the SEC and OFHEO without admitting or denying guilt. The company is in the midst of trying to create accurate accounting records for the years in question, an undertaking that is costing it hundreds of millions of dollars.
The agreement requires the company to invest in up-to-date computer technology and human expertise. It bars the company from growing one of its most profitable but risky business lines, that of buying and holding home loans for its own investment portfolio.
It also requires Fannie Mae to review the conduct of former and current executives. That includes its current chief executive, Daniel H. Mudd, and current Chairman Stephen B. Ashley. Both were on the board of the company during the six years when the accounting problems occurred.
And the company must specifically consider retroactively firing Raines and Howard, a change in status that would deprive them of millions of dollars in compensation. At the end of 2004, in the wake of an embarrassing SEC ruling that Fannie Mae's accounting was wrong, the board pressured Raines and Howard to leave. Raines was allowed to retire and Howard to resign, preserving severance packages for the two.
The OFHEO report is the second in recent months to criticize the company's management, but it goes substantially beyond the first study, which was commissioned by the board of directors, which hired Warren B. Rudman, a former Republican senator from New Hampshire, to write it. Where Rudman, applying a stricter legal standard, found only one year in which earnings were manipulated to trigger bonuses, OFHEO, using a looser burden of proof, concluded that the company consistently arranged its books to hit earnings-per-share targets almost to the penny.
The company's consistent performance was not an "uncanny coincidence," investigators wrote, but a product of executives willing to dip into "cookie jar" reserves to make up a shortfall, then push excess earnings off into the future as a cushion for the next bonus cycle.
The Rudman report essentially absolved the board from blame, saying most directors relied on lawyers and accountants who misled them. In contrast, OFHEO's report says the board was responsible for creating a system that allowed them to be misled by giving Raines and Howard too much power.
Rudman said OFHEO's report and his agree on the facts. "Their comments on the tone at the top, the arrogance of the corporation, tracks with what we said," Rudman said. "The two reports don't disagree that the board was at times misled, either intentionally or unintentionally, and was given bad information."
OFHEO concludes that the board actually helped create the problems by failing to act independently of Raines and Howard and by failing to correct accounting and internal control problems even after similar problems emerged in 2003 at Freddie Mac, which eventually paid $125 million in penalties to OFHEO to settle charges of accounting fraud.
The report cites example after example of transactions that it says Fannie Mae made solely to push earnings up or down to meet profit targets expected by Wall Street. The two transactions with Goldman Sachs in 2001 and 2002, for example, had no economic purpose beyond manipulating earnings and that purpose was not clearly articulated to investors, the report said. In a prepared statement, a Goldman Sachs spokesman disagreed with that conclusion.
Mudd said yesterday that in retrospect he should have done some things differently but that in general he felt he acted appropriately. Ashley, in a conference call with investment banking analysts, said the board supports Mudd.
Thomas P. Gerrity, a Fannie Mae director and chairman of its audit committee for the past seven years, last week said he would step down from the board at year's end.
The OFHEO report also included a new, detailed account of the actions taken by Raines and other insiders, including current chief executive Mudd, to thwart OFHEO's investigation. For example, Fannie Mae tried to insert language into an appropriations bill to cut the agency's budget until then-OFHEO Director Armando Falcon Jr. was replaced, it said.
Mudd, who was promoted to chief executive after Raines resigned in 2004, was criticized in the report for not taking more steps to address internal control problems when he became aware of them.
"This report . . . is strong medicine," Mudd said yesterday. "It is what Fannie Mae needed, and strong medicine is certainly what we received today."
Staff writers Annys Shin and Terence O'Hara contributed to this report.
Mr. Turbotax:
Johnny Depp as "Barack Obama, Public Enemy #1:
Welcome statement of the day:
“I don’t see the votes for it at this time,” Pelosi told reporters in a briefing. CHECKMATE!
Democrats propose $1.9T increase in debt limit
By ANDREW TAYLOR, Associated Press Writer
Wed Jan 20, 6:39 pm ET
WASHINGTON – Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.
The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.
It's hardly the debate Democrats want or need in the wake of Sen.-elect Scott Brown's victory in Massachusetts. Arguing over the debt limit provides a forum for Republicans to blame Democrats for rising deficits and spiraling debt, even though responsibility for the government's financial straits can be shared by both political parties.
The measure came to the floor under rules requiring 60 votes to pass. That's an unprecedented step that could mean that every Democrat, no matter how politically endangered, may have to vote for it next week before Brown takes office and Democrats lose their 60-vote majority.
Democratic leaders are also worried that Sen. Evan Bayh, D-Ind., who opposed the debt limit increase approved last month, will vote against the measure.
The record increase in the so-called debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress. Last year's deficit hit a phenomenal $1.4 trillion, and the current year's deficit promises to be as high or higher.
Congress has never failed to increase the borrowing limit.
We have gone to the restaurant. We have eaten the meal. Now the only question is whether we will pay the check," said Finance Committee Chairman Max Baucus, D-Mont. "We simply must do so."
A White House policy statement said the increase "is critically important to make sure that financing of federal government operations can continue without interruption and that the creditworthiness of the United States is not called into question."
Less than a decade ago, $1.9 trillion would have been enough to finance the operations and programs of the federal government for an entire year. Now, it's only enough to make sure Democrats can avoid another vote before Election Day.
Republican Sen. John Thune of South Dakota immediately offered an amendment to end the bank and Wall Street bailout, officially known as the Troubled Asset Relief Program, or TARP. Thune would prohibit further expenditure of TARP funds and would require that all funds paid back be used to retire debt.
The latest increase comes on top of a stopgap $290 billion measure that cleared the Senate on Christmas Eve. Given the country's finances, that measure would last only about six weeks, lawmakers said, requiring the far larger measure that's pending.
Quote du jour:
"The ultimate result of shielding men from the effects of folly is to fill the world with fools."
Herbert Spencer
Writings of Our Founding Fathers
Federalist Papers
Author: John Jay
Federalist No. 4
Federalist No. 4
The Same Subject Continued: Concerning Dangers from Foreign Force and Influence
For the Independent Journal.
To the People of the State of New York:
MY LAST paper assigned several reasons why the safety of the people would be best secured by union against the danger it may be exposed to by JUST causes of war given to other nations; and those reasons show that such causes would not only be more rarely given, but would also be more easily accommodated, by a national government than either by the State governments or the proposed little confederacies.
But the safety of the people of America against dangers from FOREIGN force depends not only on their forbearing to give JUST causes of war to other nations, but also on their placing and continuing themselves in such a situation as not to INVITE hostility or insult; for it need not be observed that there are PRETENDED as well as just causes of war.
It is too true, however disgraceful it may be to human nature, that nations in general will make war whenever they have a prospect of getting anything by it; nay, absolute monarchs will often make war when their nations are to get nothing by it, but for the purposes and objects merely personal, such as thirst for military glory, revenge for personal affronts, ambition, or private compacts to aggrandize or support their particular families or partisans. These and a variety of other motives, which affect only the mind of the sovereign, often lead him to engage in wars not sanctified by justice or the voice and interests of his people. But, independent of these inducements to war, which are more prevalent in absolute monarchies, but which well deserve our attention, there are others which affect nations as often as kings; and some of them will on examination be found to grow out of our relative situation and circumstances.
With France and with Britain we are rivals in the fisheries, and can supply their markets cheaper than they can themselves, notwithstanding any efforts to prevent it by bounties on their own or duties on foreign fish.
With them and with most other European nations we are rivals in navigation and the carrying trade; and we shall deceive ourselves if we suppose that any of them will rejoice to see it flourish; for, as our carrying trade cannot increase without in some degree diminishing theirs, it is more their interest, and will be more their policy, to restrain than to promote it.
In the trade to China and India, we interfere with more than one nation, inasmuch as it enables us to partake in advantages which they had in a manner monopolized, and as we thereby supply ourselves with commodities which we used to purchase from them.
The extension of our own commerce in our own vessels cannot give pleasure to any nations who possess territories on or near this continent, because the cheapness and excellence of our productions, added to the circumstance of vicinity, and the enterprise and address of our merchants and navigators, will give us a greater share in the advantages which those territories afford, than consists with the wishes or policy of their respective sovereigns.
Spain thinks it convenient to shut the Mississippi against us on the one side, and Britain excludes us from the Saint Lawrence on the other; nor will either of them permit the other waters which are between them and us to become the means of mutual intercourse and traffic.
From these and such like considerations, which might, if consistent with prudence, be more amplified and detailed, it is easy to see that jealousies and uneasinesses may gradually slide into the minds and cabinets of other nations, and that we are not to expect that they should regard our advancement in union, in power and consequence by land and by sea, with an eye of indifference and composure.
The people of America are aware that inducements to war may arise out of these circumstances, as well as from others not so obvious at present, and that whenever such inducements may find fit time and opportunity for operation, pretenses to color and justify them will not be wanting. Wisely, therefore, do they consider union and a good national government as necessary to put and keep them in SUCH A SITUATION as, instead of INVITING war, will tend to repress and discourage it. That situation consists in the best possible state of defense, and necessarily depends on the government, the arms, and the resources of the country.
As the safety of the whole is the interest of the whole, and cannot be provided for without government, either one or more or many, let us inquire whether one good government is not, relative to the object in question, more competent than any other given number whatever.
One government can collect and avail itself of the talents and experience of the ablest men, in whatever part of the Union they may be found. It can move on uniform principles of policy. It can harmonize, assimilate, and protect the several parts and members, and extend the benefit of its foresight and precautions to each. In the formation of treaties, it will regard the interest of the whole, and the particular interests of the parts as connected with that of the whole. It can apply the resources and power of the whole to the defense of any particular part, and that more easily and expeditiously than State governments or separate confederacies can possibly do, for want of concert and unity of system. It can place the militia under one plan of discipline, and, by putting their officers in a proper line of subordination to the Chief Magistrate, will, as it were, consolidate them into one corps, and thereby render them more efficient than if divided into thirteen or into three or four distinct independent companies.
What would the militia of Britain be if the English militia obeyed the government of England, if the Scotch militia obeyed the government of Scotland, and if the Welsh militia obeyed the government of Wales? Suppose an invasion; would those three governments (if they agreed at all) be able, with all their respective forces, to operate against the enemy so effectually as the single government of Great Britain would?
We have heard much of the fleets of Britain, and the time may come, if we are wise, when the fleets of America may engage attention. But if one national government, had not so regulated the navigation of Britain as to make it a nursery for seamen--if one national government had not called forth all the national means and materials for forming fleets, their prowess and their thunder would never have been celebrated. Let England have its navigation and fleet--let Scotland have its navigation and fleet--let Wales have its navigation and fleet--let Ireland have its navigation and fleet--let those four of the constituent parts of the British empire be be under four independent governments, and it is easy to perceive how soon they would each dwindle into comparative insignificance.
Apply these facts to our own case. Leave America divided into thirteen or, if you please, into three or four independent governments--what armies could they raise and pay--what fleets could they ever hope to have? If one was attacked, would the others fly to its succor, and spend their blood and money in its defense? Would there be no danger of their being flattered into neutrality by its specious promises, or seduced by a too great fondness for peace to decline hazarding their tranquillity and present safety for the sake of neighbors, of whom perhaps they have been jealous, and whose importance they are content to see diminished? Although such conduct would not be wise, it would, nevertheless, be natural. The history of the states of Greece, and of other countries, abounds with such instances, and it is not improbable that what has so often happened would, under similar circumstances, happen again.
But admit that they might be willing to help the invaded State or confederacy. How, and when, and in what proportion shall aids of men and money be afforded? Who shall command the allied armies, and from which of them shall he receive his orders? Who shall settle the terms of peace, and in case of disputes what umpire shall decide between them and compel acquiescence? Various difficulties and inconveniences would be inseparable from such a situation; whereas one government, watching over the general and common interests, and combining and directing the powers and resources of the whole, would be free from all these embarrassments, and conduce far more to the safety of the people.
But whatever may be our situation, whether firmly united under one national government, or split into a number of confederacies, certain it is, that foreign nations will know and view it exactly as it is; and they will act toward us accordingly. If they see that our national government is efficient and well administered, our trade prudently regulated, our militia properly organized and disciplined, our resources and finances discreetly managed, our credit re-established, our people free, contented, and united, they will be much more disposed to cultivate our friendship than provoke our resentment. If, on the other hand, they find us either destitute of an effectual government (each State doing right or wrong, as to its rulers may seem convenient), or split into three or four independent and probably discordant republics or confederacies, one inclining to Britain, another to France, and a third to Spain, and perhaps played off against each other by the three, what a poor, pitiful figure will America make in their eyes! How liable would she become not only to their contempt but to their outrage, and how soon would dear-bought experience proclaim that when a people or family so divide, it never fails to be against themselves.
PUBLIUS.
References:
http://www.hotair.com/
http://www.wnd.com/
http://www.youtube/
Kathleen Day
Washington Post
http://www.quotationspage.com/
http://www.drudgereport.com/
http://www.politico.com/
Business Week
Bloomberg
Andrew Taylor
AP
Library of Congress/Federalist's Papers
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