Geithner Needs More Power - Voids The Constitution

U.S. May Oust CEOs at Banks Needing ‘Exceptional’ Aid

By Jesse Westbrook
April 5, 2009

(Bloomberg) -- Treasury Secretary Timothy Geithner said he’s prepared to oust the senior management and boards of directors at banks that require “exceptional” assistance from the U.S. government.

“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said today in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”

Geithner noted that American International Group Inc., Fannie Mae and Freddie Mac had their chief executives removed after it became clear the companies couldn’t survive without government rescues. The Treasury is reviewing how much capital the biggest U.S. financial companies need in order to endure a severe economic downturn.

“Where we’ve had to do exceptional things,” the government has replaced management and boards of directors, Geithner said.

Geithner’s pledge comes as signs emerge that the world economy may be stabilizing. Confidence among U.S. consumers climbed last month from the lowest level on record, according to the Conference Board. U.K. house prices rose in March for the first time since October 2007, while Chinese manufacturing increased, reports last week showed.

Compensation Limits

The Treasury secretary pledged to enforce congressional legislation that limits pay at companies receiving government loans. Geithner said the Obama administration has no intention of letting banks get around the rules.

“Our obligation is to apply the laws that Congress just passed,” he said. “We want the American taxpayer’s assistance going to generate greater lending, not providing excess compensation.”

Treasury last month proposed a public-private partnership to spur investors to buy -- and banks to sell -- the illiquid real estate assets clogging lenders’ books. The program relies on financing from the Federal Reserve and debt guarantees from the Federal Deposit Insurance Corp., and it could use up to $100 billion from the government’s bank-rescue fund.

Geithner, responding to a question about whether rules approved by the Financial Accounting Standards Board last week may deter banks from participating, said Treasury will make sure companies do what’s needed to clean up their balance sheets.

‘Do What’s Necessary’

“We will do what’s necessary to make sure our banking system emerges out of this stronger,” he said. He declined to say whether Treasury will force banks to sell assets.

Norwalk, Connecticut-based FASB voted on April 2 to let banks use “significant” judgment in gauging how much securities are worth. Richard Dietrich, an accounting professor at Ohio State University, said the change may discourage financial companies from selling securities because it may allow them to avoid writing down the value of their holdings.

Geithner, who accompanied President Barack Obama to London last week for the meeting of the Group of 20 policy makers, also said the administration will “keep acting as forcefully as we can” to pull the nation out of a recession.

At the summit, the world leaders called for tougher oversight of hedge funds, executive pay, credit-rating firms and derivatives trading. They also boosted funding for the International Monetary Fund, increasing its resources to $1 trillion.

‘Turning Point’

Obama called the event “historic” and predicted it will be a “turning point” for economic recovery across the world.

Geithner is pushing for an overhaul of financial rules that calls for putting big hedge funds and private-equity funds under stricter federal supervision, as well as regulating derivatives markets. He’s also seeking new powers for the government to seize and wind down nonbank financial companies whose size poses threats to the stability of the financial system.

The World Bank is warning of an “unemployment crisis,” and the U.S. lost 663,000 jobs in March, the Labor Department said April 3. The jobless rate jumped to 8.5 percent, the highest level since 1983.

To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net. Last Updated: April 5, 2009 13:11 EDT
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YOU'VE BEEN WARNED!...

from Breitbart.com
by Derek Broes
April 4, 2009

Over the past three months we have witnessed some truly amazing movements by the Obama administration.

- He has proposed more spending than all Presidents in history combined;
- He has trampled the Constitution by allowing the Treasury to take on a dictator style infringement on private companies, and now the democratically lead Congress has proposed the “Pay for Performance Act” which passed Thursday with even some Republican Congressman voted for it.

This bill essentially allows the Treasury to define “fair pay” for all employees, at any level. Worse, the Treasury would like to be able to take over any company it deemed as important enough to take over regardless of whether or not it had accepted bailout funds.

Worse still, the Serve Act proposes to make volunteering for the government mandatory (with pay, of course). Last time I looked, working for pay was called A JOB.

The scariest part of the bill is that while you’re serving as a “volunteer,” you’re prohibited from participating in worship and church activities, political rallies and being involved in a union. In short, your essential freedoms are gone. I keep hearing about Obama being a socialist but, I have to disagree. Based on these measures he appears to more like a person pursuing Communism or Fascism.

Let’s face it; if you wanted to tear down the Republic and install a Communist Oligarchy you would first have to take over all major industries where corporate power resides, then you must get the wealth away from the rich — but how would you do that? Well, you create an even larger economic crisis so the country thinks your massive debt spending is a way to help the country when your real plan is to incur so much debt that the only way to prevent the country from bankruptcy is to impose a tax system that depletes the wealth of the top 1% until we’re all equally “wealthy.” …Well, except for those wealthy people who helped you get there. You know the ones I’m talking about. I don’t mean to HARPO on the subject, but we seemed to have forgotten what we’re protecting. What about the Republic? Is it already gone?

When the government ignores legal contractual obligations because they judge someone’s bonus as unfair the law has been ignored, which means it was violated and this violation occurred at the highest level of government. I’m not saying the AIG bonuses weren’t excessive. My point is, we don’t know what these people did to deserve or NOT to deserve them because this was never mentioned or examined. Maybe some of those people brought in a billion dollars of business and their bonuses were based? Maybe the CEO is the main reason the company is failing? Does that mean that some guy who worked hard to bring in that billion dollars in business shouldn’t be rewarded? But Obama needs a way to regulate pay and the bill proposed doesn’t even stop at executives, it doesn’t even stop at dollar amounts. In fact, it has no specification whatsoever.

So we can all look forward to government cars, government jobs, paid civilian volunteers who watch our every move and the the loss of our ability to reach for our dreams. The sad part is that Obama told us exactly what he was going to do and 52% of you refused to hear what he said. In fact many of you cheered at these things. Let’s remember just of few of the things he said.

1. The Constitution is fundamentally flawed. It only protects the rights of the people but does not allow the government to do anything on your behalf.
2. He wants a civilian Army as large as our military, and as well funded ($650 billion annually).
3. He wants to “spread the wealth.” Oh, don’t pretend you don’t remember Joe the Plumber.

And let’s not forget good ole Reverend Wright whose teachings about America being evil and unequal ring in Obama’s ears. Funny … It’s equality that got Obama elected. Change? Oh yes, there’s change and if we don’t act soon the meaning of hope will have a very different meaning.

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MUST WATCH!!! Beck: “Is it against the law sir!?”

pwn'd with a capital "P"

Comments from Hot Air.com:

What happened is most certainly news because we established that the Attorney General of CT is acting in a tryannical and unlawful manner.

1 - By using his Office and the office’s legal powers to engage in hostile State action against citizens who , it is not contested by anyone, have violated no law and in course of those actions , the AG is violating
2 - The Constitution of the United States
Article I Section 10

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.
No State is permitted to interfere with any party’s obligations under a contract.
He should be impeached.
VinceP1974 on March 31, 2009 at 12:08 AM
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I like the fact that the conservatives are finally waking up and taking a stand. It’s good to see the tea parties and shows like Glenn Beck telling us it is okay to be angry, to stand up for our rights, and to march in the streets. It works for the left. Those loonies have been making noise, demanding their views be voiced, while we sit in our offices and work. Now, we have a chance to make some noise, to take back our country, to demand that the laws and the constitution be followed in our country. I like the fact that the left loonies are a little scared.I say, let’s make some noise and make the left pee down their legs in fear.I heart Glenn Beck.
HornetSting on March 30, 2009 at 9:41 PM
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When Attorney Generals devote themselves to promoting what ought to be law, particularly heinous when not defined as their “wish” but arguments presented AS IF a matter of “yes or no” law, then the Attorney Generals are not doing their job of defending what IS the law, and the rights of those who obey the law. Simple enough, and the AG finally had to admit the status of factual vs. wish-list matter.
maverick muse on March 30, 2009 at 7:55 PM
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Unbelievable, the Attorney General admits that he was enforcing a law that does not exist. In other words the Attorney General thinks… HE IS THE LAW. This is called thuggery and I’m afraid we are going to see more and more of it with the Democrats in power and encouraging it at all levels.
Maxx on March 30, 2009 at 7:59 PM
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A pity that more of those fortunate to have a megaphone do not use it to expose these fools like Beck did with AG Blumenthal.
Jdripper on March 30, 2009 at 7:58 PM
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A nice demonstration of Liberal myopia and misunderstanding of the rule of law. Also a stellar example of how the MSM has lost its will and its way. Beck is doing the job that the MSM refuses and at this point is constitutionally incapable of doing: pressing the issues and asking hard questions.
When did Connecticut turn into Vermont? Who are these unsightly Socialists who embarrass themselves and their once great state?
This Blumenthal idiot goes a long way to show how the likes of Dodd can fester.
EMD on March 30, 2009 at 8:05 PM
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You know what should be the law… following the Constitution.
Wait… that is the law? Huh, too bad there are no AGs prosecuting that one. Guess they’re too busy on “public policy”
… wait… I thought that public policy was required to be the province of legislators while the judicial branch dealt with enforcement of the law?
I am so confused… should we ask the executive branch and see if he can figure it out?
Damiano on March 30, 2009 at 8:13 PM
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Wow, no wonder CNN got rid of Beck. Those pussies simply couldn’t stand watching a real man work the magic John Wayne used to bring to the screen.
Great stuff! Melted that POS on the constitution question. Liberals think they are above our laws. Beck just brought that dynamic to life.
Keemo on March 30, 2009 at 8:29 PM
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Glenn Beck isn’t doing it for ratings, he already has the ratings.
He’s doing it because its what’s right. This AG has no business trying to enforce ‘populist principle’ vs the laws he was meant to enforce.
The CT AG had no response as to what law the people that received the bonuses was breaking. Plain and simple.
And something tells me, this is just a prelude of things to come with this new administration and its cronies.
RedbonePro on March 30, 2009 at 9:19 PM
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People in Beck’s line of work do go over the top sometimes with weak facts or poor perspective, but this ain’t it. This A.G. is a disgrace and the arrogance and over reaching he is happy to engage in is as un-American as it gets. Beck did exactly what’s needed: ask the simple questions and insist on answers. I can not figure out why some people for the sake of appearing reasonable cannot get on board with that. All that’s needed for evil to succeed is for people to try and look smart when angry indignation is called for. If this public law enforcement official does not get you angry then you would probably be fine with a good police beating or railroad of an innocent fellow citizen. It’s all just fun right, as long as it’s not you being ground up in some politician’s ego trip. No news value to this? Really AP? Maybe when some capitalists get hung in trees… well maybe the first one anyway. Then: “ho hum, that again.”
bagoh20 on March 30, 2009 at 9:29 PM
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No news value? Asking a public servant, who’s job it is to win convictions in court for violations of laws passed by our government, which broken laws he is spending his time trying to prosecute has no news value in you’re mind? Don’t you understand that it is the responsibility of a free press to find out and question how government officials do their jobs? This guy spent a solid week grandstanding against someone else’s bonuses and promising the populist mob to stop payment on a legal contract. This has no news value for you Allahpundit? I think you should really rethink this, either that or just spend you’re time reading Frum rants, monitoring Meghen McCain’s twitter musings and watching The View.
Dollayo on March 31, 2009 at 12:04 AM
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Really? So who here thinks like this wanker blueneck? Again, I have yet to hear this supposed “conservative” list a cogent argument for what his beef with Beck is. Deflect the argument of who signs your checks by another slam on Beck. Punk. It’s bitches like you that make realize America is too wealthy. Only a society as affluent as ours can afford parasites like you. What do you do for a living? And what’s with the tooth polishing? Is the only “DR” you can think of a dentist? Are you even sure I’m in the health industry? What the hell does the “D” in “JD” stand for, punk? Howzabout the “D” in PhD? Wow. Go to the dentist for your prostate exams, do you?
drballard on March 31, 2009 at 1:02 PM
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Attention White House and Congressional hacks: If you get caught in bed with a hooker, it's too late to condemn prostitution!

Attention White House and Congressional hacks: You can't go hop into bed with a hooker, have your little party, pay her and then express shock, outrage, condemn the hooker and ask for your money back when the American Taxpayer finds outs what happened.

Considering the financial condition of AIG at the time the bonuses were officially given to their executives, and the fact that the American Taxpayer had already injected billions of dollars into AIG in an attempt to rescue the company, the bonuses were a hideous, immoral example of greed. Unfortunately, the bonuses were legal and contractually agreed upon by all parties.

I'm someone who has seen their 401k destroyed. I can't describe how disgusting it is to watch watch has gone on at AIG, in the White House and in Congress. However, I don't agree with the whiplash legislation to tax the bonuses at a 90% rate.

First of all, the White House, the Federal Reserve and our Congressional Representatives all agreed to the bonuses. Now they're trying to cover their rear end because they see the outrage of the American Taxpayer.

This article by Rep. John Campbell explains why he voted against the legislation for the 90% tax on bailout bonuses. I just read this morning that it appears the bill won't even be voted upon by the Senate. That's the right thing to do. We don't need anymore slippery slopes.
Rees

John Campbell's AIG Tax Vote Explanation

from the website The Club For Growth
by Andrew Roth

Here's Rep. John Campbell's explanation for why he voted "no" on the AIG tax bill. It's very well reasoned and principled.

I firmly opposed and voted “no” on HR 1586. Let’s first understand exactly what the bill does. It imposes a 90% federal income tax on any bonus paid to any employee of any company that has received over $5 Billion in federal rescue funds. Such companies include, Bank of America, Wells Fargo Bank, Chase Bank, JP Morgan, CitiBank, Morgan Stanley, Merrill Lynch, Wachovia, Washington Mutual, Countrywide, Goldman Sachs, AIG, Fannie Mae, Freddie Mac amongst others. The tax would only apply to people with total joint incomes over $250,000 or single individuals with income of over $125,000. When combined with California Income taxes which now top out at 10.55%, this can be a tax just short of 101% of the income.


Under this law, a bank teller at Wells Fargo could receive a bonus of $1,000 for doing a great job. If that bank teller was married to a physician who made $175,000 and they had some additional investment income, that bank teller would pay a tax of $1,055 on the bonus of $1,000 that they received for doing a good job. This is horrible!

This is not raising revenues, this is punishment. It is a terrible precedent to use the tax laws for punishment. If we go down this road, the government can impose a 100% tax on anyone they don’t like, or anyone they believe is paid too much. Employees of other companies, doing the same thing for the same bonus, will not receive this tax. That probably makes it unconstitutional and I hope it does.

I understand the public outrage over these bonuses and I share much of it. But this is not the way to fix it. Sue them to get the money back. But don’t do this.

You may or may not realize it, but embezzlement income is taxable today, but at normal rates. So if you steal money, you will not have a tax higher than normal. You may be forced to give the money back because you stole it, but it will not be taxed away from you. This bill makes a bonus from Bank of America a more egregious offense under the tax laws than bank robbery.

All of this was caused because we nationalized companies that are created to make a profit. Throughout time, governments have shown themselves to be particularly inept at such an enterprise. This is another example of why.
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Terence Corcoran: Is this the end of America? A Canadian Perspective

U.S. law-making is riddled with slapdash, incompetence and gamesmanship

By Terence Corcoran

from The National Post

Helicopter Ben Bernanke’s Federal Reserve is dropping trillions of fresh paper dollars on the world economy, the President of the United States is cracking jokes on late night comedy shows, his energy minister is threatening a trade war over carbon emissions, his treasury secretary is dithering over a banking reform program amid rising concerns over his competence and a monumentally dysfunctional U.S. Congress is launching another public jihad against corporations and bankers.

As an aghast world — from China to Chicago and Chihuahua — watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America?

Probably not. The U.S. economy has pulled out of self-destructive political spirals in the past, spurred on by its business class and corporate leaders, the profit-making and market-creating people who rose above the political turmoil to once again lift the world out of financial crisis. It’s happened many times before, except for once, when it took 20 years to rise out of the Great Depression.

Past success, however, is no guarantee of future recovery, especially now when there are daily disasters and new indicators of political breakdown. All developments are not disasters in themselves. The AIG bonus firestorm is a diversion from real issues , but it puts the ghastly political classes who make U.S. law on display for what they are: ageing self-serving demagogues who have spent decades warping the U.S. political system for their own ends. We see the system up close, law-making that is riddled with slapdash, incompetence and gamesmanship.

One test of whether we are witnessing the end of America is how many more times Americans put up with congressional show trials of individual business people and their employees, slandering and vilifying them for their actions and motives. And for how long will they tolerate a President who berates business and corporations as dens of crime and malfeasance? If the majority of Americans come to accept the caricatures of business as true, then America is closer to the end of its life as a global leader, as a champion of markets and individualism.

But America is at risk in other ways, especially in the technical business of setting and executing policy. The presidency of Barack Obama has set out on a course that has no precedent in U.S. history. Franklin D. Roosevelt, whose New Deal transformed the U.S. economy during the Great Depression, pushed America off on a sharply different political and ideological course. The Obama administration is different in many ways, not least in its supreme self-confidence in its methods and objectives.

Reform of health care, environmental policy, education, energy, banking, regulation — every nook and cranny of the U.S. economy has been put on alert for major change. Expansion of government spending, plunging the U.S. into unprecedented deficits, is without parallel. In economic policy, through regulation and control of energy output, financial services and monetary expansion, the U.S. government has embarked on a fundamental reshaping of America. It is designed, in short, to bring on the end of America.

The spillover effect of all this on the rest of the world promises to be dramatically disruptive. The greatest global risk is in monetary and currency policy. Below is a chart that graphically demonstrates the sharp deviation in monetary policy from past norms. Under the chairmanship of Ben Bernanke, the Federal Reserve is in the midst of a giant economic experiment, flooding the world with U.S. dollars, hoping that flood will stimulate economic activity.

The total monetary base, already at astronomical levels, is now expected to take another big hit with the new Fed policy of buying up U.S. longer-term treasury bills in a bid to drive down long-term interest rates.

Mr. Bernanke is sometimes known as “Helicopter Ben” because he once in an academic paper referred to the use of “helicopters” full of money to rescue an economy from deflation. In comments Wednesday to explain the Fed’s new policy of buying $300-billion in U.S. treasury bills, Mr. Bernanke noted that the Fed is now more worried about inflation being too low than about it getting too high in the future.

For the rest of the world, however, the worry is that America is at risk of becoming the fountainhead of a new inflationary outburst. The U.S. dollar is now in decline, gold is moving sharply higher, and new global currency turmoil is on the horizon.

It may not happen. A paper just published by the Federal Reserve Bank of St. Louis, source of the chart above, says that the Fed will have to be prepared to absorb all the excess money it has poured into the U.S. economy. It will be a technical and political challenge unlike any central bank has ever undertaken. The future of America is at stake.

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A Presidential Wake-Up Call

from Newsweek
By Eleanor Clift
March 21, 2009

The AIG mess should be a warning to Obama that even popular presidents can squander good will.

Who would have thought 55 days into this administration we would be asking the question, what did he know and when did he know it? Word that a provision in the stimulus bill gave the green light for AIG to hand out bonuses using taxpayer money sent the media bloodhounds hot on the trail of whoever is the culprit. For a time, it looked like Senate Banking chairman Chris Dodd would take the fall, but after 24 hours of twisting in the wind, Dodd said the change that exempted past agreements to pay bonuses was made at the request of the administration.

President Obama likes to remind voters that he inherited a mess, and that's true, but this one is of his own making. And until he comes up with a satisfactory explanation of who did what, when, and why, his credibility will suffer. Forty-eight hours ago, I didn't think Treasury Secretary Tim Geithner was in trouble, but if the transaction with Dodd turns out to have Geithner's fingerprints on it, his job could be in jeopardy. The deadly chain of events may have started innocently enough, with Treasury Department lawyers raising questions about the government retroactively curtailing private-sector contracts, but did Dodd, who authored the restrictive language, capitulate to some Treasury flunky, or did someone more senior lean on him?
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Mitt Romney on Larry King Live 3/19 - 2 Parts

Hannity & Giuliani discuss The Elite Liars Club: Dodd, Geithner, Obama

The Smoking Gun Points To Geithner

by Earl Ofari Hutchinson

On March 19, Treasury Secretary Timothy Geithner was bluntly asked by a CNN interviewer: "As far as you can remember, though, you did not know about this (the tainted AIG bonuses) before March 10th?"

Geithner answered: "On Tuesday, I was informed about the full scale and scope of these specific bonus problems. And again, as soon as I did -- but, you know, it's my responsibility, I was in a position where I didn't know about those sooner, I take full responsibility for that."

This is the official Geithner and Obama administration line. But it's just that -- a line. It's not the truth. The truth is that Geithner knew everything he needed to know about the AIG bonuses long before March 10, did nothing about them, and then feigned outrage when the truth came out. Here's the smoking gun proof.

September 2008. AIG officials made no effort to mask their intent to pay the tainted bonuses. They clearly spelled out in their required SEC financial filing that they would pay $469 million in "retention payments" to keep valued employees.

November 2008. Treasury and Fed officials negotiated the specific terms under which the bonuses could be paid. This even included cuts in bonuses for most of the AIG's top executives.

December 2008. Congressional Democrats attempted to hold hearings on the bonuses. Several House Democratic Reps went further. South Carolina House Rep Elijah Cummings specifically demanded that newly appointed AIG CEO Edward Liddy scale back the bonuses. Another House rep. publicly called for the resignation of Liddy.

February 2009. Geithner and top Obama team economic advisor Larry Summers pressure Connecticut Senator Christopher Dodd and other Senate lawmakers to excise a provision from the banking bailout legislation that bans excessive executive bonuses to executives at TARP funded companies before February 11.

February 2009. Treasury staffers publicly disclose that the Treasury, the Federal Reserve in Washington, and the New York Federal Reserve held continuous interagency discussions on all operations of AIG since September. Geithner headed the New York Fed during those months.

February 2009. New York Fed officials reiterated that they carried out direct oversight of AIG and that they knew all about the bonus payments.

March 3, 2009. In an open hearing before the House Ways and Means Committee, Geithner complains to New York Rep Joseph Crowley that executive bonuses have gotten out of "whack." He was referring specifically to the tainted AIG bonuses.

March 18, 2009. A Treasury spokesperson insists that Geithner did not know about the timing of the AIG bonuses. That's far different than saying that he did not know about them at all as Geithner insisted, and apparently continues to insist despite the smoking gun proof to the contrary..

Unfortunately, this also appears to be President Obama's position as well. He has stoutly defended Geithner. The question is how long will and should he continue to defend him in the face of the smoking gun proof of what Geithner knew about AIG and when he knew it.

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