If one was looking for fiery, crowd pleasing, political rhetoric from former Speaker Newt Gingrich as he addressed CPAC today, they were likely disappointed. What Gingrich did do was run through a litany of policy solutions he claimed he has committed to implement immediately upon taking office in January of 2013.

Contrasting an America that can versus an America that can’t, Gingrich compared America’s speed and might in winning WWII versus her current inability to seal its own border. In a lighter moment, the former Speaker contrasted the efficiency of package tracking by Federal Express with the government’s inability to track illegal immigrants, suggesting sending each one a package may be the best way to apprehend the latter.

He also mentioned repealing Obamacare, Dodd Frank, and Sarbanes Oxley on his first day in office. He stated his desire to be a “paycheck president” versus a “food stamp president,” a term he used to denigrate Barack Obama.

Calling for a Fall campaign focused on substance, Gingrich also mentioned eliminating the Capital Gains tax and implementing 100% expensing for all new equipment written off in one year to help get the economy growing. Additionally, he called for a modernization of the workforce, proposing that unemployment compensation be linked to business training programs to avoid paying people for 99 weeks “for doing nothing.” (more…)

Just over a week ago in an article I published here in Big Government: “New California Budget Crisis May Torpedo November Tax Increase Initiative.” The article illuminated how State Controller John Chaing had shocked California’s spendthrift politicians by announcing the State would be out of cash beginning March 8th and would miss up to $5.4 billion in vendor payments through May 1st. The timing of the Chaing announcement was disastrous for state politicians; because it destroyed any hope that Governor Jerry Brown’s $6 billion tax increase initiative on the ballot in November would pass.

Now it appears that Brown successfully lobbied for California to get $6 billion in cash and siphon off a total of $18 billion from the $25 billion mortgage settlement with the five largest U.S. banks, who were accused of fraud in the handling of foreclosures and loan modifications. But as Franklin Center Fellow, Steven Greenhut asks in a deliciously sarcastic article: “Why should a taxpayer in Houston or Wichita bail out irresponsible California homeowners, banks and the state’s public employees’ retirement fund?” Greenhut highlights that the mortgage settlement money is really just another accounting entry, because the real source of cash to fund the “Left Coast” is “implicitly via Federal Reserve/Government coffers.”

Most Americans still snarl about crony capitalism when they think of multinational banks taking $1 trillion slurp of taxpayer’s hard earned cash and then paying themselves record bonuses, while hiking fees and cutting off borrowers. But with the United States President and Congress solemnly telling Americans healthy banks were key to our future, most Americans gritted their teeth and came together to bail-out of banks, insurance companies, and other financial firms.

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Steve understands that while we’re trying to work our way out of this economic crisis, we have to hold the financial industry accountable to prevent the next one. That’s why Steve wrote a bill that would have taken back the bonuses paid to top executives at Wall Street firms – like AIG – that received federal bailout funds. (Source: Steve Israel For Congress Website)

Did you ever wonder where a self-proclaimed corporate raider and Occupy Wall Street supporter such as Congressman Steve Israel gets his campaign donations from?

According to Open Secrets, Israel has raised $1,581,081 for this election cycle (2011-2012), of which $15,790 comes from small donors, the “average Joe” like you and me.

Another $965,850 was raised from his top 100 donors, an all-star team of big labor and big business; many of those businesses from industries, which based on his committee assignments, Israel is supposed to be overseeing (including those Wall Street firms he talks about on his campaign site). The following takes a look at the donations to his reelection campaign and political action committee (PAC).

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On Tuesday, the New York Republican State Committee issued a press release blasting Sen. Kirsten Gillibrand (D-NY) for cosponsoring a ban on insider trading when her husband shorted housing stocks 34 times and made a “killing” during a period when she was “privy to inside information.”

The New York GOP press release reads in part:

When New York’s junior senator Kirsten Gillibrand (D-WFP) was a member of Congress – and privy to inside information on a plethora of topics – her husband “shorted” housing stocks at least 34 times , making a financial killing for the couple, as millions of Americans saw the value of their homes abruptly plummet. The Gillibrand’s timing in betting against the housing market was conspicuously perfect, the New York State Republican Party today noted.

Now, Senator Gillbrand is purporting to be a champion of reform against “insider trading” among members of Congress – using the issue to raise money for her re-election campaign.

A May 2010 article published by the Wall Street Journal confirmed that Sen. Gillibrand’s husband, Jonathan Gillibrand, did execute more than 250 transactions in options in 2008:

Almost all the trades were in put options, which convey the right to sell a stock or other instrument at a given price until a given date. At least 34 times, Mr. Gillibrand bought puts on stocks of home builders, including Beazer Homes USA Inc., Hovnanian Enterprises Inc., Meritage Homes Corp. and Ryland Group Inc. These were bets the builder stocks would fall; if they did, the puts’ value would rise.

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Former New Jersey Governor Jon Corzine had little trouble finding $500,000 in his role as a top Obama campaign bundler, but locating the missing $1.2 billion in customer funds he oversaw as the head of MF Global funds is proving far more difficult–impossible even, reports the Wall Street Journal.

A person close to the investigation told The Journal that a “significant amount” of customers’ money appears to have “vaporized”:

Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.

Many officials now believe certain employees at MF Global dipped into the “customer segregated account” that the New York company was supposed to keep separate from its own assets—and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

During a House hearing in December, Mr. Corzine said he “doesn’t know” where the $1.2 billion went or is.

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Republican presidential candidate Newt Gingrich has come under fire, including from Judicial Watch, for his controversial relationship with mortgage giant Freddie Mac in the years after the former House Speaker left Congress. The issue is especially sensitive in Florida, which has been described as “ground zero” of the housing crisis. Voters take to the polls in the “sunshine state” today in the Republican primary. (Judicial Watch does not endorse or oppose candidates for office.)

Gingrich initially said in debates and press interviews that Freddie Mac paid his company as much as $25,000 per month for his services as a “historian.” He has since switched that term out for the more standard “consultant.” But the documents released by the Gingrich campaign suggest he may have been more than a “consultant.”

Politico reports:

New details from Newt Gingrich’s contracts worth $1.6 million with Freddie Mac show that the Republican hopeful wasn’t just a boardroom consultant, but served as a high-profile booster for the beleaguered organization. He even gave a rallying speech to dozens of the group’s political action committee [PAC] donors in the spring of 2007.

Shortly after the “rah, rah” speech, as one source described it, Gingrich gave an interview for the Freddie Mac website, where he supported the group’s model at length. The interview is no longer on Freddie’s site.

Gingrich said in the interview that Freddie has “made an important contribution to home ownership and the housing finance system,” even though many Republicans revile it.

And so these records seem to suggest that Gingrich, who described the Freddie Mac business model “insane” on the campaign trail, had a different tale to tell when Freddie Mac was filling his corporate bank account.

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President’s appointment of liberal former Ohio Attorney General Richard Cordray to head the powerful Consumer Financial Protection Bureau (CFPB) was a direct assault on the Constitution and the law causing constitutional scholar Jonathan Turley to remark that President Obama has surpassed Richard Nixon in “the development of an imperial presidency of unchecked executive powers.”

Cordray is well aware that the Constitution provides the president with the power of appointment when the Congress is not in session.  But the Congress was not in recess when the President appointed Cordray.  Adding insult to injury, the 2010 law that created the CFPB included a section that says many of the bureau’s new powers are to be held by the secretary of the Treasury “until the Director of the Bureau is confirmed by the Senate.”  The Senate, obviously, never confirmed Cordray.

Despite these constitutional and legal roadblocks, Cordray has assumed the full power of the office and has started the process of regulating the economy in earnest.

In Birmingham, Alabama, Cordray held a field hearing laying the groundwork for a regulatory assault on the short-term lending industry, as well as, the mortgage and student loan industry.  Cordray seems unconcerned of the constitutional and legal challenges ahead.  He told the Hill newspaper, “I’m going to leave that to others … lawyers are digging into it,” when asked if his appointment would survive a legal challenge.  But he added that “the position was long overdue to be filled.” “We’ve got a lot of work to do for the public to make these markets function effectively,” he said.

Cordray, in a few sentences was able to articulate the president’s view of the Constitution and the economy.

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OLYMPIA — State government stores money at Bank of America, buys goods with U.S. Bank cards and distributes welfare aid through JP Morgan Chase ATMs.

Supporters of cutting such ties to big banks say the first step is to create a state-owned bank.

The idea of a state bank — a favorite of the Occupy movement that sees it as an alternative to Wall Street — has strong support among the Democrats who control the state House. Speaker Frank Chopp called it a top priority last week in a speech opening this year’s session of the Legislature.

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I’ve written several times about a proposed IRS regulation that would force American banks to put foreign law above U.S. law. I’ve repeatedly warned that the scheme, which would force financial institutions to report the deposit interest they pay to foreigners, is bad economic policy, bad regulatory policy, and bad banking policy.

My arguments have included:

• Explaining that this onerous regulatory scheme will result in capital fleeing to other nations, needlessly harming the financial sector and putting American banks at risk.
• Explaining why the proposal is a threat to human rights since many foreigners keep money in the United States because they live in nations with unstable and/or repressive governments.
• Explaining that the IRS action is a gross abuse of the regulatory process since an executive branch agency does not have the authority to overturn laws enacted as part of the democratic process.
• Explaining that this proposed regulation is just the beginning, and that proponents hope to issue follow-up rules that would cripple policies making America a haven for global capital.

But these points don’t seem to matter to the Obama Administration, which is ideologically committed to the anti-tax competition agenda of Europe’s welfare states. This is why the White House supports all sorts of destructive policies, including not only this misguided regulation, but also the creation of something akin to a world tax organization that will have power to block free-market tax policy.

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Forty-four of 46 Republican Senators vowed they would not approve “any consumer financial bureau director unless the agency was put under a five-member outside board, had its work checked periodically by bank examiners and had its budget approved by Congress rather than the Federal Reserve.”

So when Republicans refused to confirm the President’s nominee, Richard Cordray, to head the Consumer Financial Protection Bureau, America’s number one duffer shouldn’t have been surprised.

Senate Republicans maintained that voting down the nomination of Cordray had everything to do with the Dodd-Frank financial reform agency lacking oversight, and nothing to do with the candidate Obama chose to head it up. In other words, Republicans wanted to take consumer protection a step further than the President was willing to go, vowing that they’d agree to confirm a director, but not before additional consumer safeguards and supervision are put in place.

As for Obama’s nominee Richard Cordray, besides being the former Attorney General of the state of Ohio and acting as chief enforcement officer at the Consumer Financial Protection Bureau for the last year, Cordray is a five-time undefeated Jeopardy champion. Which may be why, when chiding Republicans for blocking his appointment, the President kept mentioning game playing.

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The untold story of the Obama Administration’s widely reported, $335 million discrimination settlement with Countrywide Financial Corporation is that, under a secret Justice Department program, a chunk of the money won’t go to the “victims” but rather leftist groups not connected to the lawsuit.

The Department of Justice (DOJ) will determine which “qualified organizations” get leftover settlement cash and Democrat-tied groups like the scandal-plagued Association of Community Organizations for Reform Now (ACORN) and the open-borders National Council of La Raza (NCLR) stand to get large sums based on the hastily arranged deal which got court approval in just a few days.

Judicial Watch has investigated this controversial arrangement and in 2010 sued the DOJ to obtain information about the policy directing big portions of cash settlements from its civil rights lawsuits to organizations not officially connected to the cases. In response to JW’s lawsuit, the DOJ was forced to acknowledge that it has no official guidelines regarding “qualified organizations” that get leftover settlement funds and that it doesn’t monitor how the money is used.

In the Countrywide case, details of the unscrupulous arrangement are buried deep (page 10 of the 17-page settlement) in the court document where Bank of America’s Countrywide Financial Corporation agrees to pay to resolve allegations that it discriminated against qualified black and Hispanic borrowers. The lender denies all of the charges, but wanted to end the case and caved into the government’s terms.

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President Obama is hoping to capitalize on his controversial decision to appoint Richard Cordray as director of the Consumer Financial Protection Bureau. Less than 12 hours after making the announcement, Obama’s campaign sent a fundraising email seeking up to $2,500 from supporters.

The purported “recess” appointment enraged conservatives because the Senate isn’t even in recess. Senators never passed a resolution to adjourn, meaning it is officially still in session.

That didn’t dissuade Obama, however. Now the president is seeking to use the publicity to raise money for his re-election campaign.

“We can’t afford to continue allowing Wall Street to write its own rules. But today’s action by the President is already coming under partisan attack, which we expect to intensify in the days to come,” wrote James Kvaal, national policy director at Obama for America, in Wednesday night’s email.

The fundraising pitch was disguised as a petition to supporters. Only when recipients click on the link to “stand with President Obama and Richard Cordray” and sign the petition are they taken to a fundraising page with a form to donate up to $2,500 to Obama.

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(Reuters) – President Barack Obama plans to use a recess appointment to install Richard Cordray as head of the country’s new consumer financial protection watchdog, sidestepping Republican congressional opposition to his pick.

“Today in Ohio, President Obama will announce the recess appointment of consumer watchdog Richard Cordray,” White House communications director Dan Pfeiffer announced in a tweet.

The Consumer Financial Protection Bureau was created by the 2010 Dodd-Frank financial oversight law to police the market for consumer products such as credit cards and mortgages.

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Senate Republicans have been holding up the confirmation of Richard Cordray to head the new Consumer Financial Protection Bureau until changes to the agency’s structure are made to provide oversight and accountability at the agency. But sources from inside the Capitol tell Capitol Confidential that a recess appointment of Richard Cordray to head the unconstitutional CFPB could come as early as tomorrow.

“We have been hearing consistently from the Senate offices that the President is considering a recess appointment of Richard Cordray along with a slew of other controversial nominees in the brief period between the two sessions of Congress,” a key Senate source said. “Now we are hearing from Senior Democrat staffers that something big is coming tomorrow [Jan 4].”

Article II, Section 2 of the Constitution provides the president with the power to “fill up all Vacancies that may happen during the Recess of the Senate.” The problem for the president and his liberal allies is that the Senate has not recessed and technically remains in session. However, liberal groups are pressing the White House to invoke the “Roosevelt Option” to stack key government positions with radicals ready to carry out an anti-business, pro-big labor regulatory agenda. The Roosevelt Option is coined from the actions of Teddy Roosevelt who in 1903, in a split-second between two congressional sessions of Congress, made more than 100 recess appointments. In 2012, Congress will need to move from the First Session of this current Congress to the Second Session. Liberals claim the fraction of a second between the sessions is enough to trigger presidential power.

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Last year, I came up with a saying that “Bad Government Policy Begets More Bad Government Policy” and labeled it “Mitchell’s Law” during a bout of narcissism.

There are lots of examples of this phenomenon, such as the misguided War on Drugs being a precursor to intrusive, costly, and ineffective money laundering policies.

Or how about government healthcare subsidies driving up the price of healthcare, which then leads politicians to decide that there should be even more subsidies because healthcare has become more expensive.

But if you want a really stark example of Mitchell’s Law, the internal revenue code is littered with examples.

The politicians created a nightmarishly complex tax system, for instance, and then decided that enforcing the wretched system required the erosion of civil liberties and constitutional freedoms.

The latest example of this process involves the Foreign Account Tax Compliance Act, a piece of legislation that was imposed in 2010 because politicians assumed they could collect lots of tax revenue every single year by getting money from so-called tax havens.

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The same man who oversaw MF Global’s $1.2 billion in missing funds, Bradley I. Abelow, is also currently listed on the Environmental Protection Agency’s website as the current chairman of the EPA’s Financial Advisory Board.

From the Washington Times:

During two days of recent congressional hearings into how as much as $1.2 billion disappeared from MF Global customer accounts, the chief operating officer of the imploding investment firm responded again and again that he did not know.

Yet as the House and Senate interrogated Bradley I. Abelow and other top executives at MF Global Holdings Ltd., lawmakers did not mention Mr. Abelow’s role as a financial adviser for the Environmental Protection Agency, which as of Tuesday listed him as the chairman of its financial advisory board.

Even as he finds himself the public face of a bankruptcy and admitted to lawmakers that he had no idea how client funds disappeared, Congress and the administration have voiced no public concern about Mr. Abelow’s role advising the $8.6 billion government agency on its finances.

Mr. Abelow also served as former New Jersey Governor Jon Corzine’s chief of staff before Mr. Corzine went on to become MF Global’s CEO.  Interestingly, current EPA Administrator Lisa Smith also previously served as then-Gov. Corzine’s chief of staff.  Whether the Corzine connection played any role in Mr. Abelow’s appointment to the chairmanship of the EPA’s Financial Advisory Board is as yet unclear.

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China is suffering a brutal economic “hard landing” as the pay-back for their massive Keynesian stimulus spending to revive economy growth after the 2008 credit crisis. China’s stimulus bought two years of economic boom, but the cost of this instant gratification was unleashing venomous run-away inflation that forced the central government to hammer the economy this year. Touted by most Wall Street analysts as the world’s engine of growth, we now learn that regional Chinese governments are so cash-strapped they are refusing to make interest and principal payments on their bond debt. Given the state integration of banks and the economy, if Chinese local governments are unable to pay their debts, who will bail-out China’s economy?

China Daily reported this morning: “China’s biggest provincial borrowers are deferring payment on loans just two months after the country’s regulator said some local government companies would be allowed to do so.” After the economy shrank by 8% during the 2008 worldwide credit crunch; Chinese authorities responded with epic spending of borrowed money. Adjusted for the differences in size of economies, the China stimulus was twice the size and happened in half the time for the U.S. stimulus programs. But now that the world’s economies have again stalled and the European sovereign debt crisis is about to spark a deflationary spiral, the cash-flow of China heavily indebted provincial governments has evaporated.

China’s Zhou Mubing, Vice-Chairman of the China Banking Regulatory Commission, announced in October the first Chinese national audit determined local governments had $1.7 trillion dollars in debt. Given China has 1/3 of the GDP as the United States, Chinese provincial government debt is twice the debt load of U.S. state and local governments. More than half this debt was issued in the last three years and Chinese state-owned-banks hold 79% of the debt.

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The European Sovereign Debt Crisis that morphed into the European Banking Crisis is about to morph into a powerful worldwide deflationary spiral. The bankruptcy of MF Global, a former primary dealer for the U.S. Federal Reserve, has propelled a growing electronic bank run as many depositors have lost faith in the liquidity and solvency of many of their financial institutions. The banks, brokers and other lenders are responding by firing bankers to slash costs, selling off assets, and curtailing lending. As borrowing becomes more difficult large companies and virtually unavailable for smaller firms; production will fall and unemployment will rise.

On February 2, 2011 MF Global was accepted as one of the 21 “primary dealers” for the U.S. Federal Reserve Bank on the strength of the economic and political clout of Jon Corzine, former CEO of Goldman Sachs and Governor of New Jersey. Primary dealer is a formal title for the world’s most elite financial institutions that are allowed to act as direct market-makers with the U.S. Federal Reserve System (“the Fed”). The stellar credibility of this designation gave the firm inside access about funding requirements for the U.S. budget deficit and implementation of Fed monetary policy. Primary dealers legally use this information to distribute debt of the U.S. at home and around the world.

Less than eight months later on October 30, 2011, MF Global announced a “material shortfall” in client funds. The next day regulators froze assets and the company filed the 8th largest bankruptcy in U.S. history with $1.2 billion of missing customer funds. What creditors are now learning is the “hypothication agreements” banks routinely require their customers to sign, allow banks to re-hypothecate customer funds to invest repurchase agreements (repos).

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In all this debate, I fear both parties have missed a critical point.

Both versions of this bill impose a permanent new tax on every mortgage backed by Fannie Mae and Freddie Mac.

To pay for an additional two months of tax relief under the Senate version or 12 months under the House version, more than $3,000 of new taxes will be imposed on every $150,000 mortgage backed by Fannie or Freddie.

A family taking out a $250,000 mortgage will pay $5,000 more in taxes–directly and solely because of this bill– hidden in their future mortgage payments.

This is atrocious public policy.

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From Bloomberg:

Daniel Mudd, the former chief executive officer of Fannie Mae, andRichard Syron, ex-CEO of Freddie Mac, were sued by the U.S. Securities and Exchange Commission for understating by hundreds of billions of dollars the subprime loans held by the agencies.

The lawsuits filed today in Manhattan federal court were followed by an SEC statement that it had entered into non- prosecution agreements with each lender. Fannie Mae, the government-sponsored enterprise which issues almost half of all mortgage-backed securities, and Freddie Mac, the McLean, Virginia-based mortgage-finance company, had “agreed to accept responsibility” for their conduct, the SEC said.

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