The Hill reports that Senator Vitter wants to use this legislation to slam the door on state and local bailouts by the federal government.

With the State Bailout Prevention Act, Vitter is looking to make legally binding an earlier commitment from Fed Chairman Ben Bernanke that the central bank would not make loans to states and municipalities struggling with budget gaps and large debt burdens. Testifying before the Senate Budget Committee on Jan. 7, Bernanke said states “should not expect loans from the Fed.”

Vitter is memorializing the Bernanke promise into law.  Because of Bernanke’s promise, one should expect the Federal Reserve to wholeheartedly support this effort by Senators Vitter, DeMint and Crapo.  This law would make it the iron clad promise of the federal government not to use taxpayer money or taxpayer backed loans to prop up, bail out and otherwise enable state and local governments in deep financial distress because of irresponsible budgetary decisions.

The legislation is a comprehensive effort to shut the door on all of the federal government’s financial tools available today to bailout states and localities.  This legislation follows on the heels of the termination of President Obama’s “Build America Bonds” (BABs) created in the President’s so called “Stimulus” plan.  The BABs were tax free federal bonds that served to provide a rolling blue state bailout for states that have spent more than they take in.  The BABs expired at the end of 2010 and conservatives blocked all efforts to renew these bonds.

The Vitter bill will stop states on the verge of bankruptcy, like California or Illinois, to secretly borrow hundreds of billions from the Federal Reserve to push to the future tough budgetary cuts.  The Vitter bill is just what the Tea Party doctor ordered for America and this hopefully is evidence of a trend on Capitol Hill for politicians to just say no to more and more government spending.

The Hill further reports that earlier this year both Republican and Democrat leaders have closed the door on legislative bailouts.

House Majority Leader Eric Cantor (R-Va.) said state and local governments already have all the tools they need to shore up their budgets. House minority whip Steny Hoyer (D-Md.) has agreed that the federal government will not step in to rescue state budgets.

The Vitter legislation makes good on that promise.  Vitter said in a press release that taxpayers were exposed to billions in risk when the Fed bailed out failing banks and they should not have the power to do the same for irresponsible state and local governments.

The Federal Reserve has already put taxpayers at serious risk in recent years by unilaterally propping up failing banks and other financial entities, and by no means should the federal government be in the business of bailing out state and local governments that are in the red.

The legislation uses three methods of preventing bailouts.  Section (a) of the Vitter legislation prevents federal funds from being used to bail out any state that is at risk of default.  This is an effort to prevent the whole federal government from bailing out a State, municipality, locality, county.

Notwithstanding any other provision of law, no Federal funds may be used to purchase or guarantee obligations of, issue lines of credit to, or provide direct of indirect grants-and-aid to, any State government, municipal government, local government, or county government which, or or after January 26, 2011, has defaulted on its obligations, is at risk of defaulting, or is likely to default, absent such assistance from the United States Government.

The next section is more specific to prevent Treasury Secretary Tim Geithner from using Treasury authority to bail out states or localities.  Section (b) of the bill prohibits the Department of Treasury from directly or indirectly bailing out those at risk of default.

The Secretary of the Treasury shall not, directly or indirectly, use general fund revenues or funds borrowed pursuant to title 31, United States Code, to purchase or guarantee any asset or obligation of any State government, municipal government, local government, or county government, or otherwise assist such government entity, if, on or after January 26, 2011, that State government, municipal government, local government, or county government has defaulted no its obligations, is at risk of defaulting, or is likely to default, absent such assistance from the United States Government.

The last section targets the Fed and makes good on Chairman of the Fed Ben Bernanke’s promise.  Section (c) of the legislation prohibits the Federal Reserve from repeating the mistakes of the past.

Notwithstanding any other provision of law, the Board of Governors of the Federal Reserve System shall not provide or extend to, or authorize with respect to, any State government, municipal government, local government, or county government, or other entity that has taxing authority or bonding authority, any funds, loan guarantees, credits, or any other financial instrument or other authority, including the purchasing of the bonds of such State, municipality, locality, county, or other bonding authority, or to otherwise assist such government entity under any authority of the Board of Governors.

Vitter concluded that “it’s encouraging that the chairman believes that the Fed shouldn’t get involved in bailing out states, but my legislation solidifies that into law.”  This bill is a comprehensive means to shut the door on State and local bailouts.  It will be interesting to see how quickly Congress acts on this proposal and if the Fed flip-flops on the Bernanke promise.

Let’s review some of Casey’s recent steps.  Casey met with the Teamsters union back in March 2010 and the “Create Jobs and Save Benefits Act of 2010” bill’s branding became apparent:

Casey, a Pennsylvania Democrat, explained that his legislation is important to protecting pensions and saving jobs. It’s also important to keep promises made to retirees, he said.

“We have to fulfill our obligations,” Casey said. “Pensions are a basic commitment to workers and their families that they will be there for them.”

The bill will strengthen the trucking and other industries. It will change the pension funding rules so employers won’t have to make payments that could force them into bankruptcy. Employers can use their savings to hire and retain workers.

In addition, according to the press release, Teamsters Local 776 shop steward Dave Wolf added:

“It was fraud and corruption on Wall Street that caused the crash,” Wolf said. “Now working people are losing their jobs and their pensions because of it.

John B. Taylor, professor of economics at Stanford and senior fellow at the Hoover Institution would disagree with Wolf on the cause of the crash citing the federal government as the leading cause of the crash.  There are many others who would agree with Taylor as well.

Moreover, why not allow these companies to file for bankruptcy protection and restructure?  The answer, simply, is that when bankruptcy happens, the union contracts can be renegotiated.

When you look at his family history, the Casey’s always championed the unions and big government, but managed to recently package it rather inconspicuously.  When, in fact, Casey realizes the power of the unions and their money as seen in this video:

My, how “blessed” he is indeed.  And it’s also nice to know his loyalty goes to the unions as it clearly is not to his non-union constituents.  Maybe if the unions would demonstrate some fiscal campaign donation discipline of their own, they could fund their own pensions instead of taking it from their neighbors.

Casey may have an uphill battle to retain his Senate seat if he treats his constituents like ATMs to protect the unions using hard-earned taxpayer dollars.  When the non-union wage earners get hit and have to continually make adjustments to their budgets, but the unions get a blank check on the backs of the private sector, it is going to be very hard for Casey to effectively fool the voters again.  I’m sure he’s hoping PA voters will forget by 2012.  They won’t, because we will remind them.

Photo credit: Associated Press

The corrupt Shorebank bailout has pitted one faction of the left against another. On the one side are those like Geithner, who are starting to wake up to the grim economic reality that bailouts and corruption have imposed on our nation. On the other side are those like Schakowsky, who are determined to borrow, spend, and tax our nation into penury in order to chase their radical ideals and reward their political cronies.

The dividing line between the two factions is not based on ideology, but circumstance: those with actual responsibilities are the ones getting cold feet. Even Rep. Barney Frank (D-MA) was prepared to allow an investigation of ShoreBank and other bailouts into the financial regulation  bill, until that amendment was killed in Senate negotiations at the last moment by those determined to cover up the role of the White House in the affair.

Schakowsky and other Chicago politicians who have lobbied for the ShoreBank bailout claim they are acting on behalf of a bank that serves needy communities. What they refuse to explain is why ShoreBank is the only community development bank they have campaigned and lobbied for, out of all the community development financial institutions in America that would be eligible for the $1 billion set aside within TARP for their benefit.

Schakowsky did not try to bail out Park National Bank, for example, which failed last year and had a distinguished record of addressing the needs of low-income customers. Nor has she tried to help banks in her own community, such as Bank of Lincolnwood, which was an iconic symbol in the 9th congressional district. This year alone, 11 banks have failed in Illinois, and 86 nationwide. None received the help ShoreBank is getting.

The Treasury is backing away from ShoreBank because of the mounting political and financial cost of supporting it. Schakowsky and other Illinois politicians are determined to save ShoreBank because of what might be revealed in an audit if it were allowed to fail. This is the classic pattern of failed hegemonic political movements, left or right: they fall apart not over differences of principle, but over the rapidly dwindling spoils of power.

The facts of the ad are indisputable but not to Alexi Giannoulias and his trial lawyer buddies. They sent this letter to the stations demanding censorship because they claim the FDIC bailout of the Giannoulias family owned bank was not a “bailout.”

Letter to Station and System Managers[1]

The Giannoulias family bank — Broadway Bank — used its depositors money to loan money to the mob characters and fugitives of the law. Those benefiting from the lending practices of the Giannoulias family include Boris Stratievsky, a fugitive of the law who built a money laundering network received received more than $10 million from Broadway Bank. Giannoulias bankrolled Michael ‘Jaws’ Giorango, a Chicagoan twice convicted of bookmaking and promoting prostitution.

It’s little surprise that the Broadway bank failed, needing the FDIC to come in and rescue depositors money. That, my friends, is a bailout. Without the help of the Feds, depositors would have been ruined.

Comcast Chicago has blinked and are refusing to run the ad. Whether citizens ever get to see this ad, one thing is for sure, the Giannoulias campaign has made a fatal error by entering this debate. They have given the ad more attention that it might have gotten and they have awakened Illinois citizens about the scandal.

SEIU Debt Ceiling

Debts are increasing at every level of the SEIU purple conglomerate. SEIU’s national headquarters reported that at the end of 2008, its total liabilities grew to $156 million, a total debt increase of $36 million from the prior year. And, about $60 million of its assets are receivables owed to it by SEIU affiliates.

Even though SEIU’s national headquarters reports receiving $247 million in dues revenue called “per capita taxes”, much coming from workers who would be fired if they did not pay, its combined “Representational,” “Political,” “General Overhead,” “Union Administration,” “Benefits,” and “Gifts” activities cost the union $285 million.

With the ACORN kerfuffle staining SEIU’s purple branding and causing it to spend resources on an unanticipated public relations problem combined with a continuing costly push for ObamaCare, SEIU resources are under increasing pressure.

And like the politicians he endorses, Stern continues to spend and borrow rather than live within the union’s means or pay down debt. Clearly he is focused on the mother lode of SEIU public sector membership drives, also known as ObamaCare or PelosiCare. SEIU’s own public estimates reveal that nationalization of health care could quadruple its membership, even if it costs a million of its current members their jobs.

But, are these ceaseless campaign cycles and continuous pumping of SEIU’s income into politics going to payoff?

The number of places where Stern can borrow millions is diminishing and may explain SEIU’s progressively more cozy relationship with Amalgamated Bank’s holding company, also known as UNITE-HERE. In 2008, SEIU’s national headquarters borrowed $15 million from Amalgamated.

Corzine Could Open Up BofA Doors to SEIU Organizers

In his years as Governor, Corzine gave Big Labor pretty much everything it demanded (not to mention his special gifts to one union boss), and he may consider helping out SEIU bosses for old time’s sake.  He could quickly enter into a card-check forced unionism agreement with Stern that would eliminate the opportunity for employees to vote in a secret ballot certification election.  This is a cornerstone to SEIU’s corporate campaigns and BofA has been an SEIU organizer’s target in the past.

Would Corzine as Bank of America CEO help SEIU out of its loan? Corzine perfectly fits the SEIU politician mold. William F.  Buckley, Jr. described Corzine as the “Universalist Candidate … to read from his own campaign literature: Universal health-care coverage; ‘Universal long-term care;’ ‘Universal quality public education;’ ‘Universal gun registration and licensing;’ ‘Universal access and opportunity.’”

Yes, a move to Bank of America could create a delicious opportunity for Mr. Stern. However with a $45 billion U.S. taxpayer investment in BofA and another $118 billion in assets guarantees, it is an expensive opportunity that should be avoided.

Winery receives federal stimulus grant

Musicians more effective communicating in noisy environments than non-musicians, according to findings of a National Science Foundation study

Only 20 percent of Americans hold positive view of government

Research company receives millions of dollars of congressional earmarks and has nothing to show for it

Federal program touted as a model for using local law enforcement to help control U.S. borders is handing out $165 million, but with little tracking of how the money is spent, no clear objective and no benchmarks for success

The Federal Housing Administration may be next government agency to seek a taxpayer bailout

It continues to bailout homeowners doing more of the same policies that put us in this mess in the first place. The government now plans to bailout seniors and small businesses and it won’t be long before Obama proposes to bailout children. Also,  as the debate over health care reform continues, we are left to wonder: how much is this going to cost us? One trillion dollars or two?

But as I am listening to the hearing on executive compensation and TARP special master (how crippy is this title?), I realize we are now officially living in a world that resembles an Ayn Rand novel. One man, one unelected government official, not even a Cabinet member confirmed by the Senate, has the power cut the pay of executives in private businesses by 50 percent or 90 percent in the banks the government now “owns.” A single individual is given too much power without accountability. But more importantly, this charade  masks the fact that the world we live in has nothing to do with capitalism. It’s nothing more than crony capitalism. The government went around bailing out out automobile companies that were producing cars that people didn’t want to buy, bailing out banks that were careless with their capital and assets, and bailing out homeowners that couldn’t afford the houses they were buying.