Before D.C. Gets Our Money, It Owes Us Some Answers (Newt on the bailout)

The Corner at National Review ^ | 21 September 2008 | Newt Gingrich

[Brian S. Fitzgerald]

Q: HOW MANY DIVISIONS DOES THE AMERICAN TAXPAYER HAVE?

A: ALL OF THEM, IF WE ACT QUICKLY!

I have left phone messages for my two Senators and Congressman, and now am preparing faxes to send today in opposition to the ONE TRILLION DOLLAR BAILOUT!

[KoRn]

Wise words from Newt regarding this “crisis”.

Actually this is far from a “crisis”. Banks have failed before, and other banks pick up the pieces. Sure there is some pain, but life goes on.

We are about to turn this into a REAL crises by screwing up the market with the inevitable unintended consequences.

[SE Mom]

God in heaven Jim, I pray you’re right. The problem is how mis-informed the electorate has become about the nature of freedom, the rule of law and the duty of citizens.

Already- if you listen you can hear the MSM beating the drums with the liberal talking points “not enough regulation”...”what about the little guy facing foreclosure...”

[upchuck]

Newt has expressed all my thoughts on this and then some.

In addition, IMHO, the Feds should not do anything. Let the markets take care of this. When was the last time the Feds tried to influence something and the outcome was good? Their track record, frankly, sucks. Explain to me how this will be different?

[brityank]

Bump for reference.

Amen, Newt !!!

[SE Mom]

How will it be different? I don’t know. The electorate is at odds with itself as to the cause and desired outcome.

The blaming has started and it will color all attempts to solve and rebuild.

As yet- I’ve not heard one elected person stand up and say- we failed the country, we take responsibility for our part.

[ebiskit]

If they want the bailout, we want the FAIRTAX!!!

Quid Pro Quo...

It’s the only thing that will recover the economy with enough strength to rescue us from our pol’s profligate ways. Without the innate power of DC being seriously curtailed, we will only see more of the same ol, same ol. The Fairtax WILL be a game changer and recalibrate the balance of power back to the people. This a ‘populist’ issue and can be effectively manipulated as such.

the Deets

[ConservativeMind]

SOX is not a problem with anything to do with this. The purpose of SOX is not to prevent stupid decisions from being made. It is to assure there are controls in place to prevent fraud and assure people within the company are held accountable for fraud.

It is definitely an expense for companies, but it has also been a needed set of internal changes because a number of companies never bothered to put in place reliable controls, through policies and procedures made after simple analysis.

It is much harder for fraud or other internal issues to bring down a company in unexpected ways now, thanks for Sarbanes-Oxley.

[ConservativeMind]

SOX has nothing to do with preventing stupid decisions based on credit.

It does hold CEOs accountable for the accuracy of their financial information, and reduces opportunities for fraud.

Unfortunately, our current crisis has nothing to do with these.

[NVDave]

Then you’re not paying attention.

What are we to make of i-bank CEO’s who come out and tell us, only a couple of weeks before their collapse, that they have “adequate capital reserves” - and then earlier in the same week that they collapse that there is “no problem, they have sufficient reserves” — and within 10 days they’re busted?

When a CEO makes such pronouncements in public, they’re making a statement of financial condition.

For a great first example, just go back and review the statements of Chuck Prince (former CEO of Citi) from August to November, 2007.

When the company is taken out as a result of insolvency, that’s a lack of capital, right?

So the CEO was lying. Flat-out lying about the finances of the company.

And that is a violation of SarBox.

[NVDave]

Here’s another great example:

http://www.reuters.com/article/ousiv/idUSN2930358920080730

Thain’s flip-flops on capital. They didn’t need more — just before they needed more.

[Earthdweller]

Sounds great. Now if only Congress would do all that in a timely fashion. I’m not holding my breath.

[ConservativeMind]

There is no SOX violation withing what you've alluded to.

Financial investments with a value can quickly have that value changed. For instance, one could say they have $1 million in the bank today, but have that bank go insolvent tomorrow, leaving them with $100,000 from the FDIC as all they will see. Does that mean the individual was lying when they said they had $1 million? Not at all.

The same has basically happened with the banks, investment houses, and insurance companies around this recent collapse. Their quarterly reports, which would have been signed off on by their CEOs, could all have been in good order, but with extreme financial circumstances, fallout affects many. Their last statements were totally in order, and their upcoming ones can be in perfect order, even though their situations greatly changed.

SOX prevents problems, financial, and otherwise, but it doesn't stop people from making mistakes in judgment on investments.

[Texas Songwriter]

It seems Gingrich asks a very important question. The Repbulicans and dems are uncharacteristically silent in pointing to the culprit in this mess. Could it be they are all textbook cases of Congressional malfeasance and simply do not want those questions asked and answered. Is there no honest Patriot in all of Congress?

[Wilhelm Tell]

Mark Levin said that members on congress on both sides of the aisle will try to prevent any investigation because Congress will never take responsibility for anything.

We will have crooks bailing out crooks under cover of a national emergency. We are about to get a system of crony capitalism/fascism and the ironic thing is that these "progressive" Democrats are the chief ones who are leading us to fascism.

[Eva]

“Progressive” is just a euphemism for socialist. There used to be an essay on the Democratic Socialists of America web site that explained how the term “progressive” came to be used to connote socialist. The explanation was that the socialist party realized that they needed recruit “Negroes” (Black was not a term that was commonly used when the term progressive was invented, but it was used in the essay). Anyway, the socialists claimed that the Blacks didn’t understand socialism and that the word was enough to turn them off, so, they came up with the term, “progressive”. This essay was posted along with the names of all the members of the Progressive Caucus in Congress and the explanation that the members of the progressive caucus were also members of the DSA.

[Tolik]

Nailed It!

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Disclaimer: I am NOT an expert on finance beyond basic economics (as learned from Thomas Sowell and Walter Williams). What Newt proposes sounds very reasonable. Let me know if you can prove it he is full of it.

[Loud Mime]

In the historical context, “We the People” meant the writers of the Constitution; i.e.: politicians. It’s inclusion of the run-of-the-mill citizenry is questionable; look what they’ve done.

The preamble was written by Gouverneur Morris and was never debated; it was a last minute addition to the Constitution.

[stylin_geek]

Jim,

I agree Newt with the elimination of the cap gains tax.

I think eliminating cap gains would allow business to take care of itself without government deciding who wins or loses.

This would get government out of the way, reward businesses for being successful, give a break to struggling companies and punish failing businesses, because a failing business has no cap gains to report.

Paulson’s bailout strikes me as being Keynesian economics in the extreme, in that government would wind up deciding winners and losers.

[Jim Robinson]

I think Paulsen, et al, are in a panic. Cooler heads need to prevail.