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Thursday, June 13, 2024

Who Do We Believe?

I was speaking with the secretary of the church I attend, and she narrated the following incident: Her son is a registered Washington lobbyist and he tells his mother, “If you want the folks in Washington to enact legislation, then you’d better make a contribution to the Senators’ or Representatives’ reelection campaign, or you won’t get your foot in their door.”

 I contrast the lobbyist perspective with the Senator who appeared on the financial news channel and said, “My colleagues in both parties are dedicated to serving the public.”

Which one do we believe? I lean toward believing the secretary’s son, the lobbyist.The vast majority of Washington’s elected are attorneys. Yet, the US Government is one of the largest global businesses. For example, our government has a worldwide impact on agriculture, banking, commerce, transportation, etc., and our country would be better served by decision makers elected from the business community.

 The Senator went on to say, “His colleagues were dedicated to serving the American public.”

I would agree with the Senator that anyone who is elected to Washington, to serve the public for one term, should be admired. But those who seek reelection, those that cannot accomplish their agenda, in one term, and those that are addicted to prolonging their stay in power should be despised.

 Why does a career politician believe that none, not one, of our three-hundred million Americans be given a chance to lead this nation? Why do they believe that only they know what is best for your family?

 Today President Obama again attacked the banks for their failure to lend to the small business community. Yet, we also learned that taxpayers’ $750 billion dollar bank bailout was, “ONLY made available to the largest and least likely banks to fail.” The purpose of our government’s loan program, “Was to curtail the run on bank deposits.” But the action that ended the run on banks was raising FDIC insurance to $250K (Federal Deposit Insurance Corporation).

The public was then reassured their cash was safe, regardless of financial institution. Many banks claimed, “They were forced to take the TARP funds.” Many financial institutions never withdrew one dime from federal assistance. They left their TARP line of credit untouched on the books of the US Treasury. Yet, they repaid millions to the federal government.

The current administration claims they are collecting repayment of TARP funds, plus interest.

Now think about this one, ultimately who gives the government its money? It’s either you or me! When we tax businesses, they pass the tax on to their customers. Americans need to, “Wake up and smell the coffee.” Higher taxes and bigger government sucks the life out of capitalism. It is the private sector, not governments, that provides us with a higher standard of living.

The more interesting aspect of today’s disclosures are: (1) individual investor were not allowed to participate in bank recapitalization; (2) taxpayer money, TARP dollars, were used for bank acquisitions; and (3) banking lobbyist are hell bent to reduce the number of American banks.

If Washington legislates 8,000 banks down to 20 financial institutions, then your elected and career politicians, that claim they represent your best interest, have created a banking cartel. And, the people who own that monopoly take a lot of our money.

The banking community employs 2.5 million workers. Collectively they are one of the US largest employers.

Small businesses create sixty percent of our employment. It is business growth that drives bank lending. Bank lending does not drive business growth. Banks have plenty of money to lend, but they must be repaid. Yet, Obama claims the banks are not lending and in the next breath his administration demands banks increase their capital requirements. If you legislate an increase in bank capital, the result is less dollars to lend.

Banks are subject to financial legislation and at this moment the rules are changing. Yet, our elected officials chose to duck reining in Fanny May and Freddie Mac. Ninety-five percent of home loans pass through these mortgage- guarantee corporations. These quasi-government entities are projected to yearly lose about $1.2 trillion taxpayer dollars. None of Washington’s elected would risk legislating the housing market in an election year. After all, they are career politicians and you, the taxpayers that are on the hook for the $1.2 trillion loss.

In a global economy, how do US employers compete with offshore production? When we elect lawyers to run our country, we end up with a proposal to inflate our way to prosperity. Inflation increases the price of commodities and wages. In the short run, this quick fix may be used to reelect the incompetent. But in the long term, the number of US unemployed will definitely pick up mass, as the snowball of displaced workers rolls downhill.

Note: CSMS Magazine and the author are not in the business of providing financial services or advice. Prior to investing, readers must seek professional assistance.

Andrew Robbins is the author of: It Took My Breath Away; One Man’s Experience May Save Your Life. He may be reached by email at: awrobbins1@earthlink.net

Comment this article or e-mail it to a friend.
Also see It’s Your Money, The Way I See It (Part VII)

It’s Your Money, The Way I See It (Part VI)

It’s Your Money, The Way I See It (Part V)

It’s Your Money, The Way I See It (Part IV)

It’s Your Money, The Way I See It (Part III)

Also see It’s Your Money, The Way I See It (Part II)  

It’s Your Money, The Way I See It  

 Telling us the truth: Bailing out Wall Street or bailing out the country?

The financial crisis in the US and the mirage of an enlightened global capitalism

Global stock markets stumbled in the aftermath of the Wall Street downslide on Monday

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