Obama is doing the same thing to pass his financial reforms as he did to pass his health care reforms. To start the takeover of the US health care system he made a boogeyman out of Blue Cross after it raised premiums in California. Now hes kicking off his takeover of our financial systems by crucifying Goldman Sachs. Of course, just like with health care, this is not about reform its about government control.
I wont spend a lot of time on the specifics of the Goldman Sachs situation. Let me just predict that nothing will come of it for several reasons:
1)Too many key Obama people (including Treasury Secretary Geithner) are closely tied to Goldman Sachs, or actually worked there when the supposed wrong-doing took place.
2)The SEC has known about the situation for well over two years, but has done nothing because no specific statute was violated.
3)A few days before Obama gave his kickoff speech for the financial reform bill, the SEC suddenly brought charges against the company, making it abundantly clear that it was a publicity stunt. Even the liberal news media like MSNBC commented on the suspicious timing of the charges.
What I would like to talk about today is the tactic of misdirection that Obama and the Congress have decided upon with regard to the recent financial meltdown. Dont ever forget that Obama is a lawyer, and that there are more attorneys in Congress than any other profession. So it should come as no surprise to you that the tactic they have decided to employ is one that lawyers often use to get guilty clients set free in court.
You see, the guilty party in the financial crisis is the US Government, aided and abetted by the cabal of private banks known as the Federal Reserve System. Although these parties have not been formally charged in any court (and will never be, since the guilty parties control the courts), enough people know the truth that Obama and his cronies find it necessary to defend themselves in the court of public opinion.
Remember those courtroom dramas you see on TV where the lawyer knows his client is guilty of murder, and he tries to cast suspicion on someone else? He doesnt have to actually prove that the other person is guilty of the murder; under our legal system all he has to do is create reasonable doubt.
Well, lawyer Obama has got this tactic down cold. Let me digress by discussing ObamaCare for a moment. Do you really believe that insurance companies caused the huge inflation in medical costs? If you examine the premise using critical logic and a little thing called facts, it is ludicrous. The monstrous price inflation in medicine began when the government got involved in medicine through Medicare and then Medicaid. Before the government got involved in medicine, medical inflation was about the same as general inflation. It has doubled and tripled it since. Now that Obama has gotten his way, look for costs to rise even more and services to decrease as doctors and medical facilities come under government control and competition vanishes.
Obama is using the very same tactic to take over our banks, brokerage firms, mutual funds, and eventually every insurance company, and the country is too passive to realize what is happening. The talking heads on TV keep calling this pending Socialization of our financial systems reform like the parrots they have become, just as they called ObamaCare reform.
NOTHING was reformed with the 2,700 page health care bill. Not one of the real reforms that would have actually improved the health care system of America was included only provisions that tightened the iron glove of government control over our lives and destroyed further freedoms. And NOTHING will be reformed by this new financial legislation if Obama has his way. We will simply move a giant step closer to a centrally planned economy like the old Soviet Union.
Doesnt anyone find it ironic that after Communism failed so dismally in the USSR and Cuba, and China has had to allow capitalism (albeit under Communist control) to survive, we have a president who is doing everything in his power to move us away from a market-based economy to a totally government controlled economy?
Whether Obama is a full-blown closet Marxist or just a Socialist true believer in the One World Order, he is definitely not stupid. His tactic of accusing the financial institutions of the governments own crimes is working. Just as it was easy to whip up populist anger against the big bad insurance companies, he is doing an excellent job of inciting hatred against the cruel, heartless, vicious Wall Street executives who delight in throwing families out of their homes and kicking homeless people on their way to work (to hear him tell it).
What he forgets to tell us is that he took many millions of dollars from these terrible people, and continues to do so. And that he was involved in a crooked mortgage deal with one of them that made him millions (how soon we forget).
The main thing he neglects to mention is the most important historical fact about the whole financial-credit-mortgage crisis-meltdown. It was entirely, completely caused by government action.
I have written other articles on this subject, and it would take too long cover it in detail here, but here is the Cliff Notes version of the real cause of 2008:
1)In the 1930s FDR, a true Progressive, started the ball rolling by beginning the shift of our government form a Republic to a Socialist system. He took us off the Gold Standard, which disconnected the dollar from Gold, allowing the politicians to freely buy votes by printing money without the Constitutional restraint of having the money backed by precious metals. And he passed Social Security, which began the Government must support me mindset that has polluted our thinking and left us with $50 Trillion in unfunded liabilities (more than three times the amount of our National Debt).
2)In 1977 Jimmy Carter passed the Community Reinvestment Act with the laudable goal of discouraging discrimination in mortgage loans. However, as always happens when government gets involved, the Law of Unintended Consequences comes into play. Instead of encouraging lenders to make loans to more minorities, the government ended up mandating loans to people who clearly did not qualify for loans, and who did not have the ability to repay them. He also started requiring most mortgages to be approved by government lending agencies like Fannie Mae and Freddie Mac. Prior to this most mortgages were approved in the local community, where the bankers knew the borrowers. With this takeover by nameless, faceless government bureaucrats the default rate on mortgages started to skyrocket.
3)Bill Slick Willie Clinton completed the damage done by the well-meaning peanut farmer. Instead of giving minorities 95% loans, he started forcing banks and mortgage companies to give 110% and even 120% loans. In other words, they would get 100% of the money needed to but the home, plus another 10% or 20% to fix it up with. In most cases these were interest-only loans, because that was the only way the borrowers could make the payments. A typical situation would be a family living in a one-bedroom apartment and paying $500 in rent. They would be given a loan on a three-bedroom home, with interest-only payments of $750 per month. If they were careful, they could make the extra money they got back at closing last for quite a while and pay the extra $250 per month. But after five years, when the interest-only period ended, and the normal principal-plus-interest payments of, say $1,000 started to become due, they often just walked away. After all, they had nothing to lose. They normally had bad credit, which was why the government had to force the bank to give them the loan. And they had paid nothing down, so they had no skin in the game.
Friends, our Congress is made up by and large of men and women who cannot make it in the business world. If they could, they would be there. There may be a few exceptions, but the day of the public servant who takes a few years off from his business to serve his country, and then goes back to being a productive citizen are long past. The great majority of these people start campaigning for their next term the day they are elected. They are there to gather as much power as possible, get on the best committees, make deals, and then get their payoffs in the form of directorships in the very companies they helped while in office. In most cases their salaries as part-time directors at several companies are larger than their Congressional salaries were.
My point? They know nothing about business or finance. At least there were a few doctors in Congress when they passed ObamaCare (although they didnt listen to them). This bill is going to be a nightmare. Having these know-nothings write major legislation that will radically change our financial landscape will be like having me make the rules for major league baseball. (I dont know the difference between a shortstop and a quarterback.) I am frankly frightened at the prospect.
I do know one thing. Obama has his eye on your 401k and IRA. There is no way he can pay for the huge bills Congress is passing without confiscating your retirement money. As you know from his slip with Joe the Plumber, he thinks everyone should be equal. Why should you have a better retirement that a guy who only has Social Security just because you worked hard, contributed to your retirement plan, and managed it well so that it grew several hundred per cent?
If Obama gets a second term, I believe he will roll our 401ks and IRAs (including SEP-IRAs and ROTH IRAs) into the bankrupt Social Security system, all in the name of fairness. He may even do it in on term, unless we sweep Congress in the coming election and take away his absolute control over our government.
If you have money in these types of retirement plans, I will be teaching several Webinars for www.ChristianFinancialConcepts.com over the next few months on how to get your money under your own control. There are several provisions in the law that you can take advantage of, particularly before the end of 2010. If you would like to attend the Webinars (or listen to some of the Archived ones), write to Webinars@Bellsouth.net. In many cases you can roll all or part of your 401k money out even though you are still employed where it is held.
Earlier in this article I described the true genesis of the financial crisis we have just gone through. The government did it to us. And if we allow it, they will do it to us again. Look around the world. Government controlled economies have never worked. And they never will.