Private Equity Firms Have Infiltrated Almost Every Industry

The invisible money power behind these secretive private equity firms are the same international bankers that engineered the worldwide banking crisis, with the goal of consolidating the world's wealth into their hands.

Inequality in the United States Has Hit a New Level (Excerpt)

By Henry Bloget, Business Insider
October 11, 2011

People with high incomes receive income from multiple sources, particularly investments which are taxed at a much lower rate than earned income from labor. There is nothing fundamentally wrong with capital gains/investment income, a.k.a. unearned income; the issue, however, comes in its distribution and recognizing that investment income is not representative of value that is created by the recipient; rather, it represents value that was created by other people. Millions, and ultimately billions, of people creating value, significant percentages of which are funneled to a few thousand people, is what makes the wealth of the world's richest people possible.

The vast majority of the income of the wealthiest individuals comes from investment income since this is the only way that such high incomes can be generated. High incomes are generated through investments not due to the contributions of the individual investor, but because investment income is a product of collective wealth generation, whereby value created by millions of people is transferred to single individuals. Everything comes back to capital ownership and control. So all of the highest incomes in America (and generally around the world) are products of massive systems of collective production, in which significant portions of collectively-produced value is funneled to a relatively small number of people.

When we look at a breakdown of income type by income group, it's clear that the wealthiest Americans receive a significantly higher portion of their income from capital than the vast majority of other Americans. When we look at the distribution of income vs. tax receipts by type, however, we see that despite the fact that capital income is by far the primary form of income for the wealthiest Americans, the tax burden falls disproportionately on income from labor. The form of income that is most heavily concentrated among the wealthy was taxed the least, while the form of income that was dominant among working class Americans is taxed the most. This has actually been the case ever since the so-called Reagan Revolution. The tax burden on capital was significantly reduced during Reagan's presidency and has been reduced further since his presidency in following with the trends established during the Reagan Revolution.

More Americans today own some kind of investment, but far fewer stocks are owned directly by individuals, and average individuals who do directly own stocks own such small amount that their voting rights are meaningless. The amount of stock (including mutual funds) owned by most American stock holders is very small, less than $10,000, while the wealthiest Americans own billions of dollars worth of stocks each. The majority of stocks owned by Americans in the bottom 80% of the income population are owned inside of retirement plans like 401(k)s and IRAs.

While about half of Americans own stocks, the majority of those Americans are taxed at the higher wage rates on their investment income because most American's investment income comes only from their retirement plans. Likewise, with the growth of individual retirement accounts since the 1980s, it means that more of the capital that individuals do own is locked up in retirement accounts, and is thus not a source of income for most Americans until after age 65.

What many Americans don't realize is that income from these retirement plans is taxed as though it were wage income; it is not taxed at the lower capital gains tax rates. The idea that around half of Americans "own stocks" is used to support the low capital gains tax rates, when in fact the only people paying those rates are individuals who generate income from investment outside of retirement plans, which is almost exclusively wealthy Americans.

Despite rapid growth in the number of Americans owning stock over the past 30 years, the reality is that there is continued and growing disparity in capital ownership and investment income. Yes, more Americans own at least some form of stock today than ever before, but this hasn't translated into more equal distribution of capital ownership overall or of investment income. In fact, the wealthiest Americans receive a larger share of investment income today than any time in American history, aside from just prior to the market crash of 1929.

The so-called democratization of stock ownership has not lead to democratization of capital control, because despite the fact that more Americans own stocks today than ever before, the vast majority of that stock ownership is through mutual funds which are controlled by institutional investors, who in the end gain greater control and influence via the use of other people's money.

The only people with meaningful investment income prior to retirement are wealthy Americans.

Will Private Equity Be the Next Meltdown?

By Barbara Kiviat, TIME
November 24, 2009

Over the past decade, some 3,000 U.S. companies have been bought by private-equity firms. Their M.O.? Suck up companies with borrowed money, make them more efficient and then resell, turning a profit in the process.

These days, nearly 1 in 10 nongovernmental employees works for a private equity–owned company, and that, says longtime industry reporter Josh Kosman, is a big problem. In his new book, The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis, Kosman argues that private-equity firms not only pillage the companies they buy, but also put the broader economy at risk by making those companies take on copious amounts of debt.

TIME's Barbara Kiviat spoke with Kosman about where he thinks the industry is headed.

You predict that private equity will go through a shakeout similar to what we've seen in the housing market. How does that analogy work?

Private-equity firms used the same cheap credit to buy companies that caused the housing bubble.

There are about 100 of these firms — KKR, Blackstone and Carlyle are some of the bigger ones — and they buy a company the same way we would buy a house. Put down about 20% and borrow about 80%. The big difference is, the company they're buying borrows the 80%, so they're the ones responsible for repayment. These loans were structured the same way and sold to the same people as mortgages. And the same kind of crazy prices were paid, so unfortunately we probably are going to see a private-equity meltdown just like what we saw in the housing market.

How bad do you think it will get?

The opinions on this shift, but the Boston Consulting Group in late 2008 predicted that about 50% of the companies bought in leveraged buyouts would default on their debt. If half default, and they fire about half of their workers — not the most aggressive estimate — then you're talking about 1.9 million unemployed.

Why haven't we seen more evidence of this yet?

I think the media hasn't put it together, but it actually is starting. The default rate for the past 12 months is roughly 12% — that's very high. Half of those companies that have defaulted, according to Standard & Poor's, had some type of private-equity involvement in their corporate life. A lot of those are PE-owned companies, ranging from Chrysler to the Tribune Company to Simmons Bedding. We've already seen the tip of the iceberg.

More broadly, what sorts of companies should we be worried about?

Unfortunately, private-equity firms infiltrated almost every industry — industrials, consumer goods, retail, hospitals, utilities — so a leveraged-buyout bust will be very widespread. TXU, which is now called Energy Future Holdings, one of the largest utilities in Texas, faces huge problems. They probably won't default on their debt until 2013, but at this point, and this is according to ratings agencies, it looks like they have very little chance of paying their debt. The range is from a huge utility like that to HCA, the largest hospital chain in the country.

And you think the private-equity industry will be the next one to line up for bailout money?

Yes. It's already happened with GMAC. You know, private-equity firms are very well connected. Four of the last eight Treasury secretaries currently work for private-equity firms.

Is there anything we could do now to prevent this wave from coming?

Probably not much. One of the main points of the book is to show how private equity and leveraged buyouts don't work, and even if the credit crisis I'm predicting doesn't happen — even if the economy recovers and some of the companies can refinance and push their debt off — the core practice is still destructive.

Many of these companies will fall apart anyway. In the 1980s, when Michael Milken was funding buyouts, 52% of the biggest 25 companies acquired ended up going bankrupt. I did a study of the 1990s, ideal economic times, and with 6 of the 10 biggest buyouts, the companies clearly were worse off 10 years later. In three cases the results were mixed, and in one case the private-equity firm improved the business.

This decade, 6 of the 10 biggest buyouts are already considered distressed, according to Moody's. The core practice does not work and rips apart our economy.

Fairy Tales of Recovery, Reality of More Failures

By Bob Chapman, The International Forecaster
September 3, 2009

The Illuminists are desperate. They are appealing the Bloomberg directive to reveal who received funding from the Federal Reserve to keep from going bankrupt.

In addition, HR 1207 (Federal Reserve Transparency Act) will pass in the House this month. The question is in what form. No matter what happens, the Illuminati know we are hot on their trail. They have to do everything possible to end the depression, or go for broke.

Thus far there has been little recovery even with an official $23.7 trillion committed by the Treasury and the Fed. This number alone shows you how serious this situation is.

The banking sector is still broke and is using TARP funds to buy out failing smaller banks. The residential TARP funds returned will go toward helping bail out the collapsing commercial real estate industry. Quantitative easing has not worked, nor has TARP and the endless stream of money from TALF.

We are anxious to see if the FASB sticks to its guns and demands mark-to-market accounting. That will pull the cover off of the fraud known as mark-to-model, which really is mark to whatever you want it to be.

As you can now see this is a much deeper problem than a subprime problem - that just triggered events. As we pointed out before, we are still facing a new wave of subprime loans written over the past year by FHA, Ginnie Mae, Fannie Mae and Freddie Mac, plus ALT-A, Option ARMS Pick-and-Pay Loans, and the failure of prime loans that will stretch to 2013.

On top of that, we have commercial real estate loans now to deal with and credit card failure. This is what the Illuminati crime syndicate has brought you in their lust for more power and riches. We must not forget as well, standing in the wings, are America’s creditors, especially the Chinese who are dumping $25 billion to $100 billion in dollar denominated assets monthly. Their goal is to be out of dollar paper in another 1 1/2 years.

Then there are the other sellers. There are few buyers, so the Fed will have to monetize trillions of dollars in dollar denominated bonds, which presently they are doing secretly. It is no wonder they are terrified of an audit, which would not only uncover their illegal activities, but also expose their leadership and participation in the outrageous suppression of gold and silver prices.

The status of foreign creditors could turn on a dime. We predict they will abandon ship one at a time, as the dollar slips lower and lower. The Fed and the Treasury have tried over and over to keep the USDX, dollar index, over 80 for weeks, and they have been totally unsuccessful. It settled this past Friday at 78.31, just ready to break to new lows. We wonder how long these countries will tolerate such arrogance and the dream of world government? One must remember these countries are suffering the fallout of the actions that have been deliberately executed by these Illuminists, and they are not happy about that. They are all suffering recession and many depression. It is only a matter of time before they too dump dollar denominated assets.

We would like to say for individuals caught up in this mess worldwide, other currencies are not the answer. Only gold and silver related assets are the answer. Remember that, for in the final analysis, all currencies will fall in value versus gold and silver, and there are no exceptions. We have been there before and seen that, so do not be deluded into going into other currencies, or shares in foreign markets denominated in other currencies; they are not the answer, only gold and silver are.

Then we hear the fairy tales of recovery in the US, Europe and Asia. If you spend enough money you can create a recovery, albeit of short duration. No one is out of the woods. Europe, particularly the eurozone, has cut issuance of money and credit to 3.7%, but they are maintaining interest rates at 1%, which is in reality ½%. The European recovery will be a parallel movement for a year, and without more cheap money or an increase in money and credit, it will die and wither away.

Then there are the ongoing real estate collapses in the US, Ireland, Spain and in the Persian Gulf. There could be a bank panic or holiday in any of these regions. If a panic occurs, the first liquid asset sold will be US Treasuries and Agencies and the US dollar. This would spread terror in Frankfurt, Paris, London and NYC. All these stock exchanges could collapse as well.

The world is about to find out that free trade and globalization has been a disaster.

The millions of jobs lost in the US and Europe, so that transnational conglomerates could prosper, is in the final stages of death. The redistribution of wealth from the rich to the poor countries is about to end in a shattering smash-up. The myth of worldwide prosperity is about to end.

Contrary to prevailing thought, the biggest losers will be world exporters, such as China, which has already seen a 40% fall in exports. All the money and credit creation we have seen in China over the past seven months, some $1.9 trillion, isn’t going to work. They still face 30 million unemployed. Those jobs are not going to return for a long time, if ever. Out of desperation, there eventually will be tariffs (legislated in the US, Europe and in other countries), and inflation will rise as a result.

In America, the safety net of the FDIC doesn’t exist. It is virtually broke, and that is why, a few months ago, unofficially the FDIC asked government for $500 billion. Putting this into perspective, about $700 billion would insure about 1% of all the qualifying deposits in the US.

Not only will the Federal Reserve Transparency Act, HR-1207, pass the House, but also it will pass the Senate, because you are going to write every Senator demanding that they pass it.

If passed, we will see our gold inventories. We’ll find out what toxic garbage the Fed has been buying from banks and what they have paid for it. We will find out every company that received funds and how they were spent. We will subpoena every piece of correspondence, fax, e-mail, and phone calls the Fed has ever made. We will get a real balance sheet; not some version the GAO approved. Wait until the public sees how the Fed and its owners have looted the people for almost 100 years.

Two Republican lawmakers, Darrell Issa, (R-CA) and Rep. Spencer Bachus, (R-OK), House Financial Services ranking members, are seeking an audit of the trust that manages the government’s controlling stake in AIG.

Three more U.S. banks failed on Friday, bringing the total to 84 so far this year, as the industry continues to grapple with deteriorating loans on their books. Regulators shuttered Affinity Bank of Ventura, California, Bradford Bank in Baltimore, and Mainstreet Bank of Forest Lake, Minnesota, which in total are expected to cost the government’s deposit insurance fund about $446 million. 



The Federal Deposit Insurance Corp. on Thursday reported that the insurance fund’s balance stood at $10.4 billion at the end of the second quarter. But the agency also noted that the figure was adjusted to account for $32 billion set aside for expected failures over the next year. FDIC Chairman Sheila Bair said this week that bank failures will remain elevated as banks go through the painful process of recognizing loan losses and cleaning up balance sheets. The total of 84 failures this year marks a sharp rise over the 25 last year, and the three failures in all of 2007.

We stated long ago the somewhere between 3,400 and 4,200 banks would go under, and the FDIC would spend trillions of dollars to cover the loses. A loss of 3,400 banks would lead to losses of over $33 trillion.

The FDIC now has foreign banks and private equity groups about to engorge themselves on failing US banks. Worse yet, rather than cash, the FDIC is allowing these financial firms to use equity, which is unprecedented. The use of non-cash collateral assets is being used because the purchasing banks are broke; and without TARP, not only could they not buy anything, but they’d probably be out of business.

What Ms. Bair has done has been to expedite the takeover of banks by bigger banks and involved the use of foreign banks as well as private equity partnerships.

As far as we are concerned, as a foreigner, you have to be deranged to buy dollar denominated assets with the massive monetization of agency securities, collateralized debt obligations, and treasuries going on, never mind the underhanded secret deals the Fed is involved in to fund their markets. If we can understand what the Fed is up too, so can these foreigners. That is what a more than $600 billion swap facility is all about, including suppression of foreign currencies in order to bolster the strength of the dollar.

This month, September, a great confusion will begin. The occupation of Iraq will continue, more troops will be sent to Afghanistan, and Pakistan will become another major battleground. Terrorism will be used to continue to propagandize the American public, along with Cap & Trade and medical reform and the Swine Flu fiasco. These are all distractions to keep the publics’ eye off the continued failure of our financial system.

Deflation continues to eat away at assets, except for gold and silver, and the Fed creates money and credit to offset deflation’s savages.

The torrent of money and credit has pulled some nations, at least temporarily, out of the negative decline on GDP. Japan, France and Germany are examples. The question is when will their economies run out of stream? Probably when they attempt to raise interest rates. In the case of the eurozone, the expansion of money and credit has already fallen 3.7%.

The global economic crisis, now more than two years old, has allowed governments to run banking and financial systems in a usurpation of power over the individual and private property. What we are facing is perpetual crisis and intended government control. There will not be a return to normality. Next will come food shortages and rationing, and one epidemic or pandemic after another.

We wonder what will happen when the public finds out that all these problems were preplanned by the Illuminati. Then comes the control of all labor. Government is now spending 185% of tax receipts. The budget deficit will be between $1.6 and $2.00 trillion for fiscal 2009, ending on 9/30/09.

For those who hadn’t noticed, yoy commercial real estate values fell 27% and are off 36% from their October 2007 peak. We'll see a total drop of 70% to 75% from the highs, when all is said and done. Refinancing has to be found for $165 billion in properties by the end of the year, which is impossible, even with leftover TARP funds.

Deflation has prices somewhere between minus 2% to plus 5% worldwide as imports and exports have fallen over 30%. As an example, in Los Angeles, the busiest port in the US, imports have fallen 16.9% yoy. It is the exporters who are getting hit the hardest and some have cut prices in the process.

The only thing that keeps a veneer of equilibrium is the massive creation of money and credit pumped out by central banks worldwide. We said we had entered depression this past February; and just as when we called the beginning of recession two years before, no one shared our opinion. If we are not in depression, than what is the significance of 20.8% unemployment, a factory utilization level of 65%, and continued massive foreclosures?

As we have said over and over again, the Fed, Treasury, Wall Street and banking are in a box and they cannot get out. They deliberately created this horrible situation, and there is no going back. It is impossible to reverse the process. We are in an economic and financial depression. The palliative supposedly is bigger budget deficits and credit expansion into infinity. We are going to see a replay of the 1970s. Inflation will catch up and overtake deflation one more time, but in the end deflation will prevail.

Fiscal spending is running wild, and our president predicts a budget deficit of $9 trillion dollars over the next ten years. The Congressional Budget Office (CBO) says spending has to be cut 8% permanently over the next several years. In July alone, federal spending rose 26%, as revenues fell 6%. Corporate tax receipts fell 58%, as individual revenues fell 21%.

The official economic contraction is the worst since the great depression. Can you imagine what it really is? 9.4% unemployment is front-page news, but you didn’t hear about the 4.7% loss in salaries and wages of 4.7% for the 12 months ended in June. There are more government employees now than all those employed in manufacturing and construction.

How is it that state employees now make 40% more than the average income in non-governmental jobs? What a perversion of government. It is no wonder that the US poverty rate is higher than in Mexico and Turkey.

FDIC Revises Rules to Favor Takeover of Banks By Private Equity Firms

Reuters
August 27, 2009

U.S. regulators backed down from the tough stance they took a month ago on rules for auctions of troubled banks, clearing the way for more private equity bidders to come back into the game.

A capital requirement for private equity investments in banks was lowered to a Tier 1 common equity ratio of 10 percent, from the 15 percent Tier 1 leverage ratio previously proposed.

The regulators also dropped a requirement that investors serve as a "source of strength" for the bank they buy, which critics said could have put them on the hook for more capital if the institution struggled.

A cross-guarantee proposal — meaning if an investor owns more than one bank , the FDIC can use the assets of the healthier bank to cut losses from the one that has faltered — was modified to only include investors that had an 80 percent common ownership of the two banks...

"On the whole, it's favorable to private equity. It's positive in terms of attracting private equity money," said Brett Barragate, a partner with the Jones Day law firm...

The FDIC also said it would seek comment about whether to phase in the impact on banks' capital requirements of an accounting change that requires institutions to bring off-balance sheet assets back on their books.

A New Abuse on Wall Street

By Robert Kuttner, The Boston Globe
August 11, 2009

...One new abuse that should be stopped before it spreads: big private equity companies, which are largely unregulated, are hungry to take over failed banks. Their argument is that the banks need new capital, and the private equity firms have it. But this is a profoundly bad idea.

Today, the FDIC is sitting on an inventory of failed banks that it needs to unload, and an insurance fund that it needs to replenish. Enter shadowy and unregulated private equity outfits like the Carlyle Group and Blackstone Capital, who are circling like vultures. The FDIC has done the hard part — at taxpayer expense: it has eaten the losses and cleaned up the failed banks’ balance sheets, making them appetizing targets...

In earlier deals, the FDIC has bent its own rules somewhat: it doesn’t permit any single private firm to own a bank, but in the $32 billion collapse of Indy Mac last year, the agency permitted a consortium of private equity firms to be the buyer.

Last month, the FDIC proposed to toughen its policy. It put out a draft policy statement for comment, signaling that it would prefer to merge failed banks with other banks, or to find investors other than private equity conglomerates. It proposed to prohibit self-dealing by firms acquiring failed banks, and to exclude firms based in offshore tax-havens. And if a private equity firm acquired a bank, it would be required to have higher ratios of capital because of its inherently riskier business strategies.

The private-equity companies have mounted a fierce lobbying campaign to soften the terms, arguing that the banking industry needs the capital. But the FDIC, the rare agency in this whole crisis that has put the public interest first, should hold the line.

In financial crises, conflicts of interests by insiders tend to mutate. We got into this mess, after all, because federally guaranteed banks were behaving like compulsive gamblers. Let’s not repeat these abuses in new forms.

SEIU Proposes New Rules for Private Equity Investments in Nation's Struggling Banks

Service Employees International Union
August 22, 2009

With private equity firms publicly calling for radical change to banking regulations that would ease their investment into the nation's struggling banks, the Service Employees International Union (SEIU) today proposed new rules to protect consumers and working families against the buyout firms' riskiest practices, strengthen long-standing consumer protections, and support stronger banks.

The new principles called for by SEIU — the fastest-growing labor union in the Americas and a leading advocate for better private equity and banking practices — directly address recent moves by a number of leading private equity firms to win special treatment by the Federal Reserve allowing them to take over commercial banks but avoid the current transparency and oversight rules by which other investors must abide.

Allowing private equity to purchase controlling stakes in large banks would undermine long-standing banking regulations and consumer protections by permitting buyout firms to access subsidized funding in the form of FDIC-insured deposits. Special rules could allow buyout firms to sell themselves their own debt at a discounted rate from the banks they want to control.

Under the terms called for by the private equity industry, buyout firms would remain exempt from oversight and transparency rules governing bank holding companies. This kind of special treatment from the Federal Reserve could open the door for private equity firms to assume little responsibility if a bank fails, adding unacceptable risk to taxpayer bailouts of banks deemed "too big to fail" by federal regulators.

Private Equity Could Reshape U.S. Banking Industry

Reuters
May 22, 2009

After a disastrous foray into banking early last year, private equity is making a cautious comeback with deals such as the BankUnited takeover, and their return will likely change how the industry looks.

Regulators appear to be working with private equity firms looking to buy banks, and in the next year or two several U.S. regional lenders could end up in the hands of buyout funds, banking analysts said.

"I can't picture a 5,000-branch bank coming out of this. But could I see 300-, 400-, 500-branch networks stitched together? I think so," said Seamus McMahon, chief executive of bank consulting firm McMahon Advisory LLC.

"Private equity firms are going to have a lot of influence."

As real estate markets continue to crater, many of the 8,300 U.S. banks will suffer, and some will fail. Private equity funds, meanwhile, have roughly $1 trillion of untapped funds at their disposal.

Some buyout funds are dipping their toes in the water now.

Firms including Wilbur Ross's WL Ross & Co, Carlyle Group, Blackstone Group, and Centerbridge Partners teamed up to take over Florida-based BankUnited in a government-assisted deal announced on Thursday. The funds put in $900 million of their capital, and are receiving support in the deal from the government.

Earlier this year, private equity firm J.C. Flowers & Co. got together with other investors to take over assets of failed mortgage lender IndyMac. In December, MatlinPatterson Global Advisers LLC agreed to invest in Flagstar Bancorp Inc.

After winning the auction for BankUnited, the group led by former North Fork Bank head John Kanas intends to continue growing through further acquisitions that could be rolled into the new bank once it is fixed. One of the targets could be BankAtlantic Bancorp Inc. a person familiar with the consortium said. The source is anonymous because the plans are not public...

Private equity firms have to structure their deals carefully to stay below thresholds that would subject their entire firms to onerous banking regulations. So as many as eight investors pitched in to buy BankUnited. The largest stake holders are Ross, Carlyle and Blackstone, each holding between 20 percent and 24.9 percent, below the level they are deemed to be in control, the source said...

IndyMac: Private Equity Gets Smart About Banks

By Heidi N. Moore, Wall Street Journal Blogs
January 5, 2009

...This weekend, a group of seven private equity firms led by Dune Capital bought the carcass of failed Pasadena, Calif., mortgage lender IndyMac. The private-equity firms plan to rebuild it and use it as a platform to acquire other financial institutions, while overhauling IndyMac’s business model to steer clear of risky subprime mortgage loans. Because each of the firms are pitching in some money, no one firm owns more than 10% of IndyMac, thus appeasing federal regulators.

Similarly, in August, private-equity investor J. Christopher Flowers, a veteran of Goldman Sachs Group’s financial-institutions group, bought a little bank in Missouri called First Cainsville Bank. The bank, with $14 million in assets and just two branches, probably wouldn’t normally be considered worthy of the attention of a financial sophisticate like Flowers, who kicked the tires at such massive potential M&A targets as Bear Stearns, American International Group and Washington Mutual and advised on Bank of America’s acquisition of Merrill Lynch. But Flowers saw the Cainsville acquisition as a way to get a foothold into the banking business and make it easier to buy other banks. And instead of buying the bank as part of his private-equity firm, J.C. Flowers, he bought it under his own name, overhauled the board of directors and informed the Office of the Comptroller of the Currency of his plan to make more acquisitions.

Federal regulators have been amenable to such solutions thus far. Perhaps that has something to do with the fact that roughly 25 banks have already failed, and more are expected.

The benefit to the private-equity firms of participating in federal auctions for failed banks is the chance to own cheap assets and gain a toehold in the rapidly consolidating banking industry, which they know well. Private-equity firms plowed $23 billion of capital into financial-services deals in 2008, and that is down 69% decrease from the $74 billion of 2007, according to data from Freeman & Co.

Meantime, the federal government gets a known quantity: private-equity firms that are experienced players in financial services. This is something of an echo of the late 1980s and early 1990s, when some private-equity firms snapped up assets from the government’s Resolution Trust Corp. amid the savings & loan crisis. They are also willing buyers, which is no small comfort to the government. Federal regulators looked for a buyer for IndyMac for five months before finally handing it over to a private-equity consortium.

Still, in taking over banks, private-equity firms are entering somewhat complicated contracts to accept federal bank regulators as highly involved overlords, something not all PE firms have been willing to do. Blackstone Group abandoned its proposed $6 billion acquisition of Alliance Data Systems–which owned a bank — arguing that it wouldn’t be able to meeting the changing requirements of federal regulators. In addition, some banks are allowed to choose their regulator, which creates a confusing drama of regulatory competition. IndyMac, for instance, chose the Office of Thrift Supervision, which ended up looking the other way at the lender’s financial troubles...

Private Equity Aims to Snatch Up Banks

By Dollars and Sense
May 7, 2009

Very interesting piece from yesterday's New York Times ("As Investors Circle Ailing Banks, Fed Sets Limits"). Private equity manager J. Christopher Flowers buys a tiny bank in Missouri in the hopes of using its national charter to snap up ailing banks across the country. The last two paragraphs are among the juiciest: Flowers "has estimated his banking empire will one day earn at least a 35 percent return on banks it has bought in the United States. 'I find it to be an extraordinary time to invest,' he said. He was even more blunt when he spoke to an industry group in New York earlier this year. 'Lowlife grave dancers like me will make a fortune,' he predicted."

As Investors Circle Ailing Banks, Fed Sets Limits

By Eric Lipton, The New York Times
May 6, 2009

Cainsville, Mo. — No one seems to want to own a business in this dusty, windswept corner of rural America, population 370, with its crumbling sidewalks and boarded-up storefronts. Except, that is, for J. Christopher Flowers, a media-shy New York billionaire who last year bought the First National Bank of Cainesville, one of the United States’ smallest national banks.

Mr. Flowers, a private equity manager, has no particular love for rural Missouri; in fact, he has never set foot in Cainsville. Rather, he wants to use the national bank charter he picked up in this farm town to go on a nationwide buying spree.

With that charter in hand, Mr. Flowers plans to take over a handful of large struggling banks, casualties of the economic crisis. In some cases, he hopes, the federal government will help...

For all the talk of the banking crisis, Mr. Flowers and other giant private equity players are circling distressed banks around the country, competing to buy into the industry. Bidding wars are now breaking out among private equity firms, including the Carlyle Group, which is going up against Mr. Flowers’s firm for a stake in BankUnited of Florida.

They and other investors see banks as the recession’s biggest prize: potential money machines that could one day generate fabulous returns, particularly after the federal government eats the losses of failed banks, then heavily subsidizes their sale. But like Mr. Flowers, some of them would prefer to take over the banks completely, replace their managements and take all the profit.

“I don’t think the Republic is going to be brought to its knees if private equity owns banks, personally,” Mr. Flowers said from his Midtown Manhattan office with its expansive views of Central Park. “We invest around the world — Japan, Germany, England, no problem.”

The Fed is resisting this pitch, for several reasons. Current law prohibits mixing banking and commerce, based on a fear that if industrialists own banks, they will dominate — and try to manipulate — the economy, as they did during the early-20th-century heyday of John Pierpont Morgan.

The government also wants the ability to stabilize a teetering bank by drawing on the funds of its parent company. That is hard to do with private equity firms, which have numerous businesses owned by funds, each of which is walled off to protect investors.

For these reasons, banks generally cannot be owned by nonfinancial companies like the Carlyle Group, whose assets are as varied as an interest in Dunkin’ Donuts and United Defense Industries, a maker of combat vehicles and missile launchers.

The equity firms counter that banking desperately needs cash if the economy is going to recover, and that they are the only big sources of money around. An executive at the Carlyle Group said the industry had an estimated $400 billion in “dry powder,” or ready-to-invest reserves.

To push their case at the White House, the Treasury and the Fed, Mr. Flowers and others in his industry have enlisted an all-star cast of advisers, lobbyists and lawyers. They include H. Rodgin Cohen, chairman of the Sullivan & Cromwell law firm and Wall Street éminence grise, and Randal K. Quarles, a managing director of the Carlyle Group and a Treasury under secretary in the administration of President George W. Bush...

While they press their case, the firms have found some ways around the rules.

They have formed so-called club deals, in which teams of private equity firms and other investors each buy up to the legal limit of a bank — about a quarter or a third, depending on the type of bank — with their individual pieces adding up to 100 percent control. IndyMac, the failed California bank, was sold by the Federal Deposit Insurance Corporation last fall to one such club, which includes funds controlled by Mr. Flowers; the hedge fund billionaires George Soros and John Paulson; and Michael S. Dell, founder of the Dell computer company. The investors are barred from acting in concert to, in effect, take control of the bank — an unwieldy arrangement but one that regulators insist they can enforce.

As part of the IndyMac deal, the FDIC agreed to take most of the risk from future losses on loans acquired by the partnership — leading Mr. Flowers to quip at one investor forum in New York in January that “the government has all the downside and we have all the upside.”

Mr. Flowers has come up with another way around the restrictions. There is no limit on an individual’s taking over a bank, so he purchased all of the First National Bank of Cainesville in his own name and with his own funds. But that deprives him of the billions his equity firm has set aside to buy banks, so his new bank sits in this tiny town, waiting for a change in the rules.

First National — whose second story is boarded up and whose $17 million in assets are worth about a third of what Mr. Flowers paid for an Upper East Side town house in 2006 — seems an unlikely launching pad for a new American banking empire. It is so tradition-minded that it refused to change the spelling of its name, even after the town did so back in 1925 to honor its founder, Peter Cain. Suddenly, in February, the First National Bank name was dropped and “Flowers Bank” was painted on the window. New bank executives showed up, passing out packs of promotional sunflower seeds with the bank’s new logo, urging the mostly elderly town residents to get ready to “Grow with Us.”

“Everyone wonders, who is this Flowers guy?” said Lefty McLain, as he finished up the ham, mashed potatoes and butter beans lunch special at the Little Store, an all-in-one restaurant, deli, pool hall and gossip post here in the one-block downtown.

Mr. Flowers, while still in his 20s, founded Goldman Sachs’s financial services merger business, helping line up the $62 billion merger of NationsBank and BankAmerica (now Bank of America) and the $34 billion takeover of Wells Fargo by Norwest...

Mr. Flowers and other executives have lobbied hard; their efforts have included a recent meeting with William C. Dudley, chairman of the New York Fed. At the meeting, Mr. Flowers and his colleagues bragged about how they could raise as much as $10 billion in 48 hours to help with a bank takeover if they were given the chance, according to one executive in attendance.

Mr. Flowers, in an interview, said he was confident he would prevail. Even if he cannot make the Fed reverse its policy, he will consider it a victory if the Fed approves an individual deal. He has estimated his banking empire will one day earn at least a 35 percent return on banks it has bought in the United States. “I find it to be an extraordinary time to invest,” he said. He was even more blunt when he spoke to an industry group in New York earlier this year.

“Lowlife grave dancers like me will make a fortune,” he predicted.

The Carlyle Group & The Carlyle Group Bailout, March 2008
How the Bush Administration Stopped the States from Stepping In to Stop Predatory Lenders
Bush Administration Rejected Tougher Mortgage Rules in 2005
AIG, Blackstone, and Kissinger Associates Joint Venture in Private Equity Funds
Max Keiser: Goldman Sachs Gang Are 'Scum' Who Have Co-Opted the U.S. Government
1,000 Banks to Fail in Next Two Years: Bank CEO
Rothschild to Start $711M Private Equity Fund
Federal Government Needs Massive Hiring Binge of 600,000 New Workers, Study Claims
Ground broken on $3.4 billion Homeland Security complex

Read More...

Society Is Becoming Dependent on the Government to Care for Them

"If one understands that socialism is not a share-the-wealth programme, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or, more accurately, socialism is not a movement of the downtrodden masses, but of the economic elite." - Gary Allen, None Dare Call It Conspiracy, Concord Press, 1971

"Freedom and initiative are being replaced by ever higher taxation, regulation and centralization of power in Washington. Our economy is now stagnant and our standard of living is declining. Each year government takes a bigger share of our earnings, employs more and more of our people, enacts more rules that strangle our economy, and controls more and more of our lives. In the enjoyment of plenty, have Americans lost the memory of freedom? When citizens are willing to sacrifice their liberty for security, they will have neither liberty nor security and will soon find themselves living under tyranny." - Ellen Sauerbrey, The Spark That Has Triggered Rebellion, American Thinker, September 13, 2009

"Fiscal spending is running wild, and our president predicts a budget deficit of $9 trillion dollars over the next ten years. The Congressional Budget Office says spending has to be cut 8% permanently over the next several years. In July alone, federal spending rose 26%, as revenues fell 6%. Corporate tax receipts fell 58%, as individual revenues fell 21%. The official economic contraction is the worst since the great depression. Can you imagine what it really is? 9.4% unemployment is front-page news, but you didn’t hear about the 4.7% loss in salaries and wages of 4.7% for the 12 months ended in June. There are more government employees now than all those employed in manufacturing and construction. How is it that state employees now make 40% more than the average income in non-governmental jobs? What a perversion of government. It is no wonder that the US poverty rate is higher than in Mexico and Turkey." - Bob Chapman, Fairy Tales of Recovery, Reality of More Failures, The International Forecaster, September 3, 2009

Where Has the Future Gone?

By Paul Murdock, Campaign for Liberty
November 24, 2009

Political commentators and pundits in the media endlessly talk of recent developments such as universal health care, civilian trials for terrorists, and the horrors of the Afghanistan debacle. These commentators occasionally make valid points or express important views, but often fail to highlight the long-term implications of Congressional bills that truly alter history. This continues to be the case with the health care debate. Deliberations exploring the costs, payer systems, taxes, and death panels are important, but neglect the far more devastating impact this bill may have upon human behavior.

The study of human behavior and social influence are well known to editors, the media, and political hacks. The real Obama agenda is to influence Americans in such a way that society becomes dependent on the government to care for them. For health care, this means, pass anything, knowing that once it has passed, the dependency and complacency of American citizens will ensure it cannot be reversed. This has become Obama's prized political goal because this legislation will force future politicians to be more liberal, expand their voting base, increase government involvement, and negatively alter you medical liberty forever.

Introducing horrendous legislation to increase American dependency not only feeds into liberal ideology, but also expands the liberal voting base. For example, millions of Americans currently rely on Medicare, Social Security, and other government handouts for health care and economic support. In fact, many law firms specialize in, and occasionally exclusively practice, social security law.

Now, instead of striving to become doctors or business leaders, many of our youth have come to rely on and expect the government to care for them. Not only do they hear liberal propaganda on the news and in the classroom, millions have now witnessed and experienced it in their own homes. Cash for Clunkers, extended unemployment, and government bailouts constantly reinforce to Americans that Uncle Sam will pick up the bill.

Just as wild animals seek out the garbage of society, reinforced Americans citizens will increasingly seek out handouts from those who are productive. The end result is that only socially-orientated politicians are elected in the future. This pattern is destructive to human motivation and production, and destroys the work ethic and creativity of generations. Most importantly, it crushes individual liberty.

You will also notice that Obama has quietly slid into the shadows during the health care debate in Congress, except to promote "any" bill and meet with Democrats in the House for a special closed meeting. Although Obama may truly want a one-payer system, the true goal of his administration is to pass any health care bill that will survive the House and the Senate.

President Obama knows that once health care is expanded, no legislator in the future will be able to reverse this reckless program. Americans will become too complacent to object and eventually dependency will set in. Even President Clinton recently declared that no bill needs to be perfect, it just needs to be passed. In other words, the goal is not good legislation; it is to foster American dependency forever at the expense of American Liberty and economic freedom.

The examples of American dependency are becoming endless. Climate scientists rely on government handouts to push their global warming agenda, autoworkers rely on bailouts to pay for their retirements and health care, and parents rely on the Federal government to pay for their children's education. The more frequently the government pays for your car, the greater likelihood Americans will vote for increased bailouts and government support.

The same tactic is being used in global warming legislation. The goal is to pass any bill and then let American complacency ensure that government control survives forever.

Not only will America tax itself into economic poverty, but it will continue to foster dependency in the third world. Americans will become increasingly accustomed to government intervention until politicians control every aspect of your life.

If this sounds radical, a reading of the headlines in Europe and California should be alarming as the news talks of carbon credit cars, increased carbon taxes on gasoline, and mileage surcharges.

Global warming oils the wheels of the government machine as it expands it spokes into every facet of your life. It also expands the socialist voter base and dependency as the size and scope of government increases and provides additional jobs.

Many countries around the world have introduced vast social agendas and legislation. As a result, political parties in Canada and Europe are far more liberal than American. Because politicians have to manage the dependency and social welfare of their constituents, only liberal, socially-minded individuals are elected. As a result, true freedom and liberty in these nations is forever lost.

America continues to follow this same road to destruction. Despite being the leader in business innovation, economic prosperity, and health care, Americans are duped into accepting tyranny on a daily basis.

There are many good choices in this world. In an ideal setting, universal health care, world peace, and economic prosperity would be fantastic. The media and politicians constantly reinforce the moral belief that Americans should do the right thing for the poor. However, they forget that although caring for the poor is "good," there are better choices, and the best choice is to maintain our freedom. Liberty must be your first and only vote, for we have rarely regained a liberty in America that was once lost!

Copyright © 2009 Campaign for Liberty

Paul Murdock is currently a doctoral candidate in Clinical Psychology at Indiana State University. In addition to his academic studies, he is a writer, employee at a state psychiatric hospital, and is the co-founder of The Freemen Institute, a website dedicated to preserving the foundations of liberty.

Record Number of Americans on Public Dole

HotAir.com
August 30, 2010

For some, this will just prove how prescient Congress has been to create a vast network of social programs that combat poverty.

Others may wonder what the endgame looks like when one in six Americans now receive public subsidies through Medicaid, unemployment, or other welfare programs. That ratio is a new record, according to USA Today:

Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.

More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That’s up at least 17% since the recession began in December 2007.

Think the Medicaid growth comes from the passage of ObamaCare in March? Think again. The expansion comes from the Great Recession and the loss of millions of jobs. The ObamaCare expansion will come on top of the additions to the enrollments over the last two years, and that has major implications for health care providers and customers alike:

The program has grown even before the new health care law adds about 16 million people, beginning in 2014. That has strained doctors. “Private physicians are already indicating that they’re at their limit,” saysDan Hawkins of the National Association of Community Health Centers.

Some of those 16 million to be added may be part of the expanded enrollment now, of course. However, even if the number left to be added is just half of the original 16 million estimate, it will drop like a bomb on provider networks. Medicaid already pays below Medicare in reimbursements, for instance, and far below private-sector health insurance. That’s why many providers won’t take Medicaid patients at all anymore, which pushes Medicaid patients into emergency rooms at a far higher pace than the uninsured. We can expect to see even greater pressure on clinics and hospitals as a result.

But even outside of ObamaCare, the sudden growth calls into question the sustainability of the welfare state in the US. Having one in six on some form of public subsistence perhaps underscores the real nature of unemployment and underemployment in the US, but voters have to also wonder at what point we can afford to keep going.

We already have entitlement programs like Social Security and Medicare about to sink into a sea of red ink because the worker-to-beneficiary ratio has dropped too low for the programs to remain on their current trajectories. If every American has to support one-sixth of another outside of family through taxation, then either taxes will have to get hiked substantially or benefits and means tests have to be rethought.

Welfare State: Handouts Make Up One-Third of U.S. Wages

A government job or welfare. Both options looked like selling out the only thing I had left: my soul. Therefore I refused. - Margaret, Living The Dream: What Do You Own – Really?, EndoftheAmericanDream.com, June 5, 2010

CNBC
March 8, 2011

Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.

Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.

“The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”

The economist gives the country two stark choices.

In order to get welfare back to its pre-recession ratio of 26 percent of pay, “either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion,” she said.

Last month, the Republican-led House of Representatives passed a $61 billion federal spending cut, but Senate Democratic leaders and the White House made it clear that had no chance of becoming law. Short-term resolutions passed have averted a government shutdown that could have occurred this month, as Vice President Biden leads negotiations with Republican leaders on some sort of long-term compromise.

“You’ve got to cut back government spending and the Republicans will run on this platform leading up to next year’s election,” said Joe Terranova, Chief Market Strategist for Virtus Investment Partners and a “Fast Money” trader.

But the country may not be ready for these tough choices, even though economists like Schnapp say something will have to be done to avoid a significant economic crisis.

A Wall Street Journal/NBC News poll released last week showed that less than a quarter of Americans supported making cuts to Social Security or Medicare in order to reign in the mounting budget deficit.

Those poll numbers may be skewed by a demographic shift the likes of which the nation has never seen. Only this year has the first round of baby boomers begun collecting Medicare benefits—and here comes 78 million more.

Social welfare benefits have increased by $514 billion over the last two years, according to TrimTabs figures, in part because of measures implemented to fight the financial crisis. Government spending normally takes on a larger part of the spending pie during economic calamities but how can the country change this make-up with the root of the crisis (housing) still on shaky ground, benchmark interest rates already cut to zero, and a demographic shift that calls for an increase in subsidies?

At the very least, we can take solace in the fact that we’re not quite at the state welfare levels of Europe. In the U.K., social welfare benefits make up 44 percent of wages and salaries, according to TrimTabs’ Schnapp.

“No matter how bad the situation is in the US, we stand far better on these issues (debt, demographics, entrepreneurship) than other countries,” said Steve Cortes of Veracruz Research. “On a relative basis, America remains the world leader and, as such, will also remain the world's reserve currency.”

Many Americans Pay No Federal Income Tax; Earnings, Credits Eliminate Liability

Associated Press
April 8, 2010

Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.

Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it's still almost always better to file: That's the only way to get a refund of all the income taxes withheld by employers.

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 and with two children younger than 17 will owe no federal income tax for 2009, according to a separate analysis by the consulting firm Deloitte Tax.

Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Congressional Democrats. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, as well as excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.

That helps explain the country's aversion to taxes, said Clint Stretch, a tax policy expert Deloitte Tax. He said many people simply look at the difference between their gross pay and their take-home pay and blame the government for the disparity.
The federal income tax is the government's largest source of revenue, raising more than $900 billion -- or a little less than half of all government receipts -- in the budget year that ended last Sept. 30.

But with deductions and credits, especially for families with children, there have long been people who don't pay it, mainly lower-income families.

The number of households that don't pay federal income taxes increased substantially in 2008, when the poor economy reduced incomes and Congress cut taxes in an attempt to help recovery.

In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.

Income tax rates were lowered at every income level, making it relatively easy for families of four making $50,000 to eliminate their income tax liability.

Here's how they did it, according to Deloitte Tax:

The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.

With two children under 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.

The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax.

41 Obama White House Aides Owe the IRS $831,000 in Back Taxes — and They're Not Alone

Los Angeles Times
September 10, 2010

Over the years a lot of suspicion has built up across the country about Washington and its population of opportunistic transients coming to see themselves as a special kind of person, somehow above average working Americans who don't labor down in that monument-strewn former swamp.

Well, finally, an end to all those undocumented doubts. Thanks to some diligent digging by the Washington Post, those suspicions can at last be put to rest.

They're correct. Accurate. Dead-on. Laser-guided. On target. Bingo-bango. As clear as it's always seemed to those Americans who don't feel special entitlements and do meet their government obligations.

We now know that federal employees across the nation owe fully $1 billion in back taxes to the Internal Revenue Service.

As in, 1,000 times one million dollars. All this political jabber about giving middle-class ... Americans a tax cut. Thousands of feds have been giving themselves one all along -- unofficially. And these tax scofflaws include more than three dozen folks who work for the president with that newly decorated Oval Office.

The Post's T.W. Farnum did some research and found that out of the total sum, just 638 workers on Capitol Hill owe the IRS $9.3 million in back taxes. As in, overdue. The IRS gets stiffed by the legislative body that controls its budget. How Washington works.

Now, back taxes have been a problem for the Obama-Biden administration. You may recall early on that Tom Daschle was the president's top pick to run the Health and Human Services Department. But it turned out the former Democratic senator, who was un-elected from South Dakota in 2004, owed something like $120,000 to the IRS for things from his subsequent benefactor that he just forgot to pay taxes on. You know how that is. $120G's here or there. So he dropped out.

And then we learned this guy Timothy Geithner owed something like $42,000 in back taxes and penalties to the IRS, which is one of the agencies that he'd be in charge of as secretary of the Treasury. The fine fellow who's supposed to know about handling everyone else's money. In the end this was excused by Washington's bipartisan CYA culture as one of those inadvertent accidental oversights that somehow never seem to happen on the side of paying too much taxes.

And under Geithner's expert guidance the U.S. economy has been, well, wow! Just look at it.

Privacy laws prevent release of individual tax delinquents' names. But we do know that as of the end of 2009, 41 people inside Obama's very own White House owe the government they're allegedly running a total of $831,055 in back taxes. That would cover a lot of special chocolate desserts in the White House Mess.

• In the House of Representatives, 421 people owe a total $6,524,892.
• In the Senate, 217 owe $2,774,836.
• In the IRS' parent department, Treasury, 1,204 owe $7,670,814.
• At the Labor Department, where Secretary Hilda Solis' husband had some back-tax problems before her confirmation, 463 owe $7,481,463.
• Eighty-one workers for the Federal Reserve System's board of governors owe $1,076,733.
• Over at the Justice Department, which is so busy enforcing other laws and suing Arizona, 1,971 employees still owe $14,350,152 in overdue taxes.

Then, we come to the Department of Homeland Security, which is run by Janet Napolitano, the former governor of Arizona who preferred to call terrorist acts "man-caused disasters." Homeland Security is keeping all of us safe by ensuring that a Dutch tourist is aboard every inbound international flight to thwart any would-be bomber with explosives in his underpants.

Within that department, there reside 4,856 people who owe the tax agency a whopping total of $37,012,174.

And they're checking our pockets for metal and coins?

Federal Workers Owe $3 Billion in Back Taxes?

OCRegister.com
June 15, 2010

Employees of the federal government apparently are a little behind in paying their taxes — like $3 billion worth, according to Sen. Tom Coburn, R-Okla.

Coburn listed collection of these unpaid taxes among 20 measures in his proposed amendment to the so-called tax extenders bill (HR 4213). A 2008 IRS report showed that 276,300 federal employees owed $3.042 billion as of September of that year.

The senator believes the projected $126 million in savings could cover the cost of the legislation without having to increase taxes.

The tax extenders bill is being watched closely by those who are out of work because it also would provide extended unemployment benefits through the end of November for people more recently laid off.

A previous bill that allowed the unemployed to move into the next of four tiers of jobless benefits or FedEd aid expired June 2. California officials estimate thousands of people in this state alone have been cut off from unemployment benefits since the legislation lapsed.

The tax extenders bill is a grab bag of legislation that would, among other things, continue a series of tax breaks for small business to create jobs and keep jobless payments going for the unemployed.

Last month the House approved a stripped-down version of the original bill after deleting a continued subsidy for COBRA health insurance premiums for the unemployed and cutting back Medicaid to states.

It immediately ran into problems in the Senate. While some are pushing to add back benefits that were cut, others are objecting to tax increases for wealthy fund managers. And how to cover the cost of whatever is agreed on continues to be the subject of debate.

Senate Majority Leader Harry Reid, D-Nev., submitted a motion Monday to end debate on the bill, according to The Hill. A vote on the bill itself could occur later this week.

Here are some of the ways Coburn wants to save money on the bill without tax increases:

• A one-time reduction in the budgets of members of Congress: $100 million
• Enacting the White House's one-time proposed 5% cut on government spending: $22 billion
• Eliminating over 10 years non-essential government travel: $10 billion
• One-year freeze on federal employees' salaries: $2.6 billion
• Rescinding unspent federal funds: $50 billion

Tax Scam Uncle Sam? You Oughta Be Fired! Says Utah Rep. Chaffetz

ABC News
March 18, 2010

Working for Uncle Sam comes with some great perks, like job stability, posh benefits packages, and in many cases, average salaries that are higher than what the same job pays in the private sector.

That's why Republican Rep. Jason Chaffetz, R-Utah, is irked that nearly 100,000 civilian federal employees owe the IRS $962 million in back taxes. He thinks they should pay up or be fired.

Chaffetz has introduced a bill that calls for the federal government to "ferret out" civilian employees who have "seriously delinquent tax debt" and prevent the hiring of other tax delinquents.

More than 3 percent of the 2.8 million federal civilian employees owed the Treasury unpaid federal income taxes in 2008, according to the IRS. If you include retirees and military service members, the numbers go from nearly 100,000 up to 276,000 current or former workers who owe $3 billion in taxes.

"If you get to the point where the government is putting a lien on their property and they've exhausted their appeals… the right thing to do is fire them as a federal worker," said Chaffetz. "If you're going to take federal tax dollars, you should be paying your federal taxes."

Currently, only IRS employees can be terminated for non-payment of federal income taxes -- a measure Chaffetz wants extended to all federal agencies. The IRS has the lowest level of tax delinquency among its employees than at any other federal agencies, according to the most recent statistics.

But skeptics of Chaffetz's plan argue firing the delinquents en masse circumvents due process and could only hamper efforts to recoup the cash.

Firing federal employees as soon as a lien is imposed by the IRS would be "prior to any due process hearing," said Rep. Stephen Lynch, D-Mass., who chairs the House Oversight and Government Reform subcommittee on the federal workforce.

"We have a system that's in place. For a federal employee, we have the [IRS] garnish their pay at 15 percent -- which is higher than for the regular taxpayer," he said. "We're getting the money back."

Wade Morrow, assistant general counsel for the American Federation of Government Employees, the largest federal employees union, said workers should be held to account for back taxes but that Chaffetz's rule would not accommodate the complexities of individual cases.

"There may be other facts and circumstances that you should consider," he said, adding that some individuals may have become delinquent due to sickness or divorce complications or due to a mistake in tax filings.

Morrow also said the most serious offenders could face termination under existing guidelines if the tax delinquencies interfere with their jobs.

"Getting them to pay back what they owe is preferable to having them all fired, in which case you're not going to get anything at all," said Morrow.

Chaffetz: Firing Federal Employee Tax Delinquents Aligns With Obama in Principle

Chaffetz conceded the terminations would probably make it harder for the individuals to pay their tax bills and said employees appealing to the IRS or "making a good faith effort" to repay them should be spared.

But he said a broad purge of tax delinquents is still justified and consistent with a principle laid out by President Obama for contractors employed by the federal government.

Earlier this year, Obama ordered federal agencies to terminate contracts with companies who don't pay federal taxes.

"It's simply wrong for companies to take taxpayer dollars and not be taxpayers themselves," the president said Jan. 20. "We need to insist on the same sense of responsibility in Washington that so many of you strive to uphold in your own lives, in your own families and in your own businesses."

Democrats in both the House and the Senate have introduced legislation codifying new rules for federal contractors who don't pay their taxes. Chaffetz is the first and only Republican so far to co-sponsor the House version.

"I think the president's right in the case [of companies] and now I'd like it expanded to federal workers as well," he said. "If you're going to take federal tax dollars, you should be paying your federal taxes."

The bill is currently under consideration by the House Oversight and Government Reform Committee.

Federal Employees Routinely Make Six Figure Salaries

Average pay $30,000 over private sector

USA TODAY
December 11, 2009

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.

"There's no way to justify this to the American people. It's ridiculous," says Rep. Jason Chaffetz, R-Utah, a first-term lawmaker who is on the House's federal workforce subcommittee.

Jessica Klement, government affairs director for the Federal Managers Association, says the federal workforce is highly paid because the government employs skilled people such as scientists, physicians and lawyers. She says federal employees make 26% less than private workers for comparable jobs.

USA TODAY analyzed the Office of Personnel Management's database that tracks salaries of more than 2 million federal workers. Excluded from OPM's data: the White House, Congress, the Postal Service, intelligence agencies and uniformed military personnel.

The growth in six-figure salaries has pushed the average federal worker's pay to $71,206, compared with $40,331 in the private sector.

Key reasons for the boom in six-figure salaries:

• Pay hikes. Then-president Bush recommended — and Congress approved — across-the-board raises of 3% in January 2008 and 3.9% in January 2009. President Obama has recommended 2% pay raises in January 2010, the smallest since 1975. Most federal workers also get longevity pay hikes — called steps — that average 1.5% per year.


• New pay system. Congress created a new National Security Personnel System for the Defense Department to reward merit, in addition to the across-the-board increases. The merit raises, which started in January 2008, were larger than expected and rewarded high-ranking employees. In October, Congress voted to end the new pay scale by 2012.


• Pay caps eased. Many top civil servants are prohibited from making more than an agency's leader. But if Congress lifts the boss' salary, others get raises, too. When the Federal Aviation Administration chief's salary rose, nearly 1,700 employees' had their salaries lifted above $170,000, too.

In Obama's America, You'll All Work for the Government

Jewish World Review Commentary
January 31, 2010

... Does even Obama listen to Obama's speeches?

The public does — at least to this extent: They understand that, when he's attacking the tired old Washington games, he's just playing the tired old Washington games. But, when he's proposing the tired old Washington solutions, he means it; that's the real Obama, the only Obama on offer. And everything the president proposes means more debt, which, at the level this guy's spending, means, at some point down the road, either higher taxes or total societal collapse.

Functioning societies depend on agreed rules. If you want to open a business, you do it in Singapore or Ireland, because the rules are known to all parties. You don't go to Sudan or Zimbabwe, where the rules are whatever the state's whims happen to be that morning.

That's why Obama is such a job-killer. Why would a small business take on a new employee? The president's proposing a soak-the-banks tax that could impact your access to credit. The House has passed a cap-and-trade bill that could impose potentially unlimited regulatory costs. The Senate is in favor of "health" "care" "reform" that will allow the IRS to seize your assets if you and your employees' health arrangements do not meet the approval of the federal government.

Some of these things will pass into law, some of them won't. But all of them send a consistent, cumulative message: that there are no rules, that they're being made up as they go along — and that some of them might even be retroactive, as happened this week with Oregon's new corporate tax.

In such an environment, would you hire anyone? Or would you hunker down and sit things out? Obama can bury it in half a ton of leaden telepromptered sludge but the world has got the message: More Washington, more microregulation of every aspect of your life, more multi-trillion-dollar spending, and no agreed rules in a game ever more rigged against you.

Obama and the Democrats have decided, in the current cliche, to "double down." That hardly does justice to what the president's doing. In effect, he's told embattled congressmen and senators to strap on the old suicide-bomber belt and self-detonate for the team this November. That's a lot of virgins to pass out, but, with this administration, budget restraints aren't exactly a problem: Untold pleasures will await every sacrificial incumbent in paradise, or at any rate the coming liberal utopia.

What's the end game here? President Obama gave it away in his student-loan "reform" proposals: If you choose to go into "public service," any college-loan debts will be forgiven after 10 years.

Because "public service" is more noble than the selfish, money-grubbing private sector. C'mon, everybody knows that. So we need to encourage more people to go into "public service."

Why?

In the past 60 years, the size of America's state and local workforce has increased five times faster than the general population. But the president says it's still not enough: We have to incentivize even further the diversion of our human capital into the government machine.

Like most lifelong politicians, Barack Obama has never created, manufactured or marketed any product other than himself. So, quite reasonably, he sees government dependency as the natural order of things.

And in his college-loan plan he's explicitly telling you: If you start a business, invent something, provide a service, you're a schmuck and a loser. In the America he's building, you'll be working 24/7 till you drop dead to fund an ever-swollen bureaucracy that takes six weeks off a year and retires at 53 on a pension you could never dream of. Obama's proposals are bold only insofar as few men would offer such a transparent guarantee of disaster: It's the audacity of hopelessness.

In Massachusetts, enough voters got the message. And the more speeches this one-note politician inflicts on the nation, the louder they'll hear it.

US citizens continue to live in welfare quagmire
Government aid a hard habit to break
America Looking Like a Developing Nation as 30% of Americans Rapidly Approach Poverty
Largest-ever Federal Payroll to Hit 2.15 Million
A Growing Share of Americans’ Income Comes from the Government
Recession Chugs on, Except in Government
More Young People Lining Up for Government Jobs
60 Percent of the Population Now Gets More in Government Benefits Than It Pays in Taxes
Accounting for What Families Pay in Taxes and What They Receive in Government Spending
Government to Account for More Than Half of Healthcare Spending
The Federal Government is the Nation's Largest Employer

Updated 2/11/10 (Newest Additions at End of List)

Global Governance is Unnatural, Unbiblical and Un-American

The world’s governing class – its classe politique – will meet in Copenhagen, Denmark, to discuss a treaty to inflict an unelected and tyrannical global government on us, with vast and unprecedented powers to control all once-free world markets and to tax and regulate the world’s wealthier nations for its own enrichment: in short, to bring freedom, democracy, and prosperity to an instant end worldwide, at the stroke of a pen, on the pretext of addressing what is now known to be the non-problem of manmade “global warming.” - Robert Ferguson, Science & Public Policy Institute, ClimateGate: Caught Green-Handed!

Be It Known to You, O King

By Timothy N. Baldwin, JD., Liberty Defense League
November 18, 2009

Evident intents and purposes, a long train of federal government abuses, and my utter disgust with (what is even hard to consider) my country anymore, among other reasons, compels me to be as frank and candid as I can possibly be, without fear of being labeled and marginalized by those who cannot seem to grasp the concepts and principles I am about to unfold, or by those who simply disagree.

Anyone with an ear, who is able to hear; and with eyes, who is able to read; and a brain, who is able to think, should know about the Copenhagen Conference to take place from December 7 – 18, 2009, in which President Obama is to meet with other heads of state to address global governance concerns of the supposed global warming crisis and its impact on the nations of the world. Openly admitted, this meeting is to produce at the very least a politically (as compared to legally) binding agreement as a spring board for future agreements, whereby the governments of the world can create global regulations, controls and laws in response to global warming.

Now, it is no surprise that the President of the United States, Obama, is considering entering into a partnership-type agreement with other nations of the world. This model of foreign policy has been going on in the United States since the creation of the League of Nations under the Woodrow Wilson administration. G.W. Bush was no different as he entered into the Security and Prosperity Partnership agreement with Canada and Mexico during his administration. Likewise, John McCain, if he had become president, had plans on executing his League of Democracies idea, whereby more than 100 democracies around the world would enter into a political compact of what George Washington would have described as entangling alliances. The latest international alliance and compact under Obama comes as no shock as he continues the empire-building and global-unification legacy of the United States presidents for over 100 years.

Is the Copenhagen Conference to bring to fruition the goal of global unification, which previous presidents have attempted but have yet to completely succeed? Many have speculated that the Copenhagen designs would in fact create a global government. The result of this would in effect bind the citizens of the United States to a jurisdiction and authority it has never consented to, formed or authorized.

Please understand: the most fundamental and basic natural rights expressed by our forefathers is the right to be governed only by our consent, by a government we have created for our interests; by agents who act in trust of our freedoms, rights and liberties, who are accountable directly to their principals (the people who authorized their power); and by those who have non-conflicting interests to those they represent.

It is philosophically, physically and politically impossible that the people of these states could retain their natural right of self-government under any type of global government under the circumstances posed in the Copenhagen Conference or under any other circumstances. Global governance, in any form, is unnatural, unbiblical and un-American.

Now, whether or not the Copenhagen Conference produces a global government, or whether it will be another attempt in the future, time will tell. But let us get something very clear and straight right now. As soon as our government attempts to subject the citizens of these states to the authority, jurisdiction, control and regulation of any so-called government not contained in our state and federal constitutions, at that exact point and time, our government has expressly declared itself to be at open war with the people of the states of America. Allow philosophical forefather, John Locke, to describe it his own way:

“[U]sing force upon the people without authority, and contrary to the trust put in him that does so, is a state of war with the people…[and] the people have a right to remove [such a force] by force. The use of force without authority, always puts him that uses it into a state of war, as the aggressor, and renders him liable to be treated accordingly.” John Locke and C. B. Macpherson, ed., Second Treatise of Government, (Indianapolis: Hackett Publishing Company, Inc., 1980), 80-81.

If the federal government, through the executive branch, tries to use the treaty power of the United States Constitution to override and circumvent the natural laws and principles as expressed in our Declaration of Independence, upon which the constitution was predicated, then that person and all those who comply with his orders to enforce such an act have undoubtedly placed us in a state of nature and a state of war, whereby each person of these states has a natural right to declare to the world that he is no longer willingly subject to the authority of the federal government; that he declares his independence from this totalitarian, despotic and tyrannical regime; that he invokes his God-given right to defend his natural rights to be governed by his consent only; that any and all attempts made by these despots to subjugate our natural rights will be resisted--with force if necessary; and in similar order, each state in the union has the natural right to dissolve all ties in the union created by the Constitution of the United States of America and to defend the powers granted to them by the sovereigns (the people) of the state constitution.

You slave-lovers can try to justify this (illegitimate) federal government’s “right” and “authority” to enter into such agreements (as well as all of the other myriad of unconstitutional actions forced upon us) with other nations all you want. I, along with millions of other Americans, will never accept your barbaric, brute-beast concepts of politics, where your conclusions of government power and citizen submission equate to a king-peasant relationship or worse. You can postulate all you want about the constitutionality or legality of any treaty made by the president as being the supreme law of the land. You can cite U.S. Supreme Court cases, legal articles, law professors, and politicians all you want. Go on: knock yourselves out.

But know where freedom-lovers stand now and forever. My forefathers rejected those notions as blatantly unjust, and so I must. My forefathers fought bloody wars to defeat the efforts of would-be despots so that freedom may thrive, and so will I. My forefathers insisted on creating a government that best reflects the evil tendency of human nature, to protect their posterity from the Nimrods of this world, and I will too.

If you find my beliefs to contain fallacy and error, well then, we will just have to agree to disagree, and I will let God be the judge of my actions and yours, if not here on earth, then in the places hereafter. And I will let future generations curse your name or mine for the beliefs and actions we hold and advance today.

“But be it known to you, O king, that we will not serve your gods or worship the golden image that you have set up." (Daniel 3:18)

Go to www.libertydefenseleague.com for articles, speeches and interviews of Timothy Baldwin.

© 2009 Timothy N. Baldwin, JD - All Rights Reserved

Timothy Baldwin is an attorney from Pensacola, FL, who received his bachelor of arts degree at the University of West Florida and who graduated from Cumberland School of Law at Samford University in Birmingham, AL. After having received his Juris Doctorate degree from Cumberland School of Law, Baldwin became a Felony Prosecutor in the 1st District of Florida. In 2006, he started his own law practice, where he created specialized legal services entirely for property management companies.

Like his father, Chuck Baldwin, Timothy Baldwin is an astute writer of cutting-edge political articles, which he posts on his website, www.libertydefenseleague.com. Baldwin is also the author of the soon-to-be-released book entitled, Freedom For A Change, in which Baldwin expounds the fundamental principles of freedom believed by America’s forefathers and gives inspiring and intelligent application of those principles to our current political and cultural standing.

Baldwin is involved in important state sovereignty movement issues, including being co-counsel in the federal litigation in Montana involving the Firearms Freedom Act, the likes of which is undoubtedly a pivotal and essential ingredient to restoring freedom and federalism in the states of America. Baldwin is also a member of freedom organizations, such as The Oath-Keepers, and believes that the times require all freedom-loving Americans to educate, invigorate and activate the principles of freedom within the States of America for ourselves and our posterity.

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The Green Movement is the Root of a Future World Government

Green World Government

The United Nations uses environmentalism to seize control

Editorial, The Washington Times
October 27, 2009

Environmental alarmism is being exploited to chip away at national sovereignty. The latest threat to American liberties may be found in the innocuous sounding Copenhagen Climate Treaty, which will be discussed at the United Nations climate-change conference in mid-December.

The alert was sounded on the treaty in a talk given by British commentator Lord Christopher Monckton at Bethel College in St. Paul, Minn., on Oct. 14. Video of the talk has become an Internet sensation.



The treaty's text is not yet finalized but its principles are aimed at regulating all economic activity in the name of climate security, with a side effect that billions of dollars would be transferred from productive countries to the unproductive.

The control lever is the regulation of carbon emissions, which some purport are causing global warming. The treaty would establish a Carbon Market Regulatory Agency and "global carbon budget" for each country.

In effect, this would allow the treaty's governing bodies to limit manufacturing, transportation, travel, agriculture, mining, energy production and anything else that emits carbon -- like breathing.

Treaty supporters market the agreement through fear. Even though mean global temperatures have been on a downward spiral for several years after peaking in 1998, we are told that catastrophe is imminent.

"The world has already crossed the threshold beyond which it is no longer possible to avoid negative impacts of anthropogenic climate change," says proposed treaty language being circulated by Greenpeace, the World Wildlife Fund and other groups.

It is critical that they cultivate a sense of impending doom to justify the sweeping restrictions and new powers enshrined in the treaty. The sky is falling and they want us to act now, act swiftly, act before it is too late -- but don't read the fine print.

The governing authority envisioned by the document reads like a bad George Orwell knockoff. The treaty establishes a body called the Conference of the Parties (COP), which is given ultimate authority over administering and enforcing the treaty. Its executive arm is something called the Adaptation Fund Board, under which is the Copenhagen Climate Facility, also known as "the Facility." The Facility is necessary because, in order to save the planet, "the way society is structured will need to change fundamentally." This change would be impossible under the "fragmented set of existing institutions," so the Facility will step in with "such legal capacity as is necessary for the exercise of its functions and the protection of its interests." That's the Facility's interests, not yours.

The Facility will be run by an executive committee, the membership of which "may include representation from relevant intergovernmental and non-governmental stakeholders." So left-wing pressure groups, animal rights fanatics, tree-huggers, Al Gore, or any other part of the environmentalist fringe would be eligible for executive committee membership. Naturally, global-warming skeptics like Lord Monckton need not apply.

A "massive scaling up of financial resources" will be required to fund the COP's activities. The United States and others will be required to transfer $800 billion over five years, with additional funding requirements assessed on an as-needed basis. The COP will have taxing authority "including, but not limited to, a levy on aviation and maritime transport." The ability to tax aircraft and shipping is bad enough, but as careful readers of the elastic clauses of the U.S. Constitution know, the phrase "including but not limited to" authorizes any tax they can imagine.

Signatories of the treaty will be required to file reports to the Committee for Reporting and Review ("the Committee"), and if found not in compliance with the treaty's terms, they may have to face "the Facilitative Branch." If this branch finds that a country is violating the terms of the agreement, it will "undertake the measures necessary" to bring the country back into compliance.

The treaty language would be farcical but for the fanaticism of its proponents. The environmental movement is driven by a millenarian determination to save humanity from itself, regardless of its impact on real people.

President Obama reportedly will skip the Copenhagen meeting unless the treaty language is finalized. We urge him to resist the urge to pander to the international community at the expense of the United States.

We look forward to headlines about record cold temperatures during the December climate summit, and to hearing desperate speeches about stopping irresistible global warming during the signing ceremony, held during a blizzard.

Barack Obama's Suicide Mission to Copenhagen

By Tom DeWeese, The DeWeese Report
November 19, 2009

For more than fifteen years I have been studying and reporting on international United Nation conferences, treaties, and policies, warning that they are a road map to global governance and eventual UN global government.

In addition, I have warned that the international environmental movement is not really concerned about protecting the environment at all -- rather it is using mother earth as an excuse for an age-old drive for power and wealth.

For those same fifteen years my warnings have fallen on deaf ears in Congress, in state houses, and in city councils across the nation. Instead, I and others like me, have been labeled radical fringe and conspiracy nuts. As a consequence, I have been ignored by much of the media, dropped from major nation radio and television news shows that once invited me as a guest on a regular basis. Letters, petitions and meeting requests on Capitol Hill are ignored.

Vindication comes in surprising ways sometimes. Case in point: on October 27, 2009, The Washington Times, DC’s “conservative” newspaper ran an editorial entitled: “Green World Government, the UN uses environmentalism to seize control.” Readers of The DeWeese Report, would not have found the Times revelation to be news.

What is important is, that after my warnings have been one of the lone voices in the wilderness, some in the media are beginning to see the threat -- just as it is about to be jammed down their throats. The fact is, the warnings I’ve been sounding are now transformed into urgent alarm bells.

The Times editorial was about the coming UN Copenhagen Climate Treaty and it contains just about every threat to our nation’s economy and sovereignty to vindicate my fifteen years of forced isolation. All the players and issues are here to enforce global control over our nation and our personal lives. The UN; World Wildlife Fund, Greenpeace; global warming; Sustainable Development; and attempts by the UN to enforce global taxes. I have issued articles on every one of those.

And there is the new player in the game -- Barack Obama. He of course, is the reason why this new Treaty is causing such a stir and why even some main-stream media is beginning to pick up on the danger. Obama is just nuts enough to actually sign a document that would make our nation subservient to UN schemes of global control. In fact, that is exactly what he intends to do.

And here are some of the details of what Obama would be signing -- essentially committing the United States to comply.

First, The Copenhagen Climate Change Treaty will enforce dire restrictions on all humankind. One provision called the “Facility” will be used to “reorder society” to change the structure of civilization, making the environment the ruling principle. The Facility is designed to bring together a massive number of “fragmented” environmental organizations and existing regulating structures, so they can all work together. In other words, any action taken by mankind will be regulated -- because anything we do has some impact on the environment.

Energy, of course, will be the prime target. The policy won’t be to find more -- it will be to cut back on its use. Homes will not be warmed or cooled. Cars will not be driven. And manufacturing will be sharply curtailed -- at least in the “developed” countries. The price of everything manufactured by using energy (EVERYTHING) from toothpaste to food will skyrocket. Shortages will abound.

Most of all, however, the Copenhagen Climate Change Treaty is a vicious global indictment of developed industrial nations. Its pretense is that Third World nations are suffering economically because of their carbon emissions, which have changed the environment, thereby causing them economic and social loss.

To compensate these poor victims of unbridled capitalism, the Treaty calls for compensation from the big, bad developed nations (the United States), in the form of at least 0.7% of annual Gross Domestic Product (GDP) from each nation. That adds up to about $800 billion over five years, with additional funding requirements assessed on an “as needed” basis. However, the Treaty language is not yet complete and there is talk of making that figure as much as 2% of the GDP, which is roughly half of our nation’s total defense budget.

To collect these taxes, the treaty will establish a new governing body called the Conference of the Parties (COP), which will be given ultimate authority over the administration and enforcement of the treaty provisions. For additional resources, COP will have the ability to tax aviation and shipping. But, in the small print, things get worse. It says COP’s taxing authority “is not limited to” the above. That means they can tax anything that moves.

Again, what’s this money supposed to be used for? Oh yes, compensating those poor Third World nations. The UN calls it a “carbon debt” that the developed nations owe to the rest of the world. This is to be a punishment on the developed nations because they refused to abide by previous UN efforts, such as the Kyoto Climate Change Accord which called for reducing energy use by as much as 30%, and thus would destroy the economies of entire nations. Shame on us for not playing along.

The actual language of the treaty says:

“The adverse effects of climate change and response measures, due to the historical cumulative GHG emissions of developed countries, constitute an additional burden on all developing country Parties (particularly low-lying coastal, arid and semi-arid areas or areas liable to floods, drought and desertification, and developing countries with fragile mountainous ecosystems) in reducing poverty, developing strategies to address social vulnerabilities and attaining sustainable development and a threat to achieving the United Nations Millennium Goals.”

There it is. We are to be punished for refusing to destroy ourselves. And why were we supposed to do that? Because of global warming. It doesn’t matter that scientists from around the world, including leading UN climate scientists now report that there is absolutely no evidence of man-made global warming. In fact, more and more scientists are reporting an actual cooling taking place. There is no nation drowning under rising oceans. There are no floods or hurricanes consuming nations.

Droughts and desertification in most cases is natural. The only man-made desertification taking place in the world is being caused by bad government policy. The worse example of desertification is taking place in the middle of California in one of the previously most productive agriculture areas in the world. Today, because of environmental protection policy, farmers have had their water cut off to save a one inch long fish. Will treaty money be sent to those farmers to pay them back for such policies? Of course not.

It doesn’t matter that science shows that CO2 is not a pollutant but a valuable natural substance necessary for the existence of life on earth.

Above all it doesn’t matter that the largest emitters of CO2 are China, India, and Brazil, and they are all exempt from the treaty’s massive restrictions on emissions and energy use. How, then, does such a treaty pretend to have anything to do with helping the environment? In truth it doesn’t, and every party involved, from the environmental groups to Barack Obama, knows that this treaty is designed to do one thing- redistribute wealth away from the developed nations to nations that want to suck the life blood out of the United States.

Nations like those in Africa are poor, not because of pollution, or lack of resources or even lack of education. They are poor for one reason -- bad government. Those that refuse to allow their people to own property and build their own wealth and dreams. Oppressive governments that confiscate the results of the labor of their people. Governments like Robert Mugabe’s in Zimbabwe, who took the breadbasket of Africa and turned it into a desert. And those same governments intend to be first in line to gather their share of the booty from the treaty. Will their people be better off? No. Will the environment be better off? No. Will the United States be better off after Obama signs this monster? No.

So who benefits? The United Nations finally gets its global government. The environmental groups finally get their power inside the elite. The totalitarian dictators of the poor, undeveloped nations get their Swiss bank accounts enlarged and all the trappings of wealth that go with it.

Will Barack Obama sign the Copenhagen Climate Change Treaty? Insider reports indicate that there are two things that could keep him from making the trip.

• First, if the language isn’t finished by the December meeting deadline he says he won’t go.
• Second, if the U.S. Congress has not yet passed the Cap and Trade fiasco (the domestic version of the treaty) he says he won’t go.

One thing is very clear. If Barack Obama signs the Copenhagen Climate Change Treaty he will be committing national suicide.

Americans must not ignore this threat. They must not sleep while Obama and his radicals drive us to destruction. Elected officials and the news media can no longer dismiss these threats as silly conspiracy theories. The time is now to let every elected representative in the Congress know that we will not tolerate Cap and Trade or the Climate Change Treaty. Allow either to become law of the land and stand back and watch the lights go out on the shining city on the hill.

© 2009 Tom DeWeese - All Rights Reserved

Tom DeWeese is president of the American Policy Center and Editor of The DeWeese Report, 70 Main Street, Suite 23, Warrenton Virginia. (540) 341-8911

The Road to Copenhagen Part I: The Club of Rome
The Road to Copenhagen Part II: Rise of the Social Engineers
The Road to Copenhagen Part III: A "Planetary Regime" in the Making
What Americans Need to Know About the Copenhagen Global Warming Conference
Global Warming Conspiracy: "Scandal that is One of the Greatest in Modern Science"
Where the Global Warming Hoax Was Born
The devastating book which debunks climate change
Gore: Break the law to push through Copenhagen
‘Parliament of World Religions’ urges Copenhagen to act on climate change
The Real Reason Behind The Copenhagen Walk-Out
UN Treaty Creates Globalist Wealth Transfer Agencies

Updated 12/18/09 (Newest Additions at End of List)

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The British Are Coming!

Britain: A Glimpse of America's Future?

By Dale Hurd, CBN News
November 18, 2009

Former President Ronald Reagan said the nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'

Yet the size of America's government is exploding; and if you want to see where big government will lead the U.S., take a look at Britain.

European Makeover

Wouldn't it be great if America was more like Europe? You might not think so, but someone in Washington, D.C. apparently does. Because a lot of the legislation going through Congress, if passed, could make America look a lot more like a European nation.

Such a scenario would include government-run health care, cap and trade energy rationing, and a massive overall explosion of government, which means massive government spending, massive government debt, and massive government intrusion into your life. It sounds to some people like Britain.

British author James Delingpole wrote a book titled Welcome to Obamaland. He says he's seen America's future, and it's in Britain. And he says our future doesn't work.

"I've seen America's future because what is happening in America now has been happening in Britain for at least the last 12 years," Delingpole said. "I've seen my country pretty much ruined by what is essentially a socialist administration, presented by this plausible likable guy (former Prime Minister Tony Blair).

"And I see the same thing happening in America. And I think America should worry about that," he warned.

Delingpole says America is on the same course toward the kind of sprawling expensive big government that Britain has -- one that will suffocate our economy and our freedoms.

Police State

Britain today is almost a police state. The British people are under more government surveillance than the Chinese. There are cameras everywhere.

Dr. Eamonn Butler, Director of the Adam Smith Institute in London and author of The Rotten State of Britain, said:

"In the half mile between Westminster cathedral near where we're sitting and Westminster abbey, I counted 160 surveillance cameras."

There's also a government plant to put cameras in the homes of families considered "at risk."

Not only that, a new law would mandate that every phone call, e-mail or Web site a person visits be stored for a year in case the government wants to snoop on them.

There's also a law under consideration that would limit energy use in Britain through an annual carbon allowance. Use too much fuel, and you could be penalized.

And big brother is also snooping through the trash. Some local governments are experimenting with smart garbage can sensors that can tell if Brits are, in the opinion of some bureaucrat, throwing away too much.

Butler said:

"There's this attempt really to control our lifestyles. Now we're having more and more pressure to drink less and eat less fatty food and all the rest of it. All of these things are done with the best of intentions, but in fact you have built up the apparatus of a police state.

"We haven't voted for it, but we haven't resisted it," he said. "And we've put enormous power into the hands of our politicians. And if bad guys got into power, they would have huge power and control over us."

Health Care Stalin Style

Britain also has government-run health care, like a lot of Democrats want in America.

But Delingpole has a warning.

"I'm not going to try to tell you that the American healthcare system is perfect. What I am going to tell you is, definitely do not copy our healthcare system."

"We call the NHS, our National Health Service, the envy of the world. It's the envy of the third world, maybe. It's a form of health care through almost Stalinist state allocation; health care through rationing," he said.

The horror stories about care rationing in Britain's National Health Service are many. British cancer specialist Karol Sikora told CBN News how difficult it can be to get lifesaving medicines for some patients if the drugs are expensive. Katie Brickell told us how she was denied a pap smear by the NHS, after which she developed terminal cervical cancer.

Big Government = Bankruptcy?

But big government isn't just inefficient. It's expensive. And some analysts are now saying that the British government has run out of money. Delingpole said:

"We are bankrupt. Britain is bankrupt."

"The official public debt figure is 47 percent. I think the real figure is something like 147 percent because there is so much of our debt that doesn't actually appear on the government's books," added Butler.

Britain has been in this mess before. It was the sick man of Europe in the 1970s; over-taxed, over-regulated, even needing a bailout from the International Monetary Fund before Margaret Thatcher's fiscal conservatism straightened out the economy.

Under Prime Ministers Tony Blair and Gordon Brown, the size of government ballooned again, and now the bill for Britain's 12-year socialist experiment has come due.

So is bigger government better government? Some Britons would tell you that, unless you want the government snooping through your trash can someday, it's not something America should strive for.

Welcome to Obamaland

Regnery Publishing, Inc.
February 2009

The Silver Lining to Barack Obama’s Election: It’s About to Get Much, Much Worse

Does the election of Barack Obama fill you with dread, rather than elation? Do you feel like your country has been high-jacked by a bunch of liberal fruitcakes who have no idea how to fix the economy, but know exactly how to ruin your life? Then good news: you're not alone!

So what's the bad news? It's about to get a lot worse, as witty British journalist James Delingpole shows in his laugh-out-loud funny, Welcome to Obamaland.

Offering conservatives courage (and comedy) for the dark days ahead, Delingpole reveals the future in Welcome to Obamaland. No, he's not clairvoyant. He's just British. Delingpole saw what "change" (read: socialism) did to Britain, and knows exactly where America is heading: into a morass of sprawling government that will slowly suffocate our economy, our liberties, and our culture.

In Britain, socialism came in under the smiling face of Tony Blair; in America, "change" has arrived under the vibrant guise of Barack Obama. But the result will be the same: the brave, independent American eagle will become the American turkey, oven-basted by the nanny state of Barack Obama, Hillary Clinton, Nancy Pelosi, and Harry Reid.

With his coruscating wit and side-splitting asides, Delingpole shows the damage smiling socialists can do and examines the new era of well-named but disastrous policies facing us:

"UNIVERSAL HEALTHCARE": Socialized medicine that will cost billions and introduce unprecedented waste, incompetence and malpractice to American hospitals.

"ETHICAL FOREIGN POLICY": A powerless national security policy created because the left refuses to believe the truth-terrorists have a violent, homicidal hatred for our culture and will do anything to wipe it off the Earth.

"ENVIRONMENTAL CARE": Climate-change hysteria, legislation and vastly expensive projects to conquer global warming. You'll be made to feel anything less is un-American.

"SOCIAL JUSTICE": State-enforced "fairness" through policies that reward those who make no effort and punish the successful.

Hilarious, impassioned, and perceptive, Welcome to Obamaland will have you laughing through your tears and taking courage from the eternal truth of conservative convictions.

Britain faces return to Victorian levels of poverty