The Ruthless Truth blog

by: wade norris

03/12/10 @ 10:55:51 AM MST

Headlines today tell of Wall Street bailouts and banking abuses that have resulted in our usurious credit card hikes, heartless foreclosures, and the bankruptcy of Greece’s entire economy. It seems that no person or institution is safe from corrupt banking practices.

While we might naively think that these practices are limited to Wall Street and large banking institutions, it has become clear that these practices have robbed our communities as well.
Big banks, along with politicians, have lured states and communities across the US to buy into banking derivatives or ’swaps’ and all are paying the price.
And in each of these cases, well heeled politicians were paving the way for the banks at the people’s expense.
Let’s look at a few example, and find out why Bill Richardson had to withdraw his name for Commerce Secretary, and why Colorado Senator Michael Bennet has a lot to explain.
(hattip to JeffcoBlue)

wade norris :: Banks stealing our America

To explain the derivatives that bankrupted Greece, and threaten to rob the pension of Colorado School Teachers, let’s look at this article from the New York Times:

Across our very own country, municipalities, school districts, sewer systems and other tax-exempt debt issuers are ensnared in the derivatives mess.
Like the credit default swaps that hid Greece’s obligations, the instruments weighing on our municipalities were brought to us by the creative minds of Wall Street. The rocket scientists crafting the products got backup from swap advisers, a group of conflicted promoters who consulted municipalities and other issuers. Both of these camps peddled swaps as a way for tax-exempt debt issuers to reduce their financing costs.

Now, however, the promised benefits of these swaps have mutated into enormous, and sometimes smothering, expenses. Making matters worse, issuers who want out of the arrangements – swap contracts typically run for 30 years – must pay up in order to escape.

That’s right. Issuers are essentially paying twice for flawed deals that bestowed great riches on the bankers and advisers who sold them. Taxpayers should be outraged, but to be angry you have to be informed – and few taxpayers may even know that the complicated arrangements exist.

So the Bankers have preying upon municipalities who needed financial solutions in a down economy, only to find out they had been duped.
But who was advising the municipalities? Our elected officials:
New Mexico:
(hattip Colleen Heild and Mike Gallagher)

They were touted as a state-of-the-art financing tool that would help New Mexico stretch its highway improvement dollars. Nearly five years later, state officials are trying to keep the $420 million in fancy financing from turning sour. In the last six months, one of the banks involved in the so-called interest rate swaps has gone bankrupt and the state has had to post about $16 million in collateral because the value of the investments dropped.  That’s in addition to major political fallout. The swaps and how a California company was selected to handle them are at the center of a federal grand jury investigation that derailed Gov. Bill Richardson’s nomination as commerce secretary.

It seems that many state municipalities engaged in swaps that are now causing a lot of anger among tax payers:

Eight California municipalities, including Los Angeles, Fresno and San Diego County, filed civil class-action, or group lawsuits. The suits, most of which were consolidated with others in U.S. District Court in New York City, allege that banks colluded by deliberately losing bids in exchange for winning one in the future, providing so-called courtesy bids, secretly compensating losing bidders and allowing banks to see other bids.

Brokers participated in the collusion by facilitating communication among banks and sharing in illegal profits, the civil class-action suits allege.

And what is the cost of extracting your state from the swap?

New York State provides a good example. An Oct. 30, 2009, filing describing its swaps shows that for the most recent fiscal year, April 2008 to March 2009, the state paid $103 million to terminate roughly $2 billion worth of swaps – more than a quarter of which resulted from the Lehman bankruptcy in September 2008.

On a local level here in Colorado, the circle grows tighter, as Colorado’s own State Senator, Chris Romer, was at that time the person lobbying for New Mexico to engage in these Swaps.

NMFA records show that among those lobbying for the swaps was a lead banker for JP Morgan, Chris Romer. His company ended up among the five banks that entered into swap agreements with the state.

And the ties to Colorado don’t stop there – Senate appointee – Colorado’s Michael Bennet was formerly at the head of Denver Public Schools. He was at the helm when the decision was made to invest the Teacher’s pension fund into a derivative ’swap’ deal. Now, 2 years, Denver Public Schools is paying about 3 million per month in losses on this swap.

DPS (Denver Public Schools) entered into negotiations with JP Morgan and CitiGroup, agreeing to issue fixed-rate bonds secured by DPS school buildings and other properties. DPS then began discussion to enter into an interest-rate swap agreement with JP Morgan, Bank of America and the Royal Bank of Canada. We believe that following ensued: DPS entered into a swap transaction, believing that interest rates would stay high. As recent financial news tells us, interest rates fell. We are concerned that this may have translated to a loss of taxpayer dollars.

I wonder if the local SEIU chapter will stand by it’s endorsement of the newly appointed Senator – Michael Bennet, who happens to have raised the  5th highest amount of campaign cash from Wall street banks and was responsible for putting our Teacher’s pension in a ’swap’   when SEIU international is now calling for a sweeping investigation of these ’swaps’.
In the face of the worst economy since the depression, we don’t need gambling on derivatives with taxpayer money at the expense of teacher’s pension.

Join SEIU’s call for an investigation ,to get some kind of justice.

As for me, I will support Bennet’s primary challenger.

http://archive.squarestate.net/diary/9479/banks-stealing-our-america

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Today Wyoming became the latest state to enact a Firearms Freedom act, following close on the heels of South Dakota where the governor signed a similar act last week. Oklahoma’s version has passed both houses of its legislature with large majorities and is expected to be signed soon. Five other states have already passed similar acts and 24 more have acts pending or ready to be introduced.

These acts declare that the federal government has no jurisdiction to regulate the manufacture and sales of firearms or ammunition within a state, so long as those activities do not cross state lines, causing them to enter federal jurisdiction under the interstate commerce clause of the Constitution. The Wyoming law includes a $2000 fine and a year in prison for any federal official attempting to interfere with gun rights under the law within the state.

The Bureau of Alcohol Tobacco and Firearms has disputed the validity of these laws on the basis that they are in conflict with federal firearms laws, asserting that federal regulations supersede state law even if the activities are kept within the state.

The Montana version of the FFA is being tested in federal court. If it is upheld as constitutional these laws may be the first step in the efforts of many state governments to reassert control over areas of governance where authority has been ceded to the federal government over the years. If the law is struck down as unconstitutional other states plan to also file suit over the issue.

If these firearms freedom laws succeed many states have similar legislation pending to assert other rights under the 10th Amendment with the ultimate goal of challenging the ability of the federal government to impose unfunded mandates and unpopular programs on the states against their will.

http://blogcritics.org/politics/article/wyoming-and-south-dakota-declare-firearms/

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by Daryl Luna

The New York Times reports:

A panel of educators convened by the nation’s governors and state school superintendents proposed a uniform set of academic standards on Wednesday, laying out their vision for what all the nation’s public school children should learn in math and English, year by year, from kindergarten to high school graduation.

The new proposals could transform American education, replacing the patchwork of standards ranging from mediocre to world-class that have been written by local educators in every state.

Don’t be fooled. This is just another effort to subvert state sovereignty in the guise of “doing the right thing for our children.” Whether it be the Carter-era formation of the Department of Education, the Bush-era “No Child Left Behind” legislation, or the Obama-era “race to the top” program, the federal government has over the past century led a concerted effort to fully extend its reach over the entire arena of education. The problem is that the federal government has zero constitutional authority to be involved in the business of education, and the expanded federal role has not led to positive results. These acts have merely been blind, unconstitutional power grabs–not improvements for education.

Alaska and Texas are the only states that refused to participate in the standards-writing process. I say, “GOOD FOR THEM!” They are exerting their right under the Tenth Amendment to manage their own education systems and refusing to participate in an unconstitutional program. If only they would do the same in a whole host of other areas, we might be getting somewhere.

By participating in this program, states will be opening themselves up further to a floodgate of federal influence, and that is not a good thing. As I have already said, the federal government has no constitutional right to be involved in education, but there are practical concerns as well.

Massachusetts is already finding the standards to be a problem. Their state standards are actually higher than the uniformed ones being offered up. Should they lower them to fit in with the masses? Moreover, should any state compromise its current pursuits by adopting a program that cannot guarantee success.

At the heart of a free republic is the concept of localization. That is, local entities know their needs better than a central government. It is simple enough. Localization better addresses local problems because solutions are carried out within a local context. I am not saying that all states are doing a stellar job in education. In fact, no state can or will succeed in education without proper competition and market incentives. Indeed, we must meet the challenges of education, but meeting them locally will be the key.

Another problem that plagues the unified standards plan is a neglect of human action in education. Not only is it unreasonable to assume children can all be held to the same standards and achieve at similar levels, it  is unreasonable to assume that students can achieve at all unless they are truly invested in their education. A Harvard-bound honor student and a slum-dwelling drug addict can be produced by the same schools with the same standards; it is the students, parents, teachers, and communities that make the difference. Until we realize that student achievement is not a direct result of dollars and programs, we will continue to see failed schools and wasted resources.

Look to the wealth of data if you are looking for empirical proof against government involvement in schools. There has been much policy research on the matter. I merely want to alert you to the fact that there is absolutely no convincing evidence that higher standards in education produce better results and point to the philosophical reasons you should be opposed to these latest educational developments.

The Boston Globe’s Jeff Jacoby rightly notes:

[T]he very nature of American society – a nation of 300 million comprising a multitude of ethnic, religious, social, and ideological traditions – argues against the imposition of one-size-fits-all education standards. There is no uniform answer to the question of what parents want most from their children’s education. “The greater the diversity of the people falling under a single schooling authority,’’ McCluskey observes, “the greater the conflict, the less coherent the curriculum, and the worse the outcomes.’’

Anyone who called for legislation to establish mandatory national standards for television programming or restaurant menus would be laughed at: Americans don’t think the government is competent to decide what shows they can watch on TV or what they can order for dinner when eating out. Is it any less risible to think that government knows best when it comes to your children’s education?

In fact, a uniform set of achievement standards will most likely have the same effect as more educational spending–public education will still produce the same results regardless of government influence. Only the cost and federal influence will increase.

This is an influence that we cannot afford. To solve our educational woes, the state should be getting out of the education business altogether. Funds should be returned to the taxpayers to educate according to their own desires. Private schools and home schooling already does an overall better job for a fraction of the price per student. It is prime time for privatization, but that will not occur in the near future. Until then we should be fighting back against centralized education attempts and unconstitutional federal action in a state’s matter.

As Jacoby concludes so will I:

Rather than centralizing even more government authority over the nation’s schools, genuine reform would move in the opposite direction. It is parents – not local, state, or federal officials – who should control education dollars. School and state should be separated, with schools being funded on the basis of their ability to attract students and teach them well. The primary responsibility for children’s education should be vested in the same people who bear the primary responsibility for their feeding, housing, and religious instruction: their mothers and fathers.

More government control is not the cure for what ails American schools. The empowerment of parents is. No teachers’ union, no school board, no secretary of education, and no president will ever love your children, or care about their schooling, as much as you do. In education as in so much else, high standards are important – far too important to hand off to the government.

Daryl Luna is an avid defender of the Constitution, a conservative/libertarian/classical liberal. Some just call him a “Ron Paul Republican.” Most of all, he is a Christian and a “Reformed/Calvinist” one at that. He blogs at In Defense of the Constitution with the goal of giving his opinion of the world and presenting the issues from a constitutional perspective.

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http://www.tenthamendmentcenter.com/2010/03/14/national-standards-will-merely-produce-national-dominance/

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Fraudonomics
Fri, 12 Mar 2010 11:30 EST

This is a slick little piece of propaganda. How does it work? First, show images of the world trade center collapsing and inform the audience that full body scanners will be installed at "Boston’s Logan Airport where two of the flights hijacked on 911 originated." Second, state that the scanners will better detect devices such as the one that was found in the underpants of the Christmas Day bomber. Next, ask whether the scanners are really necessary and then show footage of a high ranking TSA official testifying before Congress with the answer!
Good news! 150 machines are coming SOON to an airport near you! You will get to choose between a patdown/groping search or being irradiated in a full body scanner! And, it won’t take any extra time. AWESOME. By the end of the year, 500 new machines will be installed and operating. "Their deployment expanded and accelerated after the Christmas Day airline bombing attack." Your government cares about you and so does CNN!
Finally, show images of the plane that carried the Christmas Day underpantie stooge again.
An objective report may have disclosed that the full body scanners were not needed to prevent the underpants bomber from potentially harming anyone in the United States. Why? Simple. Because the government knew about him and could have prevented him from boarding the plane and entering the country. However, the government intentionally ALLOWED HIM ENTRY.

"Washington – The State Department didn’t revoke the visa of foiled terrorism suspect Umar Farouk Abdulmutallab because federal counterterrorism officials had begged off revocation, a top State Department official revealed Wednesday.
Patrick F. Kennedy, an undersecretary for management at the State Department, said Abdulmutallab’s visa wasn’t taken away because intelligence officials asked his agency not to deny a visa to the suspected terrorist over concerns that a denial would’ve foiled a larger investigation into al-Qaida threats against the United States.
"Revocation action would’ve disclosed what they were doing," Kennedy said in testimony before the House Committee on Homeland Security. Allowing Adbulmutallab to keep the visa increased chances federal investigators would be able to get closer to apprehending the terror network he is accused of working with, "rather than simply knocking out one solider in that effort."

"Washington – An official briefed on the attack on a Detroit airliner said Saturday the U.S. has known for at least two years that the suspect in the attack could have terrorist ties.
The official told The Associated Press that the suspect, Umar Farouk Abdul Mutallab, has been on a list that includes people with known or suspected contact or ties to a terrorist or terrorist organization. The official spoke on condition of anonymity because the investigation is ongoing."

In summary, the REAL STORY is that the government knowingly allowed Mr. underpants to enter the "homeland." Because of their INCOMPETENCE, every citizen of the country will be inconvenienced FOREVER when travelling by airplane. Also, the taxpayer will get to pay for all of these unnecessary machines, as well as the associated manpower and maintenance to operate them, FOREVER. On the bright side, at least Michael Chertoff, former secretary of the Department of Homeland Security, will profit handsomely from this little fiasco because he represents the company that manufactures the full body scanners. Good for you Michael Chertoff and good for your friends! Nicely played.

"Washington - Since the attempted bombing of a US airliner on Christmas Day, former Homeland Security secretary Michael Chertoff has given dozens of media interviews touting the need for the federal government to buy more full-body scanners for airports.
What he has made little mention of is that the Chertoff Group, his security consulting agency, includes a client that manufactures the machines. Chertoff disclosed the relationship on a CNN program Wednesday, in response to a question.
An airport passengers’ rights group on Thursday criticized Chertoff’s use of his former government credentials to advocate for a product that benefits his clients."

WAKE UP FOLKS. Nobody in the government gives a damn about your safety. It’s all about the money.

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