What does Obama stand for?

Time to Pull the Plug on AIG

By Phil Kerpen

Director of Policy, Americans for Prosperity

The once-great insurance behemoth American International Group, or AIG, is now the living dead. It lives only because of massive taxpayer life support that is because of bailout after bailout of ever-increasing size. It started with a $85 billion bailout in September of 2008, which seemed outrageously large until taxpayers were forced to up the ante to $150 billion in December! The federal government now owns eighty percent of AIG, and is positioning taxpayers to make potentially unlimited future bailouts if AIG isn’t wound down.

In spite of all this taxpayer largesse, AIG is set to announce the biggest quarterly loss by any company in history on Monday –a $60 billion loss — and beg for more tax dollars. Can we finally say no?

It’s time to salvage the real businesses at AIG, sell them off, and pull the plug on AIG’s federal taxpayer life-support.

There are some divisions of the company that are in the traditional insurance businesses and are doing just fine. Those should be spun off. The cancer is the derivatives business, especially the credit-default swap business, which was central to the whole financial meltdown. Credit default swaps are insurance policies on bonds. Bondholders buy insurance to protect themselves in case the bonds they hold default. That is a risk-reduction strategy. But in recent years, people began buying enormous credit-default swaps without even owning the underlying bonds.

That’s a huge risk-magnification strategy –basically it’s just like casino gambling. One of the big risks those gamblers took is what’s called “counterparty risk.” That’s the risk that the person who sold you the insurance policy, in this case AIG, will be unable to play. Bailing out the folks who insured bonds they own may make sense for the sake of stability–although it’s arguable. Bailing out the gamblers who speculated in these swaps is completely unjustified. Gamblers who lost have no right to turn to taxpayers.

AIG’s cancerous credit default swap business can’t be saved. What all these bailouts do is use AIG as a conduit to funnel funds to all those gamblers holding swaps. I’ve heard that the biggest single holder of those swaps is Goldman Sachs, which may be one reason that company’s alumni have been so set on bailing out AIG. If we must bail out the companies who hold swaps written by AIG, we would be much better off bailing those companies out directly so they can be held accountable politically and in the court of public opinion.

There is simply no end in sight if continue to pour good money after bad in AIG. There are some businesses there that can be saved, but taxpayers cannot and should not be forced to pay what amount to bad gambling debts. We can’t get the old Ponzi scheme back up and running full-tilt for very long, as I wrote here yesterday.

It’s time to salvage the real businesses at AIG, sell them off, and pull the plug on AIG’s federal taxpayer life-support.

Phil Kerpen is director of policy for Americans for Prosperity.

http://foxforum.blogs.foxnews.com/2009/02/25/kerpen_aig/ 

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Fred Hill: From Local Ways & Means to City Lobbyist

The following article by TexasWatchdog.org exposes former Representative Fred Hill for seeking out city lobby contracts while still representing his constituents.  

Here is a portion: 

"Critics of the revolving door say voters and taxpayers are unable to tell when lawmakers stop thinking like lawmakers and start thinking like someone on the hunt for a job. And in Hill’s case – like many others who have waltzed through the revolving door – he went hunting for work from entities that had much to gain or lose from the actions on his committee: local governments.

Hill began thinking about a lobbying job in the months before he left the legislature. He announced around the middle of last year that he wouldn’t seek re-election. He registered his firm, a limited liability corporation called Solutions for Local Control, with the Secretary of State’s office on Nov. 20, records show."

To read the full story click here: http://tiny.cc/fredhill

Also - Please ReTweet this story if you are Twitter.  Just copy and paste this into your twitter status:

RT @TexasAFP Fred Hill: From Local Ways & Means to City Lobbyist - Taking our tax dollars any way he can http://tiny.cc/fredhill

Governor Perry's Letter to President Obama

President Barack Obama

The White House

Dear Mr. President:

I'm writing you today in response to stipulations set forth in H.R. 1, the $787 billion stimulus package you signed into law yesterday. As you know, I have been vocal in my opposition to this legislation because I believe there are better ways to reinvigorate our economy and believe H.R. 1 will burden future generations with unprecedented levels of debt.

Throughout the years, Texas taxpayers have sent substantially more dollars to Washington than we receive on issues ranging from transportation to border security and hurricane relief. As I have during the debate on H.R. 1, should Congress pass stimulus legislation using Texas tax dollars, I would work to ensure our citizens receive their fair share.

On behalf of the people of Texas, please allow this letter to certify that we will accept the funds in H.R. 1 and use them to promote economic growth and create jobs in a fiscally responsible manner that is in the best interest of Texas taxpayers. I remain opposed to using these funds to expand existing government programs, burdening the state with ongoing expenditures long after the funding has dried up.

I continue to believe the best way to stimulate the economy is the approach we are taking here in Texas. As a result of low taxes, controlled government spending and a predictable regulatory climate, nearly 80 percent of all jobs created in the United States were created in Texas; the vast majority of these were private sector jobs. Just last week, Texas was ranked the top exporting state in the nation for the seventh year in a row.

It was a pleasure meeting you in Philadelphia, and I appreciate your concern for the Texans displaced by Hurricane Ike. While we differ on solutions to the ongoing economic crisis facing our country, I believe we both share a desire to see our great nation endure as a beacon of freedom and economic vitality to the world.

Sincerely,

Rick Perry

Governor

WOW!

Long but VERY worth it...
What do you think?

How not to fix a problem.

There is no doubt that America is in a financial crisis. Even as conservatives, we must agree that our economy is in a slump. This is not the second coming of the Great Depression however, as many liberal doomsayers will have us believe. I would even hasten to call it a strong recession.

What we are seeing is a wane in the typical cycle of free market laissez-faire economics. This is the part where the weak fail and the strong prosper and the market clears up for new innovation and development.

We got to this point due to failed policies, some developed by corporations and others developed by do-gooder politicians, which had people borrowing money they didn’t have to get things they didn’t need. What should be happening now is that the companies that engaged in these practices should be punished economically for allowing poor loans and investments to happen. The people that asked for these loans and developed the poor investments should also be held responsible, including being financially responsible for their debt. If this means people lose the house they mortgaged that was out of their price range and are forced to live within their means, so be it.

The government has taken it upon themselves to help all of these people however. They are offering money to the institutions whose poor practices caused them to suffer, and giving out free passes to the individuals at the expense of tax payers who were responsible with their money and investments.

This is a dangerous step we are taking that destroys the basic tenet of capitalism and leads us ever closer to socialism. To quote the economist F.A. Hayek, “"The coming of socialism was to be the leap from the realm of necessity to the realm of freedom (Road to Serfdom, p. 25)."

To sum up the stupidity of the government’s plan in one statement; our government has decided the best way to fix the problem of individuals and institutions borrowing money they didn’t have to spend on things they don’t need, is for the government to borrow money they don’t have to fix institutions and individuals’ problems. Perhaps it has come time to let our government fail under the capitalistic system?