Thursday, January 29, 2009

545 Figureheads

Charlie Reese has been a journalist for 49 years.  His comments on the 545 Congressmen and women and Supreme Court judges who ought to take the blame for anything that goes wrong in the USA is excerpted below.  His anger and outrage are genuine and righteous.  But Charlie is wrong. Those 545 people don't run the government.  They are figureheads.  The real bosses don't stand for election.   

Right now we are witnessing a historic change in the machinery that determines our prosperity.  That machinery is the national banking systems of the developed nations.  In the U.S., it is the Federal Reserve System.

The Fed as an Imperial Dynasty

Note that the Fed is a corporation chartered by Congress and run by appointees from the very financial institutions that created this mess.  Geithner, former head of the New York Fed, is now head of Treasury and the IRS.  Dudley, the new head, is from Goldman, Sachs.  Fed appointees are not approved by any elected official. Nevertheless, the Fed controls our money supply, our interest rates, our monetary policy and the rate of inflation, and will now proceed to take direct control of the majority of major financial institutions using our tax money.  They will issue convertible debt instruments to banks that convert to equity (stock) at the fire sale prices that their policies created.  

This presumably benign escalation towards fiscal dictatorship was started by Republicans and is now being accelerated by Democrats.  Not one major media source even mentions it!  Everyone seems to welcome this new "regulation" as a cure for the economy!  Have you actually seen ANY published regulation that actually cures the economy?  If there were any, why would we have to spend a trillion dollars to do the same thing?

What does that tell you?

Fleecing the Credit Market

To date, $320 billion has been allocated to freeing up the credit markets.  This money went to bail out major banks and financial institutions.  $148 billion from the TARP fund went to 13 top banks.  Those banks have since shown a decrease in their loans of $46 billion.  That’s a total of $194 billion taken out of circulation, just the opposite of what was supposed to happen.  

Meanwhile, small and regional banks are failing all over the place.  The first thing that happens when the FDIC steps in to take over a failed banks is that the FDIC, another Federal agency, tries to broker the failed bank off to a stronger bank.   Those deals are also at fire sale prices.  The receiving bank gets the assets and deposits of the failed bank along with the liabilities, but the FDIC or TARP guarantees those liabilities.  

Those banks aren’t failing because they no longer make any money.  Their banking operations are usually still profitable.  They fail because their assets have been marked down to market by accountants, in accordance with the new accounting regulations fostered by the SEC.  The market drops, and the bank’s stocks, bonds and securities drop with it.  When the bank’s assets fall below a certain point and the bank no longer has adequate reserves, the FDIC steps in and takes it over.  The reserve ratio is dictated by the Fed.

OK, class.  In review, the gummint pumps money into top 13 banks, in order to free up credit markets.  At the same time the gummint regulates other banks in a down market so they fail.  Then the gummint sells off the failed banks to the big banks at fire sale prices.  The big banks use the taxpayer money the gummint gave them in the first place.  Nothing gets into the credit market.  

Does this make sense to you?

What does that tell you?


By Charlie Reese

Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?

Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

You and I don't propose a federal budget.  The president does.

You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.

You and I don't write the tax code, Congress does.

You and I don't set fiscal policy, Congress does.

You and I don't control monetary policy, the Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president, and nine Supreme Court justices  545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress.   In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason. They have no legal authority.  They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing.  I don't care if they offer a politician $1 million dollars in cash.

The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to

determine how he votes.

Those 545 human beings spend much of their energy convincing you that what they did is not their fault.   They cooperate in this common con regardless of party.


What separates a politician from a normal human being is an excessive amount of gall.   No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits.   The president can only propose a budget.   He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes.   Who is the speaker of the House?   Nancy Pelosi.  She is the leader of the majority party.  

She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.

If the tax code is unfair, it's because they want it unfair.

If the budget is in the red, it's because they want it in the red .

There are no insoluble government problems.

 Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.




  1. I thought the Chairman of the Fed had to be appointed by the US President and okayed by the US Senate.

    Other than that, are the heads of all the Fed Reserve Banks unappointed?

  2. The Chairman is elected by the members of the Fed.

  3. Each regional Fed member is appointed by his region. Supposedly, there is no political influence by the Executive branch or Congress.

  4. Retraction: The Chairman of the Fed is appointed by the President from a "recommendation" by the Fed Reserve Governors. Bryan, you were right.