Wednesday, November 30, 2011
Germany, France press for coercive euro zone debt rules
By Stephen Brown and Jan Strupczewski
BERLIN/BRUSSELS (Reuters) - Germany and France stepped up a drive on Monday for coercive powers to reject euro zone members' budgets that breach EU rules, and the United States kept up the drumbeat of demands from the rest of the world for decisive action.
The OECD rich nations' economic think-tank said the European Central Bank should cut interest rates and abandon its reluctance to step up purchases of government bonds in order to restore confidence in the euro area, which now posed the main risk to the world economy.
The ECB shows no sign of doing so yet. It bought 8.5 billion euros of euro zone government debt in the latest week, at a time of acute turmoil, in line with its previous activity but well short of what economists say is necessary to turn market sentiment around.
President Barack Obama said the European crisis was a "huge issue" for the U.S. economy after meeting top European officials Herman Van Rompuy and Jose Manuel Barroso in Washington.
White House spokesman Jay Carney said Obama's message behind closed doors was that "Europe needs to take decisive action, conclusive action to handle this problem, and that it has the capacity to do so."
In Brussels, finance ministers of the 17-nation currency area meeting on Tuesday are due to approve detailed arrangements for scaling up the European Financial Stability Facility rescue fund to help prevent contagion in bond markets, and release a vital aid lifeline for Greece.
The signs are the EFSF may not have enough clout, leaving the onus firmly on the ECB. Sources have said the Obama administration has urged Europe to allow the ECB to act as lender of last resort as the U.S. Federal Reserve does.
Berlin and Paris aim to outline proposals for a fiscal union before a European Union summit on December 9 increasingly seen by investors as possibly the last chance to avert a breakdown of the single currency area.
"We are working intensively for the creation of a Stability Union," the German Finance Ministry said in a statement. "That is what we want to secure through treaty changes, in which we propose that the budgets of member states must observe debt limits."
Moody's Investors Service warned that the rapid escalation of the euro zone sovereign debt and banking crisis threatened all European government bond ratings.
"While Moody's central scenario remains that the euro area will be preserved without further widespread defaults, even this 'positive' scenario carries very negative rating implications in the interim period," the ratings agency said in a report.
German Finance Minister Wolfgang Schaeuble acknowledged on Sunday that it may not be possible to get all 27 EU member states to back treaty amendments, saying agreement should be reached among the 17 euro zone members.
"That can be done very quickly," he told ARD television.
Sources familiar with the Franco-German negotiations said they were also exploring a deal among a smaller number of countries outside the EU treaty if necessary. But progress toward tighter fiscal rules is unlikely to solve the crisis without an effective firewall to ward off market attacks.
"SAVE THE EURO"
The leaders of two smaller euro zone countries, Finland and Luxembourg, voiced unease about the Franco-German plans because they appeared to bypass the European Commission, which is seen as a guarantor of equal treatment for all member states.
"I am not too sure if it will get wider support. The disadvantage of this proposal is that it would bypass the EU, the Commission would have a very small role," Finnish Prime Minister Jyrki Katainen told reporters.
Luxembourg Prime Minister Jean-Claude Juncker, who chairs euro zone finance ministers, also warned against looking for instruments outside the EU treaty.
In France, Agriculture Minister Bruno Le Maire said euro zone countries would have to give up some budget sovereignty to save the euro from hostile "speculators."
"We won't be able to save the euro if we don't accept that national budgets will have to be a bit more controlled than in the past," Le Maire told Europe 1 radio.
Giving up any fiscal sovereignty is politically sensitive in France, which has a strong Gaullist, nationalist tradition.
Asked whether the Commission would be granted intrusive powers over national budgets in the euro zone, Le Maire said: "Why not? The French people have to realize what is at stake -- the preservation of our common currency and our sovereignty.
"What matters is that we ensure that budget discipline is respected within the euro zone. Otherwise the euro itself is threatened."
He acknowledged that France and Germany were still at odds over greater ECB intervention to rescue the euro but said: "We will have to find a compromise."
On financial markets, the euro regained ground after slipping below $1.33 in Asia and European shares jumped on hopes of fresh measures to fight the debt crisis. Italian, Spanish, French and Belgian bond yields fell, as did the cost of insuring those countries' debt against default.
But relief may be short-lived as the rally was partly due to an Italian newspaper report that the International Monetary Fund was in talks to lend Italy up to 600 billion euros -- more than its entire war chest -- which the IMF flatly denied.
"At this point in time the IMF has not received any request for assistance from, nor are we negotiating with, either Italy or Spain," IMF chief Christine Lagarde said after meeting with Peruvian President Ollanta Humala.
The European Commission also said Italy had not asked for any amount of money and there were no discussions at European level on aid for Rome.
IMF inspectors are due in Rome this week to examine Italy's public finances after former Prime Minister Silvio Berlusconi agreed earlier this month to submit to regular monitoring of his promised austerity measures and economic reforms.
IMF TO THE RESCUE?
EU officials say some sort of IMF program could make sense for both Italy and Spain as part of a multi-pronged response, involving the ECB and the euro zone rescue fund, to supervise reforms and restore investor confidence in their debt.
Reuters reported exclusively last week that Spain's People's party, due to form a government by mid-December, is considering seeking IMF aid as one option for shoring up public finances.
In its world economic outlook, the Organization for Economic Cooperation and Development urged "a substantial relaxation of monetary conditions," and said banks would need to be well capitalized and policies put in place for sovereigns to finance themselves at reasonable rates.
"This calls for rapid, credible and substantial increases in the capacity of the EFSF together with, or including, greater use of the ECB balance sheet," the OECD said.
OECD chief economist Pier Carlo Padoan said current plans to leverage the euro zone bailout fund were insufficient. Euro zone leaders planned to boost the EFSF up to 1 trillion euros, but the fund's head said it is now unlikely to achieve that.
The fund has yet to attract the pledges it hoped to get from countries with sovereign wealth to invest and Germany refuses to countenance allowing it to draw upon ECB funds.
(Additional reporting by Leigh Thomas in Paris, Emelia Sithole-Matarise in London, Matthias Sobolewski in Berlin, Ian Chua in Singapore,; writing by Paul Taylor and Mike Peacock)
Tuesday, November 29, 2011
Ann Coulter Gets Bleeped Out on ‘Morning Joe’ for Calling John McCain a ‘Douche Bag’
Posted on November 29, 2011 at 11:34am by 
Billy Hallowell
Most people who have watched or read Ann Coulter know that she isn’t afraid to make her opinions known. In a rare appearance on MSNBC’s “Morning Joe” today, Coulter held little back. In fact, the show’s producers clearly found her words so inflammatory that they bleeped them out for a total of 13 seconds.
Apparently, the conservative commentator called Arizona Sen. John McCain a “douche bag.” Following a few elongated bleeps, Coulter said, “What did I say? Oh, douche bag.” Host Joe Scarborough responded, saying, “Just blur it all out.”
So far, MSNBC hasn’t uploaded the clip, although Politico has grabbed and posted it for curious readers. Below, watch the “bleeps” and “blurs,” as Coulter takes aim at a politician she consistently slams:
This isn’t the first time someone has used inappropriate language on “Morning Joe.” Back in June, TIME Magazine editor Mark Halperin was suspended for calling President Obama “a dick.”
Billy HallowellMost people who have watched or read Ann Coulter know that she isn’t afraid to make her opinions known. In a rare appearance on MSNBC’s “Morning Joe” today, Coulter held little back. In fact, the show’s producers clearly found her words so inflammatory that they bleeped them out for a total of 13 seconds.
Apparently, the conservative commentator called Arizona Sen. John McCain a “douche bag.” Following a few elongated bleeps, Coulter said, “What did I say? Oh, douche bag.” Host Joe Scarborough responded, saying, “Just blur it all out.”
So far, MSNBC hasn’t uploaded the clip, although Politico has grabbed and posted it for curious readers. Below, watch the “bleeps” and “blurs,” as Coulter takes aim at a politician she consistently slams:
Of course this wasn’t the only awkward moment during her brief appearance. She later referred to the deceased Ted Kennedy as “human pestilence.” Watch the clip, here (courtesy of Newsbusters):
Coulter’s appearance on the show came about following a back-and-forth with Scarborough on Twitter:Union Gangsters: Heather Booth
Posted By Matthew Vadum On November 29, 2011 @ 12:16 am
When today’s labor leaders want to hone their gangster skills they call 1960s radical Heather Booth, a mentor to generations of the activist Left.
A disciple of Saul Alinsky, the socialist-feminist Booth co-founded the Chicago-based Midwest Academy, a training institute for community organizers. “Alinsky is to community organizing as Freud is to psychoanalysis,” she says. The Midwest Academy is funded in part by radical left-wing philanthropies such as George Soros’s Open Society Institute, Tides Foundation, and the Woods Fund of Chicago. (Barack Obama and Bill Ayers served together on the Woods Fund board.)
The Midwest Academy claims since 1973 to have “trained more than 30,000 activists in progressive organizations, unions, and faith-based groups” to help advance “the struggle for social, economic, and racial justice.” The school “teaches an organizing philosophy, methods and skills that enable ordinary people to actively participate in the democratic process.”
Early in her organizing career, Booth was more honest when discussing her beliefs. “Truly reaching socialism or feminism will likely take a revolution that is in fact violent, a rupture with the old ways in which the current ruling class and elites are wiped out,” she said in the 1970s.
Booth has been honored for her contributions to the American socialist movement. In 1987 the Chicago branch of Democratic Socialists of America (DSA) bestowed the Eugene Debs Award on Booth. The honor is named after the five-time presidential candidate and labor organizer who founded the Socialist Party of America. Other radical labor leaders and community organizers to receive the award are AFSCME Council 31 political director John D. Cameron (2011), SEIU executive vice president Eliseo Medina (2004), and AFL-CIO president Richard Trumka (1994).
But Booth long ago embraced using Alinskyite stealth and subterfuge to achieve a socialist transformation of America. She knew that political activists who openly self-identify as socialists are usually doomed to fail. So she decided to associate her views with values such as fair play and “democracy.”
Instead of confronting authorities directly, radicals should embrace incrementalism, she reasoned. They ought to push for issues that matter in people’s daily lives such as health care and urban redevelopment.
The Midwest Academy, which is only one of the training facilities she created, helps organizers con the masses into accepting socialism. The school’s website is littered with a smorgasbord of Alinskyite boilerplate. For example:
Booth is now one of the better connected labor thugs in Washington, D.C. Her husband is Paul Booth, formerly national secretary of Students for a Democratic Society (SDS). Mr. Booth is executive assistant to Gerald McEntee, president of the powerful public sector employees’ union AFSCME.
In 2007 she was director of the AFL-CIO’s campaign for universal healthcare.
She was also was training director for the Democratic National Committee during the Clinton administration. She was founding director of the NAACP National Voter Fund in 2000, and claims to have increased black voter turnout by almost 2 million votes. She has done consulting work for the Center for Community Change, MoveOn, Campaign for Comprehensive Immigration Reform, Campaign for America’s Future, and the National Organization for Women.
In 1992 Booth was director of field operations for Carol Moseley-Braun’s (D-IL) successful run for the U.S. Senate. That was the same campaign that made Barack Obama, who led a get-out-the-vote effort benefiting Moseley-Braun, a rising star in the organizing community.
Booth also founded the innocuous-sounding Americans for Financial Reform, a labor-backed pressure group that advocates an economy-killing “financial speculation tax.”
“A big battle still needs to be waged to curb the incentive for speculation and to get our money back to fund jobs and health care, climate and more,” she said last year. “This fight against Wall Street is part of an even larger fight over who matters in the society, over our values and our priorities, over whether or not we have corporate control in banking, whether BP can destroy the coast, whether the insurance companies can deny our health care, whether companies can dominate our politics saying that money is speech,” Booth said.
On Dec. 13, the Midwest Academy awards in Washington, D.C. will honor one of the chief architects of the mortgage collapse, retiring Congressman Barney Frank (D-MA) and radical Congressman Keith Ellison (D-MN), a Muslim who co-chairs the far-left Congressional Progressive Caucus.
Booth is likely to provide the entertainment that night.
She can be embarrassingly schmaltzy when surrounded by fellow believers. During a panel discussion at a leftist confab in October, Booth led her fellow Marxists in a stirring recitation of the old labor movement song “Solidarity Forever.”
Perhaps at next month’s awards ceremony she’ll let her guard down and recite the lyrics of “The Internationale” instead.
When today’s labor leaders want to hone their gangster skills they call 1960s radical Heather Booth, a mentor to generations of the activist Left.
A disciple of Saul Alinsky, the socialist-feminist Booth co-founded the Chicago-based Midwest Academy, a training institute for community organizers. “Alinsky is to community organizing as Freud is to psychoanalysis,” she says. The Midwest Academy is funded in part by radical left-wing philanthropies such as George Soros’s Open Society Institute, Tides Foundation, and the Woods Fund of Chicago. (Barack Obama and Bill Ayers served together on the Woods Fund board.)
The Midwest Academy claims since 1973 to have “trained more than 30,000 activists in progressive organizations, unions, and faith-based groups” to help advance “the struggle for social, economic, and racial justice.” The school “teaches an organizing philosophy, methods and skills that enable ordinary people to actively participate in the democratic process.”
Early in her organizing career, Booth was more honest when discussing her beliefs. “Truly reaching socialism or feminism will likely take a revolution that is in fact violent, a rupture with the old ways in which the current ruling class and elites are wiped out,” she said in the 1970s.
Booth has been honored for her contributions to the American socialist movement. In 1987 the Chicago branch of Democratic Socialists of America (DSA) bestowed the Eugene Debs Award on Booth. The honor is named after the five-time presidential candidate and labor organizer who founded the Socialist Party of America. Other radical labor leaders and community organizers to receive the award are AFSCME Council 31 political director John D. Cameron (2011), SEIU executive vice president Eliseo Medina (2004), and AFL-CIO president Richard Trumka (1994).
But Booth long ago embraced using Alinskyite stealth and subterfuge to achieve a socialist transformation of America. She knew that political activists who openly self-identify as socialists are usually doomed to fail. So she decided to associate her views with values such as fair play and “democracy.”
Instead of confronting authorities directly, radicals should embrace incrementalism, she reasoned. They ought to push for issues that matter in people’s daily lives such as health care and urban redevelopment.
The Midwest Academy, which is only one of the training facilities she created, helps organizers con the masses into accepting socialism. The school’s website is littered with a smorgasbord of Alinskyite boilerplate. For example:
Oppressive social structures are maintained in part because authorities masquerade as benevolent, define inequalities as too complex for resolution, and hide real conflicts of interest in a fairy tale of paternal benevolence. An organizer, therefore, seeks out confrontations and conflict; for the organizer understands that only in conflict situations do issues become clear with real interests no longer camouflaged; only in conflict situations does the rhetoric of the powerful lie exposed and the mobilization of a movement become possible.Prominent Midwest Academy alumni include former SEIU chief Andy Stern and Miles S. Rapport, president of the influential left-wing pressure group Demos. Lesser known radicals such as Carlos Jimenez, an organizer with the labor-backed Jobs with Justice, and Becky Wasserman, a lobbyist at the anti-Israel group J Street, are also alumni.
Booth is now one of the better connected labor thugs in Washington, D.C. Her husband is Paul Booth, formerly national secretary of Students for a Democratic Society (SDS). Mr. Booth is executive assistant to Gerald McEntee, president of the powerful public sector employees’ union AFSCME.
In 2007 she was director of the AFL-CIO’s campaign for universal healthcare.
She was also was training director for the Democratic National Committee during the Clinton administration. She was founding director of the NAACP National Voter Fund in 2000, and claims to have increased black voter turnout by almost 2 million votes. She has done consulting work for the Center for Community Change, MoveOn, Campaign for Comprehensive Immigration Reform, Campaign for America’s Future, and the National Organization for Women.
In 1992 Booth was director of field operations for Carol Moseley-Braun’s (D-IL) successful run for the U.S. Senate. That was the same campaign that made Barack Obama, who led a get-out-the-vote effort benefiting Moseley-Braun, a rising star in the organizing community.
Booth also founded the innocuous-sounding Americans for Financial Reform, a labor-backed pressure group that advocates an economy-killing “financial speculation tax.”
“A big battle still needs to be waged to curb the incentive for speculation and to get our money back to fund jobs and health care, climate and more,” she said last year. “This fight against Wall Street is part of an even larger fight over who matters in the society, over our values and our priorities, over whether or not we have corporate control in banking, whether BP can destroy the coast, whether the insurance companies can deny our health care, whether companies can dominate our politics saying that money is speech,” Booth said.
On Dec. 13, the Midwest Academy awards in Washington, D.C. will honor one of the chief architects of the mortgage collapse, retiring Congressman Barney Frank (D-MA) and radical Congressman Keith Ellison (D-MN), a Muslim who co-chairs the far-left Congressional Progressive Caucus.
Booth is likely to provide the entertainment that night.
She can be embarrassingly schmaltzy when surrounded by fellow believers. During a panel discussion at a leftist confab in October, Booth led her fellow Marxists in a stirring recitation of the old labor movement song “Solidarity Forever.”
Perhaps at next month’s awards ceremony she’ll let her guard down and recite the lyrics of “The Internationale” instead.
A Bailout Monstrosity
Posted By Arnold Ahlert On November 29, 2011 @ 12:17 am
On Monday, after two years of efforts to pierce the veil of secrecy surrounding the largest bank bailout in history, Bloomberg.com revealed the true scope of the phrase, “too big to fail.” In short, the number is staggering: total loan guarantees and lending limits engineered by the Federal Reserve to rescue the financial system amounted to $7.77 trillion as of March 2009. Bloomberg got the information after the Supreme Court rejected an appeal last March by the Clearing House Association LLC, a group comprised of the nation’s largest commercial banks. They, along with Fed Chairman Ben Bernanke, tried to prevent the details from becoming public. The ultimate question: was both the scope of the effort–and the secrecy surrounding it–necessary? Unfortunately, the answer to that question is far from clear.
One thing is certain. In order to accept that any or all parts of the numerous transactions involved were necessary, one is required to accept as a given that the entire financial world was on the brink of systemic collapse. Was it? Perhaps a more accurate answer to that question is that the status quo was on the brink of collapse. It was a status quo where “too big to fail” had been institutionalized long before this particular crisis took hold. In 1984, faced with the failure of Continental Illinois, a large commercial bank, the government not only engineered a rescue, but extended FDIC insurance to both the bank depositors and all its other lenders, including those whose accounts exceeded FDIC limits, as well as global bondholders. In 1998, Long-Term Capital Management, a hedge fund whose financial excesses had many major Wall Street firms on the hook, was rescued by the Federal Reserve with funding from its member banks. Thus, long before the government-engineered housing crisis that led to the debacle of 2008 took hold, the pattern of “privatizing profits and socializing losses” had been established. This situation virtually invited financial institutions to take greater and greater risks.
As this latest revelation shows, those risks reached astronomical levels. In a single day, December 5, 2008, the banks were in such dire straits they needed a combined $1.2 trillion to remain solvent. Yet even as financial institutions were taking Fed funds, some of their leading officers were touting the strengths of the institutions involved. On Nov. 26, 2008, Bank of America Corp.’s former CEO, Kenneth D. Lewis, informed shareholders that B of A was “one of the strongest and most stable major banks in the world” despite owing the Federal Reserve $86 billion at the time. In a March 26 letter to shareholders, JP Morgan Chase & Co. CEO Jamie Dimon claimed his firm used the Fed’s Term Auction Facility (TAF) “at the request of the Federal Reserve to help motivate others to use the system,” even though the bank’s total borrowings were nearly twice its cash holdings. He also failed to mention that the height of Chase’s borrowing, which crested to $48 billion, occurred on Feb. 26, 2009–over a year after the TAF had been created. Spokesmen for both banks declined to comment.
Furthermore, borrowing by banks from the Fed substantially exceeded the $700 billion they borrowed from the Troubled Asset Relief Program (TARP), the rescue plan engineered by the government. The six largest U.S. banks–JP Morgan, Bank of America, Citigroup, Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley–received $160 billion of TARP funds, even as they took $460 billion from the Fed. Such borrowing amounted to 63 percent of the average daily debt owed to the Fed by all publicly traded U.S. banks, money managers and investment-service firms. That represented a 13 percent increase from the 50 percent the Big Six owed prior to the bailout.
And then there was the secrecy. Bush administration officials who managed the TARP program were unaware of what the Fed was doing. So were top aides to then-Treasury Secretary Hank Paulson. So was Congress, including Judd Gregg, former New Hampshire senator who was a lead Republican negotiator on TARP, and Rep. Barney Frank (D-MA), who chaired the House Financial Services Committee. Cryptically both men claim they were unaware of the “specifics,” although Frank admitted both men “were aware emergency efforts [by the Fed] were going on.” Even Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, said he “wasn’t aware of the magnitude” of Federal Reserve lending taking place.
Fed Chairman Ben Bernanke justified the secrecy, claiming that borrowers would be “stigmatized” if the extent of their loans were revealed. He further contended that investors and counterparties would shun such firms, and that needy firms would be reluctant to borrow — in the next crisis. Others contend revealing the extent of the crisis as it was happening would have exacerbated it, leading to a run on financial institutions, subsequently leading to even greater lending by the Fed as a result.
Whether either argument is reasonable is debatable. But what is now known is that the lack of knowledge was undoubtedly influential. The results of congressional legislation enacted–and not enacted–may have been radically different if those voting would have been privy to the extent of the Fed involvement. For example, the amount of money doled out via TARP legislation was based on information supplied by the Fed to the Treasury Department. Ostensibly, only banks that were still “healthy” enough to survive would merit funding, a point reinforced by Bernanke himself in a speech in April of 2009. Yet Fed internal memos described one of its biggest borrowers, Citigroup, as “marginal.” At its peak in January of 2009, Citigroup owed the Fed $99.5 billion. One month later Bank of America owed the Fed $91.4 billion. Yet the top prize for a “healthy” borrower goes to Morgan Stanley. On the day of September 29, 2008 alone, they owed the Fed $107 billion.
Another piece of legislation undoubtedly influenced by the secrecy was the Safe Banking Act of 2010. Introduced by Senator Sherrod Brown (D-OH) and former Senator Ted Kaufman (D-DE), the bill was about placing hard caps on the leveraging abilities and size of financial institutions, aimed primarily at the aforementioned Big Six banking institutions. “The amount of pain that people, through no fault of their own, had to endure–and the prospect of putting them through it again–is appalling,” Kaufman said. “The public has no more appetite for bailouts. What would happen tomorrow if one of these big banks got in trouble? Can we survive that?” he asked.
Bank lobbyists weren’t about to give up without a fight. From 2006 to 2010, spending to defeat the bill increased from $22.1 million to $29.4 million. The Financial Stability Board (FSF) sent a letter to Congress November 13, 2009, touting the “stability of large banks” and citing the “irreparable economic harm to the growth and job-creating capacity of the U.S. economy” if such a bill were to pass. Top Obama administration officials sided with the FSF, including Treasury Secretary Tim Geithner who, according to Kaufman, told the ex-senator that issue was “too complex for Congress and that people who know the markets should handle these decisions.” The bill was defeated 60-31. Kaufman believes support for the bill would have been much greater if Congress knew the extent of the Fed’s intervention.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, billed as a fix for the financial industry, was also debated without knowing the scope of the Fed’s involvement. Ironically, it creates a Financial Stability Oversight Council that has the power to shut down failing institutions in an “orderly way.” The irony? The council is headed by Secretary Geithner.
Former Senator Bob Dorgan (D-ND) believes greater knowledge might have also led to the re-instatement of the Glass-Steagall Act. The Depression-era legislation separated deposit and investment banks. Its repeal during the Clinton administration–a move the former president now regrets–led to the creation of the mega-banks at the heart of the crisis. Newt Gingrich, who also supported the repeal, has recanted as well.
On the other hand, the mega-bailout has its defenders. “Ladies and Gentlemen, this is what a lender of last resort looks like,” writes Reuters columnist Felix Salmon referring to the Bloomberg piece. “The Fed didn’t blink: it kept on lending, as much as it could, to any bank which needed the money, because, in a crisis, that’s its job,” he adds. “Supporting financial-market stability in times of extreme market stress is a core function of central banks,” says William B. English, director of the Fed’s Division of Monetary Affairs. “Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses.”
One suspects many Americans would dispute that assessment. While bigger banks have eased some of their credit restrictions, 80 percent of lenders have tighter credit since 2008. Furthermore, the “most prevalent tightening occurs in CRE (commercial real estate) loans, leasing, and small business loans. The most prevalent easing is in international, large corporate, asset-based lending, and leveraged loans.” In other words, Main Street borrowers are still taking it on the chin while Wall Street is back to business as usual.
Maybe better than usual. Even though it’s a relatively small number, banks earned an estimated $13 billion of income by taking advantage of the Fed’s below-market rates during the crisis. Total assets held by the Big Six have increased 39 percent, from $6.8 trillion on September 30, 2006 to $9.5 trillion as of September 30, 2011. The Big Six have also paid out $146.3 billion in compensation in 2010, which comes to $126,342 per worker. “The pay levels came back so fast at some of these firms that it appeared they really wanted to pretend they hadn’t been bailed out,” says Anil Kashyap, a former Fed economist who’s now a professor of economics at the University of Chicago Booth School of Business. “They shouldn’t be surprised that a lot of people find some of the stuff that happened totally outrageous.”
Much of the outrage is eminently justified. The overwhelming amount of it stems from the fact that while ordinary Americans were being hammered by a recession (and still are), the crony-capitalist nexus of big government and big finance was engineering a cushy landing for some of the most irresponsible people on the planet. People who not only remain unaccountable for their behavior, but have prospered from it.
Perhaps it was a necessary evil in the sense that a systemic failure might have hurt innocent Americans even worse than what has occurred. But it is truly disturbing that not one CEO or any other board member of the institutions who benefitted from the Fed bailout or TARP–which Bloomberg revealed was essentially collateral for the far bigger loans–was forced to resign as a condition for receiving the funds. And the “brain drain” rationale used to justify that fact is a howler. These are the same “brains” who brought the nation to its knees. No one but their equally-compromised colleagues would miss them.
Moreover, the revelations of the Fed bailout may have other repercussions. Already, Reuter’s Felix Simon is contending that the European Central Bank (EBC) should emulate the Fed and bail out the European Union. On Monday the White House also pledged its support to the EU, in order to “reinvigorate economic growth, create jobs and ensure financial stability.” And lest anyone forget, American taxpayers fund the International Money Fund (IMF) that has provided billions for the Greek bailout.
Furthermore, the Occupy Wall Street movement, despite its tenuous grasp of economics and its anti-capitalist underpinnings, is sure to get a boost. The boost will come from those Americans whose grasp of both concepts is equally suspect, and those who don’t understand that the word “crony” in front of the word “capitalism” completely changes the parameters of the debate, as sure as the word “illegal” in front of immigrant does.
As for the idea that the financial industry has been saved and that something like this couldn’t happen again, Exhibits A and B offer a different perspective. Exhibit A is the EU, which has the capacity to drag any number of American financial institutions back into trouble. Which ones? No one knows for sure, as “transparency,” despite all contentions to the contrary, remains steadfastly elusive. Exhibit B is the move by Fitch ratings agency, affirming the AAA status of U.S. debt–but changing its outlook going forward from “stable” to “negative.” Chances of another downgrade? Better than 50 percent over the next two years.
So was the Fed bailout a success? The “lender of last resort” claims almost all of the loans have been repaid, and that there have been no losses. But there is something equally big at stake here. Nobel Prize-winning economist Oliver E. Williamson explains. “The banks that were too big got even bigger, and the problems that we had to begin with are magnified in the process,” he notes. “The big banks have incentives to take risks they wouldn’t take if they didn’t have government support. It’s a serious burden on the rest of the economy.”
Burden? More moral hazard on steroids.
On Monday, after two years of efforts to pierce the veil of secrecy surrounding the largest bank bailout in history, Bloomberg.com revealed the true scope of the phrase, “too big to fail.” In short, the number is staggering: total loan guarantees and lending limits engineered by the Federal Reserve to rescue the financial system amounted to $7.77 trillion as of March 2009. Bloomberg got the information after the Supreme Court rejected an appeal last March by the Clearing House Association LLC, a group comprised of the nation’s largest commercial banks. They, along with Fed Chairman Ben Bernanke, tried to prevent the details from becoming public. The ultimate question: was both the scope of the effort–and the secrecy surrounding it–necessary? Unfortunately, the answer to that question is far from clear.
One thing is certain. In order to accept that any or all parts of the numerous transactions involved were necessary, one is required to accept as a given that the entire financial world was on the brink of systemic collapse. Was it? Perhaps a more accurate answer to that question is that the status quo was on the brink of collapse. It was a status quo where “too big to fail” had been institutionalized long before this particular crisis took hold. In 1984, faced with the failure of Continental Illinois, a large commercial bank, the government not only engineered a rescue, but extended FDIC insurance to both the bank depositors and all its other lenders, including those whose accounts exceeded FDIC limits, as well as global bondholders. In 1998, Long-Term Capital Management, a hedge fund whose financial excesses had many major Wall Street firms on the hook, was rescued by the Federal Reserve with funding from its member banks. Thus, long before the government-engineered housing crisis that led to the debacle of 2008 took hold, the pattern of “privatizing profits and socializing losses” had been established. This situation virtually invited financial institutions to take greater and greater risks.
As this latest revelation shows, those risks reached astronomical levels. In a single day, December 5, 2008, the banks were in such dire straits they needed a combined $1.2 trillion to remain solvent. Yet even as financial institutions were taking Fed funds, some of their leading officers were touting the strengths of the institutions involved. On Nov. 26, 2008, Bank of America Corp.’s former CEO, Kenneth D. Lewis, informed shareholders that B of A was “one of the strongest and most stable major banks in the world” despite owing the Federal Reserve $86 billion at the time. In a March 26 letter to shareholders, JP Morgan Chase & Co. CEO Jamie Dimon claimed his firm used the Fed’s Term Auction Facility (TAF) “at the request of the Federal Reserve to help motivate others to use the system,” even though the bank’s total borrowings were nearly twice its cash holdings. He also failed to mention that the height of Chase’s borrowing, which crested to $48 billion, occurred on Feb. 26, 2009–over a year after the TAF had been created. Spokesmen for both banks declined to comment.
Furthermore, borrowing by banks from the Fed substantially exceeded the $700 billion they borrowed from the Troubled Asset Relief Program (TARP), the rescue plan engineered by the government. The six largest U.S. banks–JP Morgan, Bank of America, Citigroup, Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley–received $160 billion of TARP funds, even as they took $460 billion from the Fed. Such borrowing amounted to 63 percent of the average daily debt owed to the Fed by all publicly traded U.S. banks, money managers and investment-service firms. That represented a 13 percent increase from the 50 percent the Big Six owed prior to the bailout.
And then there was the secrecy. Bush administration officials who managed the TARP program were unaware of what the Fed was doing. So were top aides to then-Treasury Secretary Hank Paulson. So was Congress, including Judd Gregg, former New Hampshire senator who was a lead Republican negotiator on TARP, and Rep. Barney Frank (D-MA), who chaired the House Financial Services Committee. Cryptically both men claim they were unaware of the “specifics,” although Frank admitted both men “were aware emergency efforts [by the Fed] were going on.” Even Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, said he “wasn’t aware of the magnitude” of Federal Reserve lending taking place.
Fed Chairman Ben Bernanke justified the secrecy, claiming that borrowers would be “stigmatized” if the extent of their loans were revealed. He further contended that investors and counterparties would shun such firms, and that needy firms would be reluctant to borrow — in the next crisis. Others contend revealing the extent of the crisis as it was happening would have exacerbated it, leading to a run on financial institutions, subsequently leading to even greater lending by the Fed as a result.
Whether either argument is reasonable is debatable. But what is now known is that the lack of knowledge was undoubtedly influential. The results of congressional legislation enacted–and not enacted–may have been radically different if those voting would have been privy to the extent of the Fed involvement. For example, the amount of money doled out via TARP legislation was based on information supplied by the Fed to the Treasury Department. Ostensibly, only banks that were still “healthy” enough to survive would merit funding, a point reinforced by Bernanke himself in a speech in April of 2009. Yet Fed internal memos described one of its biggest borrowers, Citigroup, as “marginal.” At its peak in January of 2009, Citigroup owed the Fed $99.5 billion. One month later Bank of America owed the Fed $91.4 billion. Yet the top prize for a “healthy” borrower goes to Morgan Stanley. On the day of September 29, 2008 alone, they owed the Fed $107 billion.
Another piece of legislation undoubtedly influenced by the secrecy was the Safe Banking Act of 2010. Introduced by Senator Sherrod Brown (D-OH) and former Senator Ted Kaufman (D-DE), the bill was about placing hard caps on the leveraging abilities and size of financial institutions, aimed primarily at the aforementioned Big Six banking institutions. “The amount of pain that people, through no fault of their own, had to endure–and the prospect of putting them through it again–is appalling,” Kaufman said. “The public has no more appetite for bailouts. What would happen tomorrow if one of these big banks got in trouble? Can we survive that?” he asked.
Bank lobbyists weren’t about to give up without a fight. From 2006 to 2010, spending to defeat the bill increased from $22.1 million to $29.4 million. The Financial Stability Board (FSF) sent a letter to Congress November 13, 2009, touting the “stability of large banks” and citing the “irreparable economic harm to the growth and job-creating capacity of the U.S. economy” if such a bill were to pass. Top Obama administration officials sided with the FSF, including Treasury Secretary Tim Geithner who, according to Kaufman, told the ex-senator that issue was “too complex for Congress and that people who know the markets should handle these decisions.” The bill was defeated 60-31. Kaufman believes support for the bill would have been much greater if Congress knew the extent of the Fed’s intervention.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, billed as a fix for the financial industry, was also debated without knowing the scope of the Fed’s involvement. Ironically, it creates a Financial Stability Oversight Council that has the power to shut down failing institutions in an “orderly way.” The irony? The council is headed by Secretary Geithner.
Former Senator Bob Dorgan (D-ND) believes greater knowledge might have also led to the re-instatement of the Glass-Steagall Act. The Depression-era legislation separated deposit and investment banks. Its repeal during the Clinton administration–a move the former president now regrets–led to the creation of the mega-banks at the heart of the crisis. Newt Gingrich, who also supported the repeal, has recanted as well.
On the other hand, the mega-bailout has its defenders. “Ladies and Gentlemen, this is what a lender of last resort looks like,” writes Reuters columnist Felix Salmon referring to the Bloomberg piece. “The Fed didn’t blink: it kept on lending, as much as it could, to any bank which needed the money, because, in a crisis, that’s its job,” he adds. “Supporting financial-market stability in times of extreme market stress is a core function of central banks,” says William B. English, director of the Fed’s Division of Monetary Affairs. “Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses.”
One suspects many Americans would dispute that assessment. While bigger banks have eased some of their credit restrictions, 80 percent of lenders have tighter credit since 2008. Furthermore, the “most prevalent tightening occurs in CRE (commercial real estate) loans, leasing, and small business loans. The most prevalent easing is in international, large corporate, asset-based lending, and leveraged loans.” In other words, Main Street borrowers are still taking it on the chin while Wall Street is back to business as usual.
Maybe better than usual. Even though it’s a relatively small number, banks earned an estimated $13 billion of income by taking advantage of the Fed’s below-market rates during the crisis. Total assets held by the Big Six have increased 39 percent, from $6.8 trillion on September 30, 2006 to $9.5 trillion as of September 30, 2011. The Big Six have also paid out $146.3 billion in compensation in 2010, which comes to $126,342 per worker. “The pay levels came back so fast at some of these firms that it appeared they really wanted to pretend they hadn’t been bailed out,” says Anil Kashyap, a former Fed economist who’s now a professor of economics at the University of Chicago Booth School of Business. “They shouldn’t be surprised that a lot of people find some of the stuff that happened totally outrageous.”
Much of the outrage is eminently justified. The overwhelming amount of it stems from the fact that while ordinary Americans were being hammered by a recession (and still are), the crony-capitalist nexus of big government and big finance was engineering a cushy landing for some of the most irresponsible people on the planet. People who not only remain unaccountable for their behavior, but have prospered from it.
Perhaps it was a necessary evil in the sense that a systemic failure might have hurt innocent Americans even worse than what has occurred. But it is truly disturbing that not one CEO or any other board member of the institutions who benefitted from the Fed bailout or TARP–which Bloomberg revealed was essentially collateral for the far bigger loans–was forced to resign as a condition for receiving the funds. And the “brain drain” rationale used to justify that fact is a howler. These are the same “brains” who brought the nation to its knees. No one but their equally-compromised colleagues would miss them.
Moreover, the revelations of the Fed bailout may have other repercussions. Already, Reuter’s Felix Simon is contending that the European Central Bank (EBC) should emulate the Fed and bail out the European Union. On Monday the White House also pledged its support to the EU, in order to “reinvigorate economic growth, create jobs and ensure financial stability.” And lest anyone forget, American taxpayers fund the International Money Fund (IMF) that has provided billions for the Greek bailout.
Furthermore, the Occupy Wall Street movement, despite its tenuous grasp of economics and its anti-capitalist underpinnings, is sure to get a boost. The boost will come from those Americans whose grasp of both concepts is equally suspect, and those who don’t understand that the word “crony” in front of the word “capitalism” completely changes the parameters of the debate, as sure as the word “illegal” in front of immigrant does.
As for the idea that the financial industry has been saved and that something like this couldn’t happen again, Exhibits A and B offer a different perspective. Exhibit A is the EU, which has the capacity to drag any number of American financial institutions back into trouble. Which ones? No one knows for sure, as “transparency,” despite all contentions to the contrary, remains steadfastly elusive. Exhibit B is the move by Fitch ratings agency, affirming the AAA status of U.S. debt–but changing its outlook going forward from “stable” to “negative.” Chances of another downgrade? Better than 50 percent over the next two years.
So was the Fed bailout a success? The “lender of last resort” claims almost all of the loans have been repaid, and that there have been no losses. But there is something equally big at stake here. Nobel Prize-winning economist Oliver E. Williamson explains. “The banks that were too big got even bigger, and the problems that we had to begin with are magnified in the process,” he notes. “The big banks have incentives to take risks they wouldn’t take if they didn’t have government support. It’s a serious burden on the rest of the economy.”
Burden? More moral hazard on steroids.
The eurozone really has only days to avoid collapse
November 27, 2011 7:38 pm
By Wolfgang Münchau
In virtually all the debates about the eurozone I have been engaged in, someone usually makes the point that it is only when things get bad enough, the politicians finally act – eurobond, debt monetisation, quantitative easing, whatever. I am not so sure. The argument ignores the problem of acute collective action.
Last week, the crisis reached a new qualitative stage. With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function.
The banking sector, too, is broken. Important parts of the eurozone economy are cut off from credit. The eurozone is now subject to a run by global investors, and a quiet bank run among its citizens.
By Wolfgang Münchau
In virtually all the debates about the eurozone I have been engaged in, someone usually makes the point that it is only when things get bad enough, the politicians finally act – eurobond, debt monetisation, quantitative easing, whatever. I am not so sure. The argument ignores the problem of acute collective action.
Last week, the crisis reached a new qualitative stage. With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function.
The banking sector, too, is broken. Important parts of the eurozone economy are cut off from credit. The eurozone is now subject to a run by global investors, and a quiet bank run among its citizens.
This massive erosion of trust has also destroyed the main plank of the rescue strategy. The European Financial Stability Facility derives its firepower from the guarantees of its shareholders. As the crisis has spread to France, Belgium, the Netherlands and Austria, the EFSF itself is affected by the contagious spread of the disease. Unless something very drastic happens, the eurozone could break up very soon.
Technically, one can solve the problem even now, but the options are becoming more limited. The eurozone needs to take three decisions very shortly, with very little potential for the usual fudges.
First, the European Central Bank must agree a backstop of some kind, either an unlimited guarantee of a maximum bond spread, a backstop to the EFSF, in addition to dramatic measures to increase short-term liquidity for the banking sector. That would take care of the immediate bankruptcy threat.
The second measure is a firm timetable for a eurozone bond. The European Commission calls it a “stability bond”, surely a candidate for euphemism of the year. There are several proposals on the table. It does not matter what you call it. What matters is that it will be a joint-and-several liability of credible size. The insanity of cross-border national guarantees must come to an end. They are not a solution to the crisis. Those guarantees are now the main crisis propagator.
The third decision is a fiscal union. This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well. The eurozone needs a treasury, properly staffed, not ad hoc co-ordination by the European Council over coffee and desert.
I am hearing that there are exploratory talks about a compromise package comprising those three elements. If the European summit could reach a deal on December 9, its next scheduled meeting, the eurozone will survive. If not, it risks a violent collapse. Even then, there is still a risk of a long recession, possibly a depression. So even if the European Council was able to agree on such an improbably ambitious agenda, its leaders would have to continue to outdo themselves for months and years to come.
How likely is such a grand deal? With each week that passes, the political and financial cost of crisis resolution becomes higher. Even last week, Angela Merkel was still ruling out eurobonds. She was furious when the European Commission produced its owns proposals last week. She had planned to separate the discussion about the crisis from that of the future architecture of the eurozone. The economic advice she has received throughout the crisis has been appalling.
Her own very public opposition to eurobonds has now become a real obstacle to a deal. I cannot quite see how the German chancellor is going to extricate herself from these self-inflicted constraints. If she had been more circumspect, she could have travelled to the summit with the proposal of the German Council of Economic Advisers, who produced a clever, albeit limited and not yet fully worked-out-plan. They are a proposing a “debt redemption” bond – another candidate for this year’s top euphemism award. The idea is to have a strictly temporary eurobond, which member states would pay off over an agreed time period. At least this proposal would be in line with the more restrictive interpretation of German constitutional law.
Ms Merkel’s hostility to eurobonds certainly resonates with the public. Newspapers expressed outrage at the commission’s proposal. I thought both the proposal itself and its timing were rather clever. The Commission managed to change the nature of the debate. Ms Merkel can get her fiscal union, but in return she will now have to accept a eurobond. If both can be agreed, the problem is solved. It is the first intelligent official proposal I have seen in the entire crisis.
I have yet to be convinced that the European Council is capable of reaching such a substantive agreement given its past record. Of course, it will agree on something and sell it as a comprehensive package. It always does. But the half-life of these fake packages has been getting shorter. After the last summit, the financial markets’ enthusiasm over the ludicrous idea of a leveraged EFSF evaporated after less than 48 hours.
Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.
Technically, one can solve the problem even now, but the options are becoming more limited. The eurozone needs to take three decisions very shortly, with very little potential for the usual fudges.
First, the European Central Bank must agree a backstop of some kind, either an unlimited guarantee of a maximum bond spread, a backstop to the EFSF, in addition to dramatic measures to increase short-term liquidity for the banking sector. That would take care of the immediate bankruptcy threat.
The second measure is a firm timetable for a eurozone bond. The European Commission calls it a “stability bond”, surely a candidate for euphemism of the year. There are several proposals on the table. It does not matter what you call it. What matters is that it will be a joint-and-several liability of credible size. The insanity of cross-border national guarantees must come to an end. They are not a solution to the crisis. Those guarantees are now the main crisis propagator.
The third decision is a fiscal union. This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well. The eurozone needs a treasury, properly staffed, not ad hoc co-ordination by the European Council over coffee and desert.
I am hearing that there are exploratory talks about a compromise package comprising those three elements. If the European summit could reach a deal on December 9, its next scheduled meeting, the eurozone will survive. If not, it risks a violent collapse. Even then, there is still a risk of a long recession, possibly a depression. So even if the European Council was able to agree on such an improbably ambitious agenda, its leaders would have to continue to outdo themselves for months and years to come.
How likely is such a grand deal? With each week that passes, the political and financial cost of crisis resolution becomes higher. Even last week, Angela Merkel was still ruling out eurobonds. She was furious when the European Commission produced its owns proposals last week. She had planned to separate the discussion about the crisis from that of the future architecture of the eurozone. The economic advice she has received throughout the crisis has been appalling.
Her own very public opposition to eurobonds has now become a real obstacle to a deal. I cannot quite see how the German chancellor is going to extricate herself from these self-inflicted constraints. If she had been more circumspect, she could have travelled to the summit with the proposal of the German Council of Economic Advisers, who produced a clever, albeit limited and not yet fully worked-out-plan. They are a proposing a “debt redemption” bond – another candidate for this year’s top euphemism award. The idea is to have a strictly temporary eurobond, which member states would pay off over an agreed time period. At least this proposal would be in line with the more restrictive interpretation of German constitutional law.
Ms Merkel’s hostility to eurobonds certainly resonates with the public. Newspapers expressed outrage at the commission’s proposal. I thought both the proposal itself and its timing were rather clever. The Commission managed to change the nature of the debate. Ms Merkel can get her fiscal union, but in return she will now have to accept a eurobond. If both can be agreed, the problem is solved. It is the first intelligent official proposal I have seen in the entire crisis.
I have yet to be convinced that the European Council is capable of reaching such a substantive agreement given its past record. Of course, it will agree on something and sell it as a comprehensive package. It always does. But the half-life of these fake packages has been getting shorter. After the last summit, the financial markets’ enthusiasm over the ludicrous idea of a leveraged EFSF evaporated after less than 48 hours.
Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.
Copyright The Financial Times Limited 2011.
Germany told to act to save Europe
November 28, 2011 7:08 pm
By Quentin Peel in Berlin, Jan Cienski in Warsaw and Norma Cohen in London
Germany is the only country in Europe that can act to save the eurozone and the wider European Union from “a crisis of apocalyptic proportions”, the Polish foreign minister warned on Monday in a passionate call for more drastic action to prevent the collapse of the European monetary union.
The extraordinary appeal by Radoslaw Sikorski, delivered in the shadow of the Brandenburg Gate in the German capital, came as the Organisation for Economic Co-operation and Development called on European leaders to provide “credible and large enough firepower” to halt the sell-off in the eurozone sovereign debt market, or risk a severe recession.
By Quentin Peel in Berlin, Jan Cienski in Warsaw and Norma Cohen in London
Polish foreign minister Radek Sikorski: 'I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity'
The extraordinary appeal by Radoslaw Sikorski, delivered in the shadow of the Brandenburg Gate in the German capital, came as the Organisation for Economic Co-operation and Development called on European leaders to provide “credible and large enough firepower” to halt the sell-off in the eurozone sovereign debt market, or risk a severe recession.
The OECD’s comments came as the organisation slashed its half-yearly forecasts for growth in the world’s richest countries, warning that economic activity in Europe would grind to a near-halt.
Yet their calls were met by a stubborn insistence in Berlin that only EU treaty change to forge a “stability union” in the eurozone would revive confidence in the markets.
Wolfgang Schäuble, German finance minister, rejected calls for the European Central Bank to act as a “lender of last resort” in the eurozone, and for the introduction of jointly guaranteed eurozone bonds to relieve the pressure on the most debt-strapped members of the common currency such as Greece and Italy.
Germany was not big enough to support the rest of the eurozone on its own, Mr Schäuble told foreign correspondents in Berlin. The way to win back the confidence of the markets was to complete monetary union with a “stability union” based on strict budget discipline enshrined in the treaties of the EU.
In a startling comment for a senior Polish minister, Mr Sikorski declared that the biggest threat to his nation’s security was not terrorism, or German tanks, or even Russian missiles, but “the collapse of the eurozone”.
“I demand of Germany that, for your own sake and for ours, you help it survive and prosper,” he said. “You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity. You have become Europe’s indispensable nation.”
Yet he backed Germany’s drive for deeper integration in the EU and the eurozone. The member states faced a stark choice between “deeper integration or collapse”, he warned, challenging the UK government to support reform, or “risk a partial dismantling” of the union. “We would prefer you in, but if you cannot join, please allow us to forge ahead,” he said.
His call for the EU member states to decide whether they wanted to become “a proper federation” is in line with the German government’s insistence that only much closer political integration is essential to underpin the existing rules of the eurozone.
Angela Merkel, the German chancellor, called last week for a “big step towards fiscal union”. But Mr Schäuble said on Monday that his government wanted a quick and limited treaty change to enshrine budget discipline in the EU’s Lisbon treaty.
He rejected any suggestion that this was a way of forcing all the EU members to become more Germanic. “The Mediterranean countries will not become German,” he said. “And Europe will not be speaking German.”
Yet their calls were met by a stubborn insistence in Berlin that only EU treaty change to forge a “stability union” in the eurozone would revive confidence in the markets.
Wolfgang Schäuble, German finance minister, rejected calls for the European Central Bank to act as a “lender of last resort” in the eurozone, and for the introduction of jointly guaranteed eurozone bonds to relieve the pressure on the most debt-strapped members of the common currency such as Greece and Italy.
Germany was not big enough to support the rest of the eurozone on its own, Mr Schäuble told foreign correspondents in Berlin. The way to win back the confidence of the markets was to complete monetary union with a “stability union” based on strict budget discipline enshrined in the treaties of the EU.
In a startling comment for a senior Polish minister, Mr Sikorski declared that the biggest threat to his nation’s security was not terrorism, or German tanks, or even Russian missiles, but “the collapse of the eurozone”.
“I demand of Germany that, for your own sake and for ours, you help it survive and prosper,” he said. “You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity. You have become Europe’s indispensable nation.”
Yet he backed Germany’s drive for deeper integration in the EU and the eurozone. The member states faced a stark choice between “deeper integration or collapse”, he warned, challenging the UK government to support reform, or “risk a partial dismantling” of the union. “We would prefer you in, but if you cannot join, please allow us to forge ahead,” he said.
His call for the EU member states to decide whether they wanted to become “a proper federation” is in line with the German government’s insistence that only much closer political integration is essential to underpin the existing rules of the eurozone.
Angela Merkel, the German chancellor, called last week for a “big step towards fiscal union”. But Mr Schäuble said on Monday that his government wanted a quick and limited treaty change to enshrine budget discipline in the EU’s Lisbon treaty.
He rejected any suggestion that this was a way of forcing all the EU members to become more Germanic. “The Mediterranean countries will not become German,” he said. “And Europe will not be speaking German.”
Copyright The Financial Times Limited 2011.
Iranian protesters storm UK compound in Tehran
TEHRAN |
TEHRAN (Reuters) - Iranian protesters stormed two British Embassy compounds in Tehran Tuesday, smashing windows, hurling petrol bombs and burning the British flag during a rally to protest against sanctions imposed by Britain, live Iranian television showed.
The attacks followed the rapid approval by Iran's Guardian Council of a parliamentary bill compelling the government to expel the British ambassador in retaliation for the sanctions, and warnings from a lawmaker that angry Iranians could storm the British embassy as they did to the U.S. mission in 1979.
Several dozen protesters broke away from a crowd of a few hundred protesters outside the main embassy compound in downtown Tehran, scaled the embassy gates and went inside. Iranian security forces appeared to do little to stop them.
The semi-official Mehr news agency said protesters pulled down the British flag, burned it, and put up the Iranian flag.
Inside, the demonstrators threw stones and petrol bombs. One waved a framed picture of Queen Elizabeth, state TV showed.
The British Foreign Office said it was outraged by the incursion into embassy.
It was not clear if British diplomats had been caught up in the action, or had been harmed. Embassy staff fled protesters "by the back door," the Mehr news agency said.
Demonstrators waved flags symbolizing martyrdom and held up portraits of Iran's Supreme Leader Ayatollah Ali Khamenei.
A separate group of protesters broke into a second British embassy compound in the north of the city, the IRNA state news agency said, and seized "classified documents."
Riot police later moved in and mounted the embassy gates, helping protesters climb back on the street outside, television pictures showed, and began to slowly clear demonstrators.
The incident followed Britain's imposition of new sanctions on the Islamic state last week over its nuclear program.
London banned all British financial institutions from doing business with their Iranian counterparts, including the Central Bank of Iran, as part of a new wave of sanctions by Western countries.
In London, Foreign Secretary William Hague said Britain expected other countries to follow its lead in imposing financial sanctions on Iran and will take "robust" action if Tehran reduces their diplomatic relations.
Hague was speaking in a parliamentary debate as news broke of the incident in Tehran but he made no comment on it.
(Reporting by Robin Pomeroy; Writing by Jon Hemming; Editing by Angus MacSwan)
Monday, November 28, 2011
Rep. Maloney Lies about Fast and Furious
November 28, 2011
By M. Catharine Evans
Read more M. Catharine Evans at Potter Williams Report.
By M. Catharine Evans
Shilling for Dems desperate to pass off the hot potato known as Fast and Furious to the nearest Republican, Congresswoman Maloney (D-NY) wrote an op-ed piece for the New York Daily News last week entitled "Fast and Furious 'scandal' is a Republican red herring: What we really need are tougher gun laws."
Maloney followed the DOJ playbook on Fast and Furious. Terms like "gotcha games," "ill-conceived operation," "political fodder," "political sideshow," "witch hunts," and "lax gun laws" are everywhere. But that's not the worst of it. The facts don't fit her agenda, so what does she do? The congresswoman piles lies on top of the propaganda.
If not for the unspeakable grief of the Terry and Zapata families, as well as thousands of Mexican citizens, Maloney's rant wouldn't merit a response. But people died, and their loved ones deserve better.
Lie: The "Fast and Furious Scandal is a Republican Red Herring."
Truth: The guns retrieved at the scene of Border Patrol Agent Brian Terry's murder were real; they were later traced to the gun-walking operation. Senator Grassley and Congressman Issa did not manufacture a crisis, and the only "red" involved is the blood of the victims.
Lie: "Holder is being blamed for a program that is not his creation."
Truth: Fast and Furious was initiated under Holder's watch in the fall of 2009. The Bureau of Alcohol, Tobacco and Firearms falls under the Department of Justice, therefore he "owns" it.
Lie: "But this initiative, which was identical to one launched under the Bush administration, spiraled out of control, with ATF agents losing track of the guns as soon as they crossed the border."
Truth: The experienced ATF agents deposed by Issa's House subcommittee said they were ordered by higher-ups not to intercept guns "being essentially just bee lined to the drug trafficking organizations" -- a practice one seasoned 21-year veteran agent called "inconceivable ... never, ever in my wildest dreams would I have thought this was a technique ... You don't lose guns ... you don't let guns out of your sight."
Operation Wide Receiver involved approximately 450 guns, not thousands; there was a serious attempt to track the weapons; no one was killed; and Mexican authorities were told about gun-trafficking suspects. By all accounts, the program was shut down in 2007 after some weapons went missing.
By contrast, Operation Fast and Furious kept ATF agents stationed in Mexico as well as Mexican officials out of the loop; guns were allowed to walk without interdiction; and despite agents' vocal protestations of "outrage and disgust" about the deadly program, Fast and Furious continued until Brian Terry's murder. Those in charge at the ATF Phoenix field division "ignored their concerns" and told the agents "to get with the program" because senior ATF officials like Special Agent in Charge William Newell had "sanctioned the program." Hardly "identical."
Lie: "Americans who are outraged at Terry's death rightly want to know whether it has been scrapped and whether Attorney General Eric Holder who oversees ATF, is aggressively investigating Fast and Furious. I can report that the answer to both of those questions is a resounding yes."
Truth: Holder has stonewalled the investigation at every turn, and he perjured himself on May 3 at a House Judiciary hearing. Both he and President Obama have denied any knowledge of or involvement in the operation. When faced with questions from the media, each defers to the ongoing investigation by the DOJ's inspector general, who, coincidentally, worked under Holder as assistant attorney general in D.C. from 1994 to 1997. This faux oversight amounts to Holder investigating himself. Lie: "But for Republican congressional leaders, one botched operation is not enough to serve their political goals. They need a scandal -- and are desperate to create one."
Truth: The word "botched" might be applicable if the operation out of the Phoenix division of the ATF had been stopped as soon as Agents like John Dodson and Olindo Casa related their fears about the deadly program to superiors. Agent Dodson reported the general feeling among those in charge was that "if you're going to make an omelet, you need to scramble some eggs."
Agents testified they were essentially told to "stand down" when requesting permission to interdict guns -- that "all of this was sanctioned" and was an "acceptable practice." At one point, an agent confirmed for the questioner that Phoenix supervisor David Voth regarded the increasing violence (958 killed in March 2010 according to one e-mail) as proof that they were on the right track. According to a June 14, 2011 staff report prepared for Issa and Grassley, "the agents within Group VII described Voth's reaction to all this gun violence in Mexico as 'giddy'" (36).
The chilling accounts of Phoenix Group VII special agents, who were repeatedly ordered not to intervene when they witnessed suspected straw purchases buying "enormous quantities of assault rifles," made this a full-blown scandal from the beginning.
Lie: "According to recent media reports, another Bush-era AG, Michael Mukasey, received a detailed Fast and Furious briefing in 2007. But only Holder took decisive action in response to these dangerous tactics."
Truth: Here is the memo and supporting documents from 2007. Congresswoman Maloney's deliberate use of "Fast and Furious" in the same sentence as the year 2007 suggests that specific program began before the 2008 election. It did not.
Furthermore, Holder has not taken decisive action. If former AG Mukasey was briefed on ATF's Project Gunrunner two months after taking office, as the memo indicates, Holder's persistent denial that he knew anything about Fast and Furious until April of 2011, more than two years after he took over, can mean only that he's lying or seriously unhinged. To date, no one has been held criminally accountable for giving orders to "stand down" while mass murder took place.
Lie: "Given the ongoing violence on our border and the glaring loopholes in our gun trafficking laws, it's time for Congress to drop its witch hunts and get serious. We cannot continue allowing weapons to end up in the wrong hands."
Truth: I doubt that the Terry or Zapata families would consider Congress' efforts to thoroughly investigate the murders of their loved ones a "witch hunt."
Congress happens to be dead serious. For some unknown reason, those "glaring loopholes" became craters on Holder's watch. The distinct feature of Fast and Furious that sets it apart from previous operations "is that absolutely no effort to track the guns was ever in place."
So far, big media has gone along with the "lax gun laws" and "Bush started it" defense. But Americans are growing tired of the lies -- to say nothing of representatives like Maloney who spew them and an administration who continues to blame a former president while ratcheting up its own so-called failed programs.Read more M. Catharine Evans at Potter Williams Report.
Sunday, November 27, 2011
Sermon - Christian Patriot - Boston, 1840
| M. I. Motte - 07/05/1840 | |
Rev. Mellish Irving Motte (1801-1881) was originally from Charleston, South Carolina. He obtained a Bachelors of Arts from Harvard in 1821 and became pastor of the South Congregational Church in Boston on May 21, 1828. In this 1840 sermon, Rev. Motte encourages Christians to fully engage the culture, especially in the political arena. He decries politicians acting out of self-interest and greed rather than making decisions based upon what is morally right and wrong. Motte insists that religious morality is the very first manifestation of true patriotism and "Public virtue is the strongest spirit of national vitality." He reminds his listeners that nations must be judged in the present since they do not exist in eternity and national ruin awaits national unrighteousness. Rev. Motte states that America's Fathers founded the country on Christian principles and intended for the United States to be a Christian nation. According to Motte, the realization of this goal is to be found in individual piety and allegiance to righteousness over any political party. The Christian Patriot By M. I. Motte A Sermon Delivered at the South Congregational Church, Boston, July 5, 1840 Psalm 144:15 Happy is that people, whose God is the Lord One of the most common of mistaken and false forms, into which religion is apt to run, is an isolated piety, and abstract and independent devotion; religion separated from the business of life, instead of being woven up, conscientiously, with all its concerns. For convenience' sake, we have a particular day, and place, and order of men, and class of exercises, especially devoted to the consideration of the great topic; but it is that its influence may be made to run through all days and places, all intercourse, every subject and employment. Yet the church has every been prone, even more than it conscious of, to sever itself from the world, instead of leavening it to its own spirit; and the same man, in his church relations, is a Christian, or would grieve not to be considered and to consider himself so, who, in some of his worldly interests and pursuits, is absolutely an atheist, living without God in his thoughts. On no subject us thus more obvious, than on the one, from which it is most unfortunate in our country religion should be driven off, seeing it is that which agitates more people here than any other, viz. the whole business of politics. Religion and politics are spoken of as opposite poles, the positive and the negative as the acknowledgment of God is concerned. We hear it said, politics are of no particular religion; and it is too often true, in a more absolute sense than is intended. It would seem, at first, as if both subject were so important, so exciting, that the human hear is hardly large enough for both. (3) When we speak of a man as a politician preeminently, one enthusiastically absorbed in the affairs of the nation, or more probably of a party, we do not expect to find him in a church. And when a zealot for churches is invited to the polls, he seems to answer to the purpose, when he replies, "My Master's kingdom is not of this world." If he is a clergyman, the professional response expected from him is, "I have nothing to do with politics;" and only those object to this, who suppose, if he voted at all, he would vote with them; to all others he seems to have made the natural and legitimate reply. Both of these men are wrong, but they both point the direction in which public prejudice blows. Our festivals, again, are either political or religious; not both together. There would seem to be something incompatible and profane, or absurd, in making them both. Such an anniversary as yesterday is not strikingly a religious day; as tomorrow's published list of its outrages and truculent mishaps in all our cities will attest. Early in the morning, trains may be seen leaving the city by every outlet, anxious to escape the celebration of the National Independence. And, when the day of the month falls upon the first day of the week, its celebration is postponed till Monday; as if confessedly impossible to bring its spirit to into harmony with the Christian Sabbath. All this shows, not the politics and religion are necessarily inconsistent, - for the former, I suppose, is a duty as really as the latter, and all duties should be performed in the fear of God, - but it shows, that the spirit of politics which prevails is not the right one. The good of our country should be provided for, as in the sight of God, and in sacred love to our fellow-men; and then it is a holy service, and need not be dissevered from the solemnest ministrations of devotions. It is one of the modes of worship with which the Universal Father is well pleased; one of the forms of his appointed ceremonial of religion pure and undefiled, which consists in going about doing good for his sake. But, if it is only a selfish, headlong, intemperate scramble for preeminence, if it is mercenary, not moral, in its spirit, a question of interest, not of right, the Sabbath is too good a day for it, and so is every other day. Interest is to be regarded as well as right; but do not all political parties appeal too exclusively to the former? A reverence for right is not held high enough, as the guiding polar star for the opinions of the people. The people think, morality is a matter of home and neighborly intercourse, not involved in the vote they cast, and the opinions they express, on the acts of government, encouraging or condemning. How seldom is the guilt of upholding iniquitous public measures reflected on, as good men reflect on private violations of the ten Commandments. They may do infinitely more mischief than an individual's misdemeanor, and yet many deem it a little thing. Men seem to think they may hold what opinions, and belong to what parties they please, without regard to their truth or effects, except as affecting themselves; as if politics were a lawless region, always out of Christendom, and from which even conscious was excluded by general consent. Look through the community and the world, and see how, on almost every question, you may draw a line between parties, accurately coinciding with the line between their interests. You need not ask, on which side a man's convictions lie, if you only know on which side his wishes lie. The coincidence is certainly remarkable; and melancholy it is to reflect on the wide heartlessness it indicates. Here we see men fair-minded in every other concern, men of severe religious sanctity, of nice honor, of scrupulous integrity in their personal transactions, where the welfare of a few immediate connections or acquaintances is at stake; but, when millions lose though the prevalence of an opinion, the first and only thought that seems to occur to them is, How will it affect us, and I our lowest interests? And, if it promise to be lucrative, forthwith they adopt that opinion, and if their soul's salvation hung upon it. They adopt that opinion, I said; But can it be possible, that men always do really believe as if for their interests? Can they be conscientious, in such innumerable cases, arriving, through the careful and dispassionate examination, at precisely the result that happens to favor the views and wishes? I allow a great deal for the blinding power of self-interest; but this uniform concurrence of hope and belief is astonishing still. These same people will reason as clearly as daylight on any argument which comes within the tenth of an inch of their own concerns without touching it; but, the moment it touches, their light is darkened, their logical acumen is blunted, their perceptions evince a certain unfortunate obliquity, which is sure to twist their notions in one invariable direction. Can this be right? Can it be honest? We know, or we might know, if we chose, that truth and justice cannot always, and on every accidental question and measure, be in our favor. We are bound, at any rate, not to take it for granted. Let us inquire. Let us make up our minds to lose so many dollars, relinquish a few prejudices, and partialities, and expectations, rather than lose probity, the approbation that speaks within, all generosity of soul, and the smiles of God. Let us not be satisfied to be guilty, because the guilt is shared with a multitude. Away with injustice and ungenerosity, though only in thought, however popular, however fashionable. So shall we do our part to bring into currency a more elevated and uncompromising tone of political honor and conscience; and the whole regions of politics be no longer but as the Barbary States of moral geography, outlawed lands and piratical seas, from which are excluded all faith and virtue, all laws of God and man. Politics should be but one form of that charity which is the end of the divine law. One more of benevolence, one of the ministrations of philanthropy; and "Holiness to the Lord" be inscribed over the portals of its halls of state and the chambers of its social festivals, as over the church door. Especially with us should this be aimed at on triple grounds. For, if political parties with us cannot be Christian parties, then are we a godless nation; there can be few Christians throughout the length and breadth of the land; since he, who is no politician under our institutions, is a solitary rarity. Then, if they believe their own declamations, puffing up so unweariedly the national vanity, we are the most favored people on which the sun shines, at least, as regards all that God has done for us; and the Giver of all good should, least of all, be ungratefully overlooked by us. All the flights of rhetoric, that yesterday glittered over this continent, all the floods of panegyric that were sounded forth upon ourselves and our institutions and advantages, should they not all reecho, at least in and undertone whisper in reason's ear, as if saying, To whom much is given, of them much will be required? And, then, to make all that is given to us safe for us, and to expect a blessing continuance, we must remember God, and insist on a religious morality as the very first manifestation of a true patriotism. Ay, patriotism, that most abused words. Alas! That it is every vaunted and bravadoed by the scoffer and the profligate, not knowing, that blessed is that people, and that alone, whose God is the Lord. Without him they may speak great swelling words of vanity; but bombastic professions and oratorical displays are not the disinterested self-denial and sober toils of a virtuous citizen, who fears God and honors government, and serves and saves the state without boasting. He alone is a patriot. By such alone the country stands. The Ruler of nations hath uttered the decree. From beginning of time his world has illustrating it. As surely as he is just and the King of nations as of individuals; as surely as there is truth taught by experience, and the unvarying certainty of the same effects from the same causes, according to the natural constitution he has impressed on his universe, the past, in all quarters of the globe, bids us look well to it. You may be the traitor within the garrison, though treason to the country be furthest from your thoughts. You may invoke ruin upon it when you are shouting, louder than any, the glory of its institutions. You may be the deadly enemy, though you shed your blood for it. Look into the nature of things. When hath a righteous nation perished? Where is there one doing justice and judgment, and it is not well with it? Public virtue is the strongest spirit of national vitality; and private virtue is the life-blood, coursing through every artery and vein, large and small, of the public institutions. On the other hand, is it not undeniable from reason, scripture, and experience, that predominance of selfish principles and corrupt morals is the unfailing cause of calamities, perplexities, and ruin in a country? Reason tells us, that the character of the Judge of all the earth is the pledged to have it so. Vice, in the individual, may not always meet its retribution, nor virtue its reward, in this world, because there is to be another, of more perfect retribution for individuals. But nations exist here alone. Unlike the soul, they are annihilated at their temporal dissolution. Therefore, if their fortunes and fate be subject of the Divine Providence, to their present existence, which is the only one, must be applied the principle of its moral rule. The scriptures confirm this rule, and do not restrict it to the theocracy of Israel. They say; "O Israel, thou hast fallen by thine iniquity; your iniquities have turned away good things and withheld them from you." But it is not of Israel alone, (of whom it might be said, God was, in a peculiar way, a Governor by temporal sanctions,) that he announces this principle of legislation. His declarations are general. "At what instant I shall speak concerning a nation and concerning a kingdom, to build up and to plant it; if it do evil in my sight, that it obey not my voice, then I will repent of the good wherewith I said I would benefit them. In the hand of the Lord, there is a cup, and the wine is red. It is full mixed, and he poureth out of the same. As for the dregs thereof, all the ungodly of the earth shall drink them." And the experience of mankind puts the impressive truth beyond dispute. What is history but, on this account, like the Prophet's, a scroll written, within and without, with lamentation, and mourning, and woe. Pity weeps as she unrolls its venerable annals. Its oldest records present the Cities of the Plain set forth for an example of the national ruin, that full surely awaits national unrighteousness. "Ten righteous men could not be found in them," and they perished. Even to an earlier page the genius of history points, and sighs over the ravages of the flood. "All flesh had corrupted their ways before the Flood." And we stand aghast at the sweeping catastrophe. Turn over a few pages onward, and direct your attention to the chosen people. See them, at one time, visited with pestilence, famine, conflagration, tempest; at another, falling under the sword, or languishing in captivity, feeling before the scourge of war, or terrified with awful phenomena of nature, and all these proclaimed the retributory angels of the Lord, the ministers of his justice for their sins. The wisdom of their wise men was taken away, and the understanding of their prudent men hid; and it was moral debasement that did it. Their cities, the places of their fathers' sepulchers, were laid waste, and the gates thereof consumed with fire; and, in all the seasons of their affliction, mark the moral shade running though the history in proportioned intenseness; mark idolatry and its bitter fruit, general profligacy, tempting them to forget their God. Read of a later day, travel among the scenes of profane chronicles, if you would see, that national vice is national suicide. Stand upon the moldering ruins of a thousand cities, once great and fair, and seek, - you will seek in vain, - for trace or even site of many others; and ask where are they, and why have they vanished from the earth? Roam through the desolated territories of empires, once splendid and mighty, and, as you brood over the gloomy vestiges of their decay, cannot find an inhabitant for many a mile, where throngs were loud and busy once, ask yourself, if integrity, industry, humanity, temperance, piety, and purity were rife there, when the besom of destruction came to sweep a tomb under those wide-spread ruins. Thus history or travel will conduct you over the globe, and everywhere teach the same salutary lesson. They will point to empire after empire, and dynasty after dynasty, shriveling and shrinking with the imbecility of moral corruption; and it is not more sure, that the palaces of their pride, and the monuments of their perverted might, are crumbling into dust, than that other empires and other dynasties, now treading in their steps, will follow them to decay and desolation. O that our beloved land may be wise from the lesson! And the lesson is more pertinent under our republican polity, than under any other. If righteousness exalteth a nation, and sin is a reproach and ruin to any people, most speedily of all must it prove so to a people without the restraints of a strong government. Liberty and licentiousness roll trippingly off the tongue together; they flow, unseparated, from the lips of many, with easy alliteration and commonplace proverbialness, as if they were almost the same thing, or one inevitably followed the other. But, if it does, it is as commonplace a maxim of history, that it will follow it speedily to ruin. Liberty licentiousness, - it is the tritest of proverbs, - cannot coexist lastingly. The free people is the last that can afford to be vicious. The slave may throw off the restraints of virtue, and yet be kept in order by the restraints of despotism. But, when a freeman does not govern himself, he is ungoverned, so to speak, and careering to perdition; like the uncurbed wild ass of the desert, rushing to the precipice he tosses his head too high to see. Therefore, every immoral republican is a traitor and conspirator against his government, as much as if, being the subject of a king, he pointed a dagger against his life. He is spreading stratagems and snares for the feet of his sovereign; for public virtue is his sovereign. He is seeking to blind, and deafen, and lame, and cripple, and make wholly inefficient, and worse than inefficient, he is seeking to corrupt, into tyrannical wantonness and cruelty, the most beneficent monarch that ever sat upon a throne. So that you see, my brethren, in addition to every other motive for being good Christians, patriotism should be one. After we have turned away from the voice of God; after we have steeled our hearts to the claims of him who died upon Calvary, the just for the unjust, the he might bring us to God; after we have besotted our minds to act the fool's part of blindness to our own interest; there is yet one appeal which may not be lost upon our generosity, one consideration that should be sufficient; public spirit, the love of our country. Its welfare is resting on our individual virtue. For as drops of water make up the ocean, and grains of sand constitute vast continents, so the personal character of the humblest individual among us adds something, for weal or for woe, to that national character, by which the land of our love, the government which has cherished us, will stand or fall. Our native soil, the scene of our happy childhood, the land of our fathers, the land where we have enjoyed so much, where we expect so much, and from which the world expects so much, shall it realize these expectations? Shall it become, as has been so fondly anticipated, the glory of the nations, has the perfection of beauty, the joy of the whole earth, showing what man can do with unshackled energies and faculties ripely developed in the wholesome air of liberty? Or shall it be one more byword and mockery of the aspirations and pretensions of freedom. Think of this, when tempted to any wicked or base act. Above all, think of it when tempted to into any of the peculiar and besetting snares, and betraying exaggerations and caricatures of liberty; to vicious license, to lawlessness and recklessness of restraint, to inebriate zeal, party prejudice, bigoted factiousness, mob-rioting, passionate reviling of the powers that be, or the powers that are to be, and all bitter or mercenary partisanship. Remember, when tempted to any of these, you are tempted then to disappoint so many noble souls, the lovers of their kind, in every quarter of the globe, the enthusiasts for the advancement of the human race to a pitch of excellence and enjoyment yet unrealized, but the guaranty for which they look for in the great experience of self-government now trying on these shores. The old world may be said to be leaning, with feverish anxiety, over the ocean to catch every symptom of the success or failure of his experiment. Have pity on the last hopes on man. Let is not be said again, as it was by the dying Brutus, after he had sacrificed all to realize a patriot's dream; "O virtue, I have worshipped thee as a reality, and found thee but a shadow." Let it not be said, again, as it was by the noble-hearted Madame Roland, as, on her way to the guillotine to lose her head for continuing a virtuous enthusiast for freedom amidst the herd of vicious, she passed under the statue of Liberty; "O Liberty, how they have played thee! What crimes have been committed in the name!" Ay, how it has been played in the world, historionized, juggled! What crimes have been committed, what crimes have not been committed, in its sacred name? It is assuredly the cloak of boundless evil, when not guarded with most scrupulous probity; for the best things, corrupted, always become the worst. The precious diamond may be blackened into a worthless coal. The sweet name of liberty has become a sound of ill omen and nauseous associations to many of the readers of history, from want of virtue in its votaries. Patriotism has been characterized as the last resource of a villain. Revolutions, said Napoleon, are not made with rosewater; but it were well if blood, and seas of it, were the dearest price paid. Moral corruption is what renders revolutions worse than vain. Our fathers have made one more trial, knowing that past failures were from want of Christian principle, and that they had settled these shores expressly in obedience to Christian principle, and therefore they might hope. In faith and prayer they struggled; for they felt, that with God all things are possible in the cause of righteousness, and they hoped their children would feel this too. From the first, they set out with the idea of making this community that happy people, whose God is the Lord, - a Christian nation, - what the world had never yet seen, but what all its experience concurred in testifying it must seem or it would never see the amount of prosperity man is capable of attaining on earth. A Christian people! Not merely a sober, industrious people, without religion, if such could be expected, but distinctively a Christian people. Bright and glorious idea, far-seeing wisdom, true friends, and see its kingdoms prospering at this time just in proportion as they come near realizing this idea, other elements of their greatness being the same. Begin from the effete East, and come to the infant West. The nominally Christian are more thriving than the Pagan Mahometan; the Protestant than the Catholic; the praying and Bible-reading, than the ceremonial and formalist; and, so long hypocrisy could be kept out, that people would prosper most, who should require, as the settlers of these New England colonies did, that none but members of the church should be rulers in the state. Such a regulation is a bait for hypocrites, a trap for the consciences of the ambitious, and, therefore, it is not to be enforced after the primitive virtues of the settlement have been corrupted. But, is there were not fear of hypocrisy, verily and indeed happy would be that people, with whom God was effectively their Lord through the strict observances of such a rule. Then might we see such a phenomenon as a Christian people. As it is, let us, - and it seems more incumbent on us than on any nation that lives in the sun's more expressive, than as a mere geographical term. When we are called a Christian nation, let us allow more the meant, than that we are not savages or barbarians, or only semi-civilized, as all those nations are in which Christianity is unknown. Christian should be more than European or American, as distinguished from Asiatic or African. It should be more than latitude and longitude; more than eastern or western, northern or southern; more than tropics and zones, equator and ecliptic, arctic or antarctic. And how can we make a Christian nation? To become so, must be an individual, not a collective act. Legislation cannot do it, if legislation would. Resolves of majorities, in caucus or in Congress, in towns or by states, or even unanimous votes, is not the way to affect it. The simple and sole process is for each person privately to resolve, for his single part, no influence in legislative deliberations, no political name or fame whatever, - nay, the shrinking woman and child, whose deliberations look not beyond the homestead, or who can legislate only over their own hearts, - these can add a stone, as truly as the mightiest statesman or the loudest demagogue, to build up the national temple to the Lord. Public opinion is the life-breath of our own government, and therefore to Christianize that, we have but to Christianize ourselves. O what it is ye may achieve! No such power as this is possessed by the subjects of any government but yours. They cannot regenerate their sovereign. They cannot even pray for his conversion with hope, the assurance, of the prayer being granted if sincere, which may warm your breasts. And is there a consideration of earth or heaven, that is not present and potent to move us to this prayer? Pour it out to God, if righteousness would have but the promise of the life that now is. If a majority of the citizens were sincere followers of Jesus Christ, is it not evident, the councils of this nation would be wiser and mightier, its progress more glorious, its dominion even more potent than any the world has ever seen? The day when it shall be resolved, that the same evangelical principles shall govern states that govern churches and gospel professors in their private relations, would be the true jubilee of freedom. That will be the mind's and the soul's declaration of independence. That will be breaking every yoke at length from body, and heart, and spirit. Thenceforth slavery, in any form, would be but a tradition and a name; whereas now it is the commonest of conditions, and to the mass liberty is but a name; for he that serveth any sin is the slave of sin. That day will come, when the people choose. Choose it, resolve it, O my brethren, as the first of civil duties. Whatever your party predilections, sacrifice them all for the party of righteous men. Support no administration, and oppose none, but one the ground of moral principle. Go with them as far as Jesus Christ would go, and no further. Read the constitution by the light of the Gospel. The Savior be your paramount leader. And now I see his communion table before me this day, and I fear all that has been said will seem out of keeping with its solemn associations; so desecrating, as I began with intimating, seems any allusion to the politician's trade. But let me hope I have not spoken all in vain. Follow it in the spirit in which you come here to the house of the Lord himself. You are performing a solemn act of worship then, if you feel it aright. You should enter upon office, you should deposit your vote for office, with a religious sense of accountableness, like that which makes you so serious when you handle the emblems of the Savior's body and blood. Approach his table because you would be good citizens, among the other reasons of the act; because you love, and you serve and save, your country; because you would have it long free; because you would be truly free yourselves. Where the spirit of the Lord is, there is liberty. If his Son shall make your free, ye shall be free indeed. Where he is not the deliverer, men may clamor, and boast, and carouse, and with bacchanalian revelry call themselves free but they are the bondmen of corruption, the thralls of Satan. O be ye, unlike them, the freedmen of the Lord, whose service is perfect freedom. |
Benjamin Rush Personal Bible Study
| Benjamin Rush | ||||||||||||
Founding Father Benjamin Rush's handwritten personal Bible study booklet entitled “References to Texts of Scriptures Related to Each Other Upon Particular Subjects.” In it he listed scriptures under various topics and wrote his own notes on those scriptures. We have included excerpts of the booklet below.
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Rush recorded three pages of scriptures and notes regarding “Atonement”
Rush cataloged scriptures such as Exodus 32:11-12; Romans 5:3-4; Isaiah 49:6,8-9; Matthew 15:13; etc. under the title “Universal Salvation”
Rush's notes on scripture passages related to prayer and God's blessings (Note: nail used in book seam)
Rush lists Leviticus 19:33, Exodus 12:49, Deuteronomy 23:7 and other verses under the heading “Kindness to Strangers”
Rush's scriptures on the effectiveness of prayer include Genesis chapter 18 and 21:17 & 21. Benjamin Rush (1745-1813) Rush was a physician, educator, philanthropist, and statesman. He graduated from Princeton (1760) and then studied medicine in Philadelphia, Edinburgh, London, and Paris. He served in the Continental Congress (1776-77) and signed the Declaration of Independence (1776). Rush also: suggested to Thomas Paine that he write Common Sense (1776) and supplied the title for it as well as helped publish it; was Surgeon-General of the Continental Army (1777-78); and was one of the founders of Dickinson College (1783). He was an influential delegate to the State ratification convention for the federal Constitution (1787), and along with James Wilson, one of the principal coauthors of the Pennsylvania constitution (1789-90). Rush served as Treasurer of the U. S. Mint under Presidents John Adams, Thomas Jefferson, and James Madison (1797-1813). He mediated a reconciliation between long time political rivals John Adams and Thomas Jefferson; was a founder of the Pennsylvania Society for Promoting the Abolition of Slavery (1774) and its president; founder and Vice-president of the Philadelphia Bible Society (1808-13); member of the First Day Society of Philadelphia (1790); and a member of the Abolition Society (1794-97). Benjamin Rush is called the “Father of American Medicine” for his numerous medical discoveries. |
