How Republicans will give Obama carte-blanche in his last two years as President

United we stand.  Divided we fall.

The absurdity that is running amuck in Congress is destined to stop soon.  This is not just wishful thinking.  I say this with  complete confidence.   Republicans in Congress will take the lead in ending their own misery with two last desperate actions to win favor with their wealthy constituents while betraying the rest of us, and this will signal the end.

Within the Republican party, members of the Tea Party caucus are deliberately choosing to end our government.  They have shown that they do not have a desire to compromise, do not want to create useful legislation and are even willing to cause an economic crisis if they don't get their way.  They have split their own party.  Tea Party leaders such as Canadian born Ted Cruz and his Cuban born father are leading simple-minded Tea Party members astray.

Ted Cruz

They claim that the Affordable Care Act (ObamaCare) is the single most injurious program in the history of the world and must be stopped.  They blame the actions of unethical business owners, such as reducing full time employee hiring and cutting hours to avoid having to provide insurance to their employees, on Obama.  They asked for concessions to allow one more year for business owners to conform to healthcare regulations and requested exemption from the business mandated penalties and got them from Obama.  Now they claim that Obama is helping big business but denies the same exemption for individuals.  Politics and truth seem to be unfamiliar partners in Republican circles.

The first desperate action that Republicans will take is to offer a much monetarily reduced continuing resolution to keep the government running but will attach an amendment to defund ObamaCare.  This will pass the House but fail in the Senate.  After this useless legislation delay, Republicans will allow the government to shut down long enough to make the debt ceiling the next issue they can use as leverage to defund Obama Care.  Typically, they take actions that will hurt many Americans with the

aloof disregard of sociopaths.  

When it becomes painfully obvious that Republicans are hurting their own constituents with the government shut down, they will eventually pass a continuing resolution to fund the government.  You can bet that it will continue to contain articles to attack some aspect of Obama Care which Democrats may allow in order to continue governing.  My guess is that they will first propose a year exemption from the individual mandate penalty that will not be approved.  Then they will attach a demand for reduced employer contributions to the employee insurance premium.  That or something like it will probably pass.

With the government back in operation, a week or so later, Republicans will use the threat of not passing the debt ceiling as another attack on defunding ObamaCare.  Most members of Congress know that increasing the debt ceiling is needed in order to pay for debt obligations already made by Congress.  The last time increasing the debt ceiling was rejected by Republicans, America's credit rating dropped and the interest rate charged increased.  Increasing the interest on trillions of dollars in loans makes for a huge increase in our deficit.  Republicans never seem to remember how much they are personally responsible for "Obama's" deficit.

This time there will be no compromise and America will go into default on its loans for some period of time.  Then it will be a race to see which side will give in first.  Because of our already tight monetary policy, the economic health of America is sure to be hurt.  Federal Reserve Chair Bernanke has described this as a recession inducing action.  

If it appears that there is no compromise in sight, stocks will be affected and Americans 401K's will

Crash of 2013?

lose tremendous value.  Retirees can expect that their incomes from investments will be slashed and their standard of living will be drastically reduced.  The wealthy will remove their cash from the stock market and place it into tax sheltered off-shore accounts.  This will pull the market down even more.  A middle-class financial crisis could become the most severe in history and will signal the end of the middle-class in America.  When the middle-class is gone, business will be affected and the entire economic structure of the United States could undergo the greatest depression in our history.

Because of the potential economic damage to America and the world, I have to believe that Republicans will give up on their insistence to defund ObamaCare and pass the increase in the debt ceiling, especially when they realize that the world will see them as the cause of a world-wide depression.

But some damage will be done to the economy because Republicans won't give up their senseless acts of desperation in short order.  Because this will hurt their own wealthy Wall Street constituents, the Tea Party Republicans will be stifled and healthier Republican minds will prevail.

The future may bring civility back to governing.

Remember the next month when you are voting for your Congressmen in the 2014 mid-term elections.  Let's hope righteousness is a powerful enough ideal and pervasive enough in our voting public to overcome the evil that seems to have invaded Republican politics.

Your vote is the key.

Legal action against Congressional Republicans is overdue

They wanted to make him a one term President.  In a clandestine  meeting they conspired to block every piece of legislation that supported his policies so he would be ineffective as a President.  They lied about his intentions during the 2012 Presidential campaign.  They continually lie about the Affordable Care Act and have voted to repeal it 37 times.  They have even voted against their own legislation when it is clear that Obama supports it.

The obstruction happening in Congress is solely due to Republicans who hate Obama more than they love America.  The most frustrating thing is that not all of America is as angry at Republicans as Republicans in Congress are with President Obama.

Because this Republican obstruction is a conspiracy that is intentionally designed to be destructive to America, Republicans in Congress are guilty of the crimes of "Conspiracy to Obstruct"  and "Conspiracy to Defraud."

The following is the legal explanation of "Conspiracy to Obstruct" (18 U.S.C. 371).

If two or more persons conspire either to commit any offense against the United States or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.

The following is the legal explanation of "Conspiracy to Defraud" 

Section 371 contains both a general conspiracy prohibition and a specific obstruction conspiracy prohibition in the form of a conspiracy to defraud proscription. The elements of conspiracy to defraud the United States are: (1) an agreement of two more individuals; (2) to defraud the United States; and (3) an overt act by one of conspirators in furtherance of the scheme.  The "fraud covered by the statute ‘reaches any conspiracy for the purpose of impairing, obstructing or defeating the lawful functions of any department of Government” by “deceit, craft or trickery, or at least by means that are dishonest.” The scheme may be designed to deprive the United States of money or property, but it need not be so; a plot calculated to frustrate the functions of a governmental entity will suffice.

Debt ceiling discussions are coming up again in the fall.  Raising the debt ceiling is necessary to allow America to pay debts that Congress has already made.  Republicans have already threatened to use the debt ceiling as leverage to get the administration to repeal the Affordable Care Act.  Federal Reserve Chairman, Ben Bernanke and other financial experts have indicated to Congress, that blocking the debt ceiling increase will lead to a serious recession.

If Republicans go ahead with this threat it will do severe damage to the United States economy with their full approval.  This is more than ordinary politics.  It is akin to a terrorist threat that means to do harm to America.

If Republicans block debt ceiling increases, Attorney General Eric Holder would be correct to bring them up on criminal charges.  Republicans in Congress have so far escaped legal action for their conspiracy against the United States, but they are no longer legitimate politicians.  If they place America into default on its debts they have entered into the realm of disobedience to law and deserve to be held accountable.  

The chances of legal action against them are slim but you can do something about them.  Write them, call them and tell others how you feel about their actions.  Doing this now may help avoid disaster.  Don't wait until it's too late and you are personally affected by their actions.

At the very least, please vote them out of office in the 2014 mid-term elections and help get government working for all the people and not against them.

Fed Chairman Bernanke's report to Congress

Ben Bernanke

Federal Reserve Chairman Ben Bernanke met today with Congressional leaders of the Financial Services Committee to report on the Federal Reserve's take on the state of the economy and Federal Reserve actions in that regard.

In an introductory statement Mr. Bernanke made it clear that the fiscal policy that legislators have chosen to take has been a detriment to the economic recovery.  In an effort to acknowledge the impact that a dysfunctional Congress has on the economy, he highlighted that tight fiscal policy will restrain economic growth.  He warned that political fights over raising the debt ceiling as has happened in the past would hamper the recovery.  Although a few of the Congressmen on the committee appeared to understand the importance Congress has in assisting in the recovery, it is still to be seen if Congressional Republicans take this guidance into consideration as they enter discussions about raising the debt ceiling, ending sequester or resurrecting the American Jobs Act.

Bernanke believes the economy is recovering at a moderate pace.  He cited the improvements in the housing market as contributing to economic gains and predicted this would continue to improve notwithstanding recent mortgage interest gains.

He believes the labor market is improving gradually and contributed a 0.1% drop in the unemployment rate to the Fed's policies of buying assets.  He admits that job growth has a long way to go to be considered satisfactory.  As I have stated in previous blogs, I question the impact that buying assets really has on the job market especially because it does nothing to increase demand for products and services.  It does have an important impact on the stock market as we have seen investors sell off stocks and bonds when Bernanke hinted that the asset purchase program was going to be discontinued.

Understanding the emotional nature of the stock market, Bernanke was careful not to repeat the mistake of hinting at a change in the asset program at the committee meeting.  He emphatically stated that the current asset purchase program will continue and monetary policy will be "accommodative" for the foreseeable future.  As of noon today the US markets appeared to be unaffected by Bernanke's comments.

In order to help prevent another Bush era financial collapse of the big banks, Fed policy is to prevent  collapse by increasing the requirement for cash reserves under what is called Basel III capital reforms.

 In summary, Bernanke explained three mechanisms that the Fed is using to support economic growth.  These are mortgage asset purchases, forward guidance on Fed plans for the federal fund rate target and Basel III capital reforms.

Based on the comments at the committee meeting, it appears obvious that the Fed needs a lot of help from Congress to revitalize the economy.  Bernanke's warning about Congressional actions around fiscal policy may have been his cry for help.

How the rich will make $millions while avoiding the impending financial crisis

Ben Bernanke

When Fed commissioner Ben Bernanke announced that the Fed’s purchase of mortgage securities might be reduced if the economy continued to improve, he gave early warning to the 1% that they should cash out of the market and use one of their off-shore tax shelters to keep their money safe.

As a result, the market lost billions of dollars in the last two days when many wealthy investors cashed out.  The market doesn't look much better today.

I contribute the recent loss in the stock market directly to the one-per centers.  

This was not a case of middle-class investors cashing out their 401K’s because the penalty is too much to cash out a 401K.  It was not a case of investors moving their investments around because that would have had no net change impact on the market.  It was an outright removal of investment cash by selling while prices are still good.  The group of investors who can do this without tax consequence are the wealthiest people in America.  Other investors may soon follow in this selling frenzy now that the trend is sounding alarm bells.

Middle-class workers who try to save some of their pay in 401Ks have the most to lose. 

They do not have the freedom to cash out of the market without losing 40% of their cash to early withdrawal penalty tax.  They must weather the storm when disaster happens.  So when the billionaire investors got out of the market it caused the loss in value which will be to the detriment of middle-class owners of 401Ks.

In 2007 we saw the serious financial collapse of the market as millionaire’s and billionaire’s who had the freedom to remove their dollars from the market did so at a rapid-fire pace.  In that disaster middle-class Americans lost up to 50% of their savings in 401K’s.  

After only the last two days, the market has lost up to 5% of its value.  The trend seems to be continuing today.  If it continues to lose at this rate it will only take a month to repeat the 2007 disaster.

Do the wealthy believe that Bernanke’s security purchase program is really improving the employment situation?  Is that what is worrying them?  Of course not!  They are the job creators, so they should realize that increasing jobs only happens when there is an increase in product and service demand.  That is not happening.  So what are they worried about?  

They worry that Bernanke may be starting to realize that any increase in the economic outlook or jobs for America is really not due to his policies.  They are getting the idea that Bernanke will end security purchases even if the job situation and the economy does not improve.

Up until now, Bernanke’s policies have kept interest rates low and made it easy for investors to purchase stocks and bonds without fear.  The stock market usually does very well when interest rates are low and investors feel confident.  This undoubtedly favors the wealthiest investors.  

By removing that investor guarantee, Bernanke has decreased the certainty of profiting in the stock market.  And one thing the 1%’ers love more than anything is profit.  So they are willing to trash the rest of America and start the collapse of the market in order to preserve their beloved cash.

I expect that this free-fall in the stock-market will persist in the upcoming weeks as more and more of the wealthy catch on to what many of them have already deduced.  They will remove their cash from the market, shelter it off-shore and just wait it out.  When the market bottoms out, they will be ready to pounce on some really cheap stocks and the whole cycle will repeat itself.  That's how you make millions and avoid the financial crisis.

And for the millions of baby-boomers who are retiring, or about to retire, they can thank the wealthy for the additional burden that they will have in their old age as they try to find ways to stretch their greatly reduced nest eggs.  Even when the market comes back eventually, we will have lost whatever time it takes and this lost time will stunt financial growth.

I hope I am wrong.