Slow Down, We Move Too Fast

Got to make this quandary last...

Senate Republican Jon Kyl finds his nerve and a clue:

WASHINGTON – Senate Republicans are drawing out a flap that has made the Obama administration squirm, applying the brakes to Democratic attempts to quickly tax away most of the bonuses at troubled insurance giant AIG and other bailed-out companies.

Sen. Jon Kyl, the Republicans' vote counter, blocked Democratic efforts Thursday evening to bring up the Senate version of the tax bill to recoup most of the $165 million paid out by AIG last weekend and other bonuses in 2009. The House had swiftly approved its version of the bill earlier in the day.

By rushing, Kyl said, Democrats were letting populist outrage trump informed decision-making in the Senate, which is supposed to be insulated from the pressures of public passion.

"I don't believe that Congress should rush to pass yet another piece of hastily crafted legislation in this very toxic atmosphere, at least without understanding the facts and the potential unintended consequences," Kyl said on the Senate floor. "Frankly, I think that's how we got into the current mess."

You mean Congress isn't thrilled with TARP and the stimulus bill, and now wants to read the legislation before passing it?  I don't suppose another week of trying to figure out why Treasury pushed to grandfather bonus contracts in place as of Feb 11, 2009 and now has reversed course will embarrass Republicans.  An added benefit for the nation is that this gives Barack and his teleprompter some time to coordinate their position on this tax.

Meanwhile, Geithner is braced for another bad week when he announces his toxic disposal plan:

WASHINGTON – Treasury Secretary Timothy Geithner could announce as soon as Monday his much-anticipated plan to get toxic assets off the books of the country's struggling banks, administration and industry officials said.

...

The officials, who spoke on condition of anonymity because they were not authorized to speak publicly about Geithner's plan, said it will have three major parts.

One program will use the bailout fund to create a public-private partnership to back purchases of bad assets by private investors.

A second portion of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF. That program is providing loans for investors to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans. Under Geithner's proposal, this program would be expanded to support investors' purchases of banks' toxic assets.

The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets.

They state the obvious:

Hedge funds and other big investors may be even more leery of accepting the government's enticements to purchase these assets for fear of the imposition of tighter government restraints in such areas as executive compensation in the wake of the uproar over AIG.

Leery?  Really?  Partner up with Pelosi and Reid now, and later find out whether you are a hero or villain and what your tax rate is - who would say no to that?

The Times coverage is delightfully imprecise:

The uproar over the American International Group’s bonuses has not stopped the Obama administration from plowing ahead. The plan is not expected to impose restrictions on the executive pay of private investors or fund managers who participate.

Clearly that should read "The plan is not expected to impose restrictions... at this time."  Who can foretell what might pique Pelosi or enrage Reid as we move on down the road?

The Times has more details on the "Heads they win, tails we lose" leveraged financing structure:

To entice private investors like hedge funds and private equity firms to take part, the F.D.I.C. will provide nonrecourse loans — that is, loans that are secured only by the value of the mortgage assets being bought — worth up to 85 percent of the value of a portfolio of troubled assets.

The remaining 15 percent will come from the government and the private investors. The Treasury would put up as much as 80 percent of that, while private investors would put up as little as 20 percent of the money, according to industry officials. Private investors, then, would be contributing as little as 3 percent of the equity, and the government as much as 97 percent.

The government would receive interest payments on the money it lent to a partnership and it would share profits and losses on the equity portion of the investment with the private investors.

Wow.  Aparently the investor's primary role is to be the impartial outsider setting the price.  Of course, that price is adjusted for the put implicit in the the non-recourse financing - price declines of more than 15% impact the FDIC, not the investor.  On the other hand, if you think that the Treasury, Fed and FDIC are big enough (or are willing to tolerate inflation), their buying power can force this to be a real estate market bottom and the put is much less meaningful.

I grasp this logic:

Banks, unwilling to sell their loans at fire-sale prices, have had less capital available to make new loans. Mortgage investors, unable to leverage their investments with borrowed money, have been unwilling to pay more than fire-sale prices.

To break that impasse, the government’s crucial subsidy is meant to provide investors with the kind of low-cost financing that has been utterly unavailable in today’s credit markets.

Left undiscussed - weak banks may not be able to sell assets at a loss, so we may see participation only from already-strong banks.  That might be OK, as long as the Fed is satisfied that there are strong banks operating in every region of the country; eventually the locals will figure out who is lending.

The Times closes plaintively:

Still, the Treasury Department’s biggest obstacle may be the current political environment in Washington, where Democratic lawmakers are furious about the pay packages and bonuses received by executives at companies being rescued by taxpayers.

Many investment executives said they were worried that participating in any bailout program would expose them to political wrath and potentially steep new restrictions on their own pay.

Treasury and Fed officials have remained firmly against imposing any restrictions on pay for companies investing money in the rescue effort rather than receiving money from it.

Interesting that the Times blames (credits?) the Democrats - half the House Republicans backed the crazy 90% solution, too.

Comments

[Pofarmer]

I just realized that next years proposed Federal budget is 25% of GDP, without any GDP slippage. HOLY COW. And FOUR TRILLION in deficits in two years?

[jimmyk]

Well, with friends like these...

McCain speaks up for Geithner

[Thomas Esmond Knox]

"the country's struggling banks" (Wells Fargo?) may prefer to take their payment for toxic assets as a credit to their "Government Bailout" account. Of course, if the present value of the "Bailout Account" (preferred shares) is much lower now, that would be good too.

Sell the toxic assets to the Government at well above market price; accept as payment Govt owned preferred shares at say 50% of the amount the Govt paid a few months back.

50% too high?

Retires the preferred's, retires the "Bailout", the good thing is Congress won't understand. You can bet on that.

[Orion]

I was under the impression that the courts had ruled previously that the government can't tax past earnings because of the ex-post facto provision of the Constitution. True or false?

[TCO]

I told you fucking maggots, not to go for the bailouts, but you were all chicken little like kim and JOM. YOu all are socialistic AND stupid. God, you fucking make me sick. Bush is a moron and he and his old man kmifed the Reagan revolution in the back. And McCain is a joke. Sam ething as Obama. You yoyos should just run off and become Democrats. Who wants a RINO anyhow.

[kim]

Fifty-five kinds of vegetables in the White House Garden. What is the matter with those people.
================================================

[kim]

Viewer would like a word with you on the second Put Up thread, TCO.
=======================================

[BR]

I just went to Worldnetdaily.com and there are seven articles on the "Where's the Birth Certificate" subject, which I'm about to read. One with the title: "Man critical of Obama case judge visited by marshals."

I say new election, not impeachment.

[kim]

It may require rough men who've taken a rough oath to the Constitution. I think it is very instructive the way the issue was marginalized to the fringe at the gitgo. It is truly chilling the way rational debate was shut down about his fundamental eligibility.

The issue will grow, I've little doubt. As he is progressively revealed as a man who will say anything, people will increasingly wonder about everything he has said. And his past is deliberately murky. He's hidden a lot more than just his place of birth.

And the press is clearly in the throes of buyer's remorse. Even the Democrats, sooner or later, are going to look at the continuing disaster of Obama, the dread of Biden, and the stateliness of Hillary's Pilgrim's Progress. So watch for Romney/Palin vs Clinton/Lieberman, later this year.
===========================================

[Bill G.]

They have to move fast since CADD is epidemic in D.C. Congressional Attention Deficit Disorder strikes most congresscritters, and thus they rush from one spotlit issue to the next, never fixing anything but getting into the spotlight as often as possible.

[kim]

I think that's very interesting that Orly Taitz thinks that Supreme Court documents have been tampered with. We know that one particular clerk was up to some shenanigans just before the election.

Robertson's reasoning in dismissing the Hollister case is a joke. That can't possibly stand on appeal.

I'm also intrigued by Roberts' comment that 'he can't talk about it'. As I mentioned earlier, is that because he doesn't know enough to talk, or because he is constrained from talking, either because the Court will address it or from some other reason.

Truly, the mystery deepens. And one of the deepest mysteries is why Obama continues to stonewall. If he is eligible, there is not much point in continuing to hide his vault copy. He can excuse almost any embarrassment on it by simply saying he didn't know about it until recently, and almost no one is going to hold him responsible for indescretions half a century ago by other people. It would even be a source of support, and he badly needs that now. Past his election and inauguration, the only thing worth continuing to hide is alien birth. And if his birth was alien, he surely knew about it last year in time to withdraw.

Chances are I'm dead wrong about this. But there is nothing the matter with my questions. Sorry. No Way.
===========================================

[kim]

Just for amusement, if the election is annulled, who is President? Bush? What about the two term limit? Cheney? Maybe. Pelosi? I doubt it. Not Hillary because she'd only be SoS in an illegitimate administration.

What fun.
==========================================

[BR]

Gold graph at kitco.com. Click on 1975-2009 and compare it to the first stages of this:

Gold per ounce in German Marks

Jan 1919 - 170
Sep 1919 - 499
Jan 1920 - 1,340
Sep 1920 - 1,201
Jan 1921 - 1,349
Sep 1921 - 2,175
Jan 1922 - 3,976
Sep 1922 - 30,381
Jan 1923 - 372,477
Sep 1923 - 269,439,000

Oct 02, 1923 - 6,631,749,000
Oct 09, 1923 - 24,868,950,000
Oct 16, 1923 - 84,969,072,000
Oct 23, 1923 - 1,160,552,882,000
Oct 30, 1923 - 1,347,070,000,000
Nov 05, 1923 - 8,700,000,000,000
Nov 30, 1923 - 87,000,000,000,000

For the young ones who may read this: Germany was heavily in debt, money was printed based on thin air, and hyperinflation occurred. People were starving, and burning paper money to warm themselves. It was a bad mix of Wall Street, European bankers, fascism/socialism, and Hitler duped the people into believing he could save them.

When the paper money loses value, gold goes up.

A solution to inflation is to go back onto the gold standard where the paper money represents actual gold, because gold retains its value.

[Thomas Collins]

See LUN (via Drudge) for an article clearly spelling out why the "bonus tax" passed by the House is constitutional. Judd Gregg's statement to the contrary in the article, I think, is based more on his policy preferences than sound legal reasoning.

I oppose as a matter of policy any additional taxes on employees of companies receiving bailout money. Unfortunately, Congress and TOTUS are well within their constitutional powers to enact such additional taxes.

[kim]

Robertson, in dismissing the Hollister case, said the issue of his eligibility was vetted by 'a vigilant public'. That's got to be the funniest thing I've read all year.
=============================================

[kim]

Gold has its own peculiar problems. It's not as if it has had a stable value historically.

A gold mine is a hole in the ground with a liar at the top.

TC, tax in anger, recompense at leisure.
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[BR]

TC, well, Obama may very well abolish the IRS ex-post facto of the Constitutional Amendment which wasn't ratified by all the states. What a mess. It's as if the Constitution, laws and contracts suddenly have no validity.

Checks and balances, kick in. Supreme Court, open your eyes and act before you lose your power to do so.

[TCO]

You bailout lovers could have stopped all this stuff in its tracks if you stood firm. McCain would have been elected by 5-10 per cent if he had called out Bush and stod firm. Public hates bailouts. they are a lot smarter than idiots like kim who have not even read Milton Freidman, yet think they can micromanage the economy from a government seat.

You make me sick. The nation now has ~8 trillion plus of bailouts. We are killing the taxpayer to bail out financial speculators.

[BR]

Regarding the million dollars coverup of Obama's Birth Cert:

Wow, Kim, what was that about tampering at the Supreme Court? Sorry, Typepad is so slow, couldn't read yours until this minute. And your logic is totally correct. There is now no excuse for it to be withheld.

I feel like going back into past threads and linking all your gems on this subject. It really needs to be repeated.

Anyway, here's the unprofessional, amateur gibberish Hollister Dismissal link again, by Judge James Robertson - in case a member of the Supreme Court reads here and wants to review the case.

[BR]

TCO, you're so funny, what's this bee in your bonnet about kim and bailouts? Are you flirting with him?

Anyway, who would you like to see as President?

[PeterUK]

Other than the nappy seems to have fallen from the mouth of TCO,he seems to have another problem,that of failing to note that there is a different president and administration and Congress is still controlled by the Democrats.
So,considering the Democrats are holding a full house,why is the imbecile ranting here?

[boris]

TCO: "Hail Ronulus!"

[PeterUK]

"TCO: "Hail Ronulus!"

"Hail Anulus"

[Old Lurker]

Tom Collins, see LUN for Ludlow's concern about the 90% tax.

I know links to WSJ often do not work, but front page story Sat provides a preview of Turbo's toxic asset plan. Tracks the early expectations in that he will propose Public-Private funds to buy up the assets to hold them for future liquidation. Profits will go heavily to the Private Partners. But as the sun follows the moon, the likely private investors are expressing strong reluctance of making a deal with this government which might well drag them before Barney Frank to give back their obscene profits in the future. Actions have consequences folks, just as we teach our kids.

[Thomas Collins]

Yes, yes, I agree with you all that it is bad tax policy. All I am saying is that it is constitutional. Our hope is the 2010 elections, not the Supreme Court.

As the article linked by Old Lurker details, we have been down this high tax rate road before. It is a road that invariably leads into a ditch.

[ben]

"Unfortunately, Congress and TOTUS are well within their constitutional powers to enact such additional taxes."

No, actually that's incorrect. Congress has taxation powers, yes, but they are not unlimited and their are restrictions. Even liberal legal icon Lawrence Tribe thinks the AIG bill could run into trouble under the Bills of Attainder laws for being too narrow in its targeting of a specific group of people, although he sees no problem with the ex-post facto clause. Others are not so sure.
You can bet the recipients will mount a fierce challenge and have a good chance of prevailing. The fact is, most everyone in Congress doubts the constitutionality of this bill, what they want to do is get it off the front burner, they don't really care if its ruled unconstitutional years down the road...not their problem anymore.

[mel]

OL-

That's why only 22 applications were accepted yesterday, under the TALF. The only FED run portion of any of this mess, no Treasury.

Why volunteer to play the mole in "Whack A Mole"?

[Old Lurker]

"Why volunteer to play the mole in "Whack A Mole"?"

Perfectly said, Mel!

[ben]

"YOu all are socialistic AND stupid."

I take exception to be called socialistic.

[Soylent Red]

That's why only 22 applications were accepted yesterday, under the TALF.

So lemme get this straight...

All this bailout and so forth was bad mojo to start with, but according to TOTUS (I'm loving that) necessary to shock the system back into life.

But now...Team TOTUS and Congressional Dems are meddling and taxing it so much that companies are hesitant in accepting the government dole.

What happens when you throw a bailout party and then set the dress code so high no one wants to attend? More importantly, where does the excess money get diverted to?

[Pofarmer]

likely private investors are expressing strong reluctance of making a deal with this government

Then it's all working out for the best.

[Pofarmer]

What happens when you throw a bailout party and then set the dress code so high no one wants to attend?

It's more like having a bailout party, then having a bucket of water over the door as everyone comes in in their finery. Sooner or later the ones in the back of the line are gonna balk. The ones already in? They might be stuck, OR they gotta run under the bucket to get back out.

[Old Lurker]

Soy, to me it's not even the "meddling and taxing"...but the outrageous personal vilification stirred up and then directed at any group of business people that, Mel's phrase, becomes the mole for the day.

Most humans simply do not want to have that sort of genuine hatred and abuse directed at them, nor do their families, children or friends. Whether it is a screamer like Frank from that side, or a Grassley suggesting suicide for God's sake from the other side, all for the sin of engaging in commerce...

We need our inventors and producers, and treating them this way is counterproductive. This approach will not end well for any society that goes down this road.

[Thomas Collins]

Tribe points to the provisions in the House bill, ben, that will protect the bill from an attack on constitutional grounds. See the LUN to my post above.

The Feds have broad power to tax income retroactively, take away deductions and credits retroactively, and to pick and choose winners and losers in the tax system. The remedy is through the political process, not the courts.

[Charlie (Colorado)]

Kim, there's no mechanism in the Constitution for annulling an election. BR, there's no mechanism in the Constitution for having a redo of an election. It's good to have a dream, but don't get your hearts set on it; unless you're thinking a military coup is likely, the most you can hope for is Obama leaving and Biden taking over. (Not, as I've said before, that I think that's likely either.)

TCO, it's sad that you're that drunk at 6:05AM.

[MayBee]

Yes, Old Lurker. You say what I would.

I actually loved something Chris Matthews said yesterday.
"Why not just make a list of the 50 richest people in America, and pass a law taxing them 90%?"

He's appalled by the selective action against a small group. That it is being done to counter a bill Congress just passed is horrifying.

[Charlie (Colorado)]

Tribe points to the provisions in the House bill, ben, that will protect the bill from an attack on constitutional grounds. See the LUN to my post above.

TC, Tribe has lost in the SCOTUS before; there are a number of legal eagles who do think it's an unconstitutional Bill of Attainder; there's been a fair bit on that in Volokh Conspiracy.

[Charlie (Colorado)]

He's appalled by the selective action against a small group. That it is being done to counter a bill Congress just passed is horrifying.

There could be some sample selection error in this, but I don't recall hearing anyone speak well of this bill who's to the right of Rachel Maddow. Certainly no one on CNBC except for that loony advertising guy.

[kim]

You've pointed out, Charlie, precisely why so many people have trouble dealing rationally with this issue. What are we going to do if it turns out he is ineligible? The mind block before the election was that so few thought he had the chutzpah to deliberately pull off such a fraud. The mind block afterwards has been 'omigod, what a mess'. Well, when the mess he makes becomes so bad, people will start confronting the issue, because it is a way out of the minotaur's maze.

I do expect the Supreme Court to look at the issue eventually, and settle it. I doubt we'll need the military becauses if it does come to that, disgust with Obama will be at a high level, and deposing him will be acceptable.

Sure there may not be a Constitutional mechanism. Those founders imagined a lot, but the depth of fraud that is Obama was beyond their ken. So how would things work out, were he to be found ineligible? Think along these lines, rather than the lines that he shouldn't be found ineligible because we don't have a path going forward from that point. You have a blind spot.

What if his birth certificate is revealed tomorrow, and he was born in Kenya, or British Columbia? What then? I welcome your ideas. Please don't tell me you have none.
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[FredP]

>half the House Republicans backed the crazy 90% solution, too.

But some of them voted for it only to further discourage banks, etc. from participating in the bailouts. Most of the Republicans know that the bailouts are a bad idea. The more poison pills associated with bailouts, the better. (At least prospectively; targeting one group of people is still a terrible idea retrospectively.)

[Thomas Collins]

Oh, I am not holding Tribe out as anything close to a perfect analyst of constitutional issues, CHACO. But on the Feds' scope of authority to tax, I think he has analyzed it correctly.

Now, I realize that the argument may be made that the federal courts in deciding challenges to tax statutes have given Congress and the Prez far too much leeway. What I am saying is that it is too late in the game to mount successful challenges to most tax statutes, even those as nonsensical as the recently passed House tax on bonuses.

I previously LUNed a short Heritage Foundation summary of the issues involved in evaluating the constitutionality of retroactive taxation and the generally broad scope of authority Congress has in the tax area. Because this topic still seems of interest to JOMers, I am LUNing it again (see below).

[Rick Ballard]

OL,

Have you penciled the Turbo ToxAss plan from Mr. Hedge Hog's position? The current Bill of Attainder is certainly one factor (making it the Turbo Assisted Suicide ToxAss program) but I can't quite make out why Mr. Hedge Hog would want to participate in Turbo ToxAss even with the "can't lose" backstop. Not at 65 cents, anyway. At 35 cents there's potential but at 35 cents the current ToxAss holders would be a bit silly to sell (IMO).

The other page to this is the ToxAss holder's income statement. They still aren't going to have any juicy ABS fees or income because ABS are pretty much pining for the fjords. Without the velocity engendered by ABS, the cash generated by the sale of ToxAss isn't going to have the return that it would have had in "the good old days".

Am I misreading this? Is there some "secret formula" aspect that is hidden from cursory inspection?

[Ignatz Ratzkywatzky]

except for that loony advertising guy

Donny Douche?

[MayBee]

I think Eric Cantor voted for this bill, which breaks my heart.

I don't care if it was to discourage banks in the future from giving out bonuses. The people who will be taxed if this bill passes are real people, not object lessons.
I wish the people who got huge bonuses would have surveyed the situation, realized the money is coming from taxpayers, and not taken the bonus. That didn't happen.

As TM said, does Obama not realize these are REAL PEOPLE? Does Congress?

Any of us could wake up tomorrow to find our company has taken bailout money, and we are being vilified for accepting the pay we were promised a year ago.

[Gmax]

This public private leveraged by public plan is stupid on stupid just like a shirt is white on white.

I dont know anyone in the private clamoring to be a partner with the govt. And on top of that, you now can fully expect the govt at some point in the future to look on your side of the ledger and decide whether you made too much for the risk you took, and have little regard for your assessment of that equation.

There are plenty of plays available, the stock market is 50% off its highs, you can buy investment grade to near investment grade paper at or near double digits and oil is at approx 1/3 of its all time high.

None of those require you to take Hugo Chavez on as a partner who tears up the partnership contract.

Hide and watch.

[Pofarmer]

Soy, to me it's not even the "meddling and taxing"...but the outrageous personal vilification stirred up and then directed at any group of business people that, Mel's phrase, becomes the mole for the day.

Yeah, but what are you gonna do? It's hard to direct ire at a multi hundred billion dollar bill. It's much easier to direct the ire at the recipients of a portion of those funds. It's how the human mind works.

[Cecil Turner]

Yes, yes, I agree with you all that it is bad tax policy. All I am saying is that it is constitutional.

I read that article yesterday and thought it pretty weak. Essentially the argument is this:

The House took several steps to shield the measure from that argument, said Laurence Tribe, a constitutional law professor at Harvard Law School. [ . . . ]:

The measure doesn’t single out employees at AIG [ . . . ]

Tribe also pointed to a provision in the measure exempting executives at companies that repay enough bailout funds [ . . . ]

Except for the obvious . . . the bill was crafted after-the-fact, with criteria that just happened to fit the AIG bonuses exactly, and too late for them to take advantage of the payback clause. They may be "shielding" the law from that argument, but there's no way anyone can claim, with a straight face, that "the goal is not to punish." It obviously is the goal, and the AIG bonusees are just as obviously the target. Whether the Court will extend its usual deference (or whether any AIG employee will have the pluck to show up at the mob scene that will probably ensue) is an open question, but has little to do with the underlying principle.

The situation is further complicated by the fact that Congress and the Administration had an opportunity to stop the bonuses in their tracks (when they wrote the porkulus bill), and specifically included language to allow them. Going back for a rewrite is surely a special case, and in any event makes the foregone conclusion contention in the article hard to swallow.

[Pofarmer]

the most you can hope for is Obama leaving and Biden taking over.

If that's the most you can hope for, you better hide the women and children for the worst.

[clarice]

No wonder Tribe has lost so many biggies in the SCOTUS. Man pays no attention to the facts.
Exactly right, Cecil.

[kim]

I thought Obama's general incompetence would have individuals contending with each other at cross purposes, but it appears he's going to have institutions contending with each other at cross purposes, as well. This is incompetence on a grand scale, and it is being accelerated by loss of confidence.
===========================================

[Old Lurker]

"Hide and watch."

My words/action exactly. Gmax

Po, for sure it's easy to identify an enemy group and then attack. Germany in the early 30's comes to mind, and as others have noted here, that is how some people rise to power. Always with no good outcome.

Rick, your question about where the payoff is IS the big question. Sometimes it's what you see on the face of the deal - the profit split vs. the investment on the assets being traded on top of the table in public view. But sometimes its hidden down at the level of the specific toxic asset and sometimes even at the debt level attached to that toxic asset (ie the real winners can be the owners and/or lenders who benefit from the sanitization of the underlying deal once the gummint steps in to help). Back in the big real estate busts in the past, lots of wealth was created in the pulling of chestnuts out of the fire. Sometimes the wealth created was simply making personal loan guarantees disappear. This particular game has so many moving parts I know just enough to know something is up that I don't see.

Perhaps this is a good time to bring out that old JP Morgan quotation about times like these being "...when capital returns to its rightful owners".

[kim]

Hide and watch.

Now that's funny.
=================

[RabelRabel]

Aside from the legalities and future implications of the bonus tax, the sympathy for the recipients of AIG retention bonuses baffles me. The justification for the one million dollar average bonus was that these people would walk out and earn that money at another firm. So, if that justification was legitimate, don't they have the option of simply leaving and earning their million dollars plus their salary somewhere else? Why would anyone who doesn't have that option deserve a retention bonus?

[MayBee]

How much can we trust Tribe's analysis regarding something his star student Obama wants?

[Charlie (Colorado)]

What if his birth certificate is revealed tomorrow, and he was born in Kenya, or British Columbia? What then? I welcome your ideas. Please don't tell me you have none.

Assume that he was born outside US territory -- something which seems unlikely in the extreme, since that the State of Hawai'i has stated officially that there is a valid birth certificate on file and FactCheck.org has physically examined the "short form" certificate, which is in due form, with both signatures and seals -- then what?

Then we have the child of a native American citizen, born outside the confines of the US. She clearly never renounced her US citizenship. It's unclear whether she was legally married at the time, but its clear that she didn't intend to reside in Kenya since she didn't, uh, reside in Kenya. So there's very little here to go on, and indeed you ended up appealing to a statute that basically says if Mom is < 19 years old her citizenship status doesn't inhere to the child, but after 19 it does.

So let's say, for arguments sake, that all of these proved to be false: there is no certificate of live birth giving Hawai'i as place of birth, that the Director of health Service in Hawai'i lied about the existence of that certificate, that a "short form" certificate was successfully forged, including seal and signature, in a form to fool those who've examined it physically, and no one in the Department of Health, or among the people involved in the forgery and substitution, has blown the secret even with a zillion birth certificate investigations etc going on.

THEN the notion that his status as a native born citizen doesn't inhere by his mother's native birth etc stands entirely on the interpretation of that statute,in 8 U.S.C. § 1401, which wasn't written with this in mind and doesn't speak to eligibility to be President, AND depends on the SCOTUS saying that the applicable rule which cannot be physically possible to a parent of less than 19 years of age and which was revised down in 1988, applies, and that it was the intent of Congress to interpret the law as applying to Presidential eligibility, and further that this change in the law is Constitutional under Equal Protection, and that Congress can establish the eligibility or lack thereof by statute at all. This is also pretty improbable.

BUT let's assume arguendo that this all came true, and the court cases wound through all the courts and came to a final conclusion sometime before the 2016 elections.

THEN we have the 25th Amendment, which states: "1. In case of the removal of the President from office or of his death or resignation, the Vice President shall become President." and goes on and states further:

4. Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.

Thereafter, when the President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that no inability exists, he shall resume the powers and duties of his office unless the Vice President and a majority of either the principal officers of the executive department or of such other body as Congress may by law provide, transmit within four days to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office. Thereupon Congress shall decide the issue, assembling within forty eight hours for that purpose if not in session. If the Congress, within twenty one days after receipt of the latter written declaration, or, if Congress is not in session, within twenty one days after Congress is required to assemble, determines by two thirds vote of both Houses that the President is unable to discharge the powers and duties of his office, the Vice President shall continue to discharge the same as Acting President; otherwise, the President shall resume the powers and duties of his office.

So, we assume all those things. Then, at last, Congress decides, and if they can muster a two-thirds majority to hold that Obama can't continue his duties within 21 dats, THEN ... Biden is President.

No do overs.

[Charlie (Colorado)]

Sorry that's missing links, but TypePad wouldn't "accept that data".

[Charlie (Colorado)]

Yeah, but what are you gonna do?

Try not to fall for it?

[Countrylawyer]

I'm just waiting for someone in Congress to propose an Ermaechtigungsgesetz so that Pres. Opromptr won't have to go through the tiresome process of getting majorities in both houses of Congress to implement His Divine Will, and then suffer the indignity of having mere judges ask themselves whether that pesky ol' constitution allows Him to do such things. I mean, that solution worked out so well for Germany in 1933. Didn't it? Just sayin'.

[DebinNC]

The Wyden-Snowe amendment, which was in the bill when it reached conference then axed in favor of the Admin-Dodd substitute, allowed the bonuses but a 35% tax was levied on anything over $100,000. That sounds infinitely better than what replaced it. I hope the press keeps dogging Gibbs on exactly who forced the change. I think the culprit is Larry Summers but the WH admitting so would damage his viability as Geithner's replacement.

[Charlie (Colorado)]

If FDR couldn't get one, I don't think Obama will.

[Pagar]

It would be really sad to think that there are people in America that think a non eligible person should be continued in office because he (or his teleprompter-sorry, I meant to say his handler) selected someone to be his running mate that people believe would be worst than the non eligible person as a replacement.

[Cecil Turner]

Aside from the legalities and future implications of the bonus tax, the sympathy for the recipients of AIG retention bonuses baffles me.

What, don't see why people might be a little sympathetic to those who were legally doing their jobs one day, in a company led by a man who is doing it gratis, only to find the next that they were the worst sort of scoundrels, and subject to numerous scathing attacks from the bully pulpit; and their livelihoods, lives, and even children threatened. I mean, what's their beef?

And now, per Drudge, we get the next installment:

Obama will call for increased oversight of 'executive pay at all banks, Wall Street firms and possibly other companies' as part of sweeping plan to 'overhaul financial regulation', NY TIMES reporting Sunday, newsroom sources tell DRUDGE... Developing...

This outrage is manufactured, counterproductive (except to those demagogues who want to stir up resentment of "Wall Street Greed" as opposed to the wrongheaded fiscal policies--mostly Congressional and Fed related--that got us here in the first place), and a distraction from the actual problems. The "fixes" are stupid, unConstitutional, and morally bankrupt . . . to repair oversights that were intentionally inserted into the previous legislation. Other than that . . .

[kim]

Well, you are wrong on your first two counts, Charlie. Obama is depending upon the sworn statement by the Hawaiian officials, but what has been elided is that a valid birth certificate does not mean he was born in Hawaii. At the time, Hawaii issued birth certificates for people born outside of Hawaii. The critical box is line 7c. We do not know what it says. Fact Checks, factchecking was deficient. They did not prove that the COLB shown was genuine.

But you do illustrate why people think this issue is crazy. They think it is settled, and it is not.

More later. That's just your first paragraph.
============================

[kim]

Well, the rest of what you have to say assumes facts not in evidence about the birth certificate. Your argument is fundamentally that an alien birth, his if it was, is actually a naturally born citizen birth. Absurd, I'm sorry, on the face of it.

And we have a situation not envisioned by the Founders. It can just as well be argued that if Obama was ineligible then the election is invalid, which does not make Biden President.

I've little doubt though, that your analysis might stand, and Biden would become President. That's a better alternative, now, than this clown.
=======================================

[kim]

Note, please, that the Hawaiian officials did not swear he was born in Hawaii. You've been bullshat, and you are not the only one.
=============================================

[kim]

That Fact Check business is fuzzy photos. It is not a forensic examination. You've been bullshat. You are far better than that, Charlie.
============================================

[kim]

For your own sake, check it out. I'm not 100% certain of my facts. But this is the thrust of the people fighting in the courts.
=======================================

[kim]

Please check those two points which seems to have convinced you, Charlie. The sworn statement and the Fact Check examination.
=========================================

[Charlie (Colorado)]

It would be really sad to think that there are people in America that think a non eligible person should be continued in office because he (or his teleprompter-sorry, I meant to say his handler) selected someone to be his running mate that people believe would be worst than the non eligible person as a replacement.

It's really sad that people in the United States keep grasping at the straw that in the face of all apparent evidence there's some argument that Oabam isn't eligible.

[kim]

You haven't looked at the points I asked you to look, Charlie. You should be ashamed to be so gullible.

It's nice that you say 'apparent evidence'. Look behind the 'appearances' that you've been hypnotized to believe. I've pointed you at them. It's is really sad if you don't look at them.
==================================================

[bad]

Slow down you move too fast

ya got to make the morning last...

[kim]

The single most important piece of evidence, and the only convincing one, is not the least bit apparent. It is being concealed by millions of dollars, clever lawyers, and Alinsky tactics. Why you don't recognize this amazes me.
========================================

[Charlie (Colorado)]

Well, you are wrong on your first two counts, Charlie. Obama is depending upon the sworn statement by the Hawaiian officials, but what has been elided is that a valid birth certificate does not mean he was born in Hawaii. At the time, Hawaii issued birth certificates for people born outside of Hawaii. The critical box is line 7c. We do not know what it says. Fact Checks, factchecking was deficient. They did not prove that the COLB shown was genuine.

Oh, good God, Kim. Yeah, the Director of the Hawai'ian Department of health Services didn't, y say "yes, the damn box for born IN Hawai'i was checked," and yes, I suppose it's possible that she was unaware that this was a point in controversy, or if she was aware she then effectively lied about it, and yes, I imagine it's possible no one else has looked, and yes, I guess it's possible that if someone did look they wouldn't then mention it to anyone else even though they could probably sell the story for a pile of money, and yes, it's possible that the FactCheck folks are also lying about seeing the actual physical certified "short form" copy and photoshopped the picture of the seal, and that no one who saw that mentioned it.

But you know what? I couldn't prove I'm a native-born American to the standard you're proposing -- original birth certificate, chain of custody, and proof that it wasn't forged -- and my people have been here since we were napping freaking Clovis points for our mastodon spears.

And so yes, I suppose it's possible -- albeit highly unlikely -- that Obama was born outside the USA.

BUT THEN WHAT?

Then you're depending on an interpretation of a law that says he wasn't native-born on August 4th, 1961, but would have been native born if he'd waited until November 29th, 1961, and that the Supreme Court would force a Constitutional crisis over it, or that Congress wouldn't pass a law in the interim saying that the effective date was intended to have been 1952 as Eugene Volokh originally read it. But assume all THOSE things went your way.

THEN WHAT?

Then we get to the question you said I'd not considered: what happens. Which I considered. And you ended up agreeing that sure enough the Constitution does define what would happen and it doesn't include a do over election.

I'm sorry. This is just a crackpot conspiracy theory.

[Charlie (Colorado)]

It's nice that you say 'apparent evidence'. Look behind the 'appearances' that you've been hypnotized to believe. I've pointed you at them. It's is really sad if you don't look at them.

See? Now I don't see it because I haven't examined the evidence right; I've been "hypnotized".

Completely crackpot.

[kim]

That's lawyers, guns, and money, in the vernacular. Who needs those? Desperate people, that's who.
===============================================

[Thomas Collins]

Cecil Turner, I agree that the bonus statute is directed against AIG, but it is dressed up enough to pass constitutional muster. Take a look at the authorities cited in the summary of The Heritage Foundation (see LUN), and I think you and other JOMers who have expressed outrage at this will agree that although the House Bill is unjust, if passed in its current form, it will be upheld. In that regard, the summary of The Heritage Foundation acknowledges that under the case law, many unjust statutes will pass constitutional muster.

If JOMers would like to direct their energies and dollars to a legal cause, I would suggest giving money to and volunteering time to organizations that challenge restrictions on free speech (such as FIRE). In the free speech area, we generally have the case law on our side. In the tax area, we need to focus on the ballot box.

[kim]

My points are that the Fact Check examination was deficient, and that the Hawaiian officials did not swear he was born in Hawaii. You are buying into the Alinsky tactic of 'crackpot'. Shame on you, you fool.
==========================================

[Charlie (Colorado)]

The single most important piece of evidence, and the only convincing one, is not the least bit apparent. It is being concealed by millions of dollars, clever lawyers, and Alinsky tactics. Why you don't recognize this amazes me.

I've said before that I thought there might be something funny with it. I still like the theory that it says "Barry Dunham, bastard." The theory that there's a conspiracy to conceal his place of birth, when even if it were true very probably wouldn't actually DQ him for the job, is still crackpot.

[Charlie (Colorado)]

My points are that the Fact Check examination was deficient, and that the Hawaiian officials did not swear he was born in Hawaii. You are buying into the Alinsky tactic of 'crackpot'. Shame on you, you fool.

Kim, go back and read what I wrote. That is just so utterly improbable as to be ludicrous.

[bad]

Cecil, that is exactly what I've been concerned about all along.

[kim]

You are still missing the point about the Hawaiian official. She carefully did not swear that he was born in Hawaii. She only swore that there was a valid birth certificate on file. Hawaii issued 'valid' birth certificates to people born elsewhere at that time. The rest of your statement there is your hypothetical, one you've been led to believe.

I may well be wrong, but it hasn't been proved. Not by your foolish rhetoric.
=================================================

[kim]

'utterly improbable'. 'ludicrous'. These are not rational words. Show me the certificate.
=============================================

[Old Lurker]

RabRab: "Aside from the legalities and future implications of the bonus tax, the sympathy for the recipients of AIG retention bonuses baffles me."

Sort of like "...aside from that, Mrs. Lincoln, how'd you like the play?"

[kim]

And since when is Fact Check photos a decent examination? That alone should have raised your hackles and suspicions. You are being fooled, Charlie, and your resistance to looking at my points confirms your state.
=============================================

[kim]

I'm crazy, and you're a fool, Charlie. We are at an impasse. I invite anyone, including you, to check out my points. What can you lose but your gullibility?
=========================================

[kim]

The key here is to check out my points. Stop with the hypotheticals and the accusations of ludicrous. It is not crazy to want to see proof of his eligibility. Sorry. No way.
=============================================

[kim]

Why didn't she swear he was born in Hawaii if he was? That would have been an easy thing to do. And it wouldn't have been perjury if it were true. If it were not true, then swearing that there was a 'valid' birth certificate on file would not be perjury. You've been fooled, Charlie. You should not let that stand willingly.
================================

[pagar]

Has FactCheck.Org ever came up with a position that the Democrat Party did not approve, on anything?

When someone spends a million dollars (even if it is donations from others) to avoid proofing that he is eligible to fill a position, there is something wrong. The arguement that we should just accept the wrong and move on is not right, IMO.

[MayBee]

Why would anyone who doesn't have that option deserve a retention bonus?

We have to get away from words like "deserve" when it comes to creating government policy.
There's almost no way to judge whether people who get things (legally) deserve them.

President Obama has tried to introduce words like "deserve" into the tax code (the most deserving will get tax cuts), words like "greed" into the talk about executive pay, and talk of "shared sacrifice" into the discussion of people who should pay more taxes.

But they are labels that are pinned on particular groups of people for very specific reasons.
Business executives are "greedy", but millionaire authors and talk show hosts apparently are not.
Employees at AIG don't "deserve" bonuses, put people who are on welfare "deserve" a hand up.
Higher wage earners should be willing to participate in "shared sacrifice" to help pay for others (who will be getting tax cuts) to get health care.

[Cecil Turner]

Take a look at the authorities cited in the summary of The Heritage Foundation . . .

The obvious distinguishable feature between those cases and the current proposal is that they were enforcing actual taxes, which just happened to affect individuals differently . . . not taxes aimed at individuals. Again, I don't know if the Court will strike this particular statute down (if it is passed), but that doesn't change the underlying principle. It is a bill of attainder, however it's "dressed up"; and hence unconstitutional. Moreover, the ex post facto nature of the bill is not just objectionable as in those cases (where legitimate planning was torpedoed by later rule-changing); but also in the sense that it is aimed at those recipients particularly, and confiscates the entire bonus, after a previous bill specifically allowed them.

In short, I remain convinced as a matter of principle the bill is unconstitutional (and getting a favorable ruling from a particular Court is not the same as passing "constitutional muster" . . . even though it may have that practical effect). And though I'm not at all confident the bonusees will prevail in the legal system (and even less so after perusing those precedents), neither am I convinced it's a slam dunk that they won't.

[Rick Ballard]

"I know just enough to know something is up that I don't see."

I'm not so lonely any more. Between Bills of Attainder and legislative cramdown authorizations, valuation models developed by Ouija board have a very good chance at beating black box modeling - at a substantial saving of time, money and effort.

As to the retention bonuses - I wonder if fear of a situation similar to the Lehman traders and finance people "forgetting" to leave the access codes when they cleaned out their desks had an impact. I assume that's what "Loss of all accounting systems" and "No inventory of assets" means (per page 3.

Weill and Alvarez and Marsal certainly seem to be doing well (billing wise) with the Lehman situation.

[Charlie (Colorado)]

Actually, Kim, it's completely rational. If you like, I can show it to you mathematically. To a first approximation, let's consider the possibility that there's one chance in ten that each of the things we need to assume is actually going to happen. So, one chance in ten for each of these points:

- Obama was really born outside the US
- that the statement to the AP about the birth cert was purposefully misleading
- that no one else knows it was misleading, or someone else knows but hasn't leaked it
- that, assuming it was misleading, and Obama was born outside the US, that a district court will agree, the appelate courts will agree, and the SCOTUS will take cert,
- that this process will take less than the rest of the current term
- that during this process, Congress wouldn't pass a law settling the interpretation of 8 USC 1401 to include Obama in the group for whom the parent only needs two years in the US
- that having granted cert, SCOTUS will find that, as I said, three months difference (Aug 4 to Nov 29) is, and was intended by Congress, to be a disqualifier.

Then the overall probability is something like 1 in ten million. AND that's assuming each of those has a one in ten chance, AND that's giving you the benefit a second way because several of the points I couldn't in the seven I listed are compound, and could be broken up themselves. (I think the chances of each step are considerably smaller, and there are probably more steps. That would make the probability more like one in ten trillion if I took what I think are reasonable guesses.)

Kim, I've got a pretty good friend who's similarly dotty about the Kennedy assassination: he still holds out that the CIA and the Military Industrial Complex and LBJ conspired to murder Kennedy. You're way down that track here.

[kim]

pagar, Charlie is a great guy, and I love him, but he has been fooled on this issue. So has nearly everyone else, and the ones not fooled have been marginalized as crazy. So, send me to the camps. Charlie can send me baskets of food.
===========================================

[Charlie (Colorado)]

Has FactCheck.Org ever came up with a position that the Democrat Party did not approve, on anything?

Well, yeah, actually.

Kim, you're right we're at an impasse. I looked at the points you mention; I don't find them even faintly convincing. You say it's because I'm hypnotized.

Usually, the next step is to ask whether I'm being paid by someone, so just to get it out of the way, nope. And no, I'm not a leftist.

I am a Freemason, you could go for the Illuminati Grand Conspiracy one.

[Charlie (Colorado)]

Tell you what, Kim. I just went through the whole sequence assuming you were right and still don't find a convincing path to Obama being removed; what did I miss?

And remember, you were saying there would be a special election etc; how did you propose that was going to happen?

[kim]

Charlie, all that rhetoric falls to the request that you show me the certificate. And the begging plea that you check out my points. Has any official sworn that the certificate shows that Obama was born in Hawaii? Was the Fact Check photo session forensically adequate enough to prove anything. The answer to both of these is 'NO'.

All the rest of your hypothetical rationalizations are not the least bit crazy. But they are hypothetical. Surely you must recognize that. Show me the certificate, or failing that, show me the certiorari. This issue is going to grow, and then you'll certainly feel the fool if you haven't satisfied yourself on my two points. You haven't, have you? Why not?
===============================================

[Charlie (Colorado)]

Okay, one more point: Kim, when it seems nearly everyone has been fooled, and you and only a few others see the truth, it's possible you're right. (Notice I haven't said at any point that it was impossible you were right, just highly improbable.) But it's a lot more common that it really is you being fooled.

[kim]

You are rationalizing that an alien birth means we should keep Obama as President. The fact that he lied about it, and swore so, is grounds for impeachment.

I can't believe the epicycles you go through to justify your unsupported belief.
================================================

[kim]

It's not really 'nearly everyone', Charlie. Look at the signatures on Taitz's petition. Look at all the suits in court. And that argument, that he is eligible because nearly everyone believes he is eligible, is not rational. It is fallacious.

And I've readily admitted that I could be wrong. In fact, I agree with you that it is probable that I am wrong. But this has been a nation of laws, and one of them is that the President must be a natural born citizen. That has not been shown, not even close.
======================================

[kim]

So you've looked at my points and would say that the Fact Check photo session is adequate and that the specifics that the Hawaiian official swore to prove that Obama was born in Hawaii? Sorry, you've looked at it with a jaundiced, shall we say hypnotized, eye. You are asleep at the switch on this one, Charlie. The hypnotics have worked.
================================