Geithner's Stress Tests

Well, the stress tests are out, at least partly. To provide some background, let's go over the setting for a moment. Gov't mandates and equal housing goals force lenders to lower their lending standards, which makes a large portion of loans unstable and dangerous. These home loans were traded as securities and derivatives in an effort to get some worth out of the worthless paper that was made worthless by gov't intervention. The market became so risky and strung out that the bubble burst, and the rest is history.

A domino effect rolled through the financial system, adversely affecting banks and other institutions. Obama & friends come out with the TARP program, which they force banks to accept, thus injecting federal bureaucracy into all these sectors. A myriad of whispers about shady deals come out, as if anyone should have had any doubt of nefarious intentions when a massive federal money pile gets rushed through Congress in the dark of night. Bank presidents report that the whole purpose of TARP was for banks to buy each other, not to create liquidity and get lending moving again. Lending isn't happening because everyone is scared to death of the new, over-arching gov't. Anyway, Obama then goes after the auto companies.

Now, they are going to play judge and jury on the health of banks and financial institutions? They're the ones who created and burst the bubble! Let's look at the motivation here: if, and this would be so sad, the banks are declared "unhealthy", then Obama would have to come to their rescue. Hmmm...good thing he's shown no inclination to want to be king, and have control over as much of the economy as possible. The playbook is fairly simple - cripple and hamstring the private sector to the point where he can declare a crisis, and then play the savior.

The problem is that in "saving" the banks, Obama plans to run them. He has a worldview of America as a soup kitchen, as a terrible immoral place where greed and corruption are the mainstay, and only his enlightened wisdom can change it. Just listen to his words and what they mean. That's the key - stop focusing on the goals he espouses. Learn enough about history and economics to see that the incentives he's creating and the unintended consequences involved will be deeply damaging.

For an added sense of irony, step back and realize that Geithner is telling the banks that they need to raise more cash to strengthen their financial standing, while Obama is simultaneously spending us into generational debt, which equals financial slavery to China and a dismantling of any sound fiscal policy in the federal gov't. (that's assuming their was any in the first place.) The stress tests are just another way to declare that the gov't is needed, the Treasury must step in to correct the situation.

Who among you thinks that James Madison or Thomas Jefferson envisioned the President running the financial and automotive industries? Is that within his enumerated powers? Or are we witnessing a gross abuse of federal power that threatens to reduce, or seek to reduce, the population to a permanent dependency class with Obama at the helm?

The course of action is clear: call your local representatives and demand action. Tell them you see what's going on and are not fooled. Our gov't has grown to such a morbidly obese state that it must be opposed when it tries to grow ever larger. As Thomas Jefferson said, "A gov't large enough to give you everything you want is large enough to take it all away. " (paraphrased) Get involved or get ready to surrender your liberty.