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Tea Party Lights Fuse for Rebellion on Right

A Tea Party rally in Washington in September.

By DAVID BARSTOW

SANDPOINT, Idaho — Pam Stout has not always lived in fear of her government. She remembers her years working in federal housing programs, watching government lift struggling families with job training and education. She beams at the memory of helping a Vietnamese woman get into junior college.

But all that was before the Great Recession and the bank bailouts, before Barack Obama took the White House by promising sweeping change on multiple fronts, before her son lost his job and his house. Mrs. Stout said she awoke to see Washington as a threat, a place where crisis is manipulated — even manufactured — by both parties to grab power.

She was happily retired, and had never been active politically. But last April, she went to her first Tea Party rally, then to a meeting of the Sandpoint Tea Party Patriots. She did not know a soul, yet when they began electing board members, she stood up, swallowed hard, and nominated herself for president. “I was like, ‘Did I really just do that?’ ” she recalled.

Then she went even further.

Worried about hyperinflation, social unrest or even martial law, she and her Tea Party members joined a coalition, Friends for Liberty, that includes representatives from Glenn Beck’s 9/12 Project, the John Birch Society, and Oath Keepers, a new player in a resurgent militia movement.

When Friends for Liberty held its first public event, Mrs. Stout listened as Richard Mack, a former Arizona sheriff, brought 1,400 people to their feet with a speech about confronting a despotic federal government. Mrs. Stout said she felt as if she had been handed a road map to rebellion. Members of her family, she said, think she has disappeared down a rabbit hole of conspiracy theories. But Mrs. Stout said she has never felt so engaged.

“I can’t go on being the shy, quiet me,” she said. “I need to stand up.”

The Tea Party movement has become a platform for conservative populist discontent, a force in Republican politics for revival, as it was in the Massachusetts Senate election, or for division. But it is also about the profound private transformation of people like Mrs. Stout, people who not long ago were not especially interested in politics, yet now say they are bracing for tyranny.

These people are part of a significant undercurrent within the Tea Party movement that has less in common with the Republican Party than with the Patriot movement, a brand of politics historically associated with libertarians, militia groups, anti-immigration advocates and those who argue for the abolition of the Federal Reserve.

Urged on by conservative commentators, waves of newly minted activists are turning to once-obscure books and Web sites and discovering a set of ideas long dismissed as the preserve of conspiracy theorists, interviews conducted across the country over several months show. In this view, Mr. Obama and many of his predecessors (including George W. Bush) have deliberately undermined the Constitution and free enterprise for the benefit of a shadowy international network of wealthy elites.

Loose alliances like Friends for Liberty are popping up in many cities, forming hybrid entities of Tea Parties and groups rooted in the Patriot ethos. These coalitions are not content with simply making the Republican Party more conservative. They have a larger goal — a political reordering that would drastically shrink the federal government and sweep away not just Mr. Obama, but much of the Republican establishment, starting with Senator John McCain.

In many regions, including here in the inland Northwest, tense struggles have erupted over whether the Republican apparatus will co-opt these new coalitions or vice versa. Tea Party supporters are already singling out Republican candidates who they claim have “aided and abetted” what they call the slide to tyranny: Mark Steven Kirk, a candidate for the Senate from Illinois, for supporting global warming legislation; Gov. Charlie Crist of Florida, who is seeking a Senate seat, for supporting stimulus spending; and Meg Whitman, a candidate for governor in California, for saying she was a “big fan” of Van Jones, once Mr. Obama’s “green jobs czar.”

During a recent meeting with Congressional Republicans, Mr. Obama acknowledged the potency of these attacks when he complained that depicting him as a would-be despot was complicating efforts to find bipartisan solutions.

“The fact of the matter is that many of you, if you voted with the administration on something, are politically vulnerable in your own base, in your own party,” Mr. Obama said. “You’ve given yourselves very little room to work in a bipartisan fashion because what you’ve been telling your constituents is, ‘This guy’s doing all kinds of crazy stuff that is going to destroy America.’ ”

The ebbs and flows of the Tea Party ferment are hardly uniform. It is an amorphous, factionalized uprising with no clear leadership and no centralized structure. Not everyone flocking to the Tea Party movement is worried about dictatorship. Some have a basic aversion to big government, or Mr. Obama, or progressives in general. What’s more, some Tea Party groups are essentially appendages of the local Republican Party.

But most are not. They are frequently led by political neophytes who prize independence and tell strikingly similar stories of having been awakened by the recession. Their families upended by lost jobs, foreclosed homes and depleted retirement funds, they said they wanted to know why it happened and whom to blame.

That is often the point when Tea Party supporters say they began listening to Glenn Beck. With his guidance, they explored the Federalist Papers, exposés on the Federal Reserve, the work of Ayn Rand and George Orwell. Some went to constitutional seminars. Online, they discovered radical critiques of Washington on Web sites like ResistNet.com (“Home of the Patriotic Resistance”) and Infowars.com (“Because there is a war on for your mind.”).

Many describe emerging from their research as if reborn to a new reality. Some have gone so far as to stock up on ammunition, gold and survival food in anticipation of the worst. For others, though, transformation seems to amount to trying on a new ideological outfit — embracing the rhetoric and buying the books.

Tea Party leaders say they know their complaints about shredded constitutional principles and excessive spending ring hollow to some, given their relative passivity through the Bush years. In some ways, though, their main answer — strict adherence to the Constitution — would comfort every card-carrying A.C.L.U. member.

But their vision of the federal government is frequently at odds with the one that both parties have constructed. Tea Party gatherings are full of people who say they would do away with the Federal Reserve, the federal income tax and countless agencies, not to mention bailouts and stimulus packages. Nor is it unusual to hear calls to eliminate Social Security, Medicare and Medicaid. A remarkable number say this despite having recently lost jobs or health coverage. Some of the prescriptions they are debating — secession, tax boycotts, states “nullifying” federal laws, forming citizen militias — are outside the mainstream, too.

At a recent meeting of the Sandpoint Tea Party, Mrs. Stout presided with brisk efficiency until a member interrupted with urgent news. Because of the stimulus bill, he insisted, private medical records were being shipped to federal bureaucrats. A woman said her doctor had told her the same thing. There were gasps of rage. Everyone already viewed health reform as a ruse to control their medical choices and drive them into the grip of insurance conglomerates. Debate erupted. Could state medical authorities intervene? Should they call Congress?

As the meeting ended, Carolyn L. Whaley, 76, held up her copy of the Constitution. She carries it everywhere, she explained, and she was prepared to lay down her life to protect it from the likes of Mr. Obama.

“I would not hesitate,” she said, perfectly calm.

A Sprawling Rebellion

The Tea Party movement defies easy definition, largely because there is no single Tea Party.

At the grass-roots level, it consists of hundreds of autonomous Tea Party groups, widely varying in size and priorities, each influenced by the peculiarities of local history.

In the inland Northwest, the Tea Party movement has been shaped by the growing popularity in eastern Washington of Ron Paul, the libertarian congressman from Texas, and by a legacy of anti-government activism in northern Idaho. Outside Sandpoint, federal agents laid siege to Randy Weaver’s compound on Ruby Ridge in 1992, resulting in the deaths of a marshal and Mr. Weaver’s wife and son. To the south, Richard Butler, leader of the Aryan Nations, preached white separatism from a compound near Coeur d’Alene until he was shut down.

Local Tea Party groups are often loosely affiliated with one of several competing national Tea Party organizations. In the background, offering advice and organizational muscle, are an array of conservative lobbying groups, most notably FreedomWorks. Further complicating matters, Tea Party events have become a magnet for other groups and causes — including gun rights activists, anti-tax crusaders, libertarians, militia organizers, the “birthers” who doubt President Obama’s citizenship, Lyndon LaRouche supporters and proponents of the sovereign states movement.

It is a sprawling rebellion, but running through it is a narrative of impending tyranny. This narrative permeates Tea Party Web sites, Facebook pages, Twitter feeds and YouTube videos. It is a prominent theme of their favored media outlets and commentators, and it connects the disparate issues that preoccupy many Tea Party supporters — from the concern that the community organization Acorn is stealing elections to the belief that Mr. Obama is trying to control the Internet and restrict gun ownership.

WorldNetDaily.com trumpets “exclusives” reporting that the Army is seeking “Internment/Resettlement” specialists. On ResistNet.com, bloggers warn that Mr. Obama is trying to convert Interpol, the international police organization, into his personal police force. They call on “fellow Patriots” to “grab their guns.”

Mr. Beck frequently echoes Patriot rhetoric, discussing the possible arrival of a “New World Order” and arguing that Mr. Obama is using a strategy of manufactured crisis to destroy the economy and pave the way for dictatorship.

At recent Tea Party events around the country, these concerns surfaced repeatedly.

In New Mexico, Mary Johnson, recording secretary of the Las Cruces Tea Party steering committee, described why she fears the government. She pointed out how much easier it is since Sept. 11 for the government to tap telephones and scour e-mail, bank accounts and library records. “Twenty years ago that would have been a paranoid statement,” Ms. Johnson said. “It’s not anymore.”

In Texas, Toby Marie Walker, president of the Waco Tea Party, stood on a stage before several thousand people, ticking off the institutions she no longer trusts — the federal government, both the major political parties, Wall Street. “Many of us don’t believe they have our best interests at heart,” Ms. Walker said. She choked back tears, but the crowd urged her on with shouts of “Go, Toby!”

As it happened in the inland Northwest with Friends for Liberty, the fear of Washington and the disgust for both parties is producing new coalitions of Tea Party supporters and groups affiliated with the Patriot movement. In Indiana, for example, a group called the Defenders of Liberty is helping organize “meet-ups” with Tea Party groups and more than 50 Patriot organizations. The Ohio Freedom Alliance, meanwhile, is bringing together Tea Party supporters, Ohio sovereignty advocates and members of the Constitution and Libertarian Parties. The alliance is also helping to organize five “liberty conferences” in March, each featuring Richard Mack, the same speaker invited to address Friends for Liberty.

Politicians courting the Tea Party movement are also alluding to Patriot dogma. At a Tea Party protest in Las Vegas, Joe Heck, a Republican running for Congress, blamed both the Democratic and Republican Parties for moving the country toward “socialistic tyranny.” In Texas, Gov. Rick Perry, a Republican seeking re-election, threw his support behind the state sovereignty movement. And in Indiana, Richard Behney, a Republican Senate candidate, told Tea Party supporters what he would do if the 2010 elections did not produce results to his liking: “I’m cleaning my guns and getting ready for the big show. And I’m serious about that, and I bet you are, too.”

Turning Points

Fear of co-option — a perpetual topic in the Tea Party movement — lay behind the formation of Friends for Liberty.

The new grass-roots leaders of the inland Northwest had grown weary of fending off what they jokingly called “hijack attempts” by the state and county Republican Parties. Whether the issue was picking speakers or scheduling events, they suspected party leaders of trying to choke off their revolution with Chamber of Commerce incrementalism.

“We had to stand our ground, I’ll be blunt,” said Dann Selle, president of the Official Tea Party of Spokane.

In October, Mr. Selle, Mrs. Stout and about 20 others from across the region met in Liberty Lake, Wash., a small town on the Idaho border, to discuss how to achieve broad political change without sacrificing independence. The local Republican Party was excluded.

Most of the people there had paid only passing attention to national politics in years past. “I voted twice and I failed political science twice,” said Darin Stevens, leader of the Spokane 9/12 Project.

Until the recession, Mr. Stevens, 33, had poured his energies into his family and his business installing wireless networks. He had to lay off employees, and he struggled to pay credit cards, a home equity loan, even his taxes. “It hits you physically when you start getting the calls,” he said.

He discovered Glenn Beck, and began to think of Washington as a conspiracy to fleece the little guy. “I had no clue that my country was being taken from me,” Mr. Stevens explained. He could not understand why his progressive friends did not see what he saw.

He felt compelled to do something, so he decided to start a chapter of Mr. Beck’s 9/12 Project. He reserved a room at a pizza parlor for a Glenn Beck viewing party and posted the event on Craigslist. “We had 110 people there,” Mr. Stevens said. He recalled looking around the room and thinking, “All these people — they agree with me.”

Leah Southwell’s turning point came when she stumbled on Mr. Paul’s speeches on YouTube. (“He blew me away.”) Until recently, Mrs. Southwell was in the top 1 percent of all Mary Kay sales representatives, with a company car and a frenetic corporate life. “I knew zero about the Constitution,” Mrs. Southwell confessed. Today, when asked about her commitment to the uprising, she recites a line from the Declaration of Independence, a Tea Party favorite: “We mutually pledge to each other our lives, our fortunes, and our sacred honor.”

Mr. Paul led Mrs. Southwell to Patriot ideology, which holds that governments and economies are controlled by networks of elites who wield power through exclusive entities like the Bilderberg Group, the Trilateral Commission and the Council on Foreign Relations.

This idea has a long history, with variations found at both ends of the political spectrum. But to Mrs. Southwell, the government’s culpability for the recession — the serial failures of regulation, the Federal Reserve’s epic blunders, the cozy bailouts for big banks — made it resonate all the more, especially as she witnessed the impact on family and friends.

“The more you know, the madder you are,” she said. “I mean when you finally learn what the Federal Reserve is!”

Last spring, Mrs. Southwell quit her job and became a national development officer for the John Birch Society, recruiting and raising money across the West, often at Tea Party events. She has been stunned by the number of Tea Party supporters gravitating toward Patriot ideology. “Most of these people are just waking up,” she said.

Converging Paths

At Liberty Lake, the participants settled on a “big tent” strategy, with each group supporting the others in the coalition they called Friends for Liberty.

One local group represented at Liberty Lake was Arm in Arm, which aims to organize neighborhoods for possible civil strife by stockpiling food and survival gear, and forming armed neighborhood groups.

Also represented was Oath Keepers, whose members call themselves “guardians of the Republic.” Oath Keepers recruits military and law enforcement officials who are asked to disobey orders the group deems unconstitutional. These include orders to conduct warrantless searches, arrest Americans as unlawful enemy combatants or force civilians into “any form of detention camps.”

Oath Keepers, which has been recruiting at Tea Party events around the country and forging informal ties with militia groups, has an enthusiastic following in Friends for Liberty. “A lot of my people are Oath Keepers,” Mr. Stevens said. “I’m an honorary Oath Keeper myself.”

Mrs. Stout became an honorary Oath Keeper, too, and sent an e-mail message urging her members to sign up. “They may be very important for our future,” she wrote.

By inviting Richard Mack to speak at their first event, leaders of Friends for Liberty were trying to attract militia support. They knew Mr. Mack had many militia fans, and not simply because he had helped Randy Weaver write a book about Ruby Ridge. As a sheriff in Arizona, Mr. Mack had sued the Clinton administration over the Brady gun control law, which resulted in a Supreme Court ruling that the law violated state sovereignty by requiring local officials to conduct background checks on gun buyers.

Mr. Mack was selling Cadillacs in Arizona, his political career seemingly over, when Mr. Obama was elected. Disheartened by the results, he wrote a 50-page booklet branding the federal government “the greatest threat we face.” The booklet argued that only local sheriffs supported by citizen militias could save the nation from “utter despotism.” He titled his booklet “The County Sheriff: America’s Last Hope,” offered it for sale on his Web site and returned to selling cars.

But last February he was invited to appear on “Infowars,” the Internet radio program hosted by Alex Jones, a well-known figure in the Patriot movement. Then Mr. Mack went on “The Power Hour,” another Internet radio program popular in the Patriot movement.

After those appearances, Mr. Mack said, he was inundated with invitations to speak to Tea Parties and Patriot groups. Demand was so great, he said, that he quit selling cars. Then Andrew P. Napolitano, a Fox News legal analyst, invited him to New York to appear on his podcast.

“It’s taken over my life,” Mr. Mack said in an interview.

He said he has found audiences everywhere struggling to make sense of why they were wiped out last year. These audiences, he said, are far more receptive to critiques once dismissed as paranoia. It is no longer considered all that radical, he said, to portray the Federal Reserve as a plaything of the big banks — a point the Birch Society, among others, has argued for decades.

People are more willing, he said, to imagine a government that would lock up political opponents, or ration health care with “death panels,” or fake global warming. And if global warming is a fraud, is it so crazy to wonder about a president’s birth certificate?

“People just do not trust any of this,” Mr. Mack said. “It’s not just the fringe people anymore. These are just ordinary people — teachers, bankers, housewives.”

The dog track opened at 5:45 p.m. for Mr. Mack’s speech, and the parking lot quickly filled. Inside, each Friends for Liberty sponsor had its own recruiting table. Several sheriffs and state legislators worked the crowd. “I came out to talk with folks and listen to Sheriff Mack,” Ozzie Knezovich, the sheriff of Spokane County, Wash., explained.

Gazing out at his overwhelmingly white audience, Mr. Mack felt the need to say, “This meeting is not racist.” Nor, he said, was it a call to insurrection. What is needed, he said, is “a whole army of sheriffs” marching on Washington to deliver an unambiguous warning: “Any violation of the Constitution we will consider a criminal offense.”

The crowd roared.

Mr. Mack shared his vision of the ideal sheriff. The setting was Montgomery, Ala., on the day Rosa Parks refused to give up her bus seat for a white passenger. Imagine the local sheriff, he said, rather than arresting Ms. Parks, escorting her home, stopping to buy her a meal at an all-white diner.

“Edmund Burke said the essence of tyranny is the enforcement of stupid laws,” he said. Likewise, Mr. Mack argued, sheriffs should have ignored “stupid laws” and protected the Branch Davidians at Waco, Tex., and the Weaver family at Ruby Ridge.

Legacy

A popular T-shirt at Tea Party rallies reads, “Proud Right-Wing Extremist.”

It is a defiant and mocking rejoinder to last April’s intelligence assessment from the Department of Homeland Security warning that recession and the election of the nation’s first black president “present unique drivers for right wing radicalization.”

“Historically,” the assessment said, “domestic right wing extremists have feared, predicted and anticipated a cataclysmic economic collapse in the United States.” Those predictions, it noted, are typically rooted in “antigovernment conspiracy theories” featuring impending martial law. The assessment said extremist groups were already preparing for this scenario by stockpiling weapons and food and by resuming paramilitary exercises.

The report does not mention the Tea Party movement, but among Tea Party activists it is viewed with open scorn, evidence of a larger campaign by liberals to marginalize them as “racist wingnuts.”

But Tony Stewart, a leading civil rights activist in the inland Northwest, took careful note of the report. Almost 30 years ago, Mr. Stewart cofounded the Kootenai County Task Force on Human Relations in Coeur d’Alene. The task force has campaigned relentlessly to rid north Idaho of its reputation as a haven for anti-government extremists. The task force tactics brought many successes, including a $6.3 million civil judgment that effectively bankrupted Richard Butler’s Aryan Nations.

When the Tea Party uprising gathered force last spring, Mr. Stewart saw painfully familiar cultural and rhetorical overtones. Mr. Stewart viewed the questions about Mr. Obama’s birthplace as a proxy for racism, and he was bothered by the “common message of intolerance for the opposition.”

“It’s either you’re with us or you’re the enemy,” he said.

Mr. Stewart heard similar concerns from other civil rights activists around the country. They could not help but wonder why the explosion of conservative anger coincided with a series of violent acts by right wing extremists. In the Inland Northwest there had been a puzzling return of racist rhetoric and violence.

Mr. Stewart said it would be unfair to attribute any of these incidents to the Tea Party movement. “We don’t have any evidence they are connected,” he said.

Still, he sees troubling parallels. Branding Mr. Obama a tyrant, Mr. Stewart said, constructs a logic that could be used to rationalize violence. “When people start wearing guns to rallies, what’s the next thing that happens?” Mr. Stewart asked.

Rachel Dolezal, curator of the Human Rights Education Institute in Coeur d’Alene, has also watched the Tea Party movement with trepidation. Though raised in a conservative family, Ms. Dolezal, who is multiracial, said she could not imagine showing her face at a Tea Party event. To her, what stands out are the all-white crowds, the crude depictions of Mr. Obama as an African witch doctor and the signs labeling him a terrorist. “It would make me nervous to be there unless I went with a big group,” she said.

The Future

Pam Stout wakes each morning, turns on Fox News, grabs coffee and an Atkins bar, and hits the computer. She is the hub of a rapidly expanding and highly viral political network, keeping a running correspondence with her 400 members in Sandpoint, state and national Tea Party leaders and other conservative activists.

Mrs. Stout forwards along petitions to impeach Mr. Obama; petitions to audit the Federal Reserve; petitions to support Sarah Palin; appeals urging defiance of any federal law requiring health insurance; and on and on.

Meanwhile, she and her husband are studying the Constitution line by line. She has the Congressional switchboard programmed into her cellphone. “I just signed up for a Twitter class,” said Mrs. Stout, 66, laughing at the improbability of it all.

Yet for all her efforts, Mrs. Stout is gripped by a sense that it may be too little too late. Yes, there have been victories — including polls showing support for the Tea Party movement — but in her view none of it has diminished the fundamental threat of tyranny, a point underscored by Mr. Obama’s drive to pass a health care overhaul.

She and her members are becoming convinced that rallies alone will not save the Republic. They are searching for some larger answer, she said. They are also waiting for a leader, someone capable of uniting their rebellion, someone like Ms. Palin, who made Sandpoint one of the final stops on her book tour and who has announced plans to attend a series of high-profile Tea Party events in the next few months.

“We need to really decide where we’re going to go,” Mrs. Stout said.

These questions of strategy, direction and leadership were clearly on the minds of Mrs. Stout’s members at a recent monthly meeting.

Their task seemed endless, almost overwhelming, especially with only $517 in their Tea Party bank account. There were rallies against illegal immigration to attend. There was a coming lecture about the hoax of global warming. There were shooting classes to schedule, and tips to share about the right survival food.

The group struggled fitfully for direction. Maybe they should start vetting candidates. Someone mentioned boycotting ABC, CBS, NBC and MSNBC. Maybe they should do more recruiting.

“How do you keep on fighting?” Mrs. Stout asked in exasperation.

Lenore Generaux, a local wildlife artist, had an idea: They should raise money for Freedom Force, a group that says it wants to “reclaim America via the Patriot movement.” The group is trying to unite the Tea Parties and other groups to form a powerful “Patriot lobby.” One goal is to build a “Patriot war chest” big enough to take control of the Republican Party.

Not long ago, Mrs. Stout sent an e-mail message to her members under the subject line: “Revolution.” It linked to an article by Greg Evensen, a leader in the militia movement, titled “The Anatomy of an American Revolution,” that listed “grievances” he said “would justify a declaration of war against any criminal enterprise including that which is killing our nation from Washington, D.C.”

Mrs. Stout said she has begun to contemplate the possibility of “another civil war.” It is her deepest fear, she said. Yet she believes the stakes are that high. Basic freedoms are threatened, she said. Economic collapse, food shortages and civil unrest all seem imminent.

“I don’t see us being the ones to start it, but I would give up my life for my country,” Mrs. Stout said.

She paused, considering her next words.

“Peaceful means,” she continued, “are the best way of going about it. But sometimes you are not given a choice.”

Partisan Attacks WILL NOT Solve The Problem

Posted by Karl Denninger

Ann Coulter, one of the most-partisan commentators out there in the media, had this to say recently:

How about just punishing the guilty? The Democrats can’t do that because the list of Wall Street’s biggest offenders may turn out to be eerily similar to the list of Obama’s biggest campaign contributors.

How about punishing the guilty Ann?  How about punishing one JOHN JACKASS MCCAIN, who Henry Paulson personally credits for being the reason TARP passed?

 “As he was falling behind in the polls it would have been very easy for him to demagogue that issue, playing the populist card,” he said. “And if he had come out against what he were trying to do we wouldn’t have got it I believe. We wouldn’t have had the TARP legislation passed and we would have been left defenseless.”

Oh wait!  Henry Paulson was a Republican Treasury Secretary too!

Employees from Goldman Sachs gave more to the Obama campaign than any other organization except the University of California — with Citigroup and JPMorgan Chase quickly following in sixth and seventh place.

Absolutely correct.  Goldman gave money to the winner.  Big stinking surprise – NOT.

Whatever Obama has in mind for punishing the financial industry, I promise you, he won’t punish his friends. After JPMorgan CEO Jamie Dimon took a $17 million bonus this week, and Goldman CEO Lloyd Blankfein got a $9 million bonus, Obama said he didn’t begrudge them their bonuses, saying, “I know both those guys.”

Well that may well be true, but can you point to anything that Republicans did in their eight years in office prior to President Obama that actually reined in the outrageous fraud and abuse served up upon the world’s investors – not to mention everyday Americans - by Wall Street?

Let’s see…. I think I’ll list a few things that the Rethuglicans have done to our nation, since Ann has done such a great job of bagging on the Democraps.

“Bankruptcy Reform” – but only for “the little people” – that is, you and I.  We can’t declare bust if we have a good income and discharge all our debts – but corporations still can!

State laws prohibiting predatory lending: Who directed their justice department to file suit to block these laws?  That would be George W “I hope you get bit by a snake on your ranch” Bush, right?  Yep. Ann charges:

Obama, like the rest of his party, is an ideologue who doesn’t understand or particularly like the free market. He fundamentally believes in the efficacy of the welfare state, whether the beneficiary is a layabout single mother or a rich Wall Street banker.

Oh really?  Obama voted against the bankruptcy screw job Ann while he was a Senator.  You forget that, right?  Yes, he didn’t have much Senatorial record, but he did have that to his credit.

Further, “the free market” that Ann promotes under “Rethuglican” administrations turned into “I can rape you so long as I wear a ski mask and you can’t identify me.”

That’s the Republican’s view of a “free market.” 

I’m not saying that the Democrats have a particularly better view of it, by the way.  They’ll just stick you up face-first, stuffing the gun up your nose while having their way. 

In either case you get violated but at least with the Democrats it seems you get kissed first – even if the kiss is delivered by cold steel.

But instead of AIG going bankrupt and Goldman taking a hit, the U.S. taxpayer made good on AIG’s securities insurance. In a deal arranged by former Goldman CEO and current Obama BFF, Hank Paulson, Goldman ended up being paid — by you — an astonishing 100 cents on the dollar.

Uh, who’s Treasury Secretary was Henry Paulson again Ann?  Have you gone insane or did you just need to avoid bagging on the progenitor of this train wreck – George W. Bush?

More to the point, why didn’t Bush fire Paulson in September – or even sooner?  He was still President then, you know – two little words that he refused to speak Ann.  One can only conclude that Bush was perfectly happy with Hank’s looting – er – “performance.”

See, it was Bush’s SEC that admitted Hank Paulson (while he was running Government Sachs) to their august chambers and then, at his request, removed the leverage limits that formerly constrained investment banks.  Bear Stearns and Lehman Brothers both collapsed due to this excessive leverage – they each had more than double the former legal limit when they blew up.  But for the BUSH SEC decision, neither would have collapsed and, more importantly, the last three years of the Housing Bubble could not have occurred.

Those last three years, by the way, were the most toxic.  They also featured the famous Goldman “Abacus” CDOs that weren’t really backed by anything other than a hedge fund deciding it wanted to short residential subprime – of course that little fact wasn’t disclosed clearly and promiscuously to the poor bastards that were unfortunate enough to believe that Goldman was actually selling valuable securities to them in the form of those Abacus tranches!  They got violated too, courtesy of the great Republican “Free Market” that Ann feels is so defensible.

Now it’s a bit unfair to just bag on Goldman, although they’re certainly a popular whipping boy.  See, they were hardly alone.  Countrywide “Fast and Sleazy” Financial anyone?  Got a pulse?  Buy a house!  Lehman, Bear, Countrywide, New Century and dozens more – all ranged the American land, picking the pockets of millions through trickery, deceit and worse with explicit support and active legal interference run by The Bush White House.

How about Ben Bernanke?  Who appointed him?  Oh, that would be George W. Bush, right?  Do the limits of The Federal Reserve Act mean anything?  Apparently not – if you’re a Republican.

Ann finishes with this:

Republicans should defend any investment houses that never benefited from a government bailout. But anyone who took huge gambles, lost and got bailed out with taxpayer money should be tortured and then shot, miraculously brought back to life, tortured some more, then shot a few more times.

When Ann is prepared to begin her list with Hank Paulson and Ben Bernanke, along with John McCain (who Paulson asserts could have single-handled stopped the bailouts) I might tend to agree with her. 

Her web page runs an ad for a T-shirt that says “I’d rather be waterboarding.”  I can’t agree more.  We can start with the aforementioned jackasses who destroyed The American Economy, beginning with the top of the pyramid – those regulators who, under the Bush White House, watched investors and ordinarily Americans alike be serially violated by every Wall Street Bankster and their minion scammers scattered across the “fruited plain”, denuding it to feed their yachts’ thirst for fuel – and the new house in The Hamptons.

Oh, and Ann might want to consider that had RINO McCain actually done this he’d have 1600 Pennsylvania Avenue stamped on his envelopes - as his return address.

We will not solve this problem until we put away the partiscam garbage that people like Coulter run and face reality: BOTH political parties are equally guilty in this regard.  Both embraced the mathematically impossible for more than two decades as a means of disguising and justifying their profligacy when it comes to public spending (Medicare Part D anyone?), either failing to understand or simply ignoring the realities of compound growth and interest.

Now, trapped in a box of their own design and construction Republicans and Democrats alike are trying to eat one another in a partisan flame-fest that accomplishes exactly nothing other than making the problem worse.  Neither is willing to accept that we have made promises we cannot keep – and thus we must be straight with The American People and tell them we are breaking them so they can prepare to be on their own in this regard.  Neither will cut the cord from Wall Street to Washington DC – there are 200+ year old fraud statutes that are more than sufficient as the predicates to bring charges for the most-egregious acts of these “Masters of The Universe” during the bubble years – we need no new laws, the existing, old-fashioned ones would do just fine.

No, President Obama’s plans, along with those of Harry Reid and Nancy Pelosi will not make things better.  But neither will claims that The Republicans have a “better idea.” 

I’ve yet to hear either party stand up and say “if you ripped someone off during the last decade, no matter how you did it, you are going to jail!” as the central theme in their campaign, yet that is exactly what we need to hear – across this land – if we are to reclaim this nation from the brink of a financial collapse that still looms large to this day.

In a Message to Democrats, Wall St. Sends Cash to GOP

If the Democratic Party has a stronghold on Wall Street, it is JPMorgan Chase [JPM  37.81    -0.49  (-1.28%)   ] .

Its chief executive, Jamie Dimon, is a friend of President Obama’s from Chicago, a frequent White House guest and a big Democratic donor. Its vice chairman, William M. Daley, a former Clinton administration cabinet official and Obama transition adviser, comes from Chicago’s Democratic dynasty.

But this year Chase’s political action committee is sending the Democrats a pointed message. While it has contributed to some individual Democrats and state organizations, it has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead, it gave $30,000 to their Republican counterparts.

The shift reflects the hard political edge to the industry’s campaign to thwart Mr. Obama’s proposals for tighter financial regulations.

Just two years after Mr. Obama helped his party pull in record Wall Street contributions — $89 million from the securities and investment business, according to the nonpartisan Center for Responsive Politics — some of his biggest supporters, like Mr. Dimon, have become the industry’s chief lobbyists against his regulatory agenda.

Republicans are rushing to capitalize on what they call Wall Street’s “buyer’s remorse” with the Democrats. And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street “fat cats,” they may fight back by withholding their cash.

“If the president doesn’t become a little more balanced and centrist in his approach, then he will likely lose that support,” said Kelly S. King, the chairman and chief executive of BB&T [BBT  27.46    -0.05  (-0.18%)   ] . Mr. King is a board member of the Financial Services Roundtable, which lobbies for the biggest banks, and last month he helped represent the industry at a private dinner at the Treasury Department.

“I understand the public outcry,” he continued. “We have a 17 percent real unemployment rate, people are hurting, and they want to see punishment. But the political rhetoric just incites more animosity and gets people riled up.”

A spokesman for JPMorgan Chase declined to comment on its political action committee’s contributions or relations with the Democrats. But many Wall Street lobbyists and executives said they, too, were rethinking their giving.

“The expectation in Washington is that ‘We can kick you around, and you are still going to give us money,’ ” said a top official at a major Wall Street firm, speaking on the condition of anonymity for fear of alienating the White House. “We are not going to play that game anymore.”

Wall Street fund-raisers for the Democrats say they are feeling under attack from all sides. The president is lashing out at their “arrogance and greed.” Republican friends are saying “I told you so.” And contributors are wishing they had their money back.

“I am a big fan of the president,” said Thomas R. Nides, a prominent Democrat who is also a Morgan Stanley [MS  27.04    -0.22  (-0.81%)   ] executive and chairman of a major Wall Street trade group, the Securities and Financial Markets Association. “But even if you are a big fan, when you are the piñata at the party, it doesn’t really feel good.”

Roger C. Altman, a former Clinton administration Treasury official who founded the Wall Street boutique Evercore Partners, called the Wall Street backlash against Mr. Obama “a constant topic of conversation.” Many bankers, he said, failed to appreciate the “white hot anger” at Wall Street for the financial crisis. (Mr. Altman said he personally supported “the substance” of the president’s recent proposals, though he questioned their feasibility and declined to comment at all on what he called “the rhetoric.”)

Mr. Obama’s fight with Wall Street began last year with his proposals for greater oversight of compensation and a consumer financial protection commission. It escalated with verbal attacks this year on what he called Wall Street’s “obscene bonuses.” And it reached a new level in his calls for policies Wall Street finds even more infuriating: a “financial crisis responsibility” tax aimed only at the biggest banks, and a restriction on “proprietary trading” that banks do with their own money for their own profit.

“If the president wanted to turn every Democrat on Wall Street into a Republican,” one industry lobbyist said, “he is doing everything right.”

Though Wall Street has long been a major source of Democratic campaign money (alongside Hollywood and Silicon Valley), Mr. Obama built unusually direct ties to his contributors there. He is the first president since Richard M. Nixon whose campaign relied solely on private donations, not public financing.

Wall Street lobbyists say the financial industry’s big Democratic donors help ensure that their arguments reach the ears of the president and Congress. White House visitors’ logs show dozens of meetings with big Wall Street fund-raisers, including Gary D. Cohn, a president of Goldman Sachs; Mr. Dimon of JPMorgan Chase; and Robert Wolf, the chief of the American division of the Swiss bank UBS, who has also played golf, had lunch and watched July 4 fireworks with the president.

Lobbyists say they routinely brief top executives on policy talking points before they meet with the president or others in the administration. Mr. Wolf, in particular, also serves on the Presidential Economic Recovery Advisory Board led by the former Federal Reserve Chairman Paul A. Volcker.

Mr. Wolf was the only Wall Street executive on the panel and became the board’s leading opponent of what became known as the Volcker rule against so-called proprietary trading, according to participants. Such trading did nothing to cause the crisis, Mr. Wolf argued, as the industry lobbyists do now. (The panel concluded that the crisis established a precedent for government rescue that could enable big banks to speculate for their own gain while taxpayers took the biggest risks.)

Mr. Wolf and Mr. Dimon, who was in Washington last week for meetings on Capitol Hill and lunch with the president, have both pressed the industry’s arguments against other proposed regulations and the bank tax as well — saying the rules could cramp needed lending and send business abroad, according to lobbyists.

Both men are said to remain personally supportive of the president. But UBS’s political action committee has shifted its contributions, according to the Center for Responsive Politics. After dividing its money evenly between the parties for 2008, it has given about 56 percent to Republicans this cycle.

Most of its biggest contributions, of $10,000 each, went to five Republican opponents of Mr. Obama’s regulatory proposals, including Senator Richard C. Shelby of Alabama, the ranking minority member of the Banking Committee.

The Democratic campaign committees declined to comment on Wall Street money. But their Republican rivals are actively courting it.

Senator John Cornyn of Texas, chairman of the National Republican Senatorial Committee, said he visited New York about twice a month to try to tap into Wall Street’s “buyers’ remorse.”

“I just don’t know how long you can expect people to contribute money to a political party whose main plank of their platform is to punish you,” Mr. Cornyn said.

By Rocky Vega

02/06/10 Stockholm, Sweden – Despite the lack of any sustainable, long-term financing solution — and record debt levels — it seems one of the only thing Democrats and Republicans can consistently agree upon is more and more spending… whether through taxes or debt.

As Jesse Felder astutely points out, it’s a really unfortunate case of the pot calling the kettle black.

The Daily Reckoning

As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our ‘intellectual superiors’ and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 – the biggest ever bonus season (forget record bonuses in 2010… in fact, scratch any bonuses next year if what is likely to transpire in the upcoming 12 months does in fact occur).

If someone asks you what happened in 2009, the answer is simple – two things. There was a huge credit and liquidity crunch, and then there was Quantitative Easing. The last is the Fed’s equivalent of band-aiding a zombied and ponzied corpse, better known as the US economy. It worked for a while, but now the zombie is about to go back into critical, followed by comatose, and lastly, undead (and 401(k)-depleting) condition.

In 2009, total supply of all USD denominated fixed income, net of maturities, declined by $300 billion from $2.05 trillion to $1.75 trillion. This makes sense: the abovementioned crunches stopped the flow of credit from January until well into April, and generally firms were unwilling to demonstrate to the market how clothless they are by hitting the capital markets until well into Q2 if not Q3. What happened was a move so drastic by the Fed, that into November, the worst of the worst High Yield names were freely upsizing dividend recap deals (see CCU) – the very same greed and stupidity that brought us here. Luckily, so far securitization and CDOs have not made a dramatic entrance. They likely will, at which point it will be time to buy a one-way ticket for either our southern or northern neighbor, both of which, in the supremest of ironies, transact in a currency that will survive long after the dollar is dead and buried.

Back to the math… And here is the kicker. Accounting for securities purchased by the Fed, which effectively made the market in the Treasury, the agency and MBS arenas, but also served to “drain duration” from the broader US$ fixed income market, the stunning result is that net issuance in 2009 was only $200 billion. Take a second to digest that.

And while you are lamenting the death of private debt markets, here is precisely what the Fed, the Treasury, and all bank CEOs are doing all their best to keep hidden until they are safely on their private jets heading toward warmer climes: in 2010, the total estimated net issuance across all US$ denominated fixed income classes is expected to increase by 27%, from $1.75 trillion to $2.22 trillion. The culprit: Treasury issuance to keep funding an impossible budget. And, yes, we use the term impossible in its most technical sense. As everyone who has taken First Grade math knows, there is no way that the ludicrous deficit spending the US has embarked on makes any sense at all… none. But the administration can sure pretend it does, until everything falls apart and blaming everyone else for its fiscal imprudence is no longer an option.

Out of the $2.22 trillion in expected 2010 issuance, $200 billion will be absorbed by the Fed while QE continues through March. Then the US is on its own: $2.06 trillion will have to find non-Fed originating  demand. To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck.

As we pointed, the number one reason why 2010 is set to be a truly “interesting” year is a result of the upcoming explosion in US Treasury issuance. Fiscal 2010 gross coupon issuance is expected to hit $2.55 trillion, a $700 billion increase from 2009, which in turn was  $1.1 trillion increase from 2008. For those of you needing a primer on the exponential function, click here. But wait, there is a light in the tunnel: in 2011, gross issuance is expected to decline… to $1.9 trillion.

And while things are hair-raising in “gross” country (not Bill…at least not yet), they are not much better in netville either. Net of maturities, 2010 coupon issuance will be about $1.8 trillion, a 45% increase from the $1.3 trillion in FY 2009 (and the paltry $255 billion in 2008).

Now everyone knows that the average maturity of the UST curve has become a big problem for Tim Geithner: nearly 40% of all marketable debt matures within a year (a percentage that has kept on growing). In fact, the Treasury provided guidance in its November 2009 refunding, in which it stated that it intends “to focus on increasing the average maturity” of its debt after relying heavily on Bill issuance in H2. Once again, we wish Tim the best of luck.

Why our generous best intentions to the US Treasury? Because unless the US consumer decides to forgo the purchase of the 4th sequential Kindle and buy some Treasuries (and not just any: 30 Year Bonds or bust), the presumption that the Bond printer will have the option of finding vast foreign appetite for its spewage is a very myopic one. We already know that China is a major question mark, and will aggressively be looking at pumping capital into its own economy instead of that of Uncle Sam’s – at some point the return on investment in its own middle class will surpass that of funding the rapidly disappearing US middle class. That tipping point could be as soon as 2010.

As for Japan – the country has plunged into its n^th consecutive deflationary period. Whether or not the finance minister announces yet another affair with the Quantitative Easing whore on any given day, depends merely on what side of the bed he wakes up on. The country will have its hands full monetizing its own sovereign issuance, let alone ours.

Lastly, the UK – well, with the country set to have zero bankers left in a few months, we don’t think the traditionally third largest purchaser of US debt will be doing much purchasing any time soon.

None of this is merely speculation: October TIC data confirmed these preliminary observations. It will only become more pronounced in upcoming months.

How about that great globalization dynamo: emerging markets? Alas, they have their hands full with issuing their own record amounts of both sovereign and corporate debt as well: in 2009 gross EM debt issuance reached an astounding $217 billion, $29 billion higher than the previous record in 2007. Gross EM issuance was particularly high in the last quarter at $73 billion, with October breaking the record for the largest ever monthly gross issuance of emerging market global bonds at $38 billion (January is traditionally the busiest month of the year.) With $81 billion, 2009 was notably a record year for sovereign bonds, while gross issuance of corporate bonds amounted to $136 billion, the second highest level after that of 2007 with $155 billion.

Bottom line: everyone has major problems at home, and is more focused on the supply than the demand side of the equation.

What options does this leave for the administration? Very few, and all of them are ugly. As we stated earlier on, the options for the Fed are threefold:

1. Announce a new iteration of Quantitative Easing. This will be met with major disapproval across all voting classes (at least those whose residential zip codes do not start with 10xxx or 068xx), creating major headaches for Obama and the democrats which are already struggling with collapsing polls.
2. Prepare for a major increase in interest rates. While on the surface this would be very welcome for a Fed that keeps hinting that deflation is the biggest concern for the economy, Bernanke’s complete lack of preparation from a monetary standpoint (we are surprised the Fed’s $200 million reverse repos have not made the late night comedy circuit yet) to a forced interest rate increase, would likely result in runaway inflation almost overnight. The result would be a huge blow to a still deteriorating economy.
3. Engineer a stock market collapse. Recently investors have, rightfully, realized there is no more risk in equities, not because the assets backing the stockholder equity are actually creating greater cash flow (as we demonstrated recently, that is not the case), but simply because taxpayers have involuntarily become safekeepers for the entire stock market, due to Bernanke’s forced intervention in bond and equity markets. Yet the President’s Working Group is fully aware that when the time comes to hitting the “reverse” button, it will do so. Will the resultant rush into safe assets be sufficient to generate the needed endogenous demand for Treasuries is unknown. It will likely be correlated to the size of the equity market drop.

If the Fed decides on option three, we fully believe a 30% drop (or greater) in equities is very probable as the new supply/demand regime in fixed income becomes apparent. We hope mainstream media takes the ideas presented here and processes them for broader consumption as indeed the Fed is caught in a very fragile dilemma, and the sooner its hand is pushed, the less disastrous the final outcome for investors. Then again, as Eric Sprott has been pointing out for quite some time, it could very well be that the US economy has become merely one huge Ponzi, and as such, its expansion or reduction on the margin is uncontrollable. We very well may have passed into the stage where blind growth is the only alternative to a complete collapse. We hope that is not the case.

Merry Christmas and Happy Holidays to all readers.

Of course, we do not intend that Zero Hedge should become a center of excellence for the review of obscure Senate rules, but, as a consequence of the full-court-press-rush to pass the health care bill, this was too interesting not to reprint:

Under Senate Rule XXII, “a measure or motion to amend the Senate rules… the necessary affirmative vote shall be two-thirds of the Senators present and voting” to end debate. Yet there were only 60 votes for cloture on the Reid bill. So unless there is some basis for giving special treatment to rules changes that are buried into other legislation, it would seem that either a) cloture was not achieved, or b) the entrenchment provisions do not actually alter the Senate rules.

Woops.

I’m told that a fine point of distinction means that Reid’s entrenchment clauses were blessed by a Senate parliamentarian with respect to the 60 needed.  I suppose one needs to be far more versed in the minutia of Senate procedure than an honest citizen could claim to be.

UPDATE:

Here was DeMint on the topic yesterday:

The entire thing is worth watching, but here is our favorite part:

DEMINT: and so the language you see in this bill that specifically refers to a change in a rule is not a rule change, it’s a procedure change?

THE PRESIDING OFFICER: that is correct.

Either way the process continues:

Senate Democrats cleared the last 60-vote hurdle on U.S. President Barack Obama’s healthcare overhaul on Wednesday, virtually ensuring final passage of its version of the biggest health policy changes in four decades.

Too bad the dissident democrat was unable to convince more of his colleagues in the validity of his vision. The Oregon Democrat summarizies the contra case most succinctly:

“Dr. Bernanke is a dedicated and honorable public servant…however those factors in my mind do not outweigh my concerns on regulation and rebuilding the economy… Dr. Bernanke’s approach helped set our economic house on fire. That fire has destroyed the jobs, the healthcare, the retirement savings, of millions of American working families. Since then Dr. Bernanke has shown himself to be quite adroit with the fire hose, helping to put that fire out. But as we look to the future, and we look beyond the stage of putting the fire out, I think we need to look to leadership that will be adept at rebuilding our economic house.”

We hope that the Senatoral vote will see more party line breaks, in which case we urge other democrats to follow in Sen. Merkley’s footsteps. This is further reinforced by prevailing popular opinion among the American people, of whom only 21% favor the Chairman’s reappointment.

From Dow Jones:

WASHINGTON (Dow Jones)–The U.S. House of Representatives on Wednesday approved a short-term $290 billion extension in the nation’s debt ceiling, delaying a decision until February about a larger increase in the borrowing cap.

The vote comes less than a week after House Majority Leader Steny Hoyer (D., Md.) said he intended to seek a $1.8 trillion increase in the ceiling to support federal government borrowing through 2010.

A decision was made to seek the more modest increase after it became clear the larger increase may have failed to win support in the Senate.

The Senate must still take up the two month increase, which it is expected to do next week.

House lawmakers voted by a razor thing margin of 218-214 to pass the borrowing increase. On most major pieces of legislation, 218 votes are required for approval in the House.

Not a single Republican lawmaker voted to support the hike. They argued that increasing the debt ceiling was giving the Democratic majority and the Obama administration a license to spend more money.

The increase in the debt limit raises the total debt the federal government can hold to $12.394 billion from $12.104 billion.

Treasury officials have warned the current cap will shortly be hit, requiring the ceiling to be increased.

Increasing the debt ceiling is largely symbolic as the public debt is the accumulation of past deficits, or money already spent.

But were the U.S. to breach its debt limit, it would default on its obligations, potentially lose its prized top-shelf credit rating and have to pay significantly higher interest to its creditors

Such a scenario, albeit an extremely unlikely one, would have tremendous ramifications for the wider financial markets.

The federal budget deficit reached historic levels of $1.4 trillion in fiscal 2009. Through the first two months of fiscal 2010, the government is on pace to surpass that level.

No sooner did Jeff Merkley announce his opposition to Bernanke ahead of tomorrow’s reconfirmation farce/hearing, than key Republican Senator John McCain said that he was leaning against voting for the the Chairman. McCain said he would favor either former Fed Chief (and apparently only sane economist in the Administration) Paul Volcker, or ex-Treasury official, and creator of negative implied interest rates, John Taylor.

Some more from Dow Jones:

McCain joins at least two other Republicans who plan to oppose Bernanke’s renomination. Sen. Bernie Sanders (I., Vt.) has also said he opposes Bernanke’s renomination.Despite this, Bernanke is widely expected to be approved by the Senate for a second term. The Senate Banking Committee is scheduled to hold a confirmation vote on Bernanke Thursday morning.A spokeswoman for the panel said there is no way for a member to delay Thursday’s vote. Other Senate committees, like the Judiciary Committee, allow members to delay a vote by a week.

The logical political implications of this move are material: should Democrats be unable to maintain their majority hold after the upcoming mid-term elections, the populist tide against the Fed will be a substantial pent up force in 2011. How that would shape the org chart of the Fed subsequently is still unknown but it likely would not be in favor of the Man of the Year.

In what is the start of the biggest uphill battle in D.C., arguably even bigger than deposing the printing press leprechaun, five democrats are proposing an amendment to reinstate Glass-Steagal, whose repeal, through the Larry Summers orchestrated Gramm-Leach-Bliley Act, in 1999 set the economy on the collision course that culminated with the implosion of every single Goldman Sachs FICC competitor in 2008. The five Democrats who have undertaken the sisyphean task of taking on both Wall Street and their direct boss, are Maurice Hinchey of New York, John
Conyers of Michigan, Peter DeFazio of Oregon, Jay Inslee of Washington,
and John Tierney of Massachusetts.

If adopted, the measure would give banks one year to choose between
being commercial banks or investment banks. The nation’s biggest –
those now commonly referred to as “too big to fail” — would be broken
up. The Obama administration opposes the measure.

Obama, presumably a Democrat, continues to persist in endorsing each and every Republican legacy when it comes to Wall Street’s landed interests (and risk “management” practices). Of course, the last thing the administration needs is for the populace to comprehend the chameleonic nature of the administration’s action.

More from HuffPo:

The act was repealed in 1999 at the urging of, among others, Larry
Summers, now President Barack Obama’s chief economic adviser.

The five congressman all voted against the repeal then — and now they want it back.

Former Federal Reserve Chairman Paul Volcker is one of a number of
financial luminaries calling for at least a partial return to
Glass-Steagall. The Wall Street Journal’s
editorial page also endorsed the concept in a recent editorial as a way
to “reduce moral hazard” and “limit certain kinds of risk-taking by
institutions that hold taxpayer-insured deposits.”

The law’s repeal ushered in an era marked by big banks getting even
bigger. The country’s four largest — Bank of America, JPMorgan Chase,
Citigroup and Wells Fargo – now control more than half of the nation’s
mortgages, two-thirds of credit cards and two-fifths of all bank
deposits.

And because their deposits are taxpayer-insured, there’s a growing
concern that they will feel overly confident about making risky bets
through their investment arms because they know that should they suffer
huge losses, taxpayers will ultimately be there to bail them out.

The five Democrats face big obstacles, including their own leadership and the Obama administration.

At this point the whole systemic regulation debate is getting glaringly amusing. At the core of every conflict are proposed reforms that are so obvious from a risk mitigation debate: audited Fed, split up banks which are now bigger than ever before, propping a bankrupt FDIC, which in turn is backing up bankrupt institutions, and a bankrupt country which is trying to fool the world into a game of M.A.D. knowing full well if the US taxpayer goes down directly or indirectly, the world, and the proverbial flood, follow after. And the only sensible reforms are those getting the biggest push back from Obama, and of course, Wall Street. How these two seemingly traditional opponents have ended up on the same side of the page is testament enough to the cataclysmic legacy of Bernanke and Summers. Of course, nothing will be done about anything, in tried and true American fashion, until it is too late, and Main Street is left sorting through the rubble of Goldman’s new glass-plated headquarters, even as all inhabitants have long-ago departed the country and left the U.S. with a few quadrillion in I.O.U.’s. At this juncture the best option before politicians is to simply delay for one year until mid-term elections provoke some vestige of sensibility in the ruling class.