Friday, April 24, 2009

‘Mother may I’

This is what the once free America will be asking of the new ‘National’ not Federal Government of the United States.

By de Andréa

President Obama showed his socialistic hand this week when The New York Times wrote that he is considering converting the stock the government owns in our country's banks from preferred stock, which it now holds, to common stock.

Socialism
That’s right, and since the new National Government is the largest stock holder in over 500 financial companies, the Government would control the economy.

This seemingly insignificant change is actually momentous. It means that the federal (New National) government will control all of the major banks and financial institutions in the nation. It means socialism.

The Times dutifully put a spin on the Obama plan, deceptively disguised as a way to avoid asking Congress for more money for failing banks. But the implications of the proposal are obvious to anyone with at least a half of an unwashed brain.

When the Troubled Asset Relief Program (TARP) intervention was first outlined by the Bush administration, it did not call for any transfer of stock, of any sort, to the government, not even Preferred.

The Democrats demanded, as a price for their support, that the taxpayers "get something back" for the money they were lending to the banks. House Republicans, wise to what was going on, rejected the administration's proposal, and sought, instead, to provide insurance to banks, rather than outright cash. Their plan did not involve any transfer of stock. But Sen. John McCain, R-Ariz., not surprisingly undercut his own party's conservatives and went along with the Democratic plan to nationalize the banks, ensuring its passage.

But to avoid the issue of a potential for government control of the banks, everybody agreed that the stock the feds would take back in return for their money would be “preferred stock”, “not common stock”. "Preferred stock" means that these stockholders get the first crack at dividends, but only common stockholders can actually vote on company management or policy.

Now, by changing this fundamental element of the TARP plan, Obama will give Washington a voting majority among the common stockholders of these banks and other financial institutions. The almost 500 companies receiving TARP money will be, in effect, run by Washington.

And whoever controls the banks, controls the credit, and therefore the economy.
That's called socialism my friend.

Obama is dressing up the idea of the switch to common stock by noting that the conversion would provide the banks with capital they could use without a further taxpayer appropriation.

While this is true, it flies in the face of the fact that an increasing number of big banks and brokerage houses are clamoring to give back the TARP money. Goldman-Sachs, for example, wants to buy back its freedom, as do many banks. Even AIG is selling off assets to dig its way out from under federal control.

The reason, of course, is that company executives do not like the restrictions that come with TARP money. It is for this reason that Chrysler Motors refused TARP funds.

With bank profits up and financial institutions trying to give back their money, there is no need for the conversion of the government stock from preferred to common — except to advance the political socialist agenda of this administration.

Meanwhile, to keep its leverage over the economy intact, the Obama administration is refusing to let banks and other companies give back the TARP money until they pass a financial "stress test."

Nominally, the government justifies this procedure by saying that it does not want companies to become fully private prematurely and then need more help later on.

But don't believe it, my friend

They want to keep the TARP money in the banks so they can have a reason and rationale to control them.

THE BOTTOM LINE is simple. If you are an entrepreneur, a small business owner like me, then get ready to be an employee of the new National Socialist Government of America.

de Andréa

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