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February 23, 2009

Gillespie: Congress faces far more difficult task ahead

Posted: 11:41 AM ET

By Ed Gillespie, Former White House counselor to President George W. Bush

As the administration of George W. Bush was developing the $700 billion Troubled Asset Relief Program (TARP) last fall, the perils of moral hazard and government control over our nation's financial sector were well understood.

Like the president himself, I was loath to see a massive government intervention in the financial markets. But I also heard the president's top economic advisers tell him that a failure to act decisively could plunge us into another Great Depression.

As the world awaits the details of the Obama administration's version of TARP, two things have changed since last fall: First, we're not facing the same massive, day-to-day market volatility and frozen credit markets that were the context of the original TARP decision. Second, our new president doesn't have the same instinctual resistance to government intervention as his predecessor. Consequently, the next iteration of TARP is likely to be much more far-reaching. Democrats appear poised to impose many intrusive conditions on our financial institutions.

This will present Republicans in Congress with a far more difficult debate than they faced with the stimulus package earlier this month. Republicans benefited in the stimulus debate from offering an alternative approach to creating jobs, with a focus on lower taxes for small business owners, and from ridiculing outrageous pork-barrel spending. Critiquing an expanded TARP and providing a positive alternative will pose a much greater challenge.

Read MORE of Gillespie's commentary HERE

Filed under: Economy • Ed Gillespie • Larry King Live


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sean brizendine   February 23rd, 2009 12:25 pm ET

larry these people can say all they want but only time will tell if we made the right decision on the stimulus, frankly i think we did.
"sean in santa rosa"


thomas from wash dc   February 23rd, 2009 1:33 pm ET

we do not like this man..sour grapes..it's UNAMERICAN to hope Pres. Obama fails ...


thomas from wash dc   February 23rd, 2009 1:33 pm ET

we do not like this man..sour grapes..it's UNAMERICAN to hope Pres. Obama fails ...


Dmarie Writ   February 23rd, 2009 4:18 pm ET

For those Governors that refuse to implement the stimulus to help the unemployed could they be sued, i.e. could a class-action lawsuit forced them to do the right thing?


BRIAN THACKER   February 23rd, 2009 4:33 pm ET

I've felt an overwhelming desire to share my perspective as a small business owner recently devasted by our economic tailspin. I've watched as friend after friend have also been brought to their knees by our economic policies past and present. The banks I have dealt with over the last 20 years have enjoyed a nice profit from OUR business. When things tightened up, they ran away from well established relationships...... I would call the banks the epitome of a "fair weather friend". As I see the government intervene and assist the current banking structure, I can't help but feel an overwhelming feeling of revulsion. WHAT ABOUT SMALL BUSINESS OWNERS??!!~! It seems there is a growing and widespread interest in stopping aid to wasteful corporate operations and financial institutions who chew up and spit out their core clientele. WHO WANTS TO HELP FINANCIAL INSTITUITONS THAT WILL STAB YOU IN THE BACK WITH THE CHANGE OF THE WIND????!!! WHO WANTS MORE RED TAPE AND BIGGER GOVERNMENT?????!!!! I see my children saddled with more tax in the future and the fact that a large portion of the bailouts go to financial institutions makes me MAD AS HELL!!! I'M JUST GETTING STARTED!!!


BRIAN THACKER   February 23rd, 2009 4:53 pm ET

Am I the only who feels like this trickle down philosophy is stuck in the mud?? It's pretty obvious to me, that the little people are thought of last and the Coporate & FINANCIAL lobbists have our leaders right where they want them. Corporations & Financial Instituitions get the bailout money and are just padding their bottoms while the rest of us get spanked. Where is the DEMAND that money be infused into commercial and private clientele lending??? ITS NOT WORKING!!! HEY!! OBAMA!! HOW ABOUT LENDING ME YOUR EAR FOR A FEW MINUTES!!


BRIAN THACKER   February 23rd, 2009 6:10 pm ET

I have had my nose glued to CNN and I'm watching Wall Street closely. I am, admittedly, no economic expert, but I am on the front line of the American Economy. I just returned from a business trip to Las Vegas and can attest to the fear in the marketplace. As i watched the DOW tumble another 250+ pts. today, I fear to overstate the obvious and feed the fire. Watching the housing aid issues in Florida begin to boil, my heart goes out to them. Like most Americans, I am not afraid of hard work, but work hard doing what??? I hear terms like Nationalization (CITIGROUP). Economist citing more rapid declines than even in the Great Depression! My heart races faster! Shouldn't our Bailout funds have gone to the people first??? My belief....Corporate America should be at the mercy of the people, not the other way around.


sandee from las vegas nv   February 23rd, 2009 8:24 pm ET

we do not like Gillespie, Larry..we had to hear from him for 8 lousy years...we do not trust hm..he had a good job for 8 yrs..now go away Mr. Gillespie !....what horrible advice did you give GW Bush ?...go away ...


JIM CARROLL INTERNET FREE PRESS   February 23rd, 2009 9:31 pm ET

I WILL SEND YOU A COPY OF THE BOOK MIXTURISM THE RATIONAL, ECONOMIC, ETHICAL AND
POLITICAL PHILOSOPHY FOR THE 21ST CENTURY AND BEYOND FOR TEN DOLLARS.
SEND NAME AND ADDRESS TO INTERNET FREE PRESS
2201 SOUTHERN SHADE BLVD. KNOXVILLE,TENNESSEE 37932
INTERNETFREEPRESS.COM

If President Obama solves America's problems, he will have to use the ideas outlined in this book.

HOW TO GET THE ECONOMY BACK ON TRACK IN A FLASH BY GIVING 535 BILLION DOLLARS TO THE STATES

Give each state one billion dollars for each member of Congress– which would distribute the money equally among the states. States could keep all of their employees, and they could add a few more. They could create millions of new jobs by getting a lot of needed projects going. The Federal Government has the Constitutional authority to create new money. It doesn’t need to borrow it from China or anyone else. Giving 535 billion dollars to the states makes more sense than giving two or three trillion dollars to the banks.
TAX CUTS FOR THE RICH AND FLOAT DRIED UP MONEY SUPPLY When the rich get tax cuts, they don’t put it under their mattress; but what they do with it has the same effect. They store it as bytes on computer chips. They don’t spend the money that’s needed to moves goods and services.

The efficiency of the clearing houses for financial institutions has dried up trillions of dollars in float. You can’t beat a check to the bank any more. Debit cards, paying bills on line, buying on the internet with Pay Pal and the many other ways that money can instantly be taken out of bank accounts has dried up the money supply. When you could beat a local check to the bank and when it took an out of town check ten days to clear the bank, there were billions of dollars that could be spent by the depositors and billions that could be loaned out by the banks. WHERE ARE THE ECONOMISTS?

MORE TROOPS TO AFGHANISTAN

Mr. President, if you had caught Osama bin Laden yesterday, would you be sending 17,000 more troops to Afghanistan? It may not be the most important thing in the world to catch bin Laden. There is more than one kind of warfare. Osama used USA planes to take down the World Trade Center. Pretty smart if you look at it from a point of view that everything is fair in war. But is bin Laden being much smarter now by sucking the USA into a black hole in Afghanistan? Generals are somewhat like football players: they know how to run the same plays that they learn in high school and nothing more. If my street finder can direct my car to any location, and if you can find a cell phone in a jungle, and with all of our satellites, technology, our missile systems, our bombers and our Navy—why should we ever go on a war mission that we can’t get back home in time for dinner with the family? Mr. President, don’t get bogged down in Afghanistan like President Johnson did in Vietnam and miss a great opportunity to make America a great place for everyone. Anyway you would be more likely to find Osama in Saudi Arabia than in Afghanistan or Pakistan.

NATIONALIZE THE BANKING SYSTEM

You can call it Free Enterprise if you like, but the banking system controls the faucet for the life blood of all enterprise. It can put the economy on its back, and it can put people in soup lines. Interest rates should always be low and stable, and money should always be available to exchange the goods and services that the hands and minds of people produce. There is no need ever for a roller coaster economy of booms and busts. The medium of exchange is too important to all enterprise to be in the hands of private enterprise.

RECESSION is a product of the blatant ignorance of the President, Congress, Economists, and the News Media who do not understand Nature's Basic Law of Economics, and Article 1, Section 8, of the Constitution.

Nature’s Basic Law of Economics states: All goods and services flow from the action of people resources on natural resources— Money is the medium of exchange which should be equal to the value of the goods and services—and not to a gold standard or some other insane idea.

THE CONSTITUTION

Article 1, Section 8

The congress shall have power to lay and collect taxes, duties, impost and excises, to pay the debts and provide for the common defense and general welfare of the United States;

To borrow money on the credit of the United States;

To coin Money, regulate the value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes;

To establish an uniform Rule of Naturalization and uniform Laws on the subject of Bankruptcies throughout the United States;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States; etc...

Mr. President, we need to help the governors of each state balance their budgets. They do not have the Constitutional power to create money like the Federal Government does (article 1, section 8, of the Constitution). You will save a lot of jobs and fuel the economy more by this than by giving money to the banks. The Federal Government has the responsibility to make sure there is enough money so every entity can have a balanced budget.

MR. PRESIDENT, now that you have the stimulus –ask businesses to do their part by lowering all their prices by at least 1%.
Stop the negative talk. Keep encouraging people to start buying and spending.
INFLATION IS A EUPHEMISM FOR THEFT. It will change the ratio of money to the goods and services being exchanged. MR. PRESIDENT, DON”T LET BIG OIL AND BIG BUSINESS RUN OVER YOU WITH A PRICE MARKER. They did it to President Carter.

THE GREATEST DANGER FACING AMERICA TODAY IS THE MINDSET THAT THE REPUBLICAN PARTY HAS ABOUT MONEY. They have not read Article 1, section 8, of the Constitution which gives the Federal Government the power to create money equivalent to the value of the goods and services the American people produce. The lack of money is the cause of this recession.

The ignorance of people like Lou Dobbs (a Republican who is ashamed to be called one), and people like Rush Limbaugh, Bill O’Reily, Hannity’s America (not a place I would like to live), and Glen Beck (who have no shame) is overwhelming the ideas that cause economic problems, and then they try to prevent problems from being solved by feeding their ignorant ideas to the Republicans.

THE FEDERAL GOVERNMENT SHOULD NOT BORROW ONE PENNY TO PAY FOR THE STIMULUS PLAN. The Constitution, Article 1, section 8, gives the Federal Government the right to create the money. The only question that needs to be asked: Are there people resources and natural resources available? And the answer is yes. Money is the medium of exchange. Goods and services have the real value.

REPUBLICANS COULD UPSTAGE DEMOCRATS

If Republicans would take two great steps forward by forcing Democrats to support a one pay Universal Health-Care System and a new Department of Consumers Affairs, they could win the hearts and minds of millions.

Universal Health Care would make it possible for all Ma and Pa businesses to compete with the Wal-Mart’s which killed millions of small businesses. It would help many small businesses with fewer than twenty five employees to compete with larger companies. With a Department of ConsumersAffairs, consumers could control the price gouging by big oil and big business which destroys the medium of exchange.

LOU DOBBS OF CNN NEWS walks like a Republican and quacks like a Republican while calling himself Mr. Independent. Who does this duck thinks he is kidding? Even Fox News, which I turn to when he comes on, seems more balanced.

RUSH LIMBAUGH is the epitome of ignorance, but a true reflection of Republican philosophy– a philosophy of nothing.

SENATOR GRAHAM tells people that the Federal Government’s debt is the same as theirs and that the states budgets are the same. Individuals and state governments do not have the Constitutional authority to create money– but the Federal Government does and should create enough money so everyone can balance their budgets.

NATIONAL DEBT… Those who think that America could go broke or be ruined because of the national debt are not thinking. As long as America has people resources and natural resources, America will be able to produce goods and services which have real value. The present national debt has already moved the goods and services. It has no more value. It never needed to be in the first place. It only exists because of the belief that money should be tied to something other than the value of the goods and services it exchanges.

ONE OF THE HARDEST THINGS TO DO is to divorce oneself from their father’s politics and religion. The do nothing Republicans are making it much easier for thinking people to divorce themselves for their father’s politics. We need to bury the Republican Party in 2010– and start a new party which would be at least two steps ahead of the Democratic Party.

TAXATION should be one of a three- legged stool consisting of: creating money, borrowing money and taxing in order to have a balanced money supply. Taxation should be on a fixed rate—but indexed. Creating new money should be accepted. Borrowing money should be given more thought.

A TRILLION DOLLARS IS A SMALL AMOUNT OF MONEY relative to the world economy, and the money needed to exchange goods and services.

WHAT IS WRONG WITH PORK BARREL OR EARMARKS? Nothing! We need more pork. I wish Tennessee had some good Democrats in Washington who could bring home some pork instead of those do-nothing Republicans. Tennessee once had some good Democratic senators like Al Gore ,Sr. and Al Gore, Jr. Tennessee would be as well off if it sent two parrots to Washington and taught them only one word—nay. The two Republicans we now have are worthless.

2010 is the year we ought to be thinking about now as how to get rid of more Republicans.

We do not need to borrow any money from China. We need to create money to get our economy back on track. Article 1, section 8, of the Constitution gives the Government power to create the money we need.

Why doesn’t the news media know that the word INFLATION is just an EUPHEMISM for theft?

Mr. President, don’t let the thieves of Wall Street and big business steal your stimulus package with a price marker. They stole the Bush rebates before they ever got to the people. THESE THIEVES HAVE NO SHAME. The Constitution does not give thieves the right to get whatever the traffic will bear.

HOW CAN THE INTELLIGENTSIA OF AMERICA BE SO BLINDED that they cannot see that the Federal Government must have a money system that can create and maintain an equivalent ratio of money to the goods and services that its peoples’ hands and minds can produce? Nature’s Basic Law of Economics states: All goods and services flow from the action of people resources on natural resources— Money is the medium of exchange which should be equal to the value of the goods and services—and not to a gold standard or some other insane idea.

Textbook Videos – Click Here

Visit my blog CLICK HERE

SOLUTION TO ISRAEL AND GAZA PROBLEMS
Israel should annex Gaza and give all the people living in Gaza
full Israeli citizenship without conditions.

If Republicans really wanted to help small businesses as much as
they say they do, they would be for a ONE PAY UNIVERSAL HEALTH CARE SYSTEM.

PRESIDENT OBAMA WILL BRING THE CHANGE YOU CAN BELIEVE IN THAT WILL MAKE THE DIFFERENCE: THE PHILOSOPHY OF MIXTURISM AND THE FIVE- FINGER AGENDA.
.

The Five-Finger Agenda

1. ADEQUATE MONETARY SYSTEM: The three functions of the Federal Reserve are to lower or raise discount rates, to buy or sell securities on the open market, and to lower or raise the reserve requirements for member banks.These are inadequate for maintaining a balanced money supply at all times. Adding a FOURTH FUNCTION to the monetary system that would index the PAYROLL TAX on a scale of 1 to 15 would bring balance.
The index could be lowered when more money is desired in the consumers' pockets and raised when less is needed.

2. RESERVE RETRAINING WORK FORCE: The greatest problem facing America is EMPLOYMENT AND UNEMPLOYMENT TOO. This problem can be PERMANENTLY solved by establishing a Reserve Retraining Work Force. Everyone would be in the regular work force or in the Reserve-Retraining Work Force. All unemployment would be by choice.

3. ALL AMERICANS WHO WANT TO OWN A HOME– HOME OWNERSHIP SHOULD BE POSSIBLE REGARDLESS OF INCOME. The Federal Government should endow a HOME LOAN FUND, so anyone making below average wages could borrow money to finance a home at an interest rate from 1% to 5% FOR UP TO 50 YEARS.

4. HEALTH-CARE SYSTEM: Since only 1.3% of all health-care claims run over $50,000, the Federal government could pay these claims for only 13 billion dollars per 1 trillion dollars of total health-care cost. Without having to worry about the one claim in a million for a million dollars, small businesses and small organizations could self-insure which would bring about competition in the insurance industry where none now exist. THIS WILL LEAD TO A SINGLE PAY UNIVERSAL HEALTH-CARE SYSTEM.

5. A FIRST CLASS EDUCATIONAL SYSTEM CAN BEST BE ESTABLISHED BY HAVING THE TEACHER BECOME THE DIRECTOR OF A PLANNED PROGRAM THAT WILL REACH ALL OBJECTIVES DESIRED. BY USING THE BEST OF SCIENCE AND TECHNOLOGY, WE COULD SPEND A BILLION DOLLARS ON EVERY COURSE BEING TAUGHT IN HIGH SCHOOL THAT
WOULD TEACH EVERYTHING KNOWN ON THE SUBJECT BY EXPERTS; AND THAT WOULD BE CHEAPER THAN WHAT WE ARE NOW SPENDING.

ALL ARTICLES MAY BE RE-PUBLISHED PROVIDED THE URL OF THIS SITE AND THE NAME OF THE AUTHOR, JAMES M. CARROLL, ARE INCLUDED.

*Permission to re-publish is granted, provided Internetfreepress.com is given credit.


Shorty   February 23rd, 2009 9:38 pm ET

I would like to hear him say that Congress has to stop taxpayer retrets


Joanne Becker   February 23rd, 2009 9:39 pm ET

Listening to Bob Woodward, DeeDe Myers, and Ari Fleisher..... Am disappointed that while discussing the economy, etc. Ari made a slur to the effect of that people are asked to do one thing and also another ie." like an alcoholic drinking a bottle of gin and then going to an AA meeting"................ At least this action is "free will" and doesn't cost you or the government a cent..... Please think over what you said in the mind of self-help groups. "Gin is not an antadoic for clear thinking which we need more of today".


Brandon Fresard   February 23rd, 2009 9:51 pm ET

T Boone! I'm part of the Pickens army and hope you keep up all the good work. I think most Americans want to get off fossil fuels, but we need strong leadership from people like you to keep pressure on the government to transition.


dawnelle davis   February 23rd, 2009 10:02 pm ET

There is clearly a need for our country to employ as many alternativ energy sources as we can 'make work'. what about biofuel (not et hanol-based). I hear very little from any of the other alternative proponents about the merits of a 100% emission-free biofuel which could in time replace almost all of our foreign oil needs.


spiro b   February 23rd, 2009 10:47 pm ET

just another useless republican


judi Elman   February 23rd, 2009 10:50 pm ET

Mr. King,
I have something to tell you: when your guests have lost a child, you seem intrigued as to how they "handle" it..
We don't, and we don't like the word "closure".. there is never closure..and why should there be?
Our children, mine was 6 when he died, lived and his life is important to those of us who love him.
We don't need to "close out the life", but rather remember as we as parents do everyday of our lives...
We go on, because we breathe and therefore we live, but we never forget and we never look for "closure".. thats a word used by those who have never lost a loved one because it makes them feel better.
Please use some sensitiviy and let go of this meaningless word.
Sincerely
J. Elman


ed,vancouver canada   February 24th, 2009 5:11 am ET

i like what jim carroll has to say.
giving banks money does not work and never will.

However the u.s should borrow all of the 2 trillion that china has left,otherwise they will buy u.s. banks with the money.


ed,vancouver canada   February 24th, 2009 5:14 am ET

the republicans and democrats are like 2 vultures fighting over a bird that hasn't been caught yet


disgusted   February 24th, 2009 8:31 am ET

At least President Obama is trying, Bush did nothing but send us to an illegal war that costs us , oh, let's see about 1 tril????????????????????

All congress and all seante should be impeached and tried for war crimes. They all gave the green light and the war is a bigger issue than subprime as a root evil to this crisis


Peter Palms   February 24th, 2009 2:25 pm ET

Ben Bernanke just met with Congressional Banking Committee.

I understand Bernanke's plan for providing tax payer money to the banks to keep them operating until their negative net worth can be calculated.

But the main issue is how will he keep the management from stealing the taxpayer money with salaries, bonuses and other rmethods for enriching themselves

Peter Palms

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