Diary

MI Morning Update 9-24-2008

41 Days Until Election Day

September 24, 2008

MORNING UPDATE

McCAIN IN MICHIGAN…John McCain visited the Dow Corning plant in Freeland yesterday as a new MRG poll was released showing McCain up by 3% in Michigan over Obama. Michigan will be a “bellweather” state for this presidential race, coming down to the wire!

WILL SCHAUER RETURN CAMPAIGN CONTRIBUTIONS….Mark Schauer’s most recent television ad takes aim at Congressman Walberg, but manages to hit contributors to his own campaign.  Schauer attacks Congressman Walberg for voting in favor of H.R. 1830, the Andean Trade Agreement, claiming in the ad it has "sent Michigan jobs overseas."  Schauer fails to note H.R. 1830 passed the House 365-59 (no opposition in the U.S. Senate), and supporters of the legislation include House Members who have contributed at least $58,500 to Schauer’s campaign.

NEWT ON THE ECONOMY…Newt makes a great argument to get the politicians out of the economy and what government programs have stifled our economy. What we need is to return to a Reagan-Thatcher policy of economic growth through fundamental reforms. Listen to his commentary here.

http://newt.org/tabid/102/articleType/ArticleView/articleId/3727/They-Broke-it-You-Bought-it.aspx

Or you can read the transcript
http://www.solutionsday2008.com/

As a principled conservative it is even more sobering to see the amount of economic power being centralized in Washington with these interventions. Deals are being struck behind closed doors with little or no transparency. Things are happening at the intersection of politics and finance that we, the American people, know nothing about except the potential price tag we will pay. These many new federal responsibilities will politicize finances at giant institutions and will guarantee massive increases in lobbying.

FORECLOSURE RATE TODAY IS ONLY 3%…so while this is a crisis, it’s not like during the Great Depression where nearly 50% of all mortgages were in foreclosure. Unemployment is around 6%, while over 11% during the Depression. The government which caused much of these problems should not be rewarded by creating more government. Getting rid of “mark to market” accounting provisions would take care of much of the problem. We need targeted and “temporary” relief.

We cannot have capitalism on the way up and socialism on the way down. We cannot have a welfare state for Wall Street….at main street’s expense.

FORBES PROPOSES BREAK UP OF FANNIE MAE AND FREDDIE MAC…in what is the boldest, yet the most common sense approach to the government bailout of the mortgage market, Steve Forbes proposes that these "two corrupt, mismanaged monsters" be broken up into 12 new companies…to help avoid backing the U.S. government into another bailout.
http://www.forbes.com/opinions/2008/09/08/fannie-freddie-next-oped-cz_sf_0908opedfannie.html

HERITAGE FOUNDATION…has prepared a series of papers on the potential bailout plan worth reading.
David John says any plan passed by Congress must meet these two objectives: 1) restore the markets and 2) protect the taxpayers.
 
Stuart Butler and his team outlined 8 goals and strategies for lawmakers.
 
Conn Carroll says putting Chris Dodd in charge of drafting the Senate’s bailout bill is like letting Ken Lay write Sarbanes-Oxley.
 
IS LEVIN LOOKING FOR FAVORS?…Check out Hoogendyk’s article on questionable earmarks in the Defense Authorization Bill… In it, Jack differentiates between what’s good for Michigan…and $10 million in slight of hand favors. http://www.jackformichigan.org/core/2008/9/12/senator-levin-looking-for-favors.html

VOTING IS UNDERWAY… For most, Election Day is November 4, but voting is already underway in 11 states. Voters in Pennsylvania, North Carolina, South Carolina, Kentucky, Virginia, Maine, Michigan, Mississippi, Georgia, Missouri, and South Dakota already have the chance to cast ballots. In fact, in Kentucky — which started voting on Thursday — the first ballot in the state was cast for McCain (and the second went for Obama). The first absentee ballots went out Aug. 26th, more than two months before Election Day. By the end of this week, voters in 15 states will have the opportunity to cast their ballots. And by October 5, a month before Election Day, some form of early voting will happen in 23 states. This early voting creates potentially huge risk of voter fraud and abuse.

VAZNELIS FUNDRAISER…I attended a fundraiser for an old friend of mine, Lemont Township Road Commissioner and GOP Chairman Sig Vaznelis with Illinois National Committeeman Pat Brady. Yeh, it’s one of those Lithuanian connection things

VOLUNTEERS NEEDED…we are opening up new Victory Centers daily and need more and more volunteers to make phone calls, knock on doors and put up lawn signs.  The response has been overwhelming, but Michigan will be the key battleground state and we need EVERY person willing to help in anyway they can.  Thanks again for all you do!  For more info click here.

http://www.migop.org/inner.asp?z=113

R.I.P. George Vaughn….Lake County GOP activists George Vaughn passed away. Please keep his Sue Vaughn and their family in your prayers.


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TODAY’S TOP STORIES

The following stories and more are available at myArticles of Interest online.

The New World Order: More Banks Will Need Capital Infusions

by Heidi N. Moore

The ironies continue to pile up in the financial tumult.

The latest: that the government acted to save investment banks that were so interconnected with other banks that their failures would have endangered the system, and the way the new system is shaking out, banks will be more interconnected with their financial partners than ever.

That is because the changes of the past week will force two more banks, Morgan Stanley and Goldman Sachs, to meet the capital ratios and leverage requirements required of commercial banks. At the same time, falling stock prices in the bank sector will pressure other banks to shore up their equity. That will mean that many will have to seek large capital infusions and investments. That translates to more reliance on foreign banks, sovereign-wealth funds and private-equity firms–investors who have the deep pockets to provide such infusions.

Here’s how it works. it starts with Tier 1 capital, which is the gauge of a bank’s health watched by regulators. It measures whether a bank has sufficient capital to cushion future losses. Tier 1 capital is comprised of common stock, the portion of earnings not paid out as dividends and retained by a company, and disclosed reserves against losses. But with stock prices and earnings down, Tier 1 ratios are under pressure across the industry. The federal government requires a minimum Tier 1 ratio of 4%, and 8% is typically thought to be robust.

Republican anger at ‘financial socialism’

By James Politi and Daniel Dombey in Washington

Congressional Republicans on Tuesday voiced their strongest objections to date about the Bush administration’s $700bn financial rescue plans, dealing a blow to White House ambitions for them to be quickly approved.

As Hank Paulson, Treasury secretary, and Ben Bernanke, chairman of the Federal Reserve, predicted grim consequences if the plan were rejected, the Republicans’ Senate leadership called for new provisions on executive pay, which the administration opposes, while others cast doubt on the whole package.

“We are going to advance taxpayers’ dollars, and government ends up in effect taking an equity position in businesses,” Mitch McConnell, Senate minority leader, said. “I think the taxpayers should expect no less than strict limits on the type of executive compensation that might be possible for those involved in these partially government-controlled enterprises.”

FBI probing Fannie, Freddie, AIG, more

The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage-finance giants Fannie Mae and Freddie Mac, Lehman Brothers Holdings Inc. and insurer American International Group Inc.

The inquiries, still in preliminary stages, will focus on the financial institutions and the individuals that ran them, a senior law enforcement official said.

Officials said the new inquiries bring the number of corporate lenders under investigation during the last year to 26.

Bailout Plan Makes McCain ‘Deeply Uncomfortable’

by David Greene

Republican presidential hopeful John McCain called Monday for bipartisan oversight of the Bush Administration’s proposed bailout of the U.S. financial markets. Campaigning in Scranton, Pa., McCain said the current plan makes him "deeply uncomfortable" because one man, Treasury Secretary Henry Paulson, would have control over all that money.

Click to listen

Lots of People Could Use a Cash Infusion

By TOM BROKAW

Barney "Big Un" Baumgartner of Windblown, Wyo., invited the Federal Reserve and the U.S. Treasury Department to take over his business, The Big Un 24 Hour Tow Service and Trophy Taxidermy.

In a handwritten press release, Mr. Baumgartner explained that with winter and hunting season coming on, the good citizens of Windblown would be without his vital services unless he found a way to deal with his escalating debts, fast.

"This is not just about me or my neighbors in Windblown. Heck, we get three or four tourists and out-of-state hunters here every 10 days or so. What if they need a tow or a trophy mount? The consequences are too great to contemplate," Mr. Baumgartner explained.

Local backers excited to see McCain, Palin

Kelly Olson of Norton Shores was thrilled to get up close and personal with Gov. Sarah Palin, politics’ current superstar.

At Wednesday’s town-hall meeting at Grand Rapids Community College featuring Palin and GOP presidential nominee Sen. John McCain, Olson raised her hand to ask a question. She was stunned to be picked.

"I just raised my hand and happened to catch Sen. McCain’s eye and he handed me the microphone."

"As a mother I just wanted to hear your response to the people out there who said you can’t be a mother and be vice president," Olson said, holding her 9-week-old son, Gavin.

Palin meets with Afghan leader

Joseph Curl

NEW YORK – Alaska Gov. Sarah Palin on Monday had her first national security briefing from Director of National Intelligence Michael McConnell, just hours before she had her first-ever meeting with a foreign leader – which she promptly banned the press corps from covering.

Even though her schedule called for her traveling press pool to join her at the top of her meeting with Afghanistan President Hamid Karzai, her staff at the last minute barred reporters, so no one really knows what Mrs. Palin said in the meeting. Her campaign called it a staff "mix-up."

Mrs. Palin greets Colombian President Alvaro Uribe in New York on Tuesday. The meeting was one of her first with a foreign leader.

In three meetings throughout the day – the two others were with Colombian President Alvaro Uribe and former Secretary of State Henry Kissinger – she took no questions, continuing a 25-day streak without a press conference that stretches back to Aug. 29, the day she was selected to join the presidential ticket of Sen. John McCain.

Democrats abandon drilling ban

Stephen Dinan and S.A. Miller, THE WASHINGTON TIMES

Democrats will let the offshore drilling moratorium expire next week, caving in to Republicans weeks before the election and potentially opening the outer continental shelf to expanded oil and gas exploration for the first time in a generation.

Still, the surrender – a major victory for congressional Republicans and President Bush – could be short-lived. The drilling would not begin for at least a year, and Democrats hope to reimpose some sort of ban before any new wells are sunk, setting up the first bruising battle of the next administration.

"The White House made it clear any new drilling provision was a non-starter. The future resolution of offshore drilling will have to be addressed with a new president," said Drew Hammill, a spokesman for House Speaker Nancy Pelosi, California Democrat.

Bill to bar public smoking falls short

Charlie Cain and Mark Hornbeck / Detroit News Lansing Bureau

LANSING — A smoking ban for all public places in Michigan came up six votes short of passage in the state House on Tuesday, but advocates say they’ll try again — perhaps as early as today.

The legislation to bar lighting up in public buildings, any workplace, bars and restaurants, mall food courts and casinos in Detroit needs 56 votes, but Tuesday’s tally was 50-49.

Detroit Democrats, concerned about a smoking ban’s impact on the casinos and the revenues they generate, were instrumental in blocking the bill, which already has cleared the state Senate and would be signed by Gov. Jennifer Granholm. Detroit representatives voted 7-1 against it, with three not voting.

Census: State struggles to lure newcomers

By JOHN FLESHER
Associated Press Writer

Kevin Breen gets the occasional you-gotta-be-kidding stare when telling people he moved from the Boston area to southeastern Michigan — voluntarily.

"They ask if I had to, and I say no, it was a choice," the 41-year-old said Monday. "We could have gone elsewhere."

Breen arrived in July, becoming a school administrator in Grosse Pointe Woods near Detroit. He took up residence in neighboring Grosse Pointe Park with his wife and two children, ages 9 and 6.