Consulting by RPM || Free Advice Blog

Persons of Interest: Congresspeople Who Switched TARP Vote Then Left Office

[UPDATE below.]

For a while I have wanted to produce a stunning expose on how the financial sector took care of the Congressmen and women who lost their seats because they switched from “no” to “yes” on TARP back in October 2008. I have made some initial inquiries and paid someone to do the cross-referencing, but I don’t have the time to dig into the people who fit the profile. Rather than sit on this for another few months, I decided to release my findings to the millions of internet journalists who may smell a rat.

Just to refresh everyone’s memory, the House actually voted against the $700 billion TARP package the first time, on Monday, September 29, 2008. Then the Senate passed it, and the House voted again on Friday, October 3, 2008. This time it passed.

So what happened during that significant week? Obviously a bunch of representatives changed their votes. The following changed their initial “no” vote to “yes”:

Abercrombie, Neil D-HI
Alexander, Rodney R-LA
Baca, Joe D-CA
Barrett, J. Gresham R-SC
Berkley, Shelley D-NV
Biggert, Judy R-IL
Boustany, Charles W. Jr. R-LA
Braley, Bruce L. D-IA
Buchanan, Vern R-FL
Carson, Andre D-IN
Cleaver, Emanuel D-MO
Coble, Howard R-NC
Conaway, K. Michael R-TX
Cuellar, Henry D-TX
Cummings, Elijah E. D-MD
Dent, Charles W. R-PA
Edwards, Donna F. D-MD
Fallin, Mary R-OK
Frelinghuysen, Rodney P. R-NJ
Gerlach, Jim R-PA
Giffords, Gabrielle D-AZ
Green, Al D-TX
Hirono, Mazie K. D-HI
Hoekstra, Peter R-MI
Jackson, Jesse Jr. D-IL
Jackson-Lee, Sheila D-TX
Kilpatrick, Carolyn C. D-MI
Knollenberg, Joe R-MI
Kuhl, John R. “Randy” R-NY
Lee, Barbara D-CA
Lewis, John D-GA
Mitchell, Harry E. D-AZ
Myrick, Sue Wilkins R-NC
Ortiz, Solomon P. D-TX
Pascrell, Bill Jr. D-NJ
Pastor, Ed D-AZ
Ramstad, Jim R-MN
Ros-Lehtinen, Ileana R-FL
Rush, Bobby L. D-IL
Schiff, Adam B. D-CA
Schmidt, Jean R-OH
Scott, David D-GA
Shadegg, John B. R-AZ
Shuster, Bill R-PA
Solis, Hilda D-CA
Sullivan, John R-OK
Sutton, Betty D-OH
Terry, Lee R-NE
Thompson, Mike D-CA
Thornberry, Mac R-TX
Tiberi, Patrick J. R-OH
Tierney, John F. D-MA
Wamp, Zach R-TN
Watson, Diane E. D-CA
Welch, Peter D-VT
Woolsey, Lynn C. D-CA
Wu, David D-OR
Yarmuth, John A. D-KY

In addition, McDermott, Jim (D-WA) switched from “yes” to “no,” while Weller, Jerry (R-IL) initially didn’t vote but then voted “yes.”

Now of the above who switched from either an initial “no” or an initial “abstain” to a “yes” by the end of the week, which did not survive the 2008 election?

Only two: Knollenberg, Joe (R-MI) and Kuhl, John R. “Randy” (R-NY). (News accounts of their defeats here.) Clearly, if one suspects that the banking interests promised to take care of any representatives who were hurt by their TARP vote, Knollenberg and Kuhl would be the guys to investigate.

(Also of possible interest are Jim Ramstad [R-MN] who switched from “no” to “yes” but had already announced his retirement, Jerry Weller [R-IL] who initially didn’t vote then said “yes” but had already announced his retirement, and Hilda Solis [D-CA] who switched from “no” to “yes” but was named Labor Secretary in the new Obama administration.)

Note that I didn’t completely double-check the work of my assistant on this. I have made sure that Knollenberg, Kuhl, Ramstad, and Solis all switched their votes from “no” to “yes,” and I have confirmed their fates as described above. However, I did not independently verify the long list above. So if you plan on doing your own work on this, before you run with a story it would be smart for you to verify everything yourself.

The way to do this is to check the Roll Call votes. Here is the list of Ayes (Yeas), Nays, Present, and Non Votes from the Monday vote (when TARP failed to pass), and here is the list from the Friday vote when it passed.

Also, if you want to verify who is still in office, use this.

Release the hounds!

UPDATE: There was some confusion because if you click on the link above for the roll call vote on the original TARP motion, it looks like I linked to the wrong thing. But I didn’t. Here is the explanation (look at the “Note” for 9/29) in case you don’t want to take my word for it. As is its wont, the House tried to tack on the TARP to a different bill, H.R. 3997.

The Big Picture, v. 3

In previous posts (here and here) I have offered ruminations on how the rich and powerful elites might run things. The following is a continuation in this series. –RPM

If I were rich and powerful, and had no conscience, this is how I might behave…

First, let’s look at how my grandfather and his associates set things up, back around the year 1910. They had amassed huge fortunes in their respective industries, and they wanted to solidify their dominance. So they decided to spearhead the creation of a central bank and a federal income tax, as well as to push the U.S. into the global empire business. They also bought the intelligentsia who were developing the rationalizations for incredible new powers for the government that my grandfather and his associates owned.

In a particularly clever twist, my grandfather and his associates allowed the rise of “anti-trust” powers, ostensibly to attack them. But in fact they knew that they could easily circumvent the new regulations, while fooling the general public. The real purpose was to make it impossible for new upstarts to challenge their domination of their respective industries. To that end, the income tax and especially a very high estate tax were particularly useful in crippling competitors who were starting at a disadvantage. In order to shield their wealth and keep it in our families, my grandfather and his associates established dynastic trusts, which were immune to the confiscatory tax rates they had designed for everyone else. Because of a legal formality, these trusts could only shelter the family estates for roughly 100 years, at which point they would be subject to full taxation. But such technicalities never stopped my family before; the other grandchildren and I knew what to do in order to roll over the money.

Ah yes, it’s always difficult to predict these things in advance. So much of our work involves setting up roadblocks to anyone who could challenge our power, but then pulling the constraints out of the way whenever we decide they are hindering us more than our weaker competitors. For example, it was a brilliant stroke to strictly limit the amount of money outsiders could spend on political campaigns; since we own the government and major media, this ensured our complete control of what the voters saw in the year before an election. However, in the event of a “game changing” outburst of unpredicted voter behavior, we simply change the rules of the game two days later. This freedom allows us much more flexibility to massage the voters back on message by the 2010 elections, at which point they will conveniently demand that the politicians (whom we have installed because they “oppose” the previous batch we installed) reinstate the limits on campaigning.

The concentration of wealth and fixing elections are fairly easy. The part of my job that requires real finesse is moving the world toward a single fiat currency, the supply of which my associates and I strictly regulate. Naturally we have had to inculcate the concept of an all wise central bank chairman, but the downside is that if we want him to “bungle” it could spook the markets and end up costing us billions of dollars needlessly. (In contrast, we can very easily “accidentally” allow a would-be terrorist to launch an attack from a country we wish to invade, without fear that the American public will lose faith in their government’s competence to protect them. It’s a very nuanced job I have, indeed.)

But I digress. As I say, getting the American public to support our seizing control of yet another Middle Eastern country–and one with extensive water access–is easy; we’ve got that down to a science. But what’s much riskier is fiddling with the central bank, as the financial traders can be moody.

The problem is how to get the Fed chairman to wreck the dollar, so that Americans will go for a common currency with a much larger region, and yet at the same time not spook the markets into thinking that the Fed chairman is incompetent. The solution is obvious, once we spell out the problem: We have one chairman pump up excess bank reserves to ridiculous heights, but keep them bottled up to prevent price inflation. Then we have every important academic and Nobel laureate (all funded and handpicked by us, of course) praise the chairman’s brilliance.

Then, when the time comes for the massive inflation to hit, we tell our guy to start opening the spigots. At the same time, we all of a sudden have an “unthinkable” reversal in the fortunes of the Fed chair at the time of his renomination. We thus get a new guy in charge who can truthfully blame the resulting inflation on the mistakes of the last guy, and yet there is a very short window in which we have a lameduck Fed chair. It’s basically the same trick we pulled with the previous guy–who was a maestro while in power and then was the fall guy for the housing bubble once he was out.

At some point I wonder why no one has caught on to this stuff, but I guess it’s because no one really thinks people like me exist.

Robert P. Murphy holds a Ph.D. in economics from New York University. He is the author of The Politically Incorrect Guide to the Great Depression and the New Deal (Regnery, 2009), and is the editor of the blog Free Advice.

Guy Demonstrates How to Get Bomb Parts Through Body Scanner

Tony sends along this video (HT2 Gizmodo). The surprising stuff happens at 2:07, but all I can really conclude is that the TSA shouldn’t hire Germans.

Myyyyy Kind of Town

Carlos Lara and I are headed to an undisclosed location in Chicago, to interview another suite of insurance executives for our forthcoming book. At the last minute I remembered to grab my winter hat before leaving the house.

Blogging will probably be sparse until the weekend, unless Obama decides to abolish the Fed or something.

Anthony Gregory on Obama’s First Year

This is really a top-notch job. I don’t have to clone myself because Anthony Gregory is on the scene. There are no shocking revelations in this, but if you want to read a very thorough assessment of the “hope and change” of this past year–and not from a Republican sympathizer by any stretch–I heartily recommend Anthony’s article. Two excertps:

In Afghanistan, the situation has been far worse than we could have probably expected under another year of Bush. This is all because, tragically, Obama has kept his promise: He has expanded the war from the beginning, and announced in November the deployment of about 30,000 additional troops, bringing the total number up to about three times what it was when he took office. 2009 became the worst year for the Afghan people since 2001 – more depredations of children’s rights and the most civilian deaths since the invasion, including in air strikes that are ripe with scandal and can only contribute to the terrorist threat. As commander of U.S. forces in Afghanistan, Obama picked General Stanley McChrystal, who became the target of controversy in the Bush years for the draconian handling of detention centers, the blocking of the Red Cross from these prison camps, and for his involvement in covering up the truth about Pat Tillman’s death. Needless to say, when McChrystal publicly contradicted the president’s assessment of what was needed for victory, he was not fired for insubordination. Obama and the Democrats always criticized Bush and the Republicans for “neglecting” Afghanistan. The Democrats’ due diligence has successfully made Afghanistan a far deadlier place than Iraq in the last year. About 300 U.S. troops have died there since Obama took office.
…
In May, Obama stood in front of the National Archives – in front of the Bill of Rights itself – and engaged in the most impressive example of doublespeak in our time. He spoke well about the principles of the rule of law and how important they are to our country, even as he unveiled a plan to try some detainees in court, try others in front of military commissions and keep some of them imprisoned indefinitely – a policy of “prolonged detention” that, in a sense, went beyond the Bush policy of executive detention in that it was now asserted to be a part of our legal fabric, not just an ad-hoc executive prerogative. This was akin to Bush’s saying he had to destroy the free market to save it, except it was much slicker and actually fooled many people.

Megan McArdle’s Great Leap Forward Has a Snag

I really wasn’t even going to comment on Megan McArdle’s surprisingly specific recommendation for health reform (HT2MR):

Raise the Medicare tax by half a percentage point, and eliminate the tax-deductibiity of health insurance benefits for people making more than $150K a year in household income, $100K for singles. Then make the federal government the insurer of last resort. Any medical expenses more than 15% or 20% of household income, get picked up by Uncle Sam.

But then when I read “Megan McArdle Advocates 376,537.65% Marginal Tax Rate” by David R. Henderson, I had to pass it along. Here’s David:

So now imagine that you’re a married person with a family and you’re making exactly $150K a year. Your employer pays $10K toward your health insurance. Of course, it’s not subject to federal income tax, state income tax, or Social Security or HI tax. You and your spouse make a total of $150K, split roughly evenly, so both of you pay the marginal payroll tax rate of 7.65%. You also pay a marginal income tax rate of 25% and a state income tax rate of 5%. So your total marginal tax rate is 25 + 5 + 7.65 = 37.65%.

Now you earn one more dollar. What happens? That whole $10K employer contribution becomes taxable and so you pay tax on it at 37.65% or $3,765. You made an extra buck and you paid $3,765 extra in taxes. Oh, yes, plus $0.3765. So you paid $3,765.3765 in taxes. Your marginal tax rate on that dollar: 376,537.65%.

Is David right? I think so, but I went to the gym today–this figure’s not natural, kids–and I am too tired to be sure. I will apologize to Ms. McArdle if tomorrow morning some of you have explained in the comments that David is wrong.

Regular WSJ Columnist Writes Incredible Article on Gold

…and I don’t mean it as a compliment. I really can’t even begin to describe my feelings on today’s article by Thomas Frank. Here’s an excerpt:

Supporters of President Obama like to point to recent TARP-loan payoffs, plus interest, as an example of federal success. His opponents, by and large, have long held that government should be run like a business; their former leader, George W. Bush, once announced that “government should be market-based.”

It is a terrible idea. Were the government actually to begin understanding itself as a market-based, profit-maximizing enterprise, determined to bring down the deficit by whatever means present themselves, can there be any doubt what it would do?

It would sell gold. Oh, it would sell lots of gold. It would put Fort Knox on eBay. Mr. Obama could film the TV commercials.
…
The other day, as I watched the zillionth commercial for gold investments flicker by on Fox News, I thought to myself: What would happen to the American right if the price of gold suddenly tanked?

As anyone knows who has Googled the phrase, “FDR Gold Confiscation,” gold has long been the obsessive investment choice of a certain species of antigovernment crank. Its allure is especially strong for the disaster cohort—for those who believe that hyperinflation is just around the corner; that default by the U.S. government is a real possibility; and that democracy itself is something of a fraud, a populist Ponzi scheme pulled off by slimy politicians and the central bankers they’ve hired to run the printing presses.

One reason gold has been bid to its current stratospheric heights is because more and more investors and fund managers have signed on to this dark belief that America’s judgment day has finally come.

Were the administration to get started on the great gold dump, however, we’d come to a different judgment day very quickly. When the massively inflated price of that metal collapsed, it would probably take with it a hefty chunk of the portfolios of tea-party types, survivalists, Birchers, dittoheads, Objectivists and almost every imaginable species of secular end-timer.
…
Just for fun, the administration could then smooth the whole thing over with some tactical libertarian cant. It might declare that the price of gold had been propped up artificially for decades by the state’s irrational hoarding. Privatization is a far better option, administration officials might purr. It lets the market speak.

And so, in an irony worthy of Oscar Wilde, it would be the gold-investing contingent of the right who would discover that they had risked their fortunes on the whim of the very government they distrust and despise.

But it is the opposite irony that probably ensures that a great gold-dump will not take place. In addition to denting the holdings of countless extremists, such a move would also deal a massive blow to the hedge funds that have reportedly made enormous bets on the barbaric metal. Their losses would then reverberate through the financial system, inevitably shaking the institutions deemed “too big to fail.” And before long, government would have to ride to the rescue of those who have wagered so much on the government’s collapse.

So just to boil down some of Frank’s positions in this piece:

(1) The government actually has all the gold it says it has.

(2) The government doesn’t sell gold to suppress its price.

(3) The government would never do something just to harm its political opponents.

(4) The government would never do something that would hurt the economy.

(5) People who think FDR committed a massive crime are cranks.

(6) People who think gold is a good investment are stupid.

I’m not sure I want what Frank is selling.

Peter Schiff on the Minimum Wage

I think most senators talk like this; Schiff would fit right in if he wins. (HT2 von Pepe)