Washburn's World

My take on the world. My wife often refers to this as the WWW (Weird World of Washburn)

My Photo
Location: Germantown, Wisconsin, United States

I am a simple country boy transplanted from the Piehl Township in northern Wisconsin to the Milwaukee metropolitan area who came down "sout" in 1980 for college and have stayed in the area since.
If this blog is something you wish to support, consider a donation.

Wednesday, October 15, 2008

TARP has Coerced Participation

As I have stated here, here, here, here, here, and here, the bailout, now known as TARP, is not about money, mortgages, or market stabilization it is about power.

One of the dangers I mentioned BEFORE this became law is that participation in TARP prevents any court review even if the participation is not voluntary.

Yesterday, on the Glen Beck show, the ex-director of the St. Louis Federal Reserve admitted that forced confiscation of assets is the power exercised under TARP.

See for yourself.

The naiveté of the Mr. Poole is stunning. At the end of the segment he mentions that one of the 9 banks refusing to participate in the hostile takeover should take the matter to court. The courts will save the day.

Clearly, Mr. Poole has not read the TARP legislation and Section 119 in particular. Section 119 (a)(3) reads
  • No action or claims may be brought against the Secretary by any person that divests its assets with respect to its participation in a program under this Act, except as provided in paragraph (1), other than as expressly provided in a written contract with the Secretary.
The effect of section 119 is that anyone accepting or, more importantly, forced to exchange assets for money on such terms as the Secretary determines has no standing in court to bring suit. No Standing equals No judicial Review.

If a bank were to pursue Mr. Poole's recommendation and go to court here is what will happen:
  • In Federal district court, he Emperor of the Treasury will file a motion for summary dismissal based on section 119
  • Regardless of the ruling on the motion to dismiss, the bank will file a motion for injunctive relief to block the Emperor of the Treasury from confiscating the bank's assets or confiscating ownership in the bank. Section 119 also prevents such the district judge from issuing such an injunction.
  • Regardless of the ruling by the federal district judge on both motions (the motion to dismiss and the motion for injunctive relief), both rulings will be appealed to Federal circuit court
  • Regardless of the how the appellate judge rules on the two matters, again, both matters will be appealed to US Supreme Court
  • If the SCOTUS grants the writ of certiorari, then and only then will the matter finally be before a court not bound by the Congressional portion of the establishment clause in Article III section 1.
  • Even then the US Supreme Court may rule in favor of Power instead of Justice as the court did in both Kelo v New London and Gonzales V. Raich.
The American justice system(sic) has an uneven record of rendering Justice.

During all of this time, the bank will have its arm caught in the gear works of the American federal court system. Regardless of whether the injunctive relief is granted or denied (Treasury is denied the confiscation or not), the damage to the business interests of the bank while caught in the gear works will be substantial.

The proper expletive for the bank is TANJ


Anonymous george said...

Hi, it's George, we met at the Samsphere. I was checking out you profile and was thrilled to see that you like Philosophy: Who Needs It? How much of Rand have you read? Do you consider yourself an Objectivist?

My email is gsaad@uchicago.edu.

Sat Oct 18, 06:51:00 PM CDT  
Blogger Evan said...

Dear Mr. Washburn,

My name is Evan Hall and I am a student in the UW School of Journalism. Our class is gathering FOI data from every county in WI and each student is writing up a related story to open records, etc. to be posted on the Wisconsin FOI web site. I am writing about the role open government bloggers play in advocating for transparency, and I thought you were a perfect example! If I could take a little of your time to ask a few questions sometime in the next week at a time convenient for you, that would be wonderful. Thanks for your consideration!

Evan Hall

School of Journalism and Mass Communication
University of Wisconsin-Madison

Tue Oct 21, 08:47:00 AM CDT  
Blogger steveegg said...

John, could you e-mail me at norunnyeggs-at-norunnyeggs-dot-com? I've lost your e-mail address because of a computer change, and Kevin Binversie and Soren Dayton have a plan for election day.

Mon Oct 27, 09:43:00 PM CDT  

Post a Comment

<< Home