Reprinted from a recent Washington Times Article and edited for length.The federal government announced this week that it has gone to court to stop Rainbow Acres Farm from selling its contraband to willing customers in the Washington area.

The product in question: unpasteurized milk.

It’s a battle that’s been going on behind the scenes for years, with natural foods advocates arguing that raw milk, as it’s also known, is healthier than the pasteurized product, while the Food and Drug Administration says raw milk can carry harmful bacteria such as salmonella, E. Coli and listeria.

“It is the FDA’s position that raw milk should never be consumed,” said Tamara N. Ward, spokeswoman for the FDA, whose investigators have been looking into Rainbow Acres for months, and who finally last week filed a 10-page complaint in federal court in Pennsylvania seeking an order to stop the farm from shipping across state lines any more raw milk or dairy products made from it.

The farm’s owner, Dan Allgyer, didn’t respond to a message seeking comment, but his customers in the District of Columbia and Maryland were furious at what they said was government overreach.

“I look at this as the FDA is in cahoots with the large milk producers,” said Karin Edgett, a D.C. resident who buys directly from Rainbow Acres. “I don’t want the FDA and my tax dollars to go to shut down a farm that hasn’t had any complaints against it. They’re producing good food, and the consumers are extremely happy with it.”

The FDA’s actions stand in contrast to other areas where the Obama administration has said it will take a hands-off approach to violations of the law, including the use of medical marijuana in states that have approved it, and illegal-immigrant students and youths, whom the administration said recently will not be targets of their enforcement efforts.

Raw-milk devotees say pasteurization, the process of heating food to kill harmful organisms, eliminates good bacteria as well, and changes the taste and health benefits of the milk. Many raw-milk drinkers say they feel much healthier after changing over to it, and insist they should have the freedom of choice regarding their food.

One defense group says there are as many as 10 million raw-milk consumers in the country. Sales are perfectly legal in 10 states but illegal in 11 states and the District, with the other states having varying restrictions on purchase or consumption.

Many food safety researchers say pasteurization, which became widespread in the 1920s and 1930s, dramatically reduced instances of milk-transmitted diseases such as typhoid fever and diphtheria. The Centers for Disease Control and Prevention says there is no health benefit from raw milk that cannot be obtained from pasteurized milk.

Acting on those conclusions, the FDA uses its regulatory powers over food safety to ban interstate sales of raw milk and has warned several farms to change their practices.

According to the complaint the FDA filed in court, the agency began to look into Mr. Allgyer’s farm in late 2009, when an investigator in their Baltimore office used aliases to sign up for a Yahoo user group for Rainbow Acres’ customers, and began to place orders under the assumed names for unpasteurized milk.

The orders were delivered to private residences in Maryland, where the investigator, whose name was not disclosed in the documents, would pick them up. By crossing state lines the milk became part of interstate commerce, thus subject to the FDA’s ban on interstate sales of raw milk. The court papers note that the jugs of milk were not labeled - another violation of FDA regulations.

Armed with that information, investigators visited the farm in February 2010, but Mr. Allgyer turned them away. They returned two months later with a warrant, U.S. marshals and a state police trooper, arriving at 5 a.m. for what Mr. Allgyer’s backers called a “raid,” but the FDA said was a lawful inspection.

The investigators said they saw coolers labeled with Maryland town names, and the coolers appeared to contain dairy products. The inspection led to an April 20, 2010, letter from FDA telling Mr. Allgyer to stop selling across state lines.

He instead formed a club and had customers sign an agreement stating they supported his operation, weren’t trying to entrap the owners, and that they would be shareholders in the farm’s produce, paying only for the farmer’s labor.

Customers hoped that would get around the FDA’s definition of “commerce,” putting the exchange outside of the federal government’s purview.

The FDA investigators continued to take shipments, though, and last week went to court to stop the operation.

Ms. Ward, the FDA spokeswoman, didn’t say exactly why they targeted Mr. Allgyer’s farm, but that violations generally are determined either by FDA investigations or by state-obtained evidence.

Pete Kennedy, president of the Farm-to-Consumer Legal Defense Fund, said undercover stings are not unheard of.

“It happens quite a bit. It’s almost like they treat raw milk as crack. It’s happened in a number of states, and at the federal level,” he said.

His organization has sued to try to halt FDA enforcement, and the case is pending in federal court in Iowa.

Mr. Allgyer’s customers declined to talk about the operations, and when asked whether they knew what would happen to the farm’s distribution, they said they would have to wait and see.

One of those customers, Liz Reitzig, president of the Maryland Independent Consumers and Farmers Association, said she started looking for raw milk when her oldest daughter began to show signs of not being able to tolerate pasteurized milk.

She first did what’s called cow sharing, which is when a group of people buy shares in owning a cow, and pay a farmer to board and milk the cow. But Maryland outlawed that practice and she was forced to look elsewhere for raw milk, and turned to Mr. Allgyer’s farm.

“We like the way they farm, we love their product, it’s super-high-quality, they’re wonderful. It’s just a wonderful arrangement,” she said.

“FDA really has no idea what they’re talking about when they’re talking about fresh milk. They have no concept - they really don’t understand what it’s like for people like me who have friends and family who can’t drink conventional milk,” Ms. Reitzig said.

Bloggers note: On a personal note, I still remember going to my aunt's farm and milking my first cow at age 9. What an interesting experience as the cow turned to look at me throughout the process. I was trying to gently milk the cow and then I marveled at the frothy milk!

Then I remember drinking it and it was the most tasty milk ever, warm and frothy!

What the heck was pasteurization????

The locals came to the farm to buy the milk every day and put it into their own containers they brought with them. Nobody ever got sick...we were not woosies back then, I guess.

This is just a perfect example of government run amock....constant fighting with the people, trying to justify their needless existence spending needless taxpayer dollars to harass people working for a living.


Exxon-Mobil earned nearly $11 billion in the first quarter. So why are we not celebrating this lofty accomplishment?

The world's largest publicly traded company said Thursday that higher oil prices boosted profits 69 percent from a year ago. The result was Exxon's best since earning a record $14.83 billion in 2008's third quarter.

This is only 2 cents per gallon...the government collected about the same amount in taxes from Exxon!

Wall Street had been expecting sharply higher earnings for oil companies. Oil prices rose 17 percent in the quarter. President Obama wants to cut into some of those earnings by eliminating $4 billion in taxpayer subsidies for oil companies. Come on Mr. Obama, are you so financially illiterate so as to not understand the capitalist system...they paid $11 billion in taxes!!!!! This quarter!

Exxon is taking steps to dilute any potential furor over the results. On a company blog Wednesday, the company said that it has little control over the price of oil, which is now near $113 per barrel. It also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.

Gas is already above $4 in 8 states and the District of Columbia. And on Thursday, the Commerce Department said economic growth slowed sharply in the first quarter, partly because of high gas prices.

On the blog, Ken Cohen, Exxon Mobil Corp.'s vice president of public and government affairs, said the company was anticipating "the inevitable headlines and sound bites about high gasoline prices and what to do about them" after the earnings were reported. In addition to the routine post-earnings conference call with analysts, Exxon is making Cohen available this afternoon for a separate call with members of the media.

Exxon's results followed strong profit gains by other oil companies.

Europe's largest oil company, Royal Dutch Shell PLC, reported $8.78 billion in first-quarter profits, up 60 percent from a year ago. BP PLC's quarterly earnings rose 16 percent to $7.2 billion. ConocoPhillips said net income grew 43 percent to $3 billion and Occidental Petroleum Corp. said earnings climbed 46 percent to $1.55 billion.

Chevron Corp., the second-biggest U.S. oil company, is expected Friday to report a 25 percent increase to $5.69 billion.

Argus Research analyst Phil Weiss said oil companies will struggle to win over people as long as they're making billions of dollars every quarter, even though he thinks the industry makes a reasonable argument.

"They really don't have a lot of control" over the price of gasoline, Weiss said. "But then they get these high profits and people get upset. That's what politicians respond to."

Exxon reported net income of $10.65 billion, or $2.14 per share, for the first three months of the year. That compares with $6.3 billion, or 1.33 per share a year ago. Revenue increased 26 percent to $114 billion.

The results beat Wall Street estimates of $2.04 per share on sales of $112.6 billion, according to FactSet. Shares fell for Exxon and other oil companies, however, on expectations for a continued drop in U.S. gasoline demand. On Wednesday, the Department of Energy said demand for gasoline over the past four weeks was 1.6 percent lower than a year earlier.

Exxon shares lost 44 cents to $87.34 in morning trading.

Exxon increased earnings even though it produced less oil and natural gas liquids. Benchmark crude prices rose 20 percent from a year ago.

The company has increasingly focused on producing natural gas. Exxon expects natural gas to displace coal as the second most important fuel source within the next decade. Last year it acquired XTO Energy to become the largest U.S. natural gas producer.

Exxon's natural gas output rose 24 percent in the quarter, but prices declined as other companies followed its lead and rushed to develop underground shale gas deposits in North America. Natural gas prices fell nearly 16 percent from a year ago.

Earnings grew across the company's business segments. Income from its exploration and production business gained 49 percent to $8.7 billion while the company's downstream business, which includes refineries, posted a huge 30-fold jump to more than $1.1 billion.

Are to to expect that these companies, which are the most efficient generators of the energy that drives the entire world are to make no profits?

They pay the same amount to the government which does absolutely nothing to earn it, so is that supposed to be unfair?

The policies of the administration are the cause of the high prices...we have oil, we have gas and we need to DRILL, BABY DRILL!!!!!


Sometimes a photo is worth a thousand the saying goes. So, judging by the photo of lightning striking the White House on the Easter/Passover holiday may be very telling.

It seems that based on the national catastrophe that is the current administration, it appears to be a fitting sign.

Every detail of the economy, energy prices, political discourse, international policy, and the mood of the population is in a sorry state.

Interesting to note indeed!


Prices That Will Rise Along With Your Gas

You can start thinking of why the Hope and Change leader should or should not be re-elected, and I thought of the moronic agenda of not using the oil and gas resources of the USA which could actually be self sustaining in OIL energy if we tapped in and used all including the tar sands, etc...we are number one on the reserves. We have in shale, tar sands and under ground oil and offshore oil, more that Saudi Arabia. We could see $1.99 gasoline just after announcing plans to drill.


I also thought about how it seemed prior to the election of President B.O., the TV movies always seemed to show a "black" president, so we were all prepared and ready to have a great thinking and bright aggressive problem solving ( always avoided the disaster in those movies or solved world problems)black president....also the feeling was that "it was about time".

We do not expect or desire the end of cheap gas, cheap goods and low taxes....I guess nobody really asked what change he had in mind...but that will be for the 2012 election...I I could cast that early NO B.O. vote in an early voting polling station I am ready already!

I just spent $105 to fill up my tank. I watched a big truck rumble past filled with food pallets destined for Trader Joe's, and I started thinking about all the other things whose prices will go up in step with the $4.49-a-gallon gas.

Transportation costs may not have immediate effects on the prices of other goods, but as they start to build up and the trucking companies' hedges expire, everything gets more expensive.

Here are some prices that are sure to rise along with the price of gas as thousands of products contain petroleum ranging from lipstick clothing: here are some that you will feel a lot more immediately:

Air travel is, of course, number one. Expecting an unusual number of trips to conferences this summer, and watching the price of a barrel of oil tick higher and higher, I snapped up tickets as soon as I had the cash on hand rather than waiting until the almost-last-minute (my usual m.o. is to wait for fare sales).

I needn't have rushed; the last few price increase attempts by airlines haven't yet been "sticky" -- a few airlines will test the water with a $4 or $8 or $10 increase, waiting to see if other airlines on that route match the price before letting it fall back to its former level. But prices have been up between 6% and 17% all year compared to the same time in 2009, and the continued test increases say that airlines will keep pushing the fare envelope.

Fast food. Want burgers and fries? If you're a regular visitor to one of America's finest purveyors of cheap fattening food -- say, a few times a week -- you could end up spending just as much, if not more, at McDonald's and Wendy's than you do for gas. Price increases haven't been announced yet, but it's safe to say that $0.20 or $0.30 more on your favorite menu items isn't out of the question. Depending on your orders and frequency, this could add up to a few hundred dollars a year.

Bananas and potatoes and tomatoes, oh my. Rising produce prices have been a problem almost all year, and bad weather in Mexico is still depressing prices. Canadians saw an especially nasty increase in the price of fruits and vegetables in March, 3.3% sequentially; year-over-year, average nationwide prices for fresh produce were up 9.8% in March. You'll continue to see especially high prices on tropical fruits and those vegetables that are out of season in your neighborhood (think tomatoes and strawberries for most of the U.S.). Reports from farmers in Portland, Ore., have me worried that the wet weather is going to mean scary prices for fresh peas and lettuce when they start appearing in the market next month.

Stamps for postcards and packages. You know who uses a lot of gas? The people in the business of delivering letters and packages to your door -- the ones you're ordering online so you don't have to spend money for gas. Well, there's no such thing as free transportation (unless you're a bicyclist or pedestrian, I suppose), and the USPS and its private competitors are going to have to pay more for trucking packages and mail across the great U.S. of A. While regular first-class mail stamps will stay at 44 cents each, postcards will go up a penny; larger envelopes and packages will cost more per ounce, as will mail to some international destinations.

Beef and bacon. We've already seen indications that bacon prices will skyrocket this year; the raw ingredient for bacon, lean pork bellies, is up 50% so far this year. Beef prices are the impetus for Wendy's to raise prices -- they use fresh beef and can't hedge costs quite as easily at McDonald's by stocking up. Even if we don't see any other price pressures this year, the USDA predicts consumers will see 6.5% to 7.5% increase in the price of their meat.

Coffee. From Starbucks to Maxwell House, coffee prices are up as much as 56% since last year. My favorite coffee-and-pizza shop is now a pizza shop alone, thanks to rising coffee prices. The culprit is the skyrocketing price of green arabica beans, the building block of any good coffee. Unseasonable rains and frosts in Mexico and other tropical locales are the culprit; they send the harvest quantities downward and are creating such havoc in the markets that some coffee growers are hoarding beans, hoping for a huge payday to make up for the depressed yields.

Orange juice. Another victim of that unseasonable freeze in tropical areas -- this time, Florida -- Tropicana is raising prices on its orange juice. Prices are expected to go up from 4% to 8%, says Pepsi, its corporate parent. Last year, the company didn't raise prices exactly, but it did downsize its packaging. One of its popular sizes went from 64 ounces to 59 ounces. Next year, will we see 55-ouncers, I wonder? How low can you go?

Chocolate. So, we've got Middle East tensions...two years of bad weather in Florida and Mexico...rising transportation costs...and dwindling supplies of pork bellies. What else could go wrong? In the Ivory Coast, political turmoil has caused cocoa bean costs to go way up. Sugar is more expensive, too; that's what caused Hershey to raise wholesale prices for its chocolate by as much as 9.7%. I don't watch prices of this sort of chocolate closely enough to know how that's impacted Easter candy -- some chocolatiers are absorbing the costs for now, it seems -- but I think I'm going to stock up on my own favorite brand.

That is just the start...everything will cost more as you will be amazed how the world economy is driven by fossil fuels.

We got them, they are here for our use, let's use them. DRILL BABY DRILL.


Prices are quoted in US dollars per gallon for regular unleaded as of March 2011

Oslo, Norway $6.82

Hong Kong$6.25

Brussels, Belgium $6.16

London, UK $5.96

Rome, Italy $5.80
CANADA $5.36

Tokyo, Japan $5.25

Sao Paul o , Brazil $4.42

New Delhi, India $3.71

Sidney, Australia $3.42

Johannesburg , South Africa $3.39

Mexico City$2.22

Buenos Aires, Argentina $2.09

Riyadh, Saudi Arabia $0.09

Kuwait $0.08

Caracas, Venezuela $0.12

Gee, if only the U.S. was an oil producing nation.....

Hey, wait a minute!!! we are,what the hell happened!!


FALSE JOB NUMBERS lead to real trouble !!!


Deception is a dangerous thing. You never really know when a lie may turn on you.

Take, for instance, the Labor Department's annual springtime boost in the faux jobs market. While it's nice that the government thinks there is an employment boom coming, this won't be a good development if that boom turns out to be imaginary yet still causes the Federal Reserve to prematurely tighten credit conditions.

Let's start from the beginning.

Early this month Labor reported that 216,000 new jobs were created in March. It was better than Wall Street expected.

But the figure included 117,000 jobs that the department thinks, but can't prove, were created by newly formed companies that might not even exist. In fact, the department is getting so optimistic about the labor market that it increased this imaginary job count from just 81,000 in March, 2010.

As I've been telling you for months, the spring always causes the Labor Department to goose its job-creation numbers. And maybe sometime in the future this process will be warranted. But during 2009 and 2010 these springtime assumptions -- which are officially called the Birth/Death Model by Labor -- led to major errors in the annual job count.

The next three months should be doozies. In April 2010, the Labor Department guessed that 188,000 jobs were created by these newly formed, maybe nonexistent companies; last May's total job number was jacked up by a 215,000 guess, and June got an artificial boost of 147,000 jobs.

This year, Labor will likely be inserting even bigger faux job totals for each of those three months.

In other words, you still might not be able to get a job in the real world, but there should be plenty of fake jobs for the newspapers to write about and the politicians to brag about in speeches. Why should you care?

If you are just a regular person reading this column you should be appalled that Washington has trouble getting its numbers right. But wait, there's more.

Interest rates have already been rising because (and I don't need to tell you this) inflation is a problem. Mortgage rates, for instance, have moved three-quarters of a percentage point higher over the past six months. And that's without the Federal Reserve purposely tightening credit conditions.

The next three months' job figures -- if they are as strong as I think they will be -- could give the Fed a compelling reason to, at the very least, end the money-printing operation it calls Quantitative Easing. And it may even have to start talking about raising interest rates.

That won't be good news for either bonds or stocks, the latter of which have been on a truly unbelievable ride upward. Remember the first investment advice you received (probably from your mom or dad): if it's too good to be true, be suspicious.

It's gonna get exciting especially when you see what happens by summer. (But that's for a future column.)

Is the federal government like one of those hoarders you see on TV?

It buys into projects and programs (resulting in a clutter of $12 trillion in debt) but is pained when it needs to get rid of just $39 billion of those programs.

The government is a mess -- just like the homes you see on TV. And the picture isn't going to get any prettier when someone, at some time, tries to get the government's house in order.

Home sales are still plunging, and prices are going down, down, down.

Well, maybe it's time to listen to John (that would be me). Change the rules on retirement plans so the American people can rescue the ailing real estate industry, which, by the way, will take a decade to fix if left on its own.

Let people withdraw a relatively small percentage of the $15 trillion in retirement funds to purchase real estate. Give them a tax break -- maybe even a big one.

And smack Wall Street down when it voices the inevitable opposition to this plan. (Remember, the money I'm proposing to be used for this idea is now in retirement plans mainly invested in Wall Street products.)

Maybe it is time for a plan that's reasonable and doesn't risk bankrupting the nation or ruining our currency.

Ya know, I'm just thinking out loud.

How hilarious is it that Mayor Bloomberg thinks last year's census wildly under-counted the number of people who live in New York!

I spent column after column last Fall report ing how ridiculously badly the census was being handled through out the country. Census workers wrote in from all over to tell me how crazy the operation was. People taking the tally in New York said it was the most disorganized operation they had ever seen.

So, why would a miscount surprise the mayor?

But he's asking that things be corrected now! Why didn't he speak up when the census was still being done? Sorry, Mr. Bloomberg, you snooze, you lose federal funds.


March Madness: U.S. Gov't Spent More Than Eight Times Its Monthly Revenue

By Terence P. Jeffrey

The U.S. Treasury has released a final statement for the month of March that demonstrates that financial madness has gripped the federal government.

During the month, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds (including $62.011 to individuals and $3.887 to businesses) thus netting $128.179 billion in tax revenue for March.

At the same, the Treasury paid out a total of $1.1187 trillion. When the $65.898 billion in tax refunds is deducted from that, the Treasury paid a net of $1.0528 trillion in federal expenses for March.

That $1.0528 trillion in spending for March equaled 8.2 times the $128.179 in net federal tax revenue for the month.

The lion’s share of this federal spending went to redeem Treasury securities that had matured during the month—most of which were short-term Treasury bills that have terms of one-year or less.

In fact, during March the Treasury redeemed $705.3 billion in Treasury securities of which $623.9 billion were short-term bills with a term of one year or less.

After the disbursements made to pay off the $705.3 billion in loans that came due in March, three of the other top four federal spending items for the month were entitlements programs. The other top item was payments to defense contractors.

The Treasury paid $49.8 billion in Social Security benefits in March, $47.4 billion in Medicare benefits, and $22.575 billion in Medicaid benefits. It also paid $37.9 billion to defense contractors.

To help pay off its $1.0528 trillion in monthly bills on only $128.179 in monthly tax revenue, the Treasury turned primarily to new borrowing. During the month, according to the Treasury statement, the government sold $786.5 billion in new securities. It also drew down its cash balance from $190.6 billion at the beginning of the month to $118.1 billion at the end of the month. It also reaped $18 billion from the sale of assets in the Troubled Asset Relief Program.

The federal government’s cash-flow situation was summed up pungently in Senate Budget Committee testimony by Erskine Bowles, who served as chief of staff to President Bill Clinton and is now the co-chair of President Barack Obama’s National Commission on Fiscal Responsibility. IS THIS A CRAZY NAME FOR THIS COMMISSION?

“I'm really concerned,” Bowles told the committee last month. “I think we face the most predictable economic crisis in history. A lot of us sitting in this room didn't see this last crisis as it came upon us. But this one is really easy to see. The fiscal path we are on today is simply not sustainable.

“This debt and these deficits that we are incurring on an annual basis are like a cancer and they are truly going to destroy this country from within unless we have the common sense to do something about it,” said Bowles.

“I used to say that I got into this thing for my grandchildren,” Bowles said. “I have eight grandchildren under five years old. I'll have one more in a week. And my life is wonderful and it is wild. But this problem is going to happen long before my grandchildren grow up.

“This problem is going to happen, like the former chairman of the Fed said, or the Moody's said, this is a problem we're going to have to face up,” he said. “It may be two years, you know, maybe a little less, maybe a little more. But if our bankers over there in Asia begin to believe that we're not going to be solid on our debt, that we're not going to be able to meet our obligations, just stop and think for a minute what happens if they just stop buying our debt.

“What happens to interest rates?” asked Bowles. “And what happens to the U.S. economy? The markets will absolutely devastate us if we don't step up to this problem. The problem is real, the solutions are painful, and we have to act.”



Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
By Bradley Keoun and Craig Torres

U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.

Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.

The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.

“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.

Separate data disclosed in December on temporary emergency- lending programs set up by the Fed also showed big foreign banks as borrowers. Six European banks were among the top 11 companies that sold the most debt overall -- a combined $274.1 billion -- to the Commercial Paper Funding Facility.
Bank of America

Those programs also loaned tens of billions of dollars to each of the biggest U.S. banks, including JPMorgan Chase & Co. (JPM), Bank of America Corp., Citigroup Inc. and Morgan Stanley.

The discount window, which began lending in 1914, is the Fed’s primary program for providing cash to banks to help them avert a liquidity squeeze. In an April 2009 speech, Bernanke said that revealing the names of discount-window borrowers “might lead market participants to infer weakness.”

The Fed released the documents after court orders upheld FOIA requests filed by Bloomberg LP, the parent company of Bloomberg News, and News Corp.’s Fox News Network LLC. In all, the Fed was ordered to release more than 29,000 pages of documents, covering the discount window and several Fed emergency-lending programs established during the crisis from August 2007 to March 2010.
Public Outrage

“The American people are going to be outraged when they understand what has been going on,” U.S. Representative Ron Paul, a Texas Republican who is chairman of the House subcommittee that oversees the Fed, said in a Bloomberg Television interview.

“What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?” said Paul, who has advocated abolishing the Fed. “We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes.”

The Monetary Control Act of 1980 says that a U.S. branch or agency of a foreign bank that maintains reserves at a Fed bank may receive discount window credit.

David Skidmore, a Fed spokesman, declined to comment.

Wachovia Corp. was the only U.S. bank among the top five discount-window borrowers as the crisis peaked.

The Charlotte, North Carolina-based bank borrowed $29 billion from the discount window on Oct. 6, in the week after it nearly collapsed, the data show. Wachovia agreed in principle to sell itself to Citigroup Inc. on Sept. 29, before announcing a definitive agreement to sell itself to Wells Fargo & Co. (WFC) on Oct. 3. The Wells Fargo deal closed at the end of 2008.

Wells Fargo spokeswoman Mary Eshet declined to comment on Wachovia’s discount-window borrowing.
Bank of Scotland

Bank of Scotland Plc, which had $11 billion outstanding from the discount window on Oct. 29, 2008, was a unit of Edinburgh-based HBOS Plc, which announced its takeover by London-based Lloyds TSB Group Plc in September 2008.

The borrowings in 2008 didn’t involve Lloyds, which hadn’t completed its acquisition of HBOS at the time, said Sara Evans, a spokeswoman for the company, which is now called Lloyds Banking Group Plc. (LLOY)

“This is historic usage and on each occasion the borrowing was repaid at maturity,” Evans said. “The discount window has not been accessed by the group since.”

Other foreign discount-window borrowers on Oct. 29, 2008, included Societe Generale (GLE) SA, France’s second-biggest bank; and Norinchukin Bank, which finances and provides services to Japanese agricultural, fishing and forestry cooperatives. Paris- based Societe Generale borrowed $5 billion that day, and Tokyo- based Norinchukin borrowed $6 billion.

Bank of China

“We used it in concert with Japanese and U.S. authorities in the purpose of contributing to the stabilization of the market,” said Fumiaki Tanaka, a spokesman at Norinchukin.

Bank of China, the country’s oldest bank, was the second- largest borrower from the Fed’s discount window during a nine- day period in August 2007 as subprime-mortgage defaults first roiled broader markets. The Chinese bank’s New York branch borrowed $198 million on Aug. 17 of that month, while two Deutsche Bank AG divisions borrowed $1 billion each, according to a document released yesterday.

Arab Banking Corp., then 29 percent-owned by the Libyan central bank, used its New York branch to borrow at least $1.1 billion from the discount window in October 2008.

The foreign banks took advantage of Fed lending programs even as their host countries moved to prop them up or orchestrate takeovers.

Dexia received billions of euros in capital and funding guarantees from France, Belgium and Luxembourg during the credit crunch.

Dexia’s outstanding balance at the Fed has been reduced to zero, Ulrike Pommee, a spokeswoman for the company, said in an e-mail.

“This information is backward-looking,” she said. “We experienced a great deal of tension concerning the liquidity of the dollar at the time of the crisis. The Fed played its role as central banker, providing liquidity to banks that needed it.”

Depfa was taken over in October 2007 by Hypo Real Estate Holding AG, which in turn was seized by the German government in 2009. Oliver Gruss, a spokesman for Depfa’s parent company, didn’t respond to requests for comment.

Many foreign banks own large pools of dollar assets --bonds, securities and loans -- funded by short-term borrowings in money markets. The system works when markets are calm, said Dino Kos, former executive vice president at the New York Fed in charge of open-market operations. In times of stress, banks can be subject to sudden liquidity squeezes, he said.
‘Playing With Fire’

“They are playing with fire,” said Kos, a managing director at Hamiltonian Associates Ltd. in New York, an economic research firm. “When the market dries up, and they can’t roll over their funding -- bingo, you have a liquidity crisis.”

The potential for dollar shortages remains. As the Greek fiscal crisis roiled financial markets last year, the Fed had to open swap lines with the European Central Bank, the Swiss National Bank, the Bank of England and two other central banks to make more dollars available around the world. That move was partially the result of U.S. money market funds shrinking their exposure to European bank commercial paper.


Recent statistics report that of us in America work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined. EMPHASIS ADDED COMBINED!!!!!!!

America now has nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of 1960, when there were 15 million employees in manufacturing and 8.7 million working for the government.

More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined!!! We have moved from a nation of makers to a nation of takers ( just like Carl marx and the Communist manifesto plans.

Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

Every state in America today except for Indiana and Wisconsin has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. California now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida's ratio is more than 3 to 1. So is New York's.

AND THEY ALL WANT TO JOIN UNIONS AND FORCE THEIR BENEFITS ON THE REST OF THE POPULATION. ( Have you ever been waiting for some type, any type, of service in a government office???? Do we really need these people????)

Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things. The leaders in government hiring are Wyoming and New Mexico, which have hired more than six government workers for every manufacturing worker.

There are at least five times more government workers than farmers in Iowa for instance. West Virginia is the mining capital of the world, yet it has at least three times more government workers than miners. New York is the financial capital of the world—at least for now. That sector employs roughly 670,000 New Yorkers. That's less than half of the state's 1.48 million government employees.

Do not expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.

The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn't pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.

In Illinois for instance less than 40% of new teachers taking standard tests pass them the first time!!!! In some subjects it becomes a dismal 28%!!!!!

The same is true of almost all other government services. Mass transit spends more and more every year and yet a much smaller share of Americans use trains and buses today than in past decades. One way that private companies spur productivity is by firing under-performing employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we've gotten.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.

President Obama says we have to retool our economy to "win the future." The only way to do that is to grow the economy that makes things, not the sector that takes things.

Learn something Mr. POTUS.