Additional Titles









The Difference Between Wealth and Profit









PART 1 of 2


By Marilyn M. Barnewall
December 30, 2009

This year of 2009 ends and 2010 begins. How did America do this year? I always like to write a year-end review. Since this has been a particularly dismal year economically and since this will be my last article for a few months, the following words are my way of saying “if you know this, you’ll know what to expect in 2010.”

“How did we do?” can best be answered by a multimedia presentation from the American Observer titled The Geography of a Recession. It takes less than two minutes to watch. If you really want a factual overview of America as of November 2009, watch it.

No matter how many times he claims everything is George Bush’s fault, Barack Obama was President of the United States for all but a few days of 2009. The lack of economic recovery is his. It’s true that he inherited problems – just as Bush inherited a recession from Bill Clinton. I’m not a fan of the neo-conservative (liberal lite) Bush, but he did a far better job with a sagging economy than the present White House occupant.

It is apparent no one understands how impossible is the concept of using debt to get out of debt. And, in my opinion, much of what has happened constitutes fraud. Some call it treason.

At the very least, it appears to me the law was violated by the administrations of both George W. Bush and Barack Obama. Writers often talk about what Congress and other federal officials – like the FDIC and the Comptroller of the Currency – have or have not done, how they violated the law. No precise law is ever cited, however. As we end the year, I cite one. I’m confident there are others.

TITLE 12, CHAPTER 16, §1831o. Do a search for it under The Prompt Corrective Action Law (PCA). Cornell University’s law school has a good overview online, too.

Our current Secretary of the Treasury, Timothy Geithner, once said that he didn’t “have the power” to close down the big banks. Actually, both Geithner and former Treasury Secretary Henry (Hank) Paulson broke the law by not complying with Title 12, Chapter 16, §1831o.

Under 1831o (as in oh), it says:

“(3), Conservatorship, receivership or other action required

(A) In general

“The appropriate Federal banking agency shall, not later than 90 days after an insured depository institution becomes critically undercapitalized –

(i) appoint a receiver (or, with the concurrence of the Corporation, a conservator) for the institution; or,

(ii) take such other action as the agency determines, with the concurrence of the Corporation, would better achieve the purpose of this section, after documenting why the action would better achieve the purpose of this section.”

For nationally-chartered banks like Bank of America, Citibank, Chase Manhattan, Wells Fargo – the too big to jail guys that required TARP funds – the “appropriate federal banking agency” is the Comptroller of the Currency (which reports to Treasury). It is likely Treasury Secretary Geithner would respond to a question regarding his lack of attention to PCA by saying he chose alternative (ii). If so, that means he has, on file, dated within 90 days of the identified under-capitalization at BofA, Wells Fargo, Wachovia, etc., documented evidence why the action he and the FDIC and the Federal Reserve System took better achieved the purpose of this section of Title 12, Chapter 16, §1831o. In other words, under the law he had to document why a bailout better protected the American people from loss than bank closures. Such documentation would, however, have exposed a violation of the law.

Concern was raised about the lack of business experience among Obama’s Cabinet members when the appointments were made. Most of us were concerned about a Treasury Secretary who didn’t pay his own personal income taxes but was put in charge of making sure we paid ours. Maybe Congress thought it was playing a role in To Catch a Thief? Timothy Geithner is a poor little rich kid who has never been anything other than a bureaucrat – and not a very good one, at that.

In 2009, we had the Economic Stimulus Act of 2008 ($152 billion estimated) signed by Bush on February 13, 2008. We all got our $300 or $600 checks in the mail. We were supposed to spend money and stimulate the economy. The government still hasn’t figured out that an unemployed populace doesn’t support a consumer/credit-driven economy.


Then we had TARP – a $700 billion revolving line of credit to the Treasury Department. Remember that a revolving credit line may be paid down, but there is always credit available up to $700 billion limit. It’s like your credit card. You pay it down each month, but you can always take it back up to the limit. This was not a one time loan, as most Americans appear to believe. George Bush signed TARP October 3, 2008.

TARP funds ($85 billion) were used to buy American International Group (AIG) out of trouble and they, in turn, bailed out Goldman Sachs and various other Wall Street and international investment banks that believe capitalism means them taking illogical (and illegal) risks and taxpayers paying for any and all losses. It’s called “fraud.”

Then Obama took his Oath of Office (twice, to make sure he got it right at least once) and signed the American Recovery and Reinvestment Act of 2009 (AARA). A little over $750 billion in taxpayer debt was committed in February 2009. In March, Obama signed the Term Asset Lending Facility (TALF) created by the privately-owned Federal Reserve System and another $1 trillion debt was piled on the backs of American taxpayers.

There are other examples, but being a proponent of my own advice to not look at issues and to seek core problems, the above represent issues. What is the problem?

The problem is a lack of respect for the Rule of Law. A second core problem is the lack of respect and treasonous rejection of our Constitution. The Supremes can call it a “living document” all they want, but it doesn’t change the clearly stated, clearly defined limits placed on what government in America is permitted and not permitted to do. It is in black and white for anyone who can read.

One of the biggest concerns I have about Barack Obama and 2010 has to do with the advisors with whom he surrounds himself. His choices are a reflection of him – not just personally, but intellectually, morally and politically. The public may have elected the useful idiots that serve in Congress, but Obama chose his advisors.

I recently wrote an article quoting concerns expressed over Secretary of Transportation Ray LaHood’s lack of business experience. His lack of business acumen was more than evident in the non-business plan he published in 2009 about high-speed rail. A few days ago, Janet Napolitano of Homeland Security said on Sunday that regarding Flight 253, airport security systems worked.

It was such a stupid statement, she admitted on Monday the system didn’t work. A system doesn’t work when someone boards an airplane with the explosives – and sets the aircraft afire in an attempt to ignite them. I’ve mentioned the education czar in previous articles – the one who thinks young women might raise their self-images by becoming prostitutes.

This is what your tax dollars supports! Wake up!

Lawrence H. Summers, Obama’s chief economic advisor served as President of Harvard University until 2006. While there, Summers approved a decision to use swaps to pay for to the university’s expansion. A Bloomberg headline last week said: “Harvard Swaps Are So Toxic Even Summers Won’t Explain.” Harvard had to agree to pay banks a total of almost $1 billion to terminate them.

Prior to taking his Oath of Office in July 1999 as Secretary of the Treasury, Larry Summers was Under Secretary for International Affairs and Deputy Secretary of the Treasury. He served as Chief Economist of the World Bank from 1991 to 1993. Before coming to Washington, Summers taught Political Economy at Harvard.

His background is very impressive, but his actions suggest a total lack of common sense – and a lack of business expertise.

Though I never forget that Paul Volcker is a founding member of the Trilateral Commission (as is Alan Greenspan), at least he understands how to play chess. He thinks three moves ahead. He understands if he takes one action, other actions will follow. Does Obama listen to Volcker? No.

He listens to Larry Summers who just caused Harvard to pay almost $1 billion to get out of lousy investments approved by him while he was Harvard’s President.

Intelligence is not wisdom and does not suggest good judgment. Those who lack wisdom seldom realize this truth and almost always lack common sense. Perhaps they confuse “shrewd” or “educated” with “wise.”

Following are the names of people who advise the President about health care, taxation, bank regulations, unemployment, economic stimulation, and a myriad of other things that impact each of our lives, daily:

Attorney General Eric H. Holder Jr. Central Intelligence Agency Director Leon E. Panetta Chief of Staff Rahm Emanuel Director of National Economic Council Lawrence H. Summers Director of National Intelligence Dennis C. Blair Environmental Protection Agency Administrator Lisa P. Jackson National Security Adviser James L. Jones Office of Management and Budget Director Peter R. Orszag Secretary of Agriculture Tom Vilsack Secretary of Commerce Gary Locke Secretary of Defense Robert M. Gates Secretary of Education Arne Duncan Secretary of Energy Steven Chu Secretary of Health and Human Services Kathleen Sebelius Secretary of Homeland Security Janet Napolitano Secretary of Housing and Urban Development Shaun Donovan Secretary of Labor Hilda L. Solis Secretary of State Hillary Rodham Clinton Secretary of the Interior Ken Salazar Secretary of Transportation Ray LaHood Secretary of Treasury Timothy F. Geithner Secretary of Veterans Affairs Eric K. Shinseki United Nations Ambassador Susan E. Rice United States Trade Representative Ron Kirk White House Coordinator of Energy and Climate Policy Carol M. Browner White House Press Secretary Robert Gibbs

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As the French say, “C'est la vie.” That’s life. I don’t know how to say “That’s what we’re stuck with!” in French.

Here is a New Year prediction regarding the above-listed names. I went outside and stuck my finger in the air – easy to see which way the wind is blowing. The snow -- caused by global warming -- is falling in the direction the wind blows it. The wind whispered a 2010 secret: "Geithner is gone; Paul Volcker will return."

Dream on? Maybe. Maybe not. For part two click below.

Click here for part -----> 2,

� 2009 Marilyn M. Barnewall - All Rights Reserved

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Marilyn Barnewall received her graduate degree in Banking from the University of Colorado Graduate School of Business in 1978. She has authored seven non-fiction books about banking, two are listed at Oxford and Cambridge University libraries in Great Britain. Her current book, When the Swan’s Neck Breaks, details the banking problems she foresaw in 2006. Of the 24 predictions made in the book, 22 have happened. It is fiction but readers refer to it as docu-fiction.

Barnewall was named one of America's top 100 businesswomen in the book, What It Takes (Dolphin/Doubleday; Gardenswartz and Roe) and was one of the founders of the Committee of 200, the official organization of America's top 200 businesswomen. She can be found in Who's:Who in America (2005-08), Who's Who of American Women (2006-08), Who's Who in Finance and Business (2006-08), and Who's Who in the World (2008).

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Intelligence is not wisdom and does not suggest good judgment. Those who lack wisdom seldom realize this truth and almost always lack common sense. Perhaps they confuse “shrewd” or “educated” with “wise.”