Capitalism's Destruction Imminent

Redwarning was established to warn the American public of the coming wave of Socialist/Statist policies which were sure to come from the presidential election of 2008. I am not surprised with the speed and scope that Barak Hussein Obama has moved to place a stunning amount of the United States economy effectively under government control. I am surprised at how deluded the American public remains about Obama’s actual plans.

Barak Hussein Obama is a sociopathic narcissist who believes he was put in the White House to transform the nation. Transformation is not a modification; Obama is not content to be a good keeper of the nation. To transform the nation into his image, he must start with destroying the existing national order. The existing national order was republican form of government and a capitalist economy. Obama is methodically setting out to destroy the capitalist economy first. Can the over attacks on the republican form of government be far behind?

This past week, the Barak Hussein Obama has made it most dramatic grab for the control and destruction of capitalism. Barak Hussein Obama wishes to convert the preferred stock the Bush administration forced banks to issue in exchange for TARP funding for voting, controlling common shares. To kill capitalism, Obama must control the capital. To do this, he must control the banks. To control the banks, he must control the voting shares of the banks. To obtain the voting shares, he must trump up a reason to do so.

There is a reason by which the federal government may take control of a bank, namely, during a bank failure when the bank is insured by the FDIC or a similar program, and the government cannot find another health bank to buy or assume the failing bank. This is only in the case of an actual bank failure. Of course, in such an event where no merger partner can be found, the federal government undertakes to pay off the depositors and wind up the bank. At the end of the process, the federal government does not control and run a commercial bank.

What Obama is suggesting is different. The large, meaningful banks that have received TARP money are not failing. Many seek to repay TARP now to redeem the preferred shares and get the government out of the boardroom and back to a regulatory scheme.

Obama and Treasury Secretary Timmah! Geithner are afraid to lose control over the banks. Obama and Geithner have now invented a series of heretofore unknown and unpublished “stress tests” to determine, based on their own unpublished standards, whether banks are “sustainable” without a continued infusion of TARP money. The stress tests are a fiction designed to make the banks fail.

When the large commercial banks “fail” these stress tests, Obama and Geithner will declare that they need more capital, and will force the banks to take more TARP money in exchange for turning over control and ownership of the bank to the US Government through the conversion of the preferred stock to common voting stock.

I predict Bank of America and Citigroup will both be told that they are undercapitalized as a result of these “stress tests.”

Not even notorious Enron advisor and left wing economist Paul Krugman can see a benefit to the taxpayers of changing the preferred stock to common stock. In his April 20th blog post, Krugman writes “[C]onverting preferred into common does nothing: it’s just a swap among the junior stuff, with no impact further up the line. It’s certainly not a fresh infusion of capital in any meaningful sense. So who is supposed to be fooled by this?”

At least Krugman has the intellectual honestly to admit that there is no benefit the taxpayers or the banks to the conversion of the preferred stock. What the leftist Krugman takes pains in his blog to NOT point out, is that common stock is voting stock that permits the government to own and control – Socialize -- the banks.

Obama is on a long march to Socialist centralized control of the US economy. The banks and auto manufacturers are first. The medical industry is next, and no one is safe from the march of the reds in Washington. The Tea Party patriots better man up for a fight.