Congress and the Rattlesnake – Part 1
In response to the increasing wrath of the American voter, the U.S. House of Representatives came to its senses on Monday and voted 288 to 205 to kill the rash and ill-conceived proposed $700 billion bailout of Wall Street.
The so-called Emergency Economic Stabilization Act of 2008 was hastily worked out over last weekend. Better known as TARP – the Troubled Assets Relief Program, it was no bridge over troubled waters.
It was more like pulling the tarp over our eyes in a flawed and bitter partisan-plagued bill that struck a nerve with the American public.
The legislation died on its own merits. According to published reports, 13 of the “most endangered House incumbents” voted “No.”
However, in a strange moment that will be studied by political scientists for some time, House Speaker Nancy Pelosi (D., CA) addressed the House before the vote with a condescending, bitter, partisan speech that was sure to have pushed many troubled and undecided members over the edge against the bill:
“… (W)hen was the last time someone asked you for $700 billion? It is a number that is staggering, but tells us only the costs of the Bush Administration’s failed economic policies – policies built on budgetary recklessness, on an anything goes mentality, with no regulation, no supervision, and no discipline in the system.”
Not willing to let political scientists ponder that, her opening paragraph was perhaps an inadvertent mistake; she was determined to demonstrate that she has the skills, knowledge, and ability of an arrogant and childish city councilmember. So, to remove all doubts that she is unqualified for her position, she poured salt in the wound by closing with…( – I’m not making this up):
“Today, we will act to avert this crisis, but informed by our experience of the past eight years with the failed economic leadership that has left us less capable of meeting the challenges of the future. We choose a different path. In the new year, with a new Congress and a new president, we will break free with a failed past and take America in a New Direction to a better future.”
Writing for The Associated Press, Jim Kuhnhenn summed it up succinctly and accurately: “In the end, the financial markets did not stand a chance against voter antipathy, partisanship, and election-year politics.”
Ninety-five Democrats joined 133 Republicans to say NO and avoided the justifiable wrath of the voters, who were angered by the biggest government intervention into the marketplace since the Great Depression.
Published accounts report that less than 30 percent of Americans say they supported the 2008 corporate welfare act.
The defeat of TARP on Monday could not come a moment too soon as many felt that no bill was better than a bad bill.
Recently columnist Terry Paulson summed it up when he invoked a Ross Perot quote about the deficit, which I will paraphrase: The necessary government response to the current economic crisis reminds us of “the guy that finds a rattlesnake in his pants. He knows he's got to shoot it, but he doesn't want to hit anything important.”
Where do we go from here?
On Monday the Republican Study Committee released an “Economic Rescue Alternative Plan,” which is a thoughtful and pragmatic blueprint for future discussion. Briefly, the highlights address a workout – not a bailout, including ideas like:
Allowing “companies to carry-back losses arising in tax years ending in 2007, 2008, or 2009 back 5 years, generating a tax refund and immediate capital…
“Allow banks to treat losses on shares of preferred stock in Fannie Mae and Freddie Mac as ordinary losses, not as capital losses…
“A two-year suspension of the Capital Gains Tax…
“Transition Fannie and Freddie over a reasonable time period to truly private companies without special government privileges and open them up to real market competition…
“Suspend “Mark to Market” Accounting: Direct the SEC to suspend the mark-to-market regulatory rules until the agency can issue new guidelines that will allow firms to mark these assets to their true economic value.”
Hopefully history will record that the greatest underlying foundation for the widespread public disapproval for the Wall Street bailout is that an overwhelming percentage of Americans have lost all faith, trust, and confidence in the ability of the U.S. government to do anything with integrity and efficiency.
After all, the U.S. Congress already had an approval rating of 18 percent. It is not too difficult to imagine the measure of history’s reproach – unless the elite media re-writes history.
If the Democrats and the elite media were to have their way, they would have you believe that it was the capitalist free market, President George W. Bush and Arizona Sen. John McCain that caused this mess.
Which brings us back to Speaker Pelosi’s opening remarks on Monday, in which she opined: “Let us be clear: This is a crisis caused on Wall Street. But it is a crisis that reaches to Main Street in every city and town of the United States.”
Okay, let’s be clear and specific. Certainly greed played a role in the current crisis; however, the roots have been growing for 30 years and the seed was planted and fertilized by Congress.
This is where we will pick up the story in tomorrow’s installment of Congress’ Casino.
Kevin Dayhoff writes from Westminster: E-mail him at: email@example.com