The propaganda campaign has begun in earnest. Actually, it started with McCain last week comparing the 2008 Financial Crisis to 9/11, when “everyone came together” as patriots. Or, anyway, as Patriot Acts. Later, someone said the coming disaster would be like Pearl Harbor if nothing were done.
Then there was a little bustling around, some Democrats complaining about how Bush was trying to shove The Bailout Bill down their throats, and McCain rushing in to save the day while tap-dancing for the cameras. Some Republicans balked, but it looked like typical politics, a little back-and-forth for TV cameras before everyone settled down and followed the script.
But then something strange happened. Once every decade or so, democracy delivers on its promises, and the politicians listen to constituents instead of lobbyists or other politicians. This time, some Democrats and Republicans remembered that they had a spine, though perhaps only because they were afraid of being punished on election day. Anyway, they stopped to think for a moment, and realized that The Big Bad Subprime Boogeyman was not going to pop out and say “Boo,” even if they didn’t immediately give Paulson a Big Stick.
Senator Judd Gregg, Republican of New Hampshire, said of the new plan, “If we don’t pass it, we shouldn’t be a Congress.”
(The New York Times)
Perhaps Bush will oblige them and just dissolve Congress, then declare martial law and start Paulsonizing all businesses. After the vote, it was like the devastation after the real Pearl Harbor: Suddenly the Democrats loved Bush, and it was the bad old “populist” Republicans who had revolted and staged a sneak attack on the well-intentioned rescuers.
House Speaker Nancy Pelosi looked ashen as she faced reporters this afternoon, the stock markets plunging on news that the House had defeated, 205-228, a $700 billion bailout of the U.S. financial system. . . .
The scene was the world of Washington turned upside down. As members gathered to vote, Democrats gave ovations to two Republicans, House minority leader John Boehner, R-Ohio, and Financial Services Committee ranking Republican Spencer Bachus, R-Ala. for their courage in supporting the bailout.
As the voting ran into overtime, liberal Democrats such as Dennis Kucinich of Ohio were joined by conservative Republicans shouting, “Regular order!” demanding that the vote be gaveled to a close. . . .
“Everybody was just sitting there in awe,” said Rep. Sam Farr, D-Monterey, who voted for the bill. Republicans “just walked away from their leaders and threw McCain under the bus. . . .”
Telephone calls from President Bush went unheeded. Bush is now poisonous on Capitol Hill. Both parties share profound outrage at the crisis on his watch. There is little faith that an administration that oversaw the events leading to the crisis can fix it now.
Like the boy who cried wolf, said Farr, “Bush just has no credibility. When he ran around saying the sky was falling, nobody believed it. Now we’re in a domestic crisis when the government needs credibility.”
Pelosi, a fierce opponent of the Iraq war, is convinced that the risk of assuming Bush has it wrong this time is too great.
She went on the floor to recall in the starkest terms the warning Federal Reserve chairman Ben Bernanke, whom she called “one of the foremost authorities on the Great Depression,” had delivered to her when he pleaded for the bailout, describing credit meltdown as a once-in-a-century event to drive home its peril.
(The San Francisco Chronicle)
Yeah, the Democrats are incapable of acting like an “opposition” party, since they have no actual principles. I loved it where one California Democrat said that the Republicans with integrity “just walked away from their leaders and threw McCain under the bus.” When will we see that kind of thing from the congressional Democrats?
I can’t say I always like Indiana’s congressional delegation, but Monday they did the right thing at least once.
Many lawmakers who voted “no” say they didn’t like being forced to vote so quickly. . . .
“What I would like to do is see us stay here, not go home, but stay here and solve this problem in a rational way right now, just throwing $700 billion at it is not going to solve the problem and I don’t think anybody else is sure,” Burton said.
House Republicans, like Indiana’s Mike Pence, begged the House to say no to the plan.
“Stand up for limited government and economic freedom,” Pence said. “Stand up for the American taxpayer, reject this bailout. . . .”
[Democrat Baron] Hill did end up voting against the bailout, along with Republicans Pence, Burton and Steve Buyer, and fellow Democrats Peter Visclosky and Andre Carson. Voting “yes” from Indiana were Republican Mark Souder and Democrats Brad Ellsworth and Joe Donnelly.
“It is now imperative that Congress come together and develop a response to the crisis facing our financial markets that reflects the American people’s belief in personal responsibility and fiscal discipline.” – Rep. Mike Pence, Republican.
“I have been rushed to judgment by the Bush Administration before. There hasn’t been enough time to evaluate the impacts this legislation would have if enacted, or to consider alternatives. Congress deserves time to weigh the benefits and the potential pitfalls of borrowing this money.” – Rep. Baron Hill, Democrat.
“We are now in the golden age of thieves. And where I come from we put thieves in jail, we don’t bail them out.” – Rep. Pete Visclosky, Democrat.
“I am bothered that Secretary Paulson offered an immediate government solution rather than taking the time to explore effective private sector and market based solutions. The Paulson plan was an unprecedented infusion of government power into the private financial sector.” – Rep. Steve Buyer, Republican.
. . .
“I believe this particular bill would be devastating to the economy and create an inflationary nightmare. We must also ensure that we are not inadvertently purchasing bad debt from China or other countries.” – Rep. Dan Burton, Republican.
“Ultimately this is about that worker in Vincennes who is wondering if his pension will be there in the future; the single mother in Greencastle who dreams of sending her children to college; or the small business owner in Boonville who is trying to meet payroll. These are the Americans that have everything to lose if Congress fails to act.” – Rep. Brad Ellsworth, Democrat, in a statement before the vote.(WTHR-TV; updated 5:30 p.m. ET, Mon., Sept. 29, 2008; Tom Walker/Eyewitness News)
Shock and awe ensued. Some crazy folks were off the reservation, and the Good People were scared. If congressmen started representing the will of the people, what could happen next? Dogs and cats living together? Fiery hail and frogs from the sky? No one could tell what might happen, but Chicken Little was having a heart attack.
From that point on, every newscast I heard had some incredibly shrill reporter, financial analyst, banker, congressman, or average citizen wailing and gnashing their teeth: “Oh, no, who will save us? Who will rescue us? Without credit, the New Economy will melt away, and we will all be living in the stone age, oh please please won’t somebody help us please please our credit cards are melting . . . they’re meeeltiiing . . .”
OK, here are my opinions on the Big Scary Financial Panic of 2008:
- Apparently, without “looser” credit, most businesses won’t be able to make payroll. What kind of business has to borrow money every week to make payroll? A failing business, I would say; a business that doesn’t deserve any credit, because they don’t have a reliable revenue stream, they don’t have any reserves, and they spend more than they earn.
Tough. I’ve had financial counseling twice. Both times, my counselor did not say, “Gee, if only the federal government would pass a law nullifying all your debts . . .” or “Gee, maybe you could borrow more money from the bank to pile up even more debt . . .” No, both times they said to me, “Gee, you need to start making more money!”
- Apparently, some people had just shifted most of their 401K assets into stocks with the expectation of getting rich this month and retiring next month. Now it seems that wasn’t very smart, and they might have to wait awhile before the stock market goes up again. Oh, the tragedy of having a lazy investment adviser!
Tough. Maybe you don’t understand the concepts of “short-term risk” and “long-term investing.” You know, you just might have to “work” for your money for awhile instead of relying on investment income.
- Apparently, some people bought houses they couldn’t afford, with the expectation that they would make lots more money later. Now, if they can’t get “looser” credit (that is, the no-questions-asked kind they got before), they have to continue spending a large percentage of their income on their existing mortgage, and maybe they will have to live a couple more years with the house they bought.
Tough. My house is valued at less than my annual income. It has negative equity, and it always will, until about a year before it falls apart. I don’t have sympathy for anyone whining about how they paid $400,000 for a house that is now worth $350,000, and they’re going to have to cut back on dog toys or cable TV, and maybe they will have to get by on only $6.00 a day for lunches. Start shopping at Aldi, turn off the TV, and try making a budget.
I am going to be quite explicit: The 2008 Bailout is morally wrong on every level. It has no excuse at all, and of all the whiners I have read and listened to in the last week, none have gained any sympathy from me. They are all big babies, and I don’t care if their net worth falls so low that it’s [gasp!!] only twice as high as mine. Believe me, they will learn to live with it.
Every politician who supports any plan resembling a bailout for banks or consumers deserves to suffer painful defeat at the hands of a dorky third-party candidate. Every banker who knowingly approved bad loans deserves to lose his precious bonus for the next couple of years and start learning how balance sheets work. Every businessman who relies on loans to make payroll every month needs to find out about “savings accounts” and “business plans,” or he deserves to fail big and start working in fast food under the thumb of a teenaged assistant manager. Every consumer who signed for a loan that they knew they couldn’t pay for, and still can’t pay for, might just have to suck it up and sell the Hummer, cancel ESPN, and start eating Ramen noodles for lunch.