We come at it from different angles, but I completely agree that to the extent any bailout amounts to fat-cat socialism, it's a bad bad idea. I take issue with his challenge to the Democratic-controlled Congress to kill the thing -- from a practical standpoint, their majority is too slim to even manage a cloture vote in the Senate, never mind killing much or achieving any real reform. Their best hope is to shape a negotiated settlement. Also, I'm not sure the Republicans who are holding this thing hostage are doing so out of love of the Constitution -- but it may just work out that way. And I'd submit that there are many facets of American political life that have contributed to our country's prosperity -- from both sides of the aisle.
Here's his text (edited for profanity):
“This is about our way of life, our society, our economy. … This isn’t about Wall Street.”
- Rep. Mike Pence, Indiana
The Troubled Asset Relief Program would take taxpayer money (yes, this time it is taxpayer money) to buy bad mortgages and securities from financial institutions. This would provide much needed cash liquidity to the holders. The idea, then, is to turn this money around and sell it to other holders. Again, many knee-jerk reactionaries think that this is just pumping $700 billion in cash straight into the economy. It’s not. The government would be receiving money from the mortgages and once the financial system has stabilized, the government will resell the loans back to private institutions, some say at a profit.
It’s a ridiculously awful plan. I’ve already written my Congressman and Senators about this, urging them not to vote for any sort of bailout.
First and foremost, nobody actually has any idea how much is needed, and how much it’s going to cost. $500 billion in loans are already owned by Freddie/Fannie Mac, so $700 billion may be too much. Then, Pimco (a big Wall Street financial company) founder Bill Gross says that it may actually be $1.2 trillion. If the economy continues to get worse, the mortgage payments will continue to slow, and the taxpayers will definitely have to pay up, then. Also, it’s pure speculation whether the government will be able to resell the loans in the future. Sure, there can be a profit. There can also be a loss. If the only buyers are foreigners, we’re *really* screwed, then.
And Good Lord, there are so many Constitutionality issues with this plan, it’s ridiculous. The plan would also give all sorts of vague regulatory control to the Secretary of the Treasury. There’s no checks from the Legislative or Judicial branches at all. Moreover, it also eliminates many state regulations in favor of these new powers given to the Treasury Secretary.
Finally, the Market has a wonderful way of correcting itself if you just give it a tiny bit of time. Already, Bank of America has bought out Merrill Lynch, Barclays has bought out Lehman, and today, Chase has bought out Washington Mutual. The problem is fixing itself already, but nobody has any patience for anything anymore.
Ok. Enough with the practical and realism. Time to put on my idealogue hat.
This plan is definitely socialism. Socialism for the rich, to be precise. If you and I start a business, we run the risk of failing. I seriously doubt Congress would give us a cash infusion. It’s not the government’s job to rescue businesses.
In his national address, Bush warned of dire consequences if the bailout is not passed. I’ll gladly take those consequences in order to follow a political philosophy that has served this country well for the past 232 years. Wall Street’s mantra has been laissez-faire capitalism. You suddenly turn around and demand a government life preserver or else? Excuse me, but f&^% you.
Right now, Conservative Republican members of Congress are holding this plan hostage. I’m proud that Conservative Republicans have suddenly remembered that they’re Conservatives — that their fundamental political philosophy is based on things like personal responsibility, controlling spending, and Federalism. Malkin and Gingrich agree. Wall Street Republicans are none too happy with this. Good. What a bunch of hypocrites. If you only believe in limited government when it suits you, get out. The soul of Republicanism is not about maximizing profits. The soul is a political philosophy that has given birth to an economic approach that has made this country prosperous, not the other way around. I’m tired of watching hypocritical leaders perverse our core values. Forget Big Tentism. This party needs a serious philosophical purge and cleansing.Grow a spine, Democratic Congress, and kill the bailout. The way Bush has already pushed you around on Iraq is hilarious. Now he’s doing it again.