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Political games at the Capitol
House Minority Leader John Boehner surprised and angered the Bush administration with his announcement on Thursday that he would not be supporting the agonizingly negotiated bailout legislation. Treasury Secretary Henry Paulson even got down on one knee pleading with Nancy Pelosi about the legislation in late night discussions.
“It’s not me blowing this up,” she said to him. “It’s the Republicans.”
President Bush says despite the revolt, the legislation will happen.
Republican congressional staffers say that around 95 percent of calls they are receiving from constituents are against the bailout.
But Boehner’s pull out of the bailout isn’t necessarily his reaction to his constituents. The House Republican leader, in going against a Republican president, is working to score some political points. Not that there’s anything wrong with that!
Boehner has a lot to lose in the upcoming congressional election. His minority leadership is on the ropes if the Democrat majority expands significantly in the House, as The Hill writes in an article from a couple weeks ago:
September is key as he tries to minimize the damage headed for the GOP. … Over the last several weeks, he has thrown everything he can at Democrats and it is unlikely there will be any letup over the next two months.
Meanwhile, Sen. John McCain is looking for some political points, too. Not that there’s anything wrong with that!
If Congress had gone forward with the legislation agreed to yesterday, McCain would have no high ground to forgo the debate tonight. McCain needs the Republicans to stall the deal so he can be the broker, the peacemaker, and justify skipping the debate—which is still up in the air.
McCain is even now meeting with Boehner.
back to top28 Comments to “Political games at the Capitol”
We have all received tainted dollars from this bubble, at least indirectly. We all now have to send some good dollars after the bad in order to stop us all from losing many more dollars.
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I have been looking all over the web for a copy of the counter-proosal that McCain, Boehner and the “conservative” Republicans suddenly came up with. Does anybody know where it can be found?
My understanding is that it calls for lowering capital gains taxes and less financial regulation. If so, it is probably one of the more bizarre documents in political history.
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counter-proposal. It’s Random’s fault. One of his lines caused a small accident which affects my o’s and p’s.
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Meanwhile, Sen. John McCain is looking for some political points, too. Not that there’s anything wrong with that!
There is when you have purportedly suspended your campaign and your motto is “country first”.
McCain’s hysterical stunts and radical flip-flops are wearing a bit thin with folks in the middle.
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I have a better idea.
Forget the Wall Street bailout. Let ‘em sink or otherwise.
Take the $700,000,000,000 and divide it evenly among all American citizens of voting age. Then tax it to recover about 33% of it.
That would be wonderful for the economy.
And maybe a bunch of people would use some of their money for this.
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I learned from the Volokh yesterday that the Dem plan says things that appeal to people, but that they built in so much discretion into the thing that whoever is Secretary of Treasury doesn’t have to give anything back to the taxpayers.
NJ is still here now that Washington Mutual disappeared overnight, so I’m not so sure what to do.
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It’s not every bank either, is it? Just certain ones. If the other banks didn’t mess up, why should these guys be rewarded for doing so?
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The check they gave Boehner musta come back NSF?
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Maybe the funniest 5 minutes of political tv I have seen. The managing editor of faux news was asked if McC was coming to the debate. He was exasperated and said that McC would show up only if he could “fashion a political fig leaf” to cover up reneging on his earlier promise. No less than a minute later, faux announced that McC would show up.
The fig leaf won’t work. It’s waaay too transparent.
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No way should McCain be in charge of anything.
He can’t even run his campaign — or bother to show up to work for 6 months. He’s just like Bush.
Now it’s time for the debate, the dog ate his homework.
Let Sarah debate Obama. She’s ready to stand in, right?
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Here is one of the best articles I have read that explains why this economic crisis needs to be dealt with:
http://www.cantonrep.com/index.php?ID=433128&r=0&Category=9&subCategoryID=0
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It’s been a blue moon since I agreed with anything Frank in Spokane has written, but this is indeed a “mad rush to judgment”! The tail (Wall Street) is indeed wagging the dog (US government). We know what happened the last time there was a rush to judgment in Washington (Iraq). Just as surely as a poor person gets in deep with a “payday loan” company and can never get out, we (the American people) are gonna get in a deep hole that will take decades (if ever) to get out of. If this thing is rushed I guarantee down the road we’re gonna find out we were screwed royally and there will be nothing to do but pay up.
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#33 Arcadia
That’s true. It is my fault. Not only did I mess up Arcadia’s post, I caused the credit crisis.
Years ago, my wife and I were deep in credit card debt. We eventually paid the bills off. Now we pay our balance we owe to our credit union in full each month.
Without our financing, investment banks have collapsed. It’s turtles all the way down.
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Anyone read what Mike Huckabee had to say about this bailout? This whole nightmarish episode has given Mike the status of a prophet.
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Good post and link Frank.
“Call Them!”
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With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.
The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?
When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?
Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.
In liberty,
Ron Paul
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Frank: What do you think of the alternative proposal? It is summarized here:
http://www.politico.com/blogs/thecrypt/0908/As_deal_drifts_House_GOP_releases_alternative.html
Anlir: What do you propose we do? Would you tone down the bailout proposal, or what?
I know liberals won’t like parts of the Republicans’ alternative, such as the tax cut portions, or deregulation. But could there be a compromise? I really know little about economics. Does “a private insurance plan for mortgage-backed securities” conflict with a government bailout? In other words, can you do both at once?
The final three bullet points in the alternative proposal are as follows:
*Immediate Transparency, Oversight, and Market Reform. Require participating firms to disclose to Treasury the value of their mortgage assets on their books, the value of any private bids within the last year for such assets, and their last audit report.
* Wall Street Executives should not benefit from taxpayer funding. Call on the SEC to review the performance of the Credit Rating Agencies and their ability to accurately reflect the risks of these failed investment securities.
*Create a blue ribbon panel with representatives of Treasury, SEC, and the Fed to make recommendations to Congress for reforms of the financial sector by January 1, 2009.
What about these proposals?
I really prefer having Wall Street fund the recovery, rather than taxpayers.
Just trying to understand more.
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Matt Y.,
Before help is given I would like to see the following:
1. An honest/realistic assessment of the long-term prospect of the firms returning to financial stability, and paying back whatever financial help is given them.
2. In exchange for getting help, the US Government get’s a proportional stake in the company (stock) that can be sold later for a profit, giving us a return on the investment.
3. The US Government establishes an over-sight board to make sure our interests are protected.
4. A ban on excessive compensation until the firm has returned to profitability and started paying back the government.
5. A full and honest accounting before the American people and congress as to how their firm got into the mess.
6. The tightening of the financial regulations across the board.
Without those things in place, we’re gonna get ripped off.
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Thanks Anlir.
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Matt Y:
I prefer the “Austrian School” proponents’ (Lew Rockwell, Ron Paul, Peter Schiff, etc.) alternative:
• Repeal the Federal Reserve Act and abolish the Fed
• Return to an asset-based (i.e., backed by precious metals) currency
• Let the free market determine the value of the failed/failing institutions’ assets by private enterprises paying what they think they are worth. (And if nobody offers to buy them … tough darts.)
If you want to begin learning about economics, start reading and listening to what guys like Paul, Schiff and Rockwell have to say. Their stuff is all over the net, so my advice is: start Googlin’!
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I want to see a transparent market where these securities will be traded. No market exists today. This market will be set up by the Federal Reserve Board and all traders will pay a transaction fee to the Fed for each trade made. Since these financial instruments are all very complex and each one is different, they need to trade like derivatives and custom options do today which are also very complex and unique.
After the governmetn buys the CMB, it will be listed with its pertinent facts as to what it is, what is in it and its historical return to date as well as what the government paid for it. This will establish the ask price like any other security that is traded on the market today. Anyone in the private sector can see the listing and bid for the security but their bid price must be higher than what the government paid for it since that sets the floor, or bottom price.
This way the American taxpayer makes a fee on each trade like brokers do today, there is transparent market for these securities going forward and we are guaranteed to get more for them than what we paid for them. Plus as the market becomes liquid and has value, the government can sell this functioning market for another taxpayer profit.
This is how a capitalist business person would set this up. The US tax payer gets 3 levels of profit; a fee to trade, while building equity not only in the CMB’s themselves but in a new market they trade in. The government could also supply a guarantee to the initial non government CMB buyer if each security is backed up with commercial Credit Default Swaps. I would have the government do this too but this market and business already exists and we do not want the governmetn competing with private entities in any way since the government and American taxpayer will always lose.
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Matt, I’m with you about the Austrian School. It was quite interesting to see the non-answer to Ron Paul’s question asking where the Constitution give the Federal Government the power to take the actions the have already (let alone the porporsed bailout).
IMHO, the seeds of the current financial crisis lie in President Clinton’s decision to use Fannie Mae and Freddie Mac as tools for social engineering.
The elephant in the room that everyone seems to be ignoring is that Clinton’s mis-guided decision to allow, nay encourage, predatory lending to the poor and minorities (under the guise/facade of helping them) resulted not only in the rape of these less-fortunate and vulnerable Citizens but also the slow destruction of the American Financial system.
It sickens me to see the very people (like Obama) who fought to defeat McCain’s attempts to fix the problems with Fannie Mae and Freddie Mac now turn around an accuse HIM of being the cause of the problem.
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How can the Republicans be obstructing the deal, since the Democrats are the majority in both Senate and Congress? Seems they could pass the legislation without the Republicans support.
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Read the rest. (Schiff was Ron Paul’s economic advisor during his presidential run. He knows what’s going on.)
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Excellent post Llama.
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Have you seen Mike Huckabee’s e-mail to his supporters opposing the bailout?
Frankly, I’m disappointed and disgusted with my own Republican party as I watch them attempt to strong-arm a bailout of some of America’s biggest corporations by asking the taxpayers to suck up the staggering results of the hubris, greed, and arrogance of those who sought to make a quick buck by throwing the dice. They lost, but want the rest of us to cover their bets so they won’t be effected in their lavish lifestyles as they figure out how to spend their tens of millions and in some cases, hundreds of millions in bonuses and compensation which was their reward for not only sinking their companies, but basically doing the same to the entire American economy.
It’s especially disconcerting to see the very people who pilloried me during the Presidential campaign for being a “populist” and not “understanding Wall Street” to now line up like thirsty dogs at the Washington, D. C. water dish, otherwise known as Congress, and plead for help. I thought these guys were the smartest people in America! I thought that taxpayers like you and I were similar to the people at the U. N. who have no translator speaking into their headset – that we just needed to trust those that I called the power bunch in the “Wall Street to Washington axis of power.”
…
Attempts by Democrats and Republicans to blame each other is nonsense. They are both guilty and ought to own up and admit it. They all lived off big campaign contributions and the swill of the lobbyists who strong armed them into permission to steal. Enough of blame. Fix it!
It’s obvious why he never caught on with the country-club, business-oriented side of the Republican party. But that’s part of what I like about him.
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From Frank (#25):Sadly, Americans now appear willing to abandon their economic heritage at the first sting of financial pain.
Too true, but not so surprising. It’s the same thinking that wants to cut and run in the war. We love money and comfort above all things and oppose anything that looks like a reduction of either.
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