Rescued from the Bailout of Mass Destruction
Politicians and highranking government officials like to keep us in line by reminding us that they know more than we do. We heard it three years ago from congressmen who told us to trust George Bush’s judgement on weapons of mass destruction because “he has all of the facts, and we don’t.” And a few days ago we heard it all over again, except this time it was about the socalled financial crisis on Wall Street. We were all expected to just go along with the $700-billion bailout, and not ask any questions. After all, the heads of the Treasury, Federal Reserve and the SEC are the smartest men in the room. Otherwise, why would our knowledgeable president have appointed them? Sorry, but to quote Yogi Berra, this is dÃ©jÃ vu all over again. Just as with the fictional WMDs in Iraq, we are now told to trust the intelligence collected regarding the need for an emergency bailout. We are supposed to believe Bush, who believes Henry Paulson, Ben Bernanke and Chris Cox when they told him that the cow pies were about to hit the fan, and that a massive infusion of taxpayer money into the coffers of Wall Street was needed immediately. To stay with the Iraq analogy, the bailout plan as proposed originally would have been an invasion into our money with no exit strategy in sight. After 18 terrorists from Saudi Arabia attacked the United States on 9-11, Bush countered by attacking Iraq, which had nothing to do with the crimes. With the Emergency Economic Stabilization Act (EESA), Bush ordered a similarly misguided action. As BB&T’s John Allison reminded us, not all banks have been behaving badly, and those who have don’t deserve to be bailed out by taxpayers. But instead of putting these corporate whores in jail, Bush and company wanted to keep them afloat, with hope that they’d change their stripes.
Many naive congressmen jumped on the Bush bandwagon, assuring us that the bailout was prudent. What a joke. First of all, there was a provision in the EESA that if monies weren’t recouped after five years, then those who accepted the funds will have to repay them. Are you kidding me? Those guys would declare bankruptcy and head for the Caymans long before the five years were up if they even started to smell trouble. Second, we were told that there would be a curb on exorbitant CEO salaries. Not true. If you read the fine print of the bailout plan, it would not have prevented any company that receives government help from paying CEOs millions of dollars. It simply stated that any compensation exceeding $500,000 cannot be deducted by the corporation. And so the same robber barons who caused this mess can take taxpayer money and still manage to get richer and richer with everything from bonuses to deferred stock options. Third, we were told to rest easy because the bailout will be administered by Paulson and an independent oversight committee. But that committee would be led by Ben Bernanke and Chris Cox. And so Moe, Larry, and Curly — who allowed this mess to happen in the first place — would have been in charge of making sure that our money is spent wisely. At first, I held out hope that a few congressmen were going to derail this idiotic plan, but within a few days, most of them seemed to cave in the same as they did on the invasion of Iraq. Why? Because the election is one month away, and neither party wanted to risk taking the blame for a bad situation getting worse on their watch. Fortunately, a majority of congressional representative (including Rep. Virginia Foxx of North Carolina) stood up to Bush and killed the EESA. But I am still disturbed by those lockstep congressmen who tried to pass the bailout as first proposed. They suffer short-term memory loss. They should have learned not to trust the Bush administration after 9-11. They should have asked Paulson why he wanted to pay more than market value for toxic securities, and how he arrived at the $700billion figure. If nothing else, they should have called the president’s hand on this bailout plan by throwing his own words in his face. Dec 4, 2007: “We shouldn’t bail out lenders. We shouldn’t be using taxpayer money to bail out lenders.” Jan 7, 2008: “The economy rests in the hands of the American people, not in the hands of government.” March 17, 2008: “Our financial institutions are strong and our capital markets are functioning efficiently and effectively.” July 15, 2008: “I have confidence in the long-term foundation of our economy.” Sept 24, 2008: “The market is not functioning properly.” Just as with Iraq, Bush has no idea what he’s doing, but now, he’s willing to risk money that we don’t have on a plan that runs counter to everything he believes in and against every principal of a freemarket economy. And if you’re looking for irony and hypocrisy at its best, then just consider this: Most congressmen and senators are opposed to universal healthcare for all Americans. They say it would be the first step toward socialism. But any sort of bailout plan where government takes control of our financial institutions is, by definition, socialistic. Ralph Nader described it as “socialism in Washington bailing out capitalism on Wall Street.” He also warned that this would spell the “corporate destruction of capitalism.” Lisa Schiffren of the National Review recently concurred, saying that Karl Marx had once issued the same warning as Nader. Other nations that take control of their banks and investment companies also offer free healthcare and free college education. And so I don’t mind bailing out Wall Street, but where are the perks for us regular folk? Because of the money being expended on any bailout plan, we’ll still be paying high premiums for health insurance (if we can afford it at all) and we’ll still have to mortgage our homes to send our kids to college. If Congress really wanted to do the right thing, they should have enacted reforms against corporate greed and bad loan making, and instructed Paulson to spend the $700 billion by issuing a check for $12,000 to every household in America. The EESA was an overkill, knee-jerk reaction to a problem that has been brewing for two years, born out of incompetent oversight by federal agencies charged with keeping a rein on lending institutions and securities pirates. The men who caused the problem, like the bailout plan itself, are frought with political incest. Nancy Pelosi and her liberal buddies once again rolled over for Bush, while John McCain’s solution was to immediately fire Cox as head of the SEC. But it was McCain the Maverick who joined 99 other senators in confirming Cox. So it should have come as no surprise that most of Congress was willing to let Cox, who failed to see the iceberg coming, be put in charge of seeing that an inadequate number of lifeboats are distributed. The original EESA was wrong on so many levels, including that American taxpayers would have been victimized twice: once when the lenders screwed us and the speculators knew it, and again as we began to pay for the screwing. And a bailout in any form also gives Congress and the next president political cover for why we can’t afford universal healthcare or to invest in alternate sources of energy. Appropriately, all of this drama comes just in time for the Halloween season, and that’s too bad. I was really looking forward to treats this year, but with a bailout still looming, I’m afraid we might get tricked in the worst way.
Jim Longworth is the host of “Triad Today,” airing on Fridays at 6:30 a.m. on ABC 45 (cable channel 7) and Sundays at 10 p.m. on WMYV (cable channel 15).