While Republican strategists and Beltway blowhards convene VIP retreats and meetings and save-the-party parties, the road to GOP redemption starts right now. There is opportunity to be seized right now. There is a line in the sand to be drawn.
The first step toward GOP redemption is to stop the automakers’ bailout and roll back the creeping conversion of the Crap Sandwich 2.0 into an all-purpose bailout bonanza for every last American industry and corporate special interest in financial peril. The second step is barbecue Naked Emperor Hank Paulson and the Federal Reserve over their refusal to disclose how they are dispensing billions of dollars in loans.
John McCain screwed this up. The out-of-touch Republican leadership in Washington screwed it up. And let’s be honest: Too many of the same tired old faces now trying to reclaim seats of power — like Newt Gingrich — crumbled on the massive banking bailout and capitulated to Reid/Pelosi/Paulson/Bush when steel spines were needed most.
President-elect Barack Obama’s got Rahm-bo spearheading the push to fork over a piece of the banking bailout pie to the auto industry. This comes on top of the $25 billion loan package (supported by both Obama and McCain) to the car makers in September. And it comes at the same time that the feds are acknowledging that the multi-billion-dollar AIG bailout was not enough and is not working.
Has there ever been a starker case of throwing bad money after bad?
The auto industry’s troubles began well before the subprime crisis started. Is using the Crap Sandwich to rescue every “vital” industry from failure what House Republicans signed on to? Ask your congressional representative.
Stalwart fiscal conservatives like Rep. Mike Pence and Sens. Jim Bunning, Richard Shelby, and Jim DeMint were right from the get-go. They have proven their leadership. While pundits babble about the need to stand up for conservative principles, the anti-bailout conservatives who withstood scorn of their “ideological purity” have walked the walk.
We’ve seen where ideological pollution on core free-market issues takes us:
Time to turn back. The fiscal conservative counterinsurgency starts now.
Most often Wall Street, functioning as a surrogate for the free economy, is denounced for all the wrong reasons: for seeking and making a profit, as though running in the red was somehow a moral virtue and every attempt to be productive was greed. No, if we are going to offer a moral critique of Wall Street, let us not do it because free markets allocate and produce capital, without which people’s homes and savings evaporate, or to be more precise, never get created in the first place. Rather, let us offer a moral critique because all these previously private businesses are now waddling up to the governmental trough begging to be nationalized or subsidized and demanding their share of the dole. Isn’t it obvious that once we concede the principle of a bail-out for those “too big to fail,” we invite a queue that will wrap around the globe?
But if tonight I appear to be a generous distributor of anathemas, let me now turn my attention to the institution which initiated, enabled, enhanced and will deepen and sustain this economic and moral hazard. I speak of that institution which has been doing this for the last several decades, and that is the Invasive State as opposed to a limited government. Tocqueville taught us long ago the lesson we are about to re-learn, namely that a society where the moral tie is weakened and where no one accepts responsibilities and consequences for their actions will quickly morph into an authoritarian, State-centered society.
The only society worthy of the human person is a society that embraces freedom and responsibility as its two indispensable pillars which is a society that understands that our individual good depends on our common good and vice versa. Let us reflect upon some crucial facts that are too often overlooked.
The institution of government—what many view as the first resort of charity—is the very thing that unleashed and encouraged those vices of greed and avarice and reckless use of money that got us into the current financial imbroglio. It did so by first placing a policy priority on a worthy goal, increased home ownership, but pursued it with a fanaticism that neglected other goods such as prudence, personal responsibility and rational risk assessment.
Moreover, its official banking centers enjoyed subsidies which distorted that most sensitive of price signals—the price of money—to delude both investors and consumers into believing that capital existed to support vast and extravagant consumerism when in fact no such capital and savings existed.
It’s an obvious point but one the mainstream media appears intent on missing: The financial crisis did not occur within a free market, a market permitted to work within its own indigenous mechanism of risk and reward, overseen by a juridical framework marked by clarity, consistency and right judgment. Quite the contrary. The crisis occurred within a market deluged and deluded by interventionism…
…As a priest, part of my calling is to defend that Tradition. As a child of America and the West, I have a second birthright to defend—the free and virtuous society. Please help us in the critical task of demonstrating why it is not merely the technical proficiency of markets that will enable us to surmount the economic crisis we face. Help us to continue our effort to convince people that economic and moral excellence is of a piece.
Every Senate Republican should get behind Sen. Inhofe’s accountability plan:
I write to inform you of the actions I will be taking during the lame duck session of Congress regarding the funding status of the Troubled Asset Relief Program (TARP). Given the recent news about Secretary Paulson’s execution of the TARP program, I firmly believe action is required by Congress. I plan to push for legislation that will require Secretary Paulson’s plan for the remaining $350 billion in authorized TARP funds to be ratified by an affirmative vote in the U.S. Congress.
In my statement opposing the Paulson Plan last month, I laid out two primary reasons why I voted ‘no.’ The first is that I wasn’t convinced that asset-purchase program was the right way to do this, and the second is that it would lead to increased lobbying for handouts and bailouts by any industry facing financial trouble.
I stated at the time that my vote was against the Paulson plan – not against taking extraordinary action to provide necessary confidence to financial markets. I stated that “The Paulson plan would have Washington take $700 billion worth of toxic Wall Street assets from financial firms’ balance sheets and put them on the balance sheet of the federal government…. I’m not confident in its success.”
The critics were right. On October 14th, in a significant shift, Treasury outlined a plan to directly purchase equity stakes in of major financial institutions. The Wall Street Journal noted that “critics…say Treasury should have formulated a comprehensive plan earlier in the crisis.” This past week, Secretary Paulson announced that he has completed a remarkable about face, as summarized by November 13th Investor’s Business Daily front page headline, which read, “In Major Reversal, Treasury Won’t Buy Bad Mortgage Debt.” This is a complete reversal. Why did Paulson reverse course? Thursday’s Los Angeles Times provides the answer. “Treasury Secretary Henry M. Paulson’s decision to abandon plans to buy troubled bank assets shows that he has come to two conclusions about what was once the chief focus of the government’s $700-billion bailout: The first is that it wouldn’t work.”
I know many of you have serious concerns about how Secretary Paulson has executed the financial rescue program and I share them with you. Congress abdicated its Constitutional responsibility by signing a truly blank check over to the Treasury Secretary. However, the lame duck session of Congress offers us a tremendous opportunity to change course. We should take it.
During the lame duck session, I will be taking the following actions. First and foremost, if Secretary Paulson submits his plan to Congress in order to access the remaining $350 billion while we are in session, a doubtful prospect, I plan to immediately introduce the disapproval resolution pursuant to Section 115 of the EESA and push for its enactment. I will also introduce and actively pursue enactment of legislation to do two things: First, it will amend Section 115 of the Emergency Economic Stabilization Act of 2008 (EESA) to require an affirmative vote on the part of Congress to approve Treasury’s plan for the remaining $350 billion, instead of the current statutory process which gives Secretary Paulson far too much latitude. Second, it will require a freeze on any remaining funds of the first $350 billion. It is imperative that we not allow that amount of money to be added to a deficit approaching $1 trillion this year without any input from the legislative branch.
Secretary Paulson stated in a CNBC interview at 2:00pm on Friday, November 14th that “the financial markets have been stabilized.” If that is the case, it is Congress’s duty to have a say in what happens with the remaining authorized amount of $350 billion. It is clear that it was a mistake to sign a blank check to one man for such a tremendous amount of money. Though there are still significant challenges in financial markets, it appears that the threat of a catastrophic financial crisis, which was the justification for the grant of such sweeping authority, has subsided. Perhaps the additional $350 billion should not be added to the deficit. Congress should have a debate.
I appreciate your time and attention to this matter and look forward to working with you in the coming week.
Senator Jim Inhofe
And every GOP governor should be sending a letter like GOP SC Gov. Mark Sanford’s letter to the Naked Emperor Paulson:
Governor Mark Sanford today called on South Carolinians to make their voices heard to Congressional leadership about the “gaming of the nation’s taxpayers” being spurred by Congress’s lack of oversight of the recent federal bailout bill.
In a letter sent Friday to U.S. Treasury Secretary Henry Paulson, the governor urged the Secretary to take whatever steps he could to prevent taxpayers being exposed to additional and unnecessary liability from the bailout, writing that, “The federal government, and by extension taxpayers, are being gamed. I think it’s dangerous over the long run the way that taxpayers are being sapped, and this dynamic is playing out in South Carolina.”
The governor cited a number of examples today and in Friday’s letter, including:
- The sooner-than-expected retirement of Carolina First CEO Mack Whittle. Some have surmised that Whittle’s retirement date was moved up so that his bank could apply for federal bailout money while Whittle retained his “golden parachute.” The estimated value of Whittle’s retirement package is $18 million, a deal that would have been compromised if the bank had asked for a taxpayer bailout before Whittle left.
- A growing number of banks are applying for federal bailout money despite not having engaged in risky lending practices, to make sure they receive a portion of federal “free money” and not be put at a competitive disadvantage.
- The Federal Reserve is now putting $150 billion in AIG after an initial bailout attempt failed to stem massive losses, $27 billion more than previously extended. After an initial bailout with taxpayer money in September, AIG treated some staff to spa retreats in California ($440,000) and a hunting trip in England ($500,000). The Wall Street Journal reported last week that some $40 billion is being paid to executives of banking giants that are getting bailout payments. On top of that, Bloomberg reported today that the Federal Reserve is refusing to identify who is even getting $2 trillion in emergency loans.
“In the rush to ‘do something’ about the turmoil in the credit markets, Congress has failed miserably in keeping an eye out for the taxpayers and watching for unintended consequences of this bailout,” Gov. Sanford said. “To put it simply, taxpayers are getting gamed. While we continue to believe that the bailout was an incredibly bad idea in the first place, it’s being made worse by loose rules and oversight that are putting taxpayers on the hook for billions more. I’d urge every South Carolinian to make their voices heard to Washington D.C. about the need for real oversight of the bailout going forward.”
Take action: Contact the Treasury Secretary. Demand accountability. Where is your money?
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
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