People are playing with my life, my life’s work, and my dreams.
These same people are playing with yours, too. They don’t care about the immediacy of things in your life; they claim to be concerned over creeping socialism or something. It’s outrageous, and I’m outraged.
Outrage is an emotional response triggered by some vile, disgusting act that creates within an anger so deep and burning that “anger” is not adequately descriptive. Outrage burns hotter and faster than anger; we cannot sustain it of our own accord. Yet, those who committed the original outrageous act may continue to commit acts equally outrageous, triggering within us one after another episode of outrage. I’m pretty certain this is what’s going on within me right now.
Consider these recent events:
- Wall Street finally broke the camel’s back that is our national and global “financial system.”
- The specter of a new Great Depression has cast its pall across our country and the industrialized First World.
- Cabinet officers, not the President, quickly and decisively offered a legislative program to reinvigorate that which the Administration and Congress have ignored for years—regulatory oversight of the financial system—as well as a program to buy up Wall Street’s bad debt.
- With rare bipartisanship, the US House and Senate quickly worked to correct or tweak certain aspects of the proffered plan so that legislation might be passed and enacted within one week.
- President George W. Bush, acting out of character, agreed to revisions sought by Congressional leaders—Republican and Democrat—to push forward the buyout program.
- Again contravening the history of his Administration, the President scheduled a bipartisan meeting of legislators and the Presidential candidates of both major US political parties to review and explain the pending legislation.
So, what happened?
The House Republican Caucus, led by John Boehner (Ohio 8th Congressional District) “ambushed” the meeting called by President Bush yesterday in the Cabinet Room of the White House. Rep. Boehner denies this, although he offered no alternative to the legislation under negotiation as late as Wednesday.
According to reports in both liberal and conservative papers, Congressman Boehner presented a program drafted by Congressman Eric Cantor of Virginia that would rely upon a new federal mortgage-backed securities insurance program to help business and Wall Street rather than allow the federal government to buy up the so-called “illiquid assets” (bad debt) incurred by banks. Democrat, and some Republican, leaders were caught off-guard. The President was caught off-guard.
The leaders of the House Republican Caucus, acting separately from the Republicans assigned to the bipartisan negotiations, denied that any agreement had been reached by those negotiators. Why? According to various press reports, their objections include (stand by):
- Republicans saw an effort by Democrats to deny Senator McCain an opportunity to participate
- Republican Caucus members felt ignored and left out of the negotiation process
- Taxpayers should not provide corporate welfare to companies
- Some are opposed to any bailout on principle
The Cantor plan includes these elements:
- The insurance premium for the program would be paid for by the institutions that hold the troubled securities
- The federal government would allow financial companies to apply their current losses to their previous five years of income tax returns, lowering their taxes
- The federal government would “incentivize” corporations through a two-year suspension of the capital gains tax
- Removal of “certain” regulatory barriers that (supposedly) impede business opportunities
Excuse Me, But…
I cannot find a source anywhere that spells out the exact elements in Congressman Cantor’s plan. In fact, there is no mention of it on his Website! It is very interesting to note that, while the House Republican Caucus opposes “corporate welfare,” a major element of the Cantor Plan they support involves cuts in taxes and the suspension of the capital gains tax.
That is, they do not want the US taxpayer to shoulder the burden, but they want to further relieve corporations of their tax obligations! Something here does not compute…
Perhaps they think we’re too stupid to realize that, if corporations pay less into the general fund, that we—individual taxpayers—will assume much more of the overall tax burden. And, what about the current, and huge, federal deficit? Who’s going to pay that down?
Oh, and no one, especially Rep. Cantor, has estimated the cost of this alternative. For one thing, what happens to the insured securities or bonds if the companies that obtain them default, anyway? Certainly, the government would have to back up the insurance, and the costs to taxpayers could balloon way beyond the extraordinarily high $700 billion envisioned by Secretary Paulson in his plan.
But, perhaps that’s something better left unrevealed or un-analyzed.
Remove Onerous Federal Regulation
This element of Cantor’s Plan appears to directly oppose the recently-voiced analysis of Senator John McCain, the Republican candidate for President. McCain, in an early response to the current Wall Street crisis, said:
“There was no transparency into the books of Wall Street banks. Banks and brokers took on huge amounts of debt and they hid the riskiest investments. Mismanagement and greed became the operating standard while regulators were asleep at the switch.”
Well, the Republican candidate for President seems to have called for tighter regulatory oversight while the proponent of the Republican alternative to the bipartisan rendering of the Paulson Plan calls for further removal of regulatory oversight.
Perhaps someone should introduce to Republicans their right and left hands. And, I don’t mean “right” and “left” in a political sense.
The Republican Caucus members, according to a news story, felt that:
…recalcitrant Republicans were calculating that Ms. Pelosi…would not want to leave her caucus politically exposed in an election season by passing a bailout bill without rank-and-file Republican support.
(They are in the majority, after all.)
Cantor acknowledged in comments to The [Washington] Post that some of the “exotic sliced and diced” mortgage-backed securities are of such little value—because the underlying mortgages are already deep in foreclosure—that using his preferred approach of federally insuring them is pointless.
Doh! Ya think?
Bipartisanship & the Paulson Plan
Many Representatives and Senators object to significant elements of Secretary Paulson’s proposal. The Paulson Plan needs work, not the least of which is the codicil placing the Secretary in complete control without oversight by either the Administration or Congress. A friend of mine and fellow blogger called this plan: “…a blatant and ruthless power grab[Delicate Monster]”
The Good Guys
Many in Congress have worked—are working—across party lines on this catastrophe. For one, Senator Richard S. Shelby discusses his objections to the Paulson Plan openly and forthrightly. Senator Shelby issued a press release on Thursday, saying in part:
“Proponents of the Paulson plan are telling the American people we can solve this problem with a single bill. I don’t believe that is credible. We have a number of interrelated problems that need to be addressed in order of their significance. First, and most urgent, is liquidity. Then we must address the solvency of our financial institutions and declining home values, not to mention our entire regulatory structure.”
I concur with Senator Shelby’s objections. Most Democrat leaders in Congress agree, and have offered their own analyses:
“Congress will respond to the financial markets crisis by taking action this week in a bipartisan manner that will protect the taxpayers' interests. The Administration's $700 billion proposal does not include the necessary safeguards. Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation.” (statement by Speaker of the House, Congresswoman Nancy Pelosi, California 8th Congressional District)
“We will work with the President to modify his plan to make it better for tax payers and homeowners,” said Reid adding, “We will demand tough oversight to make sure tax dollars are not used to reward CEO’s who created this mess.” (statement by Majority Leader, Senator Harry Reid of Nevada)
“This issue transcends party politics, going to the concerns that every single American holds for a secure financial future…Those of us who have not been among the small group of negotiators have a duty to communicate clearly both our concerns and our expectations as the process moves forward.
“The markets should know that we want to reach a consensus expeditiously, but with a plan that protects the economy, gives a potential boost to the American taxpayer and brings accountability to those who got us in to this crisis.” (statement by Senator James Webb of Virginia)
Senator Mitch McConnell of Kentucky wrote this to the President:
“The only reason to support this action is to save ordinary Americans from an economic disaster that they had no hand in creating. And to say that I’m more than a little mad at this situation—created largely by the bad decisions of those in the subprime housing market—is an understatement…But if we are to take action then it needs to put Main Street ahead of Wall Street. This isn’t about bailing out investment bankers, this is about keeping the US economy from entering a downward spiral…The American people who were not involved in creating this situation need to be protected from the mistakes of those who were.”
Senator McConnell goes on to discuss these elements:
- Limits on executive compensation
- Debt Reduction
- Congressional Oversight and Transparency
- Taxpayer Protection
You see, the statements and actions of responsible, mature leaders in both political parties are in synch with each other. They may differ programmatically in the implementation of elements they see as essential to our financial recovery (after all, as my fellow blogger is apt to say, the devil is in the details), but they are united in their recognition of the urgency of this situation and in the need to preserve the US Constitution and protect US citizens in both the short- and long term.
A very curious moment occurred on Thursday afternoon. As the President’s bipartisan meeting broke up in recriminations following Rep. Boehner’s bombshell, Secretary Paulson apparently come over to Rep. Nancy Pelosi, Speaker of the House, and dropped to one knee, begging her not to “blow it up” by withdrawing the support of House Democrats. Rep. Pelosi reminded him that “It’s not me blowing this up, it’s the Republicans,” to which he responded: “I know, I know.
So what was his point? I guess that, if Paulson had dropped to one knee in front of Rep. Boehner, the Secretary’s act might have been misunderstood (“misunderestimated?”) for something it was not. It seems to me that, either the Secretary was so rattled that he lost it, temporarily, or there was some calculation behind the gesture.