The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.
This idea was started by Jessi at Wake Up America. It will appear here every Tuesday (whether I’m here or not; the only difference is I won’t be able to update the current gas price while on vacation) until Congress wakes up and allows a lot more domestic drilling (I’m not talking about just ANWR, or just off the Florida coast where Cuba, Red China and Brazil are preparing to drink our milkshake, or just the shale fields in the Rockies).
My Gas Price (south suburban Milwaukee County, Wisconsin): $3.539/gallon
This one is going up a bit late today, but we are within a few hours of seeing the Congressional ban on offshore drilling expire. I’ll be blunt; I want next week’s update to include news that offshore drilling leases are being negotiated and signed.
Offshore drilling is now in the hands of the oil companies and the Bush administration. I don’t want excuses; I want action, especially since this window of opportunity may be very short.
This, however, is only the beginning. There’s the matter of ANWR and oil shale out West that’s been locked up. While it’s not specifically oil-related, there’s also a lot of clean coal that’s been locked up. That needs to be opened up as well. The clock is ticking, and this has to happen.
If you think that representation from San Francisco could not get any more leftist than San Fran Nan, take a look at this video of Cindy Sheehan’s discussion of her economic platform.
I firmly believe that the Democrats do want the market to crater itself for their political benefit. Unlike Shoebox, I think they’ll be successful in conning the public into believing that they are not at fault, and that one-party Socialism (formerly known as Communism) is the “answer”. After all, where else but this end of the blogosphere and talk radio (and portions of Fox News) are you going to hear about the massive role the hyper-enforcement of the Community Reinvestment Act, ordered by Bill Clinton and the Democrats, had in creating the supersized-and-crashed subprime market? Where else are you going to hear that a sufficient number of Democrats on Barney Frank’s committee voted against it to kill it?
That is not to say that the financial sector didn’t have their own hand in this. They took that mandate and ran very hard with it, with ridiculously-easy-to-get very-low-to-no-interest loans on items such as cars and credit cards. They also joined the “don’t blame me” generation, demanding that others cover their losses or else VERY BAD THINGS WILL HAPPEN! Unfortunately for us, they are virtually unique in the private sector in their ability to cause those bad things to happen, and yesterday’s historic market crash and the complete lockup of institutional credit outlined by Shoebox are but a taste of what they can cause to happen if they don’t get their way.
Still, I am glad the “grand compromise” was killed yesterday. It combined both Socialist approaches of buying up the “distressed” paper and seizing effective control of the financial sector (i.e. the Fannie/Freddie/AIG approach that failed spectacularily with those 3 entities) with almost no actual upside for those few of us that still believe in the free market. Indeed, almost everything that was sold as an “upside” merely stripped out the further overreach from the Dems’ counterproposal.
There was no addressing the government’s role in creating the subprime bubble. There was no assurance that the assets bought/seized by the government would ever be turned back over to the private sector. Indeed, if the government refused to turn a sufficient number of assets back to the private sector to pay back the $700 billion (or whatever they ultimately would have spent), they would act to make it a non-paid seizure.
So, what now? If I thought this had a snowball’s chance in Hell of flying, I’d go back to the Paulson proposal, get the decision on which securities to buy up out of the Treasury (Shoebox mentioned Mitt Romney, Asian Badger mentioned Michael Bloomberg, T. Boone Pickens mentioned the FDIC this morning on CNBC), and make it very clear that “RTC 2.0” was a temporary, one-time solution that is focused on reintegrating those securities into the private sector ASAP. Further, I would repeal the Community Reinvestment Act. Beyond the modified Paulson plan and the elimination of the CRA, nothing, and I mean NOTHING, would be a part of this. No death to golden parachutes, no tax cuts, no giveaways to ACORN, no earmarks, NOTHING!
Of course, the Democrats won’t like that; they want Communis…er, one-party Socialis,…er, screw it, Communism. Unless there is something even worse, from a free market point of view, that comes up, I don’t see any action until the next Congress. I honestly don’t know if the markets can or will hold on for another quarter, and if that crash happens in the next month, 2008 will make 2006 look like a major win.
I’m still working up my answer to, “What now?”, but since President Bush will be speaking inside of 15 minutes, I may not have it up before then. Since I’m up, I may as well push out an snap live thread.
In a close vote, 205 – 228, the “bailout” bill was defeated. Bush, Paulson, Pelosi and everyone else who was interviewed after the vote, still say we are in a crisis. I guess the natural question is: Now What?
First, let’s take a quick look at how the bill was defeated.
The defeat began with Nancy Pelosi giving one of the more partisan speeches I can remember hearing given by a Speaker in a situation where the Speaker knew the vote was close and really wanted the bill to pass. Rather than fight for a common purpose, Nancy took her 2 minutes to point fingers at every Republican ever elected. You really need to see it to believe just how insultingly partisan her comments were:
After experiencing Pelosi’s petulance and seeing that the Dem’s were only able to get 60% of their caucus to support the bill, I’m inclined to agree with Soren Dayton over at RedState.com. I too believe that Pelosi intended this bill to fail so that she could continue to scream Buuuuuuuuush for at least another week of the election season. Pelosi believes, incorrectly, that doing nothing will provide her Presidential candidate, plausible deniability and the same ability to cry Buuuuuuush/McCaaaaaaain up until the next debate.
Perhaps the first question is: Do we need to do anything? I think the answer to that, sadly, is yes. Here are just three stories of commercial financing ending or having terms attached that are a dramatic change:
In my perfect world, I would like to see the original Paulson bill come back. Strip out the pension support the mortgage term renegotiation and a few other ornaments from TARP and I would support it. That said, I don’t think that’s going to happen.
If Pelosi is at all interested in getting a bill done, an assumption we have to work with or the remainder of the discussion is moot, I’d be willing to bet that right now she has all kinds of piglets lined up waiting to be inserted in any bill she may bring back. As has been pointed out before, she has enough Democrat members that she doesn’t need any Republicans to pass a bill.
In order for Nancy to get her caucus to fully support the bill she would likely need to be even more draconian on the pay issues. She would also likely add the provision that sends earnings from the asset sales to ACORN and La Raza back in. Finally, I would expect to see some provision that would have direct help for homeowners who are facing foreclosure. While this may be Nancy’s druthers, I don’t see that a bill with those provisions would get through the Senate unless Wall-street had a dramatic, sustained meltdown. If a true panic sets in, all bets are off.
Another possibility is that nothing is done. I don’t think that’s going to happen because Nancy is not going to let the meltdown be hung around her neck even if she really believes it’s Buuuuuuush’s fault. No, she’s likely to do something.
The final option (assuming the Republicans can’t just rewrite the bill from scratch, and I don’t think there’s any possiblity of that) is to rebring essentially the same bill to the floor. There are two problems with this approach: First, there’s no chance that Pelosi would risk another shoot down unless she was absolutely sure the votes were there. Second, if the bill is the same, how do you get Republicans to change their vote when the public appears to be behind them and elections are getting even closer?
Here’s my plan:
First, we need to get someone to talk to the American people and communicate clearly the challenge we face. No more finger pointing, politicking or use of nebulous terms like “crisis!” If this is truly a crisis than explain it to us. We’re smarter than you think and we tend to band together across ideologies when we see a true National crisis in front of us (think 9/11). If you can’t put it into terms that the majority of Americans can understand, regardless of whether we agree with them, than you haven’t done your job as a National leader!
Second, the current group has lost all credibility! President Bush, Paulson, Pelosi, Reid, Frank, Dodd etc. all have personal skins to lose in this. Of them, the only one that I believe has personal integrity, but won’t allow himself to get into the gutter far enough to fight this out, is President Bush.
We’ve been told every couple of months for the past year that we have a “Crisis!” Housing, Bear Sterns, AIG, Lehman Brothers. We’re worn out from crisis’! Worse yet, each one that comes up is supposed to be “the act” that gets us past any further crisis. To date, that hasn’t happened.
As I said, the current crop has lost all credibility. I believe that is a big reason why the bailout bill failed. The public says “fool me once shame on you, fool me twice, shame on me!” They want to know that the money that they are about to put up will actually be used for the purpose it is intended for and that the folks running it are not just mouthing “American Taxpayer” but actually working in the best interest of the American taxpayer!
To that end, I propose that we need a new leader for this effort! I propose that if Paulson really believes this to be the crisis he has been telling everyone it is, he should work with President Bush and Congress and get Mitt Romney to run the effort.
Putting Mitt in would serve two purposes. First, while he did run for President, Mitt is outside of the Washington establishment. You won’t find anyone who has no political affiliation to handle the job but Mitt should be close and seen by most folks as a strong problem solver with an excellent financial mind. If you ask most people, they would say he is known for saving the horribly mismanaged Utah Olympics and that would go a long way towards credibility. Second, if Paulson handles the program, he will be replaced when the next President is elected. This is a role that needs continuity and needs to stay apolitical if it is to be successful. Putting Mitt in now would satisfy both of those needs.
Perhaps the most important reason for Mitt to be involved is that it would give a reason for Republicans to change their vote. While they may still not like all aspects of the bill, if a cogent explanation for the need was provided (something Mitt could do better than anyone in Washington) so that the public understood the need for the plan, adding Mitt’s name would allow Representatives to tip toe down the middle with a line that sound like: “I don’t like this. However, the case has been made and it’s important that we try this. If anyone can return all the money and perhaps a profit to the American taxpayer it is Mitt Romney.”
There is no easy answer here. I believe the bill that was voted down today is now the best possible hope we have. If we can get it back and get a trusted and capable overseer, we could yet find a silver lining in this mess.
Revisions/extensions (6:54 am 9/30/2008, steveegg) – Cleaned up the formatting slightly.
