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The Bailout Sham

by Ian on October 4, 2008

We try to usually stick with Catholic matters on this blog but the whole  financial crisis / bailout fiasco these past couple of weeks has just gotten me so angry I am going to vent here.

Let's do a little review of how we got here.

I'm sure that this is a little biased but it is about the best overview of the situation.

Okay, so it's three parts bad government law, mixed with two parts bad government regulation, and a healthy dollop of bad government pressure to get people mortgages who have no business owning a house baked  with a heaping tablespoon of lender greed and cooked for a couple of decades.

Attempts have been made in the past to fix the problem but all were voted down, primarily by Democrats.

So, we woke up a couple of weeks ago with Treasury Secretary Paulson running around in circles screaming that the world was facing financial Armageddon if he didn't get $700 million dollars to fix the problem. Where did that number come from? Out of thin air.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

So we have a fake number used to create a sense of urgency coupled with a "It must be passed this week!!!!!!" cry of alarm and what did Congress do? They went home for the weekend. If this was such an emergency, why weren't they on the floor 24/7 until it passed?

So, Congress comes back on Monday and produces a bill that includes the following nation-saving-critical tidbits:

  • Constitutionally questionable authority by the Treasury department to interfere with the loan amounts, interest rates and "other similar modifications" to individual mortgages - the market will no longer determine the value of a house and what loans are worth, the government will
  • Preserve minority contracting quotas
  • Buying junk assets from foreign banks
  • Increasing eligibility for consumers to get mortgages - in spite of this being the problem that got us into the mess in the first place
  • Giving the Treasury Department the power to do "credit enhancement" to prevent foreclosures - does this mean that I can actually improve my credit score by not paying my mortgage? Score!
  • Tax breaks for solar energy
  • More here.

I am basically coming to the same conclusion as The Anchoress -

It seems to me that there is an illusion being worked in the middle of all this frenzy; if during this crisis, the Democrats can still worry about laying themselves out for ACORN, and Harry Reid can take the time to try to sneak a ban on oil shale mining into new legislation, then that tells me something. It tells me there is time and room, here, and that more is driving this than we can see. It makes me wonder if we should not hit the brakes before we go over a cliff, because we couldn’t clearly see the bend in the road.

The Democrats wrung their hands about how they needed bipartisan support to save the world and at the same time Nancy Pelosi told her people that they don't have to vote for it. So, the bill failed, Republicans are blamed, McCain looked like the fool he is for riding into town, supposedly saving the bill and claiming such right before it failed. This shows that:

  1. McCain is more concerned about politics than the Constitution.
  2. The House Democrats didn't really want to pass the bill.
  3. The House Republicans and McCain had a golden opportunity to show real leadership by presenting their own Constitutional solution to the crisis. They proved that leadership is not to be found among them.

Meanwhile, Obama basically kicked up his heals and told everyone to get along and for it he is hailed as the more trustworthy candidate on the economy.

So, the Senate gets the bill tinkers with it a little but leaves the basic problems with the House version intact and it passes with McCain again proving he isn't a leader by failing to offer a sensible alternative.

Yesterday the House took up the bill again and passed it, leaving the primary problems intact.

As much as I would like to believe that the Democrat leadership is crazed, I actually think that this whole thing was staged. If it wasn't, why did they take two weeks to pass the bill? Why did Nancy Pelosi fail to put pressure on her party to pass it without Republican help? Why didn't Obama get involved?

Unfortunately, this only worked because of two factors that were pretty much a given: The Republicans don't have strong leadership and their "Maverick" is more concerned about being "bi-partisan" (read, friends with Democrats) than doing what's right.

This reminds me of a scene from Oh Brother, Where Art Thou?

The reason he's pullin' our pants down.
Gonna paddle a little behind.
Ain't gonna paddle it - gonna kick it, real hard.
No, I believe he's gonna paddle it.
I don't believe that's a proper characterization.
Well, that's how I'd characterize it.
I believe it's more of a kickin' sitcheyation.

I believe that the Democrats used the financial problems to their advantage to get this massive piece of socialist trash passed knowing that they could count on the Republicans to roll over instead of fighting. Why were they sure of this? Because  McCain, Mr. Maverick, has a history of working to pass unconstitutional bills like McCain Feingold and McCain Kennedy. The Republicans are so worried about losing the presidency that they went along with McCain to avoid making his already horrible performance as a candidate even worse.

Oh, and on top of all this fun news, today there are multiple articles from across the spectrum saying that this is just the beginning and that it might not even work.

Welcome to socialism. Be sure to thank your Republican representatives who voted for this for moving us one giant step closer to Europe without even putting up a fight. The Democrats couldn't have gotten their wish granted any more easily than it was.

If the Republicans lose big this November it will be because of one thing - a lack of leadership from the presidential candidate on down. But don't worry, Hugh Hewitt is sure that THIS time his "party before principle" approach to politics will get the Republicans back in the game. Just like it has for the last five years. Just ask Rick Santorum.

I think a discussion of the Catholic principles of Subsidiarity would be in order now.

{ 2 comments… read them below or add one }

Deacon Patrick October 4, 2008 at 5:33 pm

Catholic Social Teaching has a lot to say about the bailout situation. I explore it here:
http://husbandfatherdeaconman.blogspot.com/search/label/Catholic%20Social%20Teaching

Blessings,
Patrick

Reply

TotaTua October 10, 2008 at 2:30 pm

RANT AND RAVE
This should all have been left to fallout on its own and there should not be a bailout for anybody. Each institution should have been hoisted on their own petard. This is all baloney. The bailout led to complete economic worldwide destabilization and the beginning of government owned financial institutions. There should be indictments instead of $$$$$. This is so much baloney on all parties, partisans and officials and officers.

Why are not these financial institutions required to uphold any fiduciary responsibility at all??????

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