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Conservatives balking at Wall Street bailout
Question of the Day
Rarely have Republican lawmakers - and especially the best conservative brains among them - been so openly rebellious against their own leadership in Congress and so critical of a GOP administration as they have been during the current financial debacle.
Elected conservatives, answerable to their constituencies back home and looking at less than two months before the general election, are saying they no longer believe the Bush administration.
“It’s a sad fact, but Americans can no longer trust the economic information they are getting from this administration,” said Sen. Jim DeMint, South Carolina Republican.
The direct target of conservative wrath is President Bush’s Treasury secretary, Henry M. Paulson Jr., whose plan to bail out Wall Street is being negotiated with Democrats who are turning the plan into a Christmas tree of added forms of relief - including home mortgages on the verge of default, car loans and no one knows what else as the chaos grows.
Conservatives on Tuesday stood up and just said no to the plan for the most massive government intrusion into the free-market system since President Nixon imposed wage and price controls on the whole economy in the 1970s.
“They are saying the consequences will be dire and imminent if we don’t take up this solution now,” said Rep. John Shadegg, Arizona Republican. “Paulson says we can talk about reform later but the bailout must be accepted now. That’s not where conservatives are now.”
Sen. Jim Bunning, a Kentucky Republican who sits on the Senate banking panel, also said no - to the administration and to the GOP Senate leadership.
“They want this bailout plan approved by Friday - I don’t think we’re going to give it to them,” Mr. Bunning said.
As for the Republican leaders in the Senate, they bought into the administration line.
“They were brought into the White House and told if they don’t [approve the bailout] by Friday, the world will end,” Mr. Bunning said. “They weren’t smart enough to ask the [follow-up] questions. There was Secretary Paulson. He’s supposed to be a big Republican.”
The amazing thing is that some lawmakers frankly admit that the immensely complicated plan that claims to be the solution to an even far more complicated financial banking credit crisis is simply beyond the comprehension and economics skills of the members of Congress who are being asked to approve it.
“Do enough people in Congress understand credit debt swaps and the rest?” Mr. Bunning said.
Conservatives admit they are caught in a philosophical trap that seems to demand that either free marketers in Congress approve the government takeover of free-market functions or face growing global financial chaos and a possible economic depression.
“Expecting Congress to the fix the current financial crisis is like expecting an arsonist to put out the fire he started. Government created this problem,” Mr. Shadegg said.
The administration’s proposal raises for conservatives the uncomfortable question of what taxpayers will say when they are forced to assume the debt of companies so poorly run that they are failing and threatening to take the economy with them.
“The administration said the bailout of Bear Stearns would stop the bleeding and solve the problem, but they were wrong,” Mr. DeMint said. “They said $150 billion in new government spending using rebate checks would solve the problem, but they were wrong again. They said new authority to bailout Fannie Mae and Freddie Mac would solve the problem without being used, but they were wrong again. Now they want us to trust them to spend nearly a trillion dollars on more government bailouts. It’s completely irresponsible and I cannot support it.”
About the Author
Chief political writer Ralph Z. Hallow served on the Chicago Tribune, Pittsburgh Post-Gazette, Washington Times editorial boards, was Ford Foundation Fellow in Urban Journalism at Northwestern University, resident at Columbia University Editorial-Page Editors Seminar and has filed from Berlin, Bonn, London, Paris, Geneva, Vienna, Amman, Beirut, Cairo, Damascus, Jerusalem, Tel Aviv, Belgrade, Bucharest, Panama and Guatemala.
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