Wednesday, February 11, 2009
Politics / Woods Corker and Alexander Say No to the Stimulus: Did They Sleep Through the Election?
Posted by Jeff Woods on Wed, Feb 11, 2009 at 5:57 AM
Wait a minute--we thought Bob Corker and Lamar Alexander were supposed to be moderates. That's what the wingnuts are always telling us. But yesterday,our senators joined all the rest of the tightasses in their party--minus Susan Collins, Olympia Snowe and Arlen Specter, thankfully--in a united front against the economic stimulus package. Alexander was absolutely outraged by the bill:
"This bill is a colossal mistake. This is still mostly a spending bill, not a stimulus bill. Even worse, it borrows an unprecedented amount of money - $1.2 trillion - spent mostly on projects that don't create jobs in the near term. We need a stimulus bill, but one that fixes housing first, lets taxpayers keep more of their own money, and spends borrowed money only on programs that create jobs quickly."
Republicans are ignoring the mandate of the November election and the advice of just about every economist on the planet in order to stick with the trickle-down philosophy that caused voters to consign the GOP to minority status. Corker and Alexander may not realize it yet (or maybe they don't care), but they will lose the PR fight on the stimulus. They're asking voters to understand their rigid adherence to failed Republican dogma as job losses mount and sick people are tossed off the health-care rolls. Newspapers are going to fill up with stories like these. TV reporters will bring their cameras to decrepit schools to ask children whether they'd like a new classroom.
The president's labor allies are up with a new radio spot targeting Congressman Jim Cooper and 17 other House members of both parties and three GOP senators. The ad offers them a "second chance" to vote for the stimulus. Republican House and Senate leaders are under attack in this cable TV spot from the same group:
"Our economy in crisis. Millions out of work. That's why 80 percent of Americans support a plan like President Obama's to create jobs. But Republican leaders? They're 'just saying no. No to changing the failed economic policies of the past 8 years. We're in an economic crisis and Republican leaders are playing politics instead of doing what's right. Call the Republican Leadership - Tell them no is not an option."
Comments (11)
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"Republicans are ignoring the mandate of the November election..."
Well lets see, Obama got 52.9% of the popular vote - which is only 2.2% more than Bush got in the 2004 election.
So any "mandate" Obama has is only 2.2% greater than the mandate Bush had in 2004.
As for your yapping about Keynsenian economics, no one on earth has ever proven that any policy based on them has ever been a success.
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No one has proven that any policy based on any economic theory has worked -- certainly not the "free for all" unregulated free market of the last 30 years.
Oh, I'm sorry. It did work: the top 1% got infinitely richer and the bottom 30% poor poorer.
sueyyy, I could not say it better. Republicans
love to see the rich get richer, that's what
they are all about.
If you think the last thirty years has been an "unregulated free market", you don't have more than two brain cells to bump together.
You're right, Gilbert, we don't have anything close to an unregulated free market. But thank God for that. Just think if Wall Street operated with no rules at all for the last eight years. Me and you would be fighting over the last piece of cardboard to sleep on underneath a bridge by the river.
Seeing as how it is an absolute fact that the financial crisis was primarily caused by government meddling in the economy in the first place, you have no point Kotz.
How was government meddling responsible, Gilbert? You're not going with the ole Let's Blame Clinton for Pressuring Fannie Mae/Mac Thing, are you? Seems the lack of serious meddling was the major problem. The entire history of our economy suggests that if business is left to its own devices, it will eventually eat itself. That's how all these rules come about in the first place--supposed remedies to catastrophic business failures or acts of larceny.
Fannie Mae and Freddie Mac are indeed part of the picture (those entities are creations of government in the first place), but by no means all of it.
First and foremost, there was Alan Greenspan's monetary policy moves at the Fed. He pumped up the money supply after the tech stock crash of 2000 in an attempt to "manage" the economy. This helped create the asset bubbble in real estate and other hard assets and commodities (such as oil, copper, corn, wheat, etc.) The run up in real estate prices is the underlying factor that enabled the house flippers and the people using their home equity as a piggy bank to buy all sorts of stuff to do their thing.
Then there was the role of Fannie and Freddie in lowering the standards for the loans that they would underwite and securitize. They were enablers of bad loans initiated by commercial banks. Since those banks could sell off those loans to Fannie and Freddie which would then securitize them and sell them to investors, the banks didn't need to care whether the borrowers could pay them back or not.
The major rating agencies of Moody's, Standard & Poors and Fitch also played an enabling role in assigning too high credit ratings to those loans. Those few rating agenies have an oligopoly on the debt rating business. Why? Because the federal government requires that all publicly traded debt securities be rated by one of those specific firms.
Then there was the so-called "mark to market" accounting rule that was part of the Sarbox legislation. It forced financial institutions to mark down financial instruments as being nearly totally worthless when the markets started freezing up and there was no trading in those issues at all. There wasn't any "market" to mark them to. It's like saying the value of your car is zero if you can't find somebody to buy by tomorrow. Then those asset writedowns triggered other regulatory capital requirements and credit rating downgrades by the very same rating agencies who had overated the subprime loans to begin with. The whole thing became a self perpetuating cycle whereby cash flow solvent financianl institutions were forced to try to raise additional capital due to non-cash asset writedowns. And when they couldn't raise that capital because of the increasingly frozen credit markets then the government swooped in to "save" them - and wiped out the stockholders in the process.
It is a hell of a mess and the government has it's fingerprints all over it.
All good points, Gilbert, but you aren't giving private industry a pass in this, are you? They're supposed to be smart people capable of thinking on their own, right?
Yes the people at Merrill Lynch, Bear Stearns, etc. do not not get a pass for all the foolishly risky investments and trades they made in subprime loan securities.
But none of it would have played out as it did without the government involvement that occured.
The asset bubble in real estate is the primary underlying factor that enabled it all to happen and the prime driver of that occuring was Federal Reserve monetary policy.
