One year ago today the U.S. Senate passed the $700 billion bank bail-out. Nearly a trillion dollars, snatched essentially from pockets of future generations, gave the federal government unprecedented access into the marketplace.
The “solution” — the Troubled Asset Relief Program — passed 75-24 by the Senate on Oct. 1, 2008, was nothing of the sort. It represented the most irrationally tilted of bad policy endeavors: the very agencies that had led to the financial crises where now being given more power in the market, and the institutions incapable of managing their own businesses were given taxpayers funds as a reward.
At the time, CNNMoney allowed U.S. Harry Reid (D-NV) to frame the vote this way:
“If we do not act responsibly today, we risk a crisis in which senior citizens across America will lose their retirement savings, small businesses won’t make payroll … and families won’t be able to obtain mortgages for their homes or cars.”
They very clearly acted irresponsibly. The economy didn’t improve for citizens, job losses have continued to mount. Citizens are at more risk and small businesses bear more long-term burdens. Meanwhile, agencies like Fannie Mae and Freddie Mac have been left untouched. The Community Reinvestment Act has escaped criticism.
Reid, his fellow Democrats and those colleagues of theirs from across the political aisle put taxpayers on the hook after having taken us to the cleaners — all in the name of subsidizing their political allies and high-dollar donors.
Let us not forget that this monstrosity was encouraged by then-President George W. Bush and received 75 votes in the Senate – including from Texas’ own Kay Bailey Hutchison and John Cornyn. Hutchison is a candidate for governor.
(With that TARP vote, Senators Hutchison and Cornyn gave away more than three-times the size of the entire Texas biennial budget.)
On Oct. 1, 2008, Gov. Rick Perry and Gov. Joe Manchin D-WV) released a join letter on behalf of the Republican Governors Association and the Democratic Governors Association, encouraging Congress to pass an economic recovery bill. According to the Houston Chronicle, that same day Perry issued a statement saying he opposed a taxpayer-financed bail-out.
Of course, the public outcry was so fierce here in Texas that Senators Cornyn and Hutchison later voted against the second-round of spending insanity by voting against the Obama Administration’s “stimulus” package. Then-Sen. Obama voted for the TARP bail-out, of course.
Sadly, though, that second stimulus was given legitimacy by the first. If it had been defeated, or had had passed with fewer “Republican” votes, things could have been different.
Indeed, the Republican Party’s own presidential candidate, Sen. John McCain, gave up the principled position for what he perceived – wrongly – to be a politically expedient expenditure of your cash with the TARP vote. McCain, you will recall, helpfully suggested the deal be called a “rescue” rather than a bail-out. Funny how his “rescue” feels a lot like being drowned in government waste…
Happy TARP-iversary, taxpayers… But with $700 billion less in our wallets, we probably shouldn’t do too much to celebrating.