Media cheerleading for the
$700-billion Wall Street bailout―labeled by House Republican Leader
John Boehner a “mud sandwich”―may have come to an end. It was
big news on the three network newscasts on Wednesday night that Treasury
Secretary Henry Paulson basically admitted that the plan hasn’t worked,
and that he has changed his mind about what is required to save the
U.S. financial system.
Paulson, former CEO of Goldman
Sachs, is not only rich; he is supposed to be smart. Our media were
surprised by his turnaround. Some are now questioning his credibility
and competence. They should go further and demand his resignation.
The plan was to buy troubled
assets. Then the money was used to buy shares in banks. Now it’s going
to be used to support financial institutions offering consumer credit.
Democrats in Congress want some of the money to go to the auto industry.
Paulson declared, “When we
went to Congress, illiquid assets looked like the way to go. As the
situation worsened, the facts changed. I will never apologize for changing
an approach or strategy when the facts change. I think the apology should
come the other way, if someone doesn’t change when the facts change.”
Remember that we were told
by the media that passage would make things better, not worse. It was
officially called a “stabilization” plan but didn’t stabilize
“The program is still called
the Troubled Asset Relief Program, or TARP, but it will not buy troubled
assets,” the New York Times reports.
Our media have been calling
it a “rescue.” But since nothing seems to have been rescued, except
for some big banks and corporations, the “rescue” label is starting
to wear thin. The media seem to be returning to use of the term “bailout.”
The problem is that those who get bailed out keep changing.
On the Fox News
“Special Report” show on Wednesday night, commenting on the latest Paulson strategy,
Fred Barnes of the Weekly Standard declared, “I’m not sure whether
it’s the right thing to do or not.”
This is actually a breath of
fresh air from Barnes, who had been a cheerleader for the original bailout
package and had declared on the October 2 edition of the “Special
Report” program that conservatives in the House of Representatives
opposed to it were “nuts” and making “crazy” and “idiotic”
Among other things, the conservatives
doubted that the plan would work as advertised. They wanted more information
and details. They also thought that, at $700 billion, it was too costly.
Who’s nuts now? Who’s crazy
now? Who’s the idiot now?
Of course, Barnes was not alone.
All of his “conservative” colleagues on that program joined him
in demanding passage of the Wall Street bailout bill. And many newspapers,
from The New York Times to The Wall Street Journal to Investor’s Business
Daily, editorially endorsed this scheme.
“The new [bailout] plan would
commit taxpayer money to buy hundreds of billions of dollars of troubled
loans and other mortgage-related securities from banks and Wall Street
firms,” declared the New York Times in a September 19 editorial. “It
is based on the reasonable premise that as long as institutions are
stuck with those assets, the flow of credit, the economy’s lifeblood,
will be constrained, or as in the past week, all but frozen.”
On September 22, the paper
declared, “Nearly everyone agrees that there will have to be another
very big bailout. The financial system, gorged on its own excesses,
cannot stabilize without intervention. The $700 billion would be used
to buy up the bad assets that are presumably clogging the system.”
The fact is that “nearly
everyone” did not agree with the bailout. Twenty-five senators and
171 representatives voted against it. Of those 25, 14 were Republicans.
Of those 171, 108 were Republicans. And this means that a majority of
House Republicans (108-91) didn’t want any part of this expensive
However, the House GOP Leadership―Reps.
John Boehner, Roy Blunt, Adam Putnam, and Eric Cantor―voted for it.
They defied the wishes of a majority of members of their own House caucus.
Boehner, who called the bailout bill a “mud sandwich,” said, “Nobody
wants to vote for this.” But he voted for it. Now he and some other
members of Congress are supporting Bloomberg News in its legal demand that the Federal Reserve provide details
of the bailout process.
Blunt and Putnam are stepping
down from their leadership posts. But Boehner and Cantor still think
they should lead the House Republicans. Rep. Dan Lungren of California
is said to be weighing a challenge to Boehner for the top Republican
job in the House, but Lungren also voted for the bailout.
Former Republican House Speaker
Newt Gingrich, who is frequently on Fox News and Sean Hannity’s radio
show promoting himself, his websites, and his ideas on this or that,
is considered by some a candidate for the position of chairman of the
Republican National Committee. But he was against the bailout before
he was for it. Then he was against it again. Like Paulson and the House
Republican leaders, he has no credibility left.
In terms of damage to the Republican
Party, it is interesting to note that the three Republican senators
whose races are still in dispute and who are in danger of losing their
re-election bids voted for the bailout.
In the Minnesota race, it is
Democrat Al Franken who is supposed to be the comedian. But his opponent,
Republican Senator Norm Coleman, became a laughingstock for claiming
that the Wall Street bailout could actually be profitable for the taxpayers
being fleeced to pay for it. “The government could make 10 or 20 times
what it pays on this, possibly,” Coleman said.
Coleman’s claim was based
on the Treasury Department buying and then selling the “troubled assets.”
That is the part of the program that has now been abandoned.
Republican Senator Saxby Chambliss
is in trouble in Georgia and has been forced into a run-off for his
seat on December 2 because of his support for the bailout. His opponent,
Democrat Jim Martin, is hammering away at it.
In Alaska, Republican Senator
Ted Stevens has many problems, having been convicted on corruption charges,
but he, too, voted for the bailout, and that was costly to him as well.
In Kentucky, in one of the
few Republican victories, Senate Republican Leader Mitch McConnell voted
for the bailout, while his opponent, Democrat Bruce Lunsford, opposed
it, and that caused a tightening in the polls. In the end, McConnell
barely won, 53-47 percent, arguing that he had brought a lot of federal
pork to his home state. McConnell was not alone; most Senate Republicans,
including John McCain, voted for the bailout.
It would be nice if pundits
like Barnes came forward to say, “I was wrong and I apologize,”
and if politicians who voted for this taxpayer rip-off did the same.
Of course, apologies won’t save us any money.
For their part, our media could
belatedly start doing their jobs by demanding that Paulson resign and
be investigated for panicking the Congress into passing a bailout that
he has so obviously mismanaged.