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The Bankruptcy of the Nation and Conservatism

A lot will be said and written about the presidential election, but one central fact remains: John McCain was ahead in the polls until the financial crisis emerged and President Bush was pushed by Treasury Secretary Paulson into seeking a $700-billion Wall Street bailout on September 18. The crisis benefited Obama, even though he voted for the bailout, because he was not a Republican, like McCain or Bush. Republicans were blamed because a Republican was in the White House.

The exit polls [1] on November 4 still found the public opposed to the bailout by a 56-39 percent margin. 

The panic around mid-September infected the conservative media, especially Fox News, which became a soapbox for the bailout that now exceeds $1.8 trillion. But rather than bail out or “rescue” anything, the hastily–passed measure, ironically named the “Emergency Economic Stabilization Act of 2008,” started a process that now threatens national bankruptcy.

Because Wall Street has gotten its bailout, the Democrats figure that they can now spend even more, supposedly to benefit Main Street. Which means spending and debt will get even more out of control and more socialist measures, this time under President Obama, will be taken. 

The Global Europe Anticipation Bulletin [2], which predicted the current financial crisis, is warning that the U.S. Government will default on its debts by the summer of 2009 and that the “unfolding implosion” of the U.S. economy will result in the dramatic decline of America as a world power.

This is not a natural disaster, like a hurricane or earthquake. It has been brought about by reckless decisions made by people on Wall Street and in the federal government, including Congress. It was man-made, and President Bush clearly deserves much of the blame. But why aren’t the media demanding accountability for how the Bush Administration and the Congress permitted the nation to come to this point?

Incredibly, we still know very little about what happened behind closed administration doors. Rep. Scott Garrett, Republican of New Jersey, is one member of Congress who wants some answers [3] from the Bush White House. One White House official simply shrugged his shoulders when I asked him how this crisis just happened to emerge six weeks before the election. Either they don’t know or don’t care to know. Either way, it borders on criminal negligence.

We do know that the powerful pro-China investment banking firm of Goldman Sachs, which backed Obama and the Democratic Party, has its fingerprints all over this debacle. Not surprisingly, the firm now benefits (so far to the tune of $10 billion) from the “rescue” package forced through Congress by its former chairman, Henry Paulson, and even got $5 billion from Obama booster Warren Buffett. 

The secretive financial hedge funds, such as those run by John A. Paulson and George Soros, who made $3.7 billion and $2.9 billion in 2007 respectively, also deserve serious scrutiny.

Meanwhile, even before the election results were in, Kimberley A. Strassel of the Wall Street Journal was urging the Republicans [4] “to start elevating the new generation of reformers―folks like Virginia Rep. Eric Cantor or Wisconsin’s Paul Ryan” in the House. She called them intellectuals, never mentioning the fact that they backed the Wall Street bailout that her colleague, Stephen Moore of the Journal’s editorial page, now admits was a big mistake. “I want to apologize,” Moore said. “I drank the Kool-aid.”

Cantor and Ryan, a member of the House Budget Committee, were good conservatives until they drank the Kool-aid and backed the bailout. Now they have lost their credibility on fiscal issues.

Of course, there were a lot of Kool-aid drinkers in Congress, including House Minority Leader John Boehner, Minority Whip Roy Blunt, Cantor, and House Republican Conference Chairman Adam Putnam of Florida. However, in the end, most House Republicans opposed the bailout, objecting to its socialist nature and questioning whether it would even work. By any objective measure, they were right. It hasn’t “stabilized” anything.

This is critical to note: all of the House Republican leaders, including Cantor, Putnam, Blunt, and Boehner, supported the bailout. But they couldn’t get a majority of House Republicans to support them.

Putnam has now resigned as chairman of the House Republican Conference, [5] and Rep. Jeb Hensarling of Texas, the chairman of the conservative Republican Study Committee who opposed the bailout, will run for that post.

Blunt may resign, and Cantor is said to want that post. Boehner says he will seek to remain in his position. On the Senate side, Republican Leader Senator Mitch McConnell not only voted for the bailout but ran for re-election on a platform of bringing home the federal pork to his constituents. He has also lost his credibility on spending issues.

In desperation, conservative radio talk-show host Laura Ingraham touts former House Speaker Newt Gingrich as a source of new ideas. But he is hardly a profile in courage. Gingrich was against the bailout plan until, on September 29, he issued a statement in favor of it. Then, in an article for Human Events on October 7, he called it “bad” and stated, “If Senator McCain is not prepared to separate himself from the Bush-Paulson economic program, he has no opportunity to win. The country is deeply fed up with the Bush presidency and angry about the Paulson bailout.”

Before it became fashionable to advocate more oil drilling, Gingrich was appearing with House Speaker Nancy Pelosi in an Al Gore-financed global warming ad. Until gas prices started rising, Gingrich had been an advocate of “green conservatism” and was proposing a Gore-like “Contract with the Earth.”

In addition to his flip-flops, Gingrich has a well-known history of personal “indiscretions” that should disqualify him from any public role in a movement that purports to advocate traditional moral values. 

Rep. Thaddeus McCotter, who called the bailout “Fleece in our time,” is beginning to receive more and more attention. He is the chairman of the House Republican Conference Policy Committee, the principal source of legislative initiatives for the party in the House. He won re-election in part because he came across as a leader in a revolt by House conservatives against Bush and Paulson over the bailout plan.

In a discussion with a local newspaper [6], McCotter was blunt, alluding to McCain’s double talk when he suspended his campaign to come to Washington to address the financial crisis. “McCain put himself in an interesting position,” McCotter said. “At the White House meeting, he said he liked what House Republicans were doing. Then the next day, he decided it was his job to get House Republicans to support the bailout.”

This erratic performance meant that McCain had blown any chance to exploit the financial crisis to his political advantage.

McCotter noted that it was a lot harder for McCain to complain about $70 billion in earmarks when he pushed for a $700-billion bailout. This sealed McCain’s fate, making his warnings about Obama’s socialism ring hollow.

Remaining true to his constituents and his own beliefs, McCotter rejected the notion [7] that we need “just a little socialism to prevent a lot of socialism later” and said Republicans “abandoned principle for expediency” when they supported the bailout.

The same goes for the faux conservatives in the media.

Having recommended two phony “fiscal conservatives” for important positions in the House, Strassel also used her column to urge Republicans to quit “harping on immigrants and gay marriage.” The term “harping on immigrants” means that she believes that Big B
usiness should be able to continue to exploit cheap labor from abroad and conservatives ought to quit advocating secure borders.

As far as gay marriage is concerned, amendments to prohibit gay marriage passed in liberal California, Arizona and Florida on November 4. This is one of the bright spots for conservatives. But Strassel wants to throw this advantage away.

One thing that I have realized, in analyzing the coverage of the campaign, is that the media are populated by many “conservatives” who are not really so conservative. It is a strange phenomenon. It is a form of false advertising.

This category includes the Fox News cheerleaders for the Wall Street bailout, such as Bill Kristol, Fred Barnes, Charles Krauthammer and Bill O’Reilly, and columnists David Brooks (New York Times), Peggy Noonan (Wall Street Journal) and Kathleen Parker (Washington Post Writers Group), who ridiculed Sarah Palin because she doesn’t enjoy the New York Times and appeals to ordinary people.

I am also getting tired of listening to former Bush adviser Karl Rove, who makes regular appearances on Fox News and writes for the Wall Street Journal and Newsweek, being constantly described as “the architect.” It’s true that he helped elect Bush two times, but considering what happened on November 4, isn’t it about time for somebody in the media to ask him some pointed questions about what he built and why it didn’t last.