One of the nation's wisest men of all time warned America about politicians like Barrack Obama: "Here comes the orator! With his flood of words, and his drop of reason." (Benjamin Franklin)
Obama, with his supposedly high IQ, has a dangerously low EQ (Economics Quotient). As I said in my article last week, this election will hinge on economics. (See "It's the Economy..." at www.ConservativeTruth.org.) Right now Obama's friends in the press have the electorate convinced that Obama is the man with a plan for the economy, according to the polls. But the lack of leadership and knowledge of the economy he exhibited on this Democrat bailout plan will put the lie to that in short order. All of his flowery speeches cannot make up for that.
For all of the desperate attempts of Obama and the Democrats to paint Bush and corporate America as the villains in this financial meltdown, Americans are smarter than they think. A poll of 70,000 voters showed that 56% place the blame where it belongs, on Congress. 20% think citizens who borrowed more on mortgages than they could repay are at fault. 19% say "Wall Street" is the culprit. And only 5% blame the Bush Administration. This makes sense, because most of the failures of Congress that caused these problems have been fourteen years in the making.
It was the corruption at mortgage giants Fannie Mae and Freddie Mac that started the whole sub-prime mortgage disgrace. And guess who "reformed" Jimmy Carter's Community Reinvestment Act" to force lenders to give mortgages to people who didn't qualify and who couldn't afford them? Borrowers who would eventually be financially devastated because they couldn't make their payments? The clue to this riddle is the year the "reforms" took place; 1994. Let's see, who was president then? Oh, yes. Democrat Slick Willie Clinton.
As all the financial problems have unfolded, Obama, who claims to be all about change, has clung desperately to the only thing he "knows" about economics. He has continued to parrot the tired old liberal mantra of class warfare. "Those Fat Cat Capitalists on Wall Street are getting rich on the backs of The Workers. Workers of the world, unite! Throw off the chains of bondage and join my Socialist Revolution."
Obama just doesn't understand that WE, the People, are Wall Street. When he blathers about evil corporations making money (horrors!), he doesn't understand that WE own those corporations, that WE receive those profits in the form of dividends. Who does this simpleton (who was once a college professor) think owns the stock in all those evil corporations that Lenin and Chairman Mao would so disapprove? OUR retirement accounts and OUR mutual funds own most of the stock. When he tries to whip up hate against Wall Street, he is asking us to hate ourselves. He doesn't get it.
This article is one day later than usual, because I wanted to cover the vote in the House on the bailout plan. I took the day off today to watch how the political drama would affect the stock market. As I watched today's events unfold, I also monitored a real-time chart of the Dow Jones Industrials Average.
The Democrats' bailout plan failed to pass today. "The Democrats' plan? I thought it was the President's plan." Yes, it started out that way. But Obama and Company decided this was the perfect way to slander the President, hurt John McCain's chances, and force the nation to accept even more Socialist provisions in the bailout (all the while pretending to "serve the people"). In effect, they hijacked the Administration's plan, and there wasn't much the President could do about it.
Bush and his advisors sent a simple three page plan to Congress, designed to provide support for troubled financial institutions. The details of the original plan don't matter now, because Nancy Pelosi and her merry band of Marxists have distorted it to the point where Bush wouldn't recognize it. It has been bloated to 110 pages of heavy-handed government control of business. If passed it would have given Democrats control over every aspect of American finance for years to come, crippled our economy, and cost taxpayers billions. It is small wonder that most Republicans and fully 40% of Democrats voted against this monstrosity.
Because the Democrats control both Houses of Congress, they also control the committees and decide when and if bills are allowed to be voted upon. They can add all the pork and earmarks to bills they wish. But they promised that in this crisis they would not add anything to the bill that did not relate directly to the purpose of the bill. They said they would (and I quote) "Act as Americans, not Democrats." ROFLOL (my daughter tells me this is text message shorthand for Rolling on Floor Laughing Out Loud).
The Democrats decided that the House would draft and pass the initial bill, then send it to the Senate for approval. Democrat House Speaker Nancy Pelosi and her cronies immediately started loading the bill down with garbage that even many of her fellow Democrats found so offensive that they couldn't stomach it. They added such draconian measures that many of the businesses the bill was designed to help would have refused to participate because they would have given Congress unconstitutional levels of control over the corporations.
Everyone with more than 18 brain cells knows government can't run anything as efficiently as private enterprise. One quick example (I could give you dozens): The US Postal Service can't guarantee the delivery of an "overnight" envelope within three days in many parts of the nation. Private services like UPS and FedEx actually deliver overnight envelopes overnight, and they do so more cheaply than the Post Office, which is subsidized by billions of our tax dollars.
So we are faced with the spectacle of Congress, which CAUSED this whole mess by mishandling its regulation of the financial industry, pretending to come to the nation's rescue by nationalizing businesses and competing with private enterprise. If the Democrats have their way, we will become a banana republic like Venezuela, where Hugo Chavez has nationalized oil and other industries, and has destroyed the national economy in the process.
Here are just a few of the unconscionable provisions the Democrats tried to sneak into the bill (many of which, through John McCain's leadership, have since been removed). They wanted to control the pay of corporate executives. No matter what we may think of how businesses pay their people, it is absolutely unconstitutional for government to try to dictate such matters. They wanted to force corporations to have a union member on their Boards of Directors. Leaving aside the question of what would qualify a steel worker or delivery driver to manage corporate finance, this is a transparent attempt to pander to the Democrat's union base.
The most egregious provision had to do with a Democrat organization called Acorn, which is under investigation in twelve states for voter fraud. Instead of just handing billions to troubled businesses, President Bush had insisted that if the businesses who received help made profits from that help, the American taxpayers who had footed the bill should share in those profits. Amazingly, Obama and Pelosi, through backroom maneuvers, had inserted a provision that Acorn would get the first 20% of any such profits, before the taxpayers got one thin dime.
I don't have time to go into the whole sordid history of Acorn. Suffice it to say that this liberal, partisan organization, in addition to its attempts to illegally influence millions of votes in favor of Democrats, was in large part responsible for the sub-prime mortgage debacle that initiated the current financial and credit crisis. Acorn, which receives millions from the government, pressured lawmakers to force mortgage companies to give mortgage loans to people who did not qualify and who could not afford the mortgage payments. Now the Democrats want to reward the very organization that caused much of the national pain by giving it billions more of our taxpayer dollars.
None of the provisions above (or the dozens of others the Dems tried to attach to the bill) have any legitimate connection to the purpose of the bill. The reason the Democrats included them was that they have the power to do so, since they control both the House and the Senate. In contrast, the only provision the Republicans tried to add related directly to the abuses that caused the current problem. They wanted to make it illegal for organizations which receive taxpayer money to lobby Congress and bribe Congressmen with campaign contributions and promises of do-nothing jobs with huge paychecks after they leave office. Of course, the Democrats used their power to crush this reform.
An example of what the Republicans wanted to change was the Fannie Mae and Freddie Mac debacle. These were two organizations chartered by Congress which controlled over half of all US mortgages. Although they are technically private organizations, our tax dollars guaranteed their loans. For decades these two corporations lobbied the very lawmakers who created and backed them. Why would they need to lobby the people who controlled them? The lobbying was nothing more than a way to funnel taxpayer's hard-earned dollars into the pockets of greedy politicians. In addition to promising many politicos jobs (such as serving on their boards with compensation that would make the Queen of England jealous), they directly bribed them with huge campaign contributions that we paid for. I am ashamed to say that some Republicans took this money, although most of the recipients were Democrats. It will come as no surprise that Barrack Obama was the recipient of the second largest amount of this money.
A few weeks ago our nation bailed out these mortgage giants to the tune of $200 Billion. Would it have been unreasonable to make further lobbying by these and other similar organizations illegal? I certainly don't think so, nor do the great majority of Americans. But Obama and his party think that these organizations and their executives should be untouchable. In fact, he hired the former CEO's of Fannie Mae and Freddie Mac (Franklin Raines and Jim Johnson), men who presided over the downfalls of their organizations, as the main economic advisors to his campaign. Even though their companies were in financial difficulties, both of these men received multi-million dollar bonuses from their respective organizations when they left (a practice Obama claims to be against).
Let me give you some perspective on the realities of national politics. President Bush is the head of the Republican Party until such time as John McCain takes office. Until then, although John McCain is the nominee of his party, he must tread carefully even when he disagrees with the president (as he does over many of the provisions of this bill). On the other hand, the Democrats had no head until Barrack Obama became their nominee. By custom Bill Clinton was in initially recognized as the head of the Democrat Party after his term ended. But he was so discredited by his own actions that for most of the last eight years the party has floundered headless. The closest they have had to national leadership have been a succession of corrupt DNC chairmen (such as Screamin' Howard Dean) who have little or no respect among the party faithful.
So it was up to Barrack Obama to provide the moral leadership (that phrase sounds strange when applied to Obama, doesn't it?) to get the Democrat's bailout bill passed, including all its pork and unconstitutional provisions. But he "voted present" on this, as he has done throughout his "career" in the Illinois Senate, and during the one year that he sometimes showed up for work in the US Senate. (During the two and a half years since he took office, which he claims as the "experience" that qualifies him to be president, he worked a total of 143 days. The rest of the time he totally ignored his responsibilities because he was busy campaigning.) He refused to return to Washington to help during this national financial crisis. Instead he spent his time worsening the crisis by lying about its magnitude and constantly harping only on the negatives, thus demoralizing the American people and causing financial panic.
Let's walk through the events of this strange day in the House of Representatives. Almost everyone predicted that the vote on the bailout bill would be close, but that it would definitely pass. Nancy Pelosi knew in advance that it would not pass. She knew that 40% of Democrats opposed it, and the Republican leadership had already told her how many votes they had been able to muster. Yet she rushed through a vote today, when there was no reason to do so. The Senate had announced that they would not consider the bill until late in the week. If Pelosi had really wanted the bill to pass, she would have taken the time needed to "twist arms" in her own party. Obviously, she wanted the bill to fail.
How can we tell that is true? First, by her failure to call for the vote when she was assured of its passage. Second, just in case there was enough support for the bill, she torpedoed it by making an extremely harsh attack speech on the floor just before the vote. If she had wanted the bill to pass, she would have made some encouraging remarks about how important it was for the parties to work together to accomplish something for America, and then called for the vote. Instead, she spent twenty minutes blaming Bush and the Republicans for all the nation's woes, in the shrill, ugly manner she has mastered since becoming the Speaker. Instead of acting as a real leader and trying to win Republicans over, she called them names and said that they were part of an evil empire. Without question, she wanted this bill to fail.
In addition to this, she gave many Democrats permission to NOT vote for the bill. For instance, she told 12 freshman representatives who are up for reelection and facing tough fights that they could vote against the bill. Homosexual Representative Barney Franks (who was caught messing with Congressional pages, and was then given an important committee chairmanship by the Democrats) chaired the committee that wrote the bill. Twelve of his committee members who authored the monstrosity voted against it. The vote failed by twelve votes.
The American public HATES this bill. They are against it by a margin of four to one. Because of this, it was fascinating to watch the vote in progress. There were three columns each for the Democrats and the Republicans: Yea, Nay, and Present not voting. The voting started very slowly, with over half the House not voting. These were the representatives who were standing around with their respective leaders, hoping to receive permission to vote Nay. Eventually they gave up and the voting proceeded much more quickly.
The public hates the bill because they don't want their children paying for a bailout that will probably end up costing trillions, not the billions advertised. The Republicans who voted against it hate it because they see it as another giant step toward Socialism. They say that government should not be running businesses, whether there is a profit or a loss. And the 40% of Democrats who voted against it hated it because they said there were not enough giveaways!
In all, 96 Democrats voted against the bill that Obama and Pelosi claimed they wanted. The Democrats have a clear majority, and could easily have passed this bill. Both Obama and Pelosi proved that one of two things is true: Either they have no leadership ability (if they can't lead their own party, how in the world will they lead any kind of bi-partisan effort?) or they lied about wanting the bailout bill to pass.
Why did Pelosi kill this bill? It embarrassed her that she is such a poor Speaker that she couldn't get more than 60% of her own party to vote for the bill. She wanted to be able to blame it on the Republican to divert attention from her failures. So she and Harry Reid told the Republican leadership that 100 Republican votes were needed to pass, knowing that was impossible.
She also had her orders from Obama to torpedo the bill, because he didn't want John McCain to get any credit for all the work he had done. According to Senator Lindsey Graham, when McCain came back to DC to provide leadership to the rescue plan, only four Republicans were willing to vote for it. After McCain forced the Dems to remove the worst pork, he was able to convince 66 Republicans to vote for the bill.
As far as how the market (as represented by the Dow Jones Industrial Average) reacted to all of the drama, it opened at 11,139. (I'll leave out the decimals for simplicity's sake.) It then dropped 2.6% within the first 20 minutes, mainly because, while the bill's passage was expected, it wasn't a done deal. It then traded in a 100 point range for several hours until just before the vote, at which point it spiked up to 10,924 in anticipation of a win. By the time it was clear that the bailout bill had failed, the Dow had dropped 472 points to 10,452. The drop was larger than one would normally have expected because the market had already "priced in" the expectation of the bill passing. But after it became clear that the world was not going to end, it rallied once again to 10,835, within 1% of the high prior to the vote.
Then the unthinkable happened. After seeing the result of her earlier negative, partisan remarks, you would think Pelosi would have tried to encourage the American people. Instead she once again attacked Bush and half of the Members of the House. As I watched the Dow dropped over 100 points during a few minutes that she and Barney Franks spewed out their hatred. From there it was all downhill to the low of the day, which was also the close: 10,365, a 6.98% drop. The irony is that if the Democrat "leaders" had put aside their bile and rancor for just a few minutes (or better yet, just said nothing), the market would have lost half as much as it did following their ill-advised remarks. The market needed reassurance, and they dished out fear.
The contrast between the way the Democrat leaders and the Republican leaders made their announcements was dramatic. While the Dems tore their hair out and blamed everyone but the Pope, The Republicans leaders were real leaders. They calmly announced that the bill had failed to pass, and then told the public they were going back inside to immediately begin work on a solution that both parties could live with. It was the difference you would see between a child throwing a temper tantrum, and an adult dealing in a mature fashion with a difficult situation.
The Democrats claim they wanted to "calm the markets," yet for weeks they have been preaching doom and gloom, including lying about a non-existent recession. It is to their advantage for America to have a false negative picture of the economy, so that they can claim it is "Bush-McCain's" fault and help Obama gain ground. The fact that McCain has had nothing to do with formulating Bush's economic policies (and in fact disagrees with Bush on many points) doesn't faze them. The fact that our economy is so massive that changes made ten years ago are just now working their way through the economy doesn't bother them. Bush has been the beneficiary of Clinton's bad economic policies, just as Clinton benefited from Reagan's smart policies. They know all this, but truth is irrelevant to these political bloodsuckers.
Following the Democrat leaders press conference, Congressman Eric Cantor talked about what everyone was thinking: Pelosi's failure to listen and her failure to lead. He stated that this last year was the least productive year he had seen in Congress during his lifetime. Even the Democrats are starting to see that Pelosi is a millstone around their necks. Don't be surprised after the dust settles from this latest debacle to see Pelosi replaced as speaker.
McCain proved himself to be a leader by returning to Washington to do his job as a Senator. Obama continued campaigning, because he had long ago abdicated the responsibilities of his office. He initially refused to make any comment on the bailout bill. Then, after he said he was for it, he failed to rally Dems behind the package. Now that it has failed, he claims will ram it through Congress. Instead of providing leadership at this critical time, he followed the lead of Nancy Pelosi, injecting even more partisan rancor into the situation and blaming everything on the Republicans in his press conference. Obama has no ideas of his own, so he just parroted the liberal line put forth by Pelosi.
On the other hand, John McCain returned to Congress to work out a bi-partisan rescue plan. He insisted that the plan contain protection for the taxpayers in the form of transparency and accountability, which was noticeably absent in the Democrat's 110 page bill. He insisted that no earmarks or special payouts (like the Acorn giveaway) be left in the bill. When the measure failed to pass, he insisted that the House reconvene instead of leaving for vacation as they had planned to do. And he continues to insist that the THIRTEEN agencies and organizations which regulate the financial markets in a fragmented fashion be reduced to one that can actually function.
After the bill failed, Obama's press spokesman defended him for not being involved in finding a solution to the financial crisis by saying that he planned to fix the bill after he became president! The television interviewer quite properly asked why he didn't get involved in the process BEFORE it passed. She observed (again correctly) that it would be much harder to change the bill once it passed. She didn't understand that Obama had no intention of changing anything; he was just looking for shelter in case things went bad. That's his basic political philosophy: don't take chances, don't commit, and for goodness sake don't do anything that requires moral courage.
McCain has great ideas. Obama has fancy multi-syllable words. McCain hurt his chances by suspending his campaign by going back to Washington to help fix the crisis - because to him, Country comes before career. Obama said, "They'll call me if they need me." McCain said, "Now is not the time to fix blame - now is the time to fix the problem." Obama just continued to blame everyone but himself.
Some final thoughts...
The root cause of this crisis is housing. Yet in the 110 page Democrat bailout plan, there is practically no mention of fixing this root problem.
Bailouts have failed to produce the needed results in the past. What makes Congress think that the biggest bailout of all time will do any better?
The Administration and Congress have rushed into this so quickly that many Congressmen say they had no time to read the bill they were voting on. Why not take a breath and consider some other, innovative alternatives to throwing money at the problem? I don't have time to discuss it here, but everyone should take a look at an idea by one of the great thinkers of our time, Newt Gingrich. Read his article at
Finally, I think very few people involved in this crisis have thought about our most valuable asset: The American people. We are strong, courageous, innovative and determined. With God's help there is no problem we can't solve if we work together.