Congressmen Manage to Bury Their Heads While Trying to Cover Their Asses

Sorry about the headline, but, geez!

In bringing the credit market bailout package proposed by Secretary Paulson, and backed by the Bush Administration and the presidential candidates to defeat on Monday, our Congressmen demonstrated a complete lack of leadership. Worse, they showed a lack of maturity, and lack of ability to put the country above their own jobs.

Although inclined to vote for the package, Republican leader John Boehner, R-Ohio, speaking for the House republicans, stated "we could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House."

WOW!

Rep. Barney Frank, D-Mass., put this into perspective with his comment, "Because somebody hurt their feelings, they decided to punish the country? I would not have imagined that degree of pettiness and hypersensitivity. Give me the 12 names and I'll to talk uncharacteristically nicely to them."

What was really going on? A big giant round of CYA. Rep. Paul Ryan, R-Wis., said in a speech "We're all worried about losing our jobs. Most of us say, 'I want this thing to pass, but I want you to vote for it — not me.'"

Well, they should be worried about their jobs, but its a little late now!

I am no fan of this package, mind you. I am disgusted that this train wreck has been allowed to happen. It was inevitable. Many had been predicting it. It took longer than I guessed. Hell, in 2002, I insisted on a fixed rate mortgage because I felt this ride would have to end some time.

The elimination of barriers between consumer and investment banking, the lowering of underwriting requirements at Fannie Mae and Freddie Mac, the overheated telemarketers calling all of us with reasons to refinance our mortgages, and "take money out" were all harbingers. And Congress was there for all of it.

Now, the chickens have come home to roost. Our government has done a terrible job of explaining the situation to the people. (Perhaps because our President has trouble with it himself?) In a nutshell, the credit market is awash with financial instruments of questionable value. Even the investment bankers, once so sure, really have no idea what this stuff is worth. Because of this, they don't know if the other banks are solvent. They are also not so sure about their own solvency. Because of this, they are afraid to lend, and are hoarding cash.

No lending means everything stops. Industry can't buy tools. Businesses can't make payroll. People can't buy cars and houses. It gets ugly, and it gets there pretty fast. This package is about taking these financial instruments off the market, and into the national treasury. This would be done at a huge discount to what they were thought to be worth a few months ago, and probably a good discount to what they are worth today. The banks take huge losses in this bailout. But they're definable. Some banks fail, but there is more certainty as to solvency, and more confidence to allow the credit markets to function again.

The hope is that, with the credit crisis behind us, and real estate markets on the mend, these instruments will have some value, and the government may recoup much of what it put on the line.

Yes, Congressmen will lose their jobs. Banks will fail. This package is about preserving the system to help us figure our way out of this mess.

When faced with the need to act on the result of too little regulation, and Wall Street greed run amock, this nation's leaders failed to act in 1929. The result of that cost us dearly. With 300,000,000 to feed, clothe and house, our leaders should not be fiddling again while the nation burns.