Congress, stop threatening Armageddon | Angie Vogt
By ANGIE VOGT
Federal Way Mirror Political commentary
October 3, 2008 · Updated 3:32 PM
There is a reason that Congress has a pathetic 10 percent approval rating, the lowest in history.
The world bore witness to their embarrassing charade of scare tactics, rear-end covering and election year posturing this past week. We’ve been scolded every day for the past two weeks now that the end of the economy is near if we don’t allow Congress to railroad through a $700 billion “bailout” package to these lowest of all creatures, the Fannie Mae and Freddie Mac parasites, complete with their multi-million dollar severance packages and stock options.
When Congress starts threatening me with Armageddon lest I consent to their spending spree, I am most certain that the money they want has nothing to do with “rescuing the economy,” but everything to do with rescuing them from their own incompetence.
First of all, let’s put to rest this ridiculous sound bite that we’re in the “worst economy since the depression.” John Kerry tried that scare tactic in 2004. Walter Mondale used it in 1984. It wasn’t true then and it’s not true now. Not even close.
During the Great Depression, unemployment hit an all time high of 25 percent. During the 1930s, 9,000 banks failed and the home foreclosure rate reached its worst point at just over 50 percent. Today, unemployment is under 6 percent and home foreclosures are at just over 2 percent.
Do you remember Black Monday, the famous stock market “crash” on Oct. 19, 1987? That was the biggest drop in stock market history since the Great Depression. The market fell 508 points, from 2,247 points to 1,739 — a 22.6 percent drop. Few people remember that 1987 ended in a positive, closing on Dec. 31 at 1,939 points (up 42 points for the year).
I remember well the fear that gripped everybody on Black Monday. What happened next? As I remember, life resumed as usual. Americans paid their mortgages, went to work and that year I remember having fun at a Halloween party. I don’t recall children in tattered clothes selling apples on the street.
During the savings and loan scandal of the late 1980s, about 2,700 banks failed. It’s a good thing that they failed. The market worked, pruning out the bad apples and allowing good business practice to flourish again in the 1990s. Bailing out corrupt institutions is the worst thing we can do to our economy.
The third scariest market “crash” happened after the Sept. 11, 2001, terrorist attacks, when it fell 14 percent. Congress and the president steered our economy well through unprecedented challenges.
How we got to this present crisis is an example, par excellence, of how government corrupts good intentions. Look up “Community Reinvestment Act” and which Congress members have been running that operation. In short, this act required lending institutions to give loans to people who otherwise could not qualify, under the guise of providing “affordable housing.” With our tax dollars providing the cover for these bad loans, institutions ran an orgy of predatory lending to people who otherwise could not qualify for loans. Interest-only, sub-prime, no income verification, no down payment required type loans were handed out like crack cocaine to consumer addicts on the streets.
Executives for Fannie Mae and Freddie Mac contributed fat sums of campaign cash to congressional leaders (Sen. Barack Obama received the second highest) in exchange for cover from regulatory oversight.
In 2003, President George W. Bush and Sen. John McCain, along with four other Republican congressmen, petitioned for regulatory reform over these institutions in a legislative bill called the Federal Housing Enterprise Regulatory Reform Act of 2005. Democrats blocked this bill. Google it for details. Then Google which legislators in the House and Senate have received the largest campaign contributions from Freddie Mac and Fannie Mae. It’s not even close.
Last Monday, Sept. 29, when the world watched the bailout go down in flames, the market went down 777 points, or 7 percent of its 11,000 points.
The media (whose credibility is about as low as Congress’) went into hyper-drive, warning the public that if we didn’t give our representatives the go-ahead to pass this bailout, we were in for dire straits. The next day, the market recovered over half of the 777 point loss. At this writing, it is wobbling downward again.
Now the Senate is reworking the plan and loading it with pork as they barter and trade (with our money) to win compliance from both sides of the aisle — by piling on pet projects that have nothing to do with the bailout itself.
People who want the bailout “rescue” are people who benefited from the bubble: Homeowners who want their equity back,
builders and bankers. The bubble was a bubble, which means it was a mirage. Trying to blow more air into a popped bubble will not fix the economy. It will prop up the weakest banks that should fail, while weakening the strong, solvent institutions. It will protect the executives and politicians implicated in this scandal.
For certain we are headed for some tight economic times, but the American people are not rubes. We work hard, we are more generous than any other nation on this Earth and that is well documented. But, we are sober, straight-talking folk. Don’t even try selling us magic beans.
It is an attempt to scare us into doling out more of our money to fund their incompetence and to distract us from their corruption.
This bailout is like the anesthesia in a life-saving triple bypass. If we just pump the patient with anesthesia, he will awaken from his fog to find his heart is still near failure…and in all probability in worse shape due to his malaise while under the anesthesia. Keep this in mind when they try to take control of your health care.
Federal Way resident Angie Vogt: firstname.lastname@example.org. For past columns and further commentary, visit www.soundupdate.com.