You may recall that I called Ray LaHood’s office to ask him not to vote for the pork-laden $700 billion bailout bill. He voted for it anyway, which shows just how much pull I have. Ha ha. Yesterday, I got a letter from him thanking me for the call and explaining his position. I thought you might be interested in hearing what he had to say (any typos are my fault):
Tag Archives: bailout
House passes bailout bill, 263-171
The U. S. House of Representatives passed the pork-laden Senate version of the $700 billion bailout bill. Obviously, many reps changed their vote from “no” to “yes.”
I can’t wait for the promised Utopia to commence.
House begins debate on Senate bailout package
For those of you in the 18th Congressional District, here’s the telephone number for Ray LaHood: (202) 225-6201. (If you live in a different district, you can find your representative’s phone number on the Clerk of the House of Representatives’ page.)
I would encourage you to do what I’ve done: call and urge Rep. LaHood to vote against the Senate’s bailout package. I know LaHood voted for the first one, and he believes a bailout package is needed. But this bill is even worse than the last one, including all kinds of indefensible pork that squanders more taxpayer money.
There are $6 million in tax breaks for the manufacturers of wooden arrows.
Another $33 million in tax relief for corporations operating in American Samoa territory.
And don’t forget the $192 million break for Puerto Rican and Virgin Islands rum producers.
U.S. senators on Wednesday tacked these incentives and nearly $150 billion in other unrelated tax breaks on to the $700 billion emergency rescue bill for the nation’s troubled financial institutions.
Besides the added pork, many economists have been saying that this bill simply won’t work to solve our credit crisis. You don’t hear these voices, unfortunately, because the media by and large hasn’t covered them, as this article from the Chicago Tribune points out:
If you’ve spent much time listening to cable news lately, you would think there is universal agreement among economists that an immediate, enormous government intervention in the markets is the only way to stave off a recession, and perhaps even a depression. This is simply false. Many economists reject the notion that something must be done immediately and have called for more careful consideration of a wider range of options. Some even reject the premise that any bailout action will make much of a difference.
This bill needs to be voted down and a serious deliberation needs to take place. Congress should stop this rush to do “something,” and focus on doing what is best.
Senate passes bailout bill 74-25
Well, everyone in Washington was just deflated after the “Emergency Economic Stabilization” bill failed in the U. S. House. But fortunately, we have the Senate to come up with the most obvious solution to the impasse: more spending!
The new bill — much bigger and more costly than the original for its addition of tax breaks — has been crafted in a way to overcome objections in a resistant House.
What’s new, since a sharply divided House voted 228-205 to scuttle the first plan on Monday:
— A dramatically higher cap on insurance that the federal government provides for individual bank depositors – lifting Federal Deposit Insurance Corp. protection to $250,000 per account.
— Also: Tax breaks for individuals and businesses alike, including relief for more than 20 million middle-income taxpayers subjected to an Alternative Minimum Tax that boosts their tax bills.
How much in tax breaks, you ask? A pittance: $150 billion. Because that’s what Americans were really concerned about — that the government wasn’t spending enough.
The more I read, the more I’m swayed that this bailout plan isn’t such a great idea.
Can 200 economists be wrong?
Here’s something that’s been little covered in the media: 200 economists signed a petition against the $700 billion bailout and sent it to the Congress on Sept. 24, 2008. It now merits a disclaimer: “This letter was sent to Congress on Wed Sept 24 2008 regarding the Treasury plan as outlined on that date. It does not reflect all signatories views on subesquent [sic] plans or modifications of the bill.” Nevertheless, it’s worth noting, especially now that the media is actively trying to convince the general public that Secretary Paulson’s plan is absolutely necessary:
To the Speaker of the House of Representatives and the President pro tempore of the Senate:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
(Click the “Read the rest of this entry” link for signatures)
Continue reading Can 200 economists be wrong?
U.S. HOUSE REJECTS $700B BAILOUT
The bailout bill vote in the House of Representatives was 205-228; motion failed.
Hallelujah. Whatever the solution to the housing crisis is, this bill wasn’t it. I never thought it would fail, but I’m happy it did.