Sunday, September 28, 2008

Bailout Consensus Reached

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The details are still sketchy but it appears that the GOP got what they were looking for:

The administration also agreed to Democratic demands that the financial services industry should help pay for the program. Under the agreement, the president would be required to propose a fee on the industry if the government has not recovered its money through sales of the assets within five years.

Democrats also made a number of concessions, abandoning demands that bankruptcy judges be empowered to modify home mortgages on primary residences for people in foreclosure. They also agreed not to dedicate a portion of any profits from the bailout program to an affordable housing fund that Republicans claimed would primarily assist social service organizations that support the Democratic Party, the official said.

Meanwhile, House Republicans won a major victory, persuading negotiators to include a provision that would require the Treasury Department to create a federal insurance program that would guarantee banks and other firms against loss from any troubled asset, the official said.
My thoughts are this: The government should never own anything designed as for-profit, ever. The federal government and the policies set forth in the 1990's into this century were directly responsible for the melt down we're now suffering. Granted, there was serious mismanagement by the various firms including Fannie Mae, etc. but the governmental oversight that was tasked with watching these firms was not only negligent but was incestuous with former governmental bureaucrats taking lucrative positions at these firms while misstating profits and taking unearned bonuses.

Second, those who were neck deep in this should be paraded in front of congressional committees including Sen. Dodd, former Clinton crony Jamie Gorelick, Rep. Barney Frank and the two chief advisers to Obama's campaign plus any other former executive from Fannie and Freddie who cooked the books. They are partly to blame for taxpayers having to foot the bill and should suffer the consequences. Their shameless attempt to institute the ACORN provision was blocked by the GOP and should be used as a hammer during the election.

Last, It should not be taken for granted that the public knows that President Bush and John McCain raised this issue and seemed quite prescient when discussing it in the past. Conversely, Obama and Frank were part of blocking any effort to overhaul the troubled agencies. That can't be repeated nearly enough between now and November 4th. Yes, we had to act because it would have been disastrous to not do so, yet it was largely Democrats who put us in this precipitous position.

It's time for a sea change in Washington and no, not the hope and change rhetoric bandied about by Obama. I'm talking real change whereby we flush all the entrenched out including Pelosi and Reid on the Dem side and Sen. Lindsey Graham and others on the GOP side. They allowed this to happen on their watch and have the ultimate responsibility to taxpayers for their handling (or non-handling) of this issue before it became a full-blown crisis.

More on the plan at the WSJ.

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