Rightists Delay Finance Industry Rescue Package

The rightists in the House of Representatives yesterday went into open revolt against their president and his treasury secretary, delaying the Wall Street rescue package. Rather than sign onto a deal that had been brokered over the last several days, they offered a brand new approach that Treasury Secretary Henry Paulson said won’t work. Congressman Barney Frank (D-MA) this morning said, “At this point, we have absolutely no participation or cooperation from House Republicans.” Meanwhile as if to remind everyone of what is at stake, Washington Mutual failed and was snapped up by JPMorganChase for about $2 billion

The deal at which the rightists balked called for $250 billion to be made available now, with another $100 billion if needed and an understanding that the next congress would vote on a further $350 billion. It would cap the CEO pay of any company participating in the rescue, and the Treasury would have an equity stake in such a firm. It wasn’t a perfect plan, but it represented an improvement on the original Paulson Proposal.

Instead, the Republican right offered a set of principles that started with injecting private capital into the market rather than taxpayer dollars. Clearly, they don’t understand the credit market because the absence of private capital is the entire problem. Then, they called for lower corporate taxes and less regulation. Their solution to a market failure is more market-based activity.

The McCain campaign has turned into a complete farce as it tried to turn the candidate into the man who fixed the problem. First, he announced he was suspending his campaign to return to Washington (the campaign, though, continued), he arrived just as the deal was announced, he met with the rightists, and magically, they came up with something that scuttled the deal. With the crisis continuing, he now has an excuse not to debate Senator Obama tonight. This won’t be the first presidential debate he ducked when the polls were against him – he did the same thing in the California primary debate in 2000. At the same time, the right-wing congressmen get distance from Mr. Bush.

Meanwhile, Mr. Bush just made a 30-second announcement that proves he really would rather be in Crawford, Texas, clearing brush, “My administration continues to work with congress on a rescue plan. The reason is that we have a big problem; need to move quickly. Anytime you have a plan this big, moving this quickly, it creates challenges. Members want to be heard, express opinions, and they should be allowed. There are disagreements over aspects of the plan, but no disagreement that something substantial should be done. The legislative process is not pretty, but we will get a package passed, will rise to the occasion, we will come together to pass a substantial plan.” The trouble is when the negotiations resume later this morning, the House Republicans have said they won’t be at the table.

© Copyright 2008 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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