College Republican Federation of Virginia

Once again, the Democratic Party has demonstrated that it does not understand economics.  It seems to think that crafting politically advantageous policies is good, no matter what those policies are.  Case in point: the recent Christmas tree bailout legislation.

Thankfully, courageous legislators like Virginia’s own Eric Cantor were able to strip the most egregious dungballs from what still turned out to be a “crap sandwich,” think giving 20% of the bailout money to race-baiting shakedown artists ACORN and La Raza.  However, the Democrats still can’t understand that just because something sounds good politically, it is therefore good policy. 

Take for instance Section 109 of the bailout, which authorized the Treasury Secretary to engage in “mortgage reduction efforts” such as reductions in interest rates, loan principle, term extensions, and removal of other modification limits.  Not even Soviet central planners were so arrogant as to try to unilaterally dictate the terms of loans and credit financing. 

This is a fascist policy plain and simple.  The Democrats call it helping ‘Main Street,’ but make no mistake, this isn’t helping main street, it’s helping Section 8 get out from under decades of no- or low-down payment loans they should never have been given.  And who does Section 8 vote for?  Democrats.  So you tell me, is this good policy, to try and do what European fascists failed to do 70-80 years ago?  Should we be trying to institute command economics that would have made the Soviets blush?

Here’s another example.  Under the bailout, the Treasury Department would be allowed to acquire warrants for non-voting stock in companies it bails out.  These warrants are essentially I.O.U.’s for real stock in companies that get bailed out.  If the government cashes them in, and nothing in the bailout bill prevents them from doing so, it would mean the US government now owns stock in private companies.

This is not a bailout, it’s a takeover.  This is a textbook definition of socialism, the central government owning all or part of the economy.  The federal government would, and you can guarantee this will be back when Congress returns, actually own stock in US companies.  Who gets the return on those investments, who gets the dividends?  Not you.  Not me.  The government does.  Do you think they’ll give it back, will any of us get a check?  Not on your life.  Well, some of us will get a check, but only if we’re already having our livelihoods subsidized by our taxpaying neighbors.

That’s who really benefits from this bailout, besides the moronic mortgage financiers who thought bad loans were good policy (James Johnson, Franklin Raines, Angelo Mozilo etc.), it’s the people who already get government assistance.  This bailout isn’t about saving the economy, it’s about saving the dependency; dependency on the government to help you get a house you can’t afford. 

Sadly, John McCain, whose first instinct was right (to say the economy was fundamentally strong), has been forced into supporting this monstrosity.  The only silver lining is that his presence has given cover to Cantor & Co. as they try and prevent us from diving head-first into a command economy.  Before McCain came in, the President and the Democrats (and sadly some Republicans) had basically reached an agreement.  Thankfully, McCain got the message that Conservative weren’t going to vote for the original bill, denounced it as a failure, and allowed them to keep working. 

Sadly, he doesn’t have much time left and eventually, Conservatives will have to cave, unless they want to guarantee an Obama presidency.  McCain and congressional leaders have to support something, or else get blamed for Wall Street’s schizophrenic sell-off, so I pity them.  However, I truly pity all the rest of us, who are going to get stuck with some kind of quasi-socialist bailout bill, all because the Democrats are hell-bent on benefitting politically from this.