TARP For Main Street?

You know the dealer, the dealer is a man
With the love grass in his hand
Oh but the pusher is a monster
Good God, he's not a natural man
The dealer for a nickel
Lord, will sell you lots of sweet dreams
Ah, but the pusher ruin your body
Lord, he'll leave your, he'll leave your mind to scream
- The Pusher, Steppenwolf 1968

When the president announced last month that some financial institutions would be permitted to repay Troubled Asset Relief Program (TARP) monies, he also said that the program had turned a profit for the government. Indeed, the General Accountability Office (GAO) stated that the government had received $6.2 billion in dividends. Great news, you might say; that money will be useful toward paying down the nations massive debt. Well, not so fast.

Rep. Barney Frank, the chairman of the House Financial Services Committee, wants to snatch up that money before the taxpayers know what hit them. While the TARP program was originally designed as an emergency measure to stop financial collapse in the banking industry, Mr. Frank now wants to start bailing out individuals. The full committee will hold a hearing on a bill - H.R. 3068, TARP for Main Street Act of 2009 - that will "use amounts made available under the Troubled Assets Relief Program of the Secretary of the Treasury for relief for homeowners and neighborhoods."

Mr. Frank wants to take $1 billion from dividends paid by financial institutions to the federal government and put it into a trust fund for low-income rental housing. Next, he wants another $1.5 billion from TARP dividends for a "neighborhood stabilization" fund. How this money would be distributed is unknown, but some speculate that it would be through "community organizing" groups. Anyone for an ACORN? This is the redistribution of wealth that Obama spoke of to Joe the Plumber during the campaign.

According to Barney Frank, we need to "help" unemployed people who are struggling to save their homes. However, his "give a man a fish" approach will only stifle the incentive for those folks to find a job. Steppenwolf had it right; "God damn the pusher man".

Fortunately, there is a counter bill in the senate - the Stop TARP Asset Recycling (STAR) Act - co-sponsored by Orrin Hatch (R-Utah) and Blanche Lincoln (D-Ark.) According to Mr. Hatch's website:

The Stop TARP Asset Recycling (STAR) Act would require any TARP funds returned to the U.S. Department of the Treasury to be placed in the general fund in order to pay down the nation’s debt. Current law is unclear whether returned funds could be recycled into TARP and used to expand federal investment in the private sector.

One would think that after the Democrats' hand-wringing over the Bush deficits, this bill would be a no-brainer slam dunk. It would also seem obvious that allowing Barney Frank to keep meddling in the housing sector would be a recipe for disaster.

Blanche Lincoln said it best:

“TARP was never meant to be a permanent program, but rather an emergency initiative designed to stabilize our financial markets and bring greater confidence to investors and business. It is only appropriate for that program to be phased out as expeditiously as possible.”

Let's hope that her point of view prevails.

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Democrats: Bi-Partisan or Bi-Polar?

The $700 billion bailout vote failed today, and the point-drop in the Dow Jones Industrial matched better than point for dollar. The DJI shed over 777 points on Monday. The only good news thus far is that it was not raining businessmen in Manhattan today.

House and Senate Democrats rushed to the microphones on Friday decrying the presence of John McCain as a force of division they could have done without, but as it turned out, it was Obama's quick tutor-job by the staff of Henry Paulson, through emails, that derailed Friday's "meeting". Obama walked in shooting from the hip and all hell broke loose.

The perplexing part of it all is this, however; Democrats claimed to "have a deal" in place before the arrival of McCain who, according to their accounts, "blew up" the meeting. So why did Indiana House Democrats, to name a few, vote two to one against the bailout? Even more important is the question of why Nancy Pelosi made this speech hours before the vote:

To me, that does not sound like a person trying to get a deal done. It sounds like a person holding a large knife and plunging it repeatedly into the deal.


Then Barney Frank decided to insert his foot into his mouth yet again by claiming that Republicans were to blame.

Rep. Roy Blunt, R-Mo., the whip, estimated that Pelosi's speech changed the minds of a dozen Republicans who might otherwise have supported the plan.

That was a remarkable accusation by Republicans against Republicans, said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee: "Because somebody hurt their feelings, they decided to punish the country."

That's a very interesting accusation of its own, considering that 40% of House Democrats also voted against the bill. This is the same Barney Frank, while we're at it, who in 2003 said:

"These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

And that was in response to a call by none other than President Bush for more regulations on the two institutions to prevent what many others recognized at the time as a potential disaster. How does Nancy Pelosi interpret history? Like this:

"[W]hen was the last time someone asked you for $700bn? It is a number that is staggering, but tells us only the costs of the Bush administration's failed economic policies — policies built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision, and no discipline in the system."

I read these quotes, I listen to the audio and I remember past events, and I am left scratching my head, trying to understand how a modern political party can utter such nonesense and not even be held accountable in the mainstream media.

But I am not alone. Is it any wonder why Congress enjoys an 11% approval rating?

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Champions Of The Poor

Democrats hold themselves up to be the champions of the poor. It always struck me as odd that a bunch of rich guys and gals, most of whom have never held a real job outside of Congress, can claim to be "one of us", the working people. They do, though, and quite successfully based on the electoral polls.

Fannie Mae and Freddie Mac were tools used by Congress ostensibly to help poor folks own a home. While home ownership is a big part of "The American Dream", it was never intended to be a guarantee. It was historically the culmination of hard work and personal sacrifice. It may be again once more, but not in the foreseeable future.

Helping people who are not financially capable of buying a home buy one anyway is not only a bad idea, it is cruel, as we are now seeing people who had a small sip of the Dream having it wrenched from their grasp. It's almost like stealing a sandwich and handing it to a starving homeless person with the police in pursuit, who then rip it from his hands just as he's about to take a bite. The sandwich-snatcher then blames the police for taking food from the hungry.

The Bush Administration is now the target, bearing the blame for the woes of Freddie and Fannie, when he tried to fix the problem five years ago.


From the above link, Barney Frank had this to say about Bush's proposed plan:

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Note the title for Mr. Frank; ranking Democrat on the Financial Services Committee. Maybe it's time for some new leadership in that area. Oh yes, and another financial expert, in the Chairman of the House Ways and Means Committee, Charles Rangel, is in trouble because he had trouble navigating the tax codes! He then had the unmitigated audacity to blame Republicans for his misdeeds. He paid the back taxes, but "penalties and interest were not included in those payments". Yeah, he's just like you and me, alright.

This brings us to Barack Obama, who is leading the charge against the Administration in an attempt to lay blame, and ultimately win the Presidency. But while Fannie Mae and Freddie Mac were about to crumble, Obama saw fit to accept over $126,000 from them. That's in just three years as a senator, folks. By contrast, John McCain accepted $21,550, over twenty years.

The bottom line here is this; the democrats were opposed to Bush's oversight plan for these two institutions because they claimed it would make it harder for poor people to get homes. So they staved off the inevitable for a little while and in the meantime some poor folks bought houses, which they are now losing again.

While it may appear to be compassionate, it is certainly not helpful at all to give a homeless person a new refrigerator box.

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