Kill the Bill

Wednesday, September 24th, 2008 10:50 am by Neal

The $700 billion blank check to Secretary Paulson must be killed.

Throwing good money after bad is stupid.

There’s so much wrong with this bill that we don’t know where to start, so here’s some information for you to digest.

First, it helps to know how we got here. Read “How the Democrats Created the Financial Crisis” by Kevin Hassett for a sobering history lesson:

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn’t. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Hassett then goes on to describe the terrible mess Fannie and Freddie were in in 2005, how Alan Greenspan predicted the current crisis, how John McCain “was one of the three cosponsors of S.190, the bill that would have averted this mess”, and how the Senate Democrats scuttled the whole thing. He also notes that Chris Dodd, John Kerry, Barack Obama, and Hillary Clinton received hundreds of thousands of campaign contributions from…Surprise!…Fannie and Freddie! They were the top four recipients.

Also don’t miss the Wall Street Journal’s analysis on this crisis, Blame Fannie Mae and Congress For the Credit Mess.

If Americans weren’t so incredibly ignorant about economics, there would be a revolution right now.

Now that you know how it happened, here’s why the “Mother of All Bailouts” must be killed. First, read Newt Gingrich:

If a Democratic administration were proposing this plan, Republicans would realize that having Connecticut Democratic senator Chris Dodd (the largest recipient of political funds from Fannie Mae and Freddie Mac) as chairman of the Banking Committee guarantees that the Obama-Reid-Pelosi-Paulson plan that will emerge will be much worse as legislation than it started out as the Paulson proposal.

If this were a Democratic proposal, Republicans would remember that the Democrats wrote a grotesque housing bailout bill this summer that paid off their left-wing allies with taxpayer money, which despite its price tag of $300 billion has apparently failed as of last week, and could expect even more damage in this bill.

But because this gigantic power shift to Washington and this avalanche of taxpayer money is being proposed by a Republican administration, the normal conservative voices have been silent or confused.

It’s time to end the silence and clear up the confusion.

Congress has an obligation to protect the taxpayer.

Congress has an obligation to limit the executive branch to the rule of law.

Congress has an obligation to perform oversight.

Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess.

There are four major questions that have to be answered before Congress adopts a new $700 billion burden for the American taxpayer. On each of these questions, I believe Congress’s answer will be “no” if it slows down long enough to examine the facts.

Read the entire article to understand Gingrich’s “four major questions” that must be answered. It’s an excellent and sobering analysis of why this bill must die.

Finally, read Michelle Malkin’s column today, Kill the bailout: Illegal immigration and the mortgage mess on just how absurd this situation is. If we don’t learn from this nightmare, it will only be repeated on a greater scale a few decades hence.

The Mother of All Bailouts has many fathers. As panicked politicians prepare to fork over a trillion dollars in taxpayer funding to rescue the financial industry, they’ve fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers, and minority home ownership mau-mauers (can’t call ‘em greedy, that would be racist) for blame.

But there’s one giant paternal elephant in the room that has slipped notice: How illegal immigration, crime-enabling banks, and open-borders Bush policies fueled the mortgage crisis.

It’s no coincidence that most of the areas hardest hit by the foreclosure wave – Loudon County, Virginia, California’s Inland Empire, Stockton, San Joaquin Valley, Las Vegas, and Phoenix, for starters — also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.

The details are amazing and depressing. Along with Michelle, we also agree with Mark Krikorian’s observation that Credit is not a civil right.

How far have we sunk?

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