At least one Republican is being honest about the abject failure of Bush on the economic front. (HT Pat S.)
Gingrich: Bush doesn’t understand fiscal crisis, and treasury secretary should resign
Former U.S. House speaker Newt Gingrich, whose criticism helped spark a GOP revolt against the bail-out of Wall Street proposed by the Bush Administration, predicted Saturday that House Republicans would reluctantly support legislation that permits the federal government to purchase and isolate the tainted mortgages at the root of the current credit crisis.
But Gingrich had harsh words for President Bush, who he said doesn’t understand the situation, and for Treasury Secretary Henry Paulson, who the former speaker said — for the first time — should resign…
Gingrich said:
“They may have to, in the end, tolerate some of this. Because in the end, you have the Democrats desperate for socialism now. You have an administration which, in my judgment, has lost its mind…“I thought when John [McCain] came back, when he made the announcement he was coming back, you in effect had a transfer of leadership. Now, the president hasn’t conceded that.
“The president did a speech today, he did a speech Wednesday night, none of which I think are particularly helpful. Both because his standing now is so low, and because he’s so partisan and because I don’t think any serious person believes he understands this problem…“It’s a little bit like trying to get the car out of the ditch when the driver is determined to drive it into the swamp. I think Paulson is destructive. I think he ought to resign. I think this is bad for the country. I think his arrogance is unending. I think the fact that he’s saying publicly, ‘Well, you can give me that provision, I won’t ever use it,’ just tells you the bad faith that they have had at Treasury from Day One.
Stark, but true.
IMO, let those that made terrible business decisions fail. No one seems to know what to do, so why mess with it? Let natural selection work. Printing all that bailout money will only further weaken the dollar and I’m sure the funds won’t go where they are supposed to. China looks like it has cut off the lending as well. Sure, it will be rough for awhile but other successful institutions will buy them up and the market will correct. The alternative? Trillion plus bucks for a band aid and the problem is still there. We will only have to apply a more expensive suture in the near future. Besides, I already have a “hard times” garden.
“IMO, let those that made terrible business decisions fail. No one seems to know what to do, so why mess with it? Let natural selection work.”
While it’s my natural inclination to agree with this line of thought, it wasn’t primarily terrible business decisions by private actors that got us to this point. It was government’s regulatory distortion of the market, through the CRA and Fannie and Freddie.
“It was government’s regulatory distortion of the market, through the CRA and Fannie and Freddie.”
Yes by forcing them to loan to people that only had a small income. Now the government wants to use tax payers money to buy up these “junk notes”. Many bought these homes for speculation and when the market imploded, they couldn’t afford the payments as their homes declined in value or just sat on the market. Those are bad decisions. They need to deal with it not stick their hands deep in our pockets to fix their mess.
“As Charles Calomiris of Columbia University and Peter Wallison of the American Enterprise Institute point out, because of taxpayer backing, Fannie Mae and Freddie Mac “were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage backed securities.” And, according to Calomiris and Wallison, as they pursued a mission to encourage “affordable housing,” they enabled massive growth in the amount of shaky sub-prime loans flowing to the marketplace over the last few years”
I think nothing should be done until those responsible are punished.
Paulson was exposed as Judas
As much as I’d like to see the likes of Raines, Johnson, Waters, Frank and Dodd honestly questioned about their roles in allowing this mess to happen, we’ve left the dogs in charge of watching the steak and it won’t happen. In 2004 the Dem’s beat up on the regulators for having the audacity to question Raines’ operation of Fannie Mae. Those are the same ones “saving” the country now.
Bush has been a disappointment in all this. Although the President is limited on what he can say because of affect on markets, he essentially turned over the “bailout” to Paulson and the Dems. He has shown no leadership in this mess. The end result is that, as usual, the “middle class” that the Dems are so fond of will bear the brunt of this absolute mismanagement. They seem to think the middle class is nothing but a source of blank checks. When will the country wake up to these people?