I received a gracious note from U.S. Sen. Patty Murray, D-Wash., the other day, explaining why taxpayers, acting through our elected representatives, had to "take action" to rescue the credit market. I presume it was the work of staffers, as I have been to her office and it is a fine, well-oiled machine with layers of well-informed insulation between the busy senator and her snorty but loyal constituency.
Despite her antipathy toward the redneck small business owners who drive the "little" economies outside King County, I've been a fan of Sen. Murray. Her record of supporting veterans' issues alone is enough to earn my vote, but Congress crossed a line this week. The House reversed itself and approved the Wall Street bailout on Friday, Oct. 3, with the Senate — sadly, including Murray — leading the way with a yes vote on Wednesday.
All over Capitol Hill, lobbyists had been jumping up and down on the desks of Congress, screaming about financial Armageddon. The chickens had come home to roost. Not the chickens slaughtered by the banking industry, but the implicit obligation your Congress owes to their employers — and that ain't you, Mr. and Ms. Everyman.
Rather, Murray referenced the truly needy folk of Washington. Her rationale for voting in favor of the Emergency Economic Stabilization Act of 2008: "Companies like Weyerhaeuser, Microsoft, and Avista have made it clear that something must be done."
That tells you everything you need to know. Your senators were called by their biggest supporters to return the thousands of favors and contributions they've enjoyed over the years — and they lined up in close formation to heed that call.
What we simpletons need to understand, as we watch this epochal check being written on our account, is that the wolf is at the door. Washington Mutual went up in smoke. What more proof could you need? Sen. Murray tells me that WaMu was "unable to withstand the crisis." Could that be because the bank refused to audit its own mortgage portfolios for honest valuations (stupid) and snatched up junk housing paper at the top of the market (and greedy)?
Once upon a time, we were told that brick and mortar banks would be replaced with electronic digital enterprises. WaMu decided to build an edifice of playing cards, instead. It was a biggish house of cards, too: the sixth-largest bank in the U.S. on the day it cased its colors and was seized by regulators. Woo-hoo!
Certain important taxpayers were unharmed. Alan Fishman, Washington Mutual's interim CEO, got a $7.5 million signing bonus for the eighteen 18 days he spent on the job shepherding a failing thrift into oblivion. Citizen Alan would have "withstood the crisis" just fine.
Did anyone notice what actually happened to WaMu? The Federal Deposit INsurance Corp. protected its depositors, per plan, and WaMu's assets were brokered into the market at no cost to taxpayers.
If that were the shape of the crisis to come, I would have taken the crisis. Juxtaposed against handing three-quarters of a trillion dollars to the Gang That Couldn't Bank Straight, riding out a liquidity cancer sounds less damaging than the clumsy chemotherapy of Congress. Please, Sen. Murray: First, do no harm.
The best way to ride out the banking crisis would have been to adjourn Congress until the bankers realized they had to change their own soiled jockeys without a gentle, aloe-cooled wipe from Aunt Patty and friends. Citizen calls to Congress, running 300-1 against any form of bailout to the greedheads, thieves, and idiots who imploded the housing market, were drowned out by the buzzsaw whine of lobbyists sharpening their rodent teeth to gnaw into the granaries of our kingdom. I wanted my senator to poison those rats dead. Instead, in her sentimental way, she fed the fuzzy li'l guys.
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