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.
Reassuringly, Murray didn't want to write a blank check without oversight. "The original plan presented to Congress by President Bush and Secretary Paulson was a non-starter," she wrote me.
Well, yes. Congress got a three-page memo urgently requesting funds — pretty much what you might expect from your teenage son after his first semester away from home. Most of us would be inclined to tell Junior to spend more time on studying and less money on beer.
That one flunked, thanks to two-thirds of the minority House Republicans who just couldn't stomach wholesale shredding of their last fig leaf of ideological principle. So your committed public servants pulled an all-nighter and came up with a far more dignified proposal.
Under the new, vastly improved, 451-page plan, Murray assured me that Congress would be "vigilant" in their oversight of the hundreds of billions of your dollars she consigned to bankers after they threatened a vast, national tightening of credit lines. Sleight-of-cash fraudsters and fear mongers waved a gun and told Patty she'd better hand over your wallet or they'd blow their own heads off.
Let's look at some of the delicious provisions of that new, improved plan. Keep in mind, absolutely everything in this bill had to be passed instantly to avoid a catastrophic meltdown:
- Sec. 325: Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds. If that doesn't make you feel warm and fuzzy, I don't know what could.
- Sec. 402: Permanent authority for disclosure of information relating to terrorist activities [as related to tax provisions]. So, uh — would refusing to pay taxes to fund this debacle define me as a terrorist?
- Sec. 503: Exemption from excise tax for certain wooden arrows designed for use by children. Unless the youthful archers threaten acts of terror, presumably.
- Sec. 308: Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands. By tomorrow, we'll all need a cheaper supply of rum to drown our buyer's remorse.
And those provisions — each an astounding Bridge to Nowhere — go on and on and on. Hundreds of pages of "emergency measures" to save our economy. Acknowledging that we'll pay for it for the rest of our lives doesn't begin to cover it. Your Congress decided to find out what they could get away with, and the answer is: anything. Anything they want.
After the House of Representatives voted down the first bill in defiance of their leadership, the Senate sent back this bulked-up atrocity for ratification. I'm not Jewish enough to mind a little bacon now and again, but this much pork should make anybody ill. Apparently, Bagman Rep. Jim McDermott — after caving in to vote in favor of the initial extravagance — finally reached down deep and found enough integrity to stand against paying protection money to racketeer bankers. So did Sen. Maria Cantwell, bless her businesswoman's heart.
Murray, on the other hand, thinks we're idiots. And when we predictably vote our senior senator back into her warm, safe seat, we'll prove her right.
Representative democracy is clearly not where we get the best government we can afford — who can afford to keep buying off our feudal overlords? — but surely we get the government we deserve. Every elected official who voted for this bloated bag of bankers' ransom should be sent into the real economy to get a real job and help fill the bag.
Right alongside the rest of us.