I've stated for months now on hundreds of talk radio shows across the USA that Republicans and Democrats have morphed into the same party- I call them big and bigger, dumb and dumber. McCain and Obama offer the same ideas- just with a slightly different right or left tilt. They both stand for corporate interests. You think only Republicans stand for Wall Street? Check the facts. Obama has gotten millions of dollars in contributions from corporate welfare queens like Bear Stearns, Lehman Brothers, AIG, Fannie Mae and Freddie Mac. You think Obama stands for change? When Obama is done with America, all we'll have left is change.
The reality is that Obama TALKS about change. Just like McCain talks about being a fiscal conservative who believes in smaller government and lower taxes. It's all just the usual talk at election time. I call it the "November political con game." The politicians simply spout the same lies and broken promises to get elected every November.
In the end, both McCain and Obama are beholden to the same status quo- lawyers, lobbyists, corporate interests, and bigger government at all costs. No one- but the Libertarian Presidential ticket of Bob Barr and Wayne Root- is looking out for taxpayers on Main Street. Perhaps that could be the reason Barr/Root hasn't raised any major corporate money. Perhaps.
The good news is we aren't beholden to the lawyers, lobbyists or Wall Street. We are free to tell the truth. Only one party- The Libertarian Party- is looking out for the common citizens and taxpayers- the ones without armies of big shot lawyers and lobbyists.
So here's the truth. Journalist and Author Bernie Goldberg had it rightâ€¦Crazies To The Left, Wimps To The Right. Both major parties are badly failing the American people. Let's look at the facts as to how this financial crisis came about. The seeds were planted in the Carter and the Clinton administrations with the good intention of helping low income families become homeowners. It all started with The Community Re-Investment Act of 1977 (under Carter). The intent of the CRA was to pressure banks into making subprime loans so that levels of home ownership among minorities and low income Americans would rise. Things got worse under liberal do-gooder Bill Clinton. The CRA was re-structured and promoted even harder under Clinton. The concept was simple- banks were told to loosen credit requirements for low income Americans or face regulatory pressure.
While the concept was noble, history proves that anything that manipulates the free market with so-called â€œgood intentionsâ€� is destined to fail. And once the politicians- those crazies and wimps- started to tinker (to make it â€œbetterâ€�), it was destined to get ugly (ie not just failure, but wholesale disaster of epic scale). Entire bureaucracies called Fanny Mae and Freddie Mac were created, and a new game called subprime mortgage-backed securities was created by the politicians- that is, by those same crazies and wimps.
If you ever had any doubt about the deficiencies of politicians, you need no longer suffer that delusion. NONE of the lawyers who make up most of Congress know anything about economics. Neither does anyone on their staff- they are almost all lawyers and career bureaucrats who have never run a business, never risked their own money, never made a payroll, or created a job in their entire lives. They live their entire lives with public money (from the taxpayers). They get paid by public money (government paychecks), and use public money to fund all their ideas, pet projects, earmarks and spending bills. Someone else (taxpayers like you and me) pays every bill, funds every idea, pays their way through life.
But it gets worse- few executives on Wall Street know anything about business either. The Wall Street big shots- investment bankers, money managers, hedge fund gurus, analysts, brokers, traders- create nothing of value. Like politicians they spend most of their lives talking about business- not doing it. And like politicians what little business they conduct is with OPM (Other People's Money). They analyze and sell stock in companies that other people created. They give opinions on whether other people will fail or succeed. And they look to their friends, the politicians, for opportunities to make gobs of money without risk- situations where any risk is passed onto you and me, the taxpayers.
Once Congress created this new â€œeasy moneyâ€� game of subprime mortgage-backed securities, Wall Street started playing it according to the rules of the game, rules established by the politicians. And they played it to the max- with both fists.
Once the gravy train started rolling, millions of low-income families took advantage of the â€œfree money.â€� They were able to qualify to buy homes for the first time in their lives and they did. The problem, of course, was that they couldn't afford to pay the mortgages, which they should never have gotten in the first place. Then, the defaults began. It's obvious that government isn't the solution to this crisis- as you can clearly see above- government is the problem. Ignorant, irresponsible and corrupt politicians looking to legislate â€œequalityâ€� caused this mess by relaxing credit standards to scandalous levels. And what a mess it is. If we are to believe the politicians and Wall Street gurus, we are facing financial Armageddon at this moment. Of course, if it's true, it's because they caused it.
It is important to point out that several years ago a group of concerned people in Congress saw the problems coming and attempted to rein in a program that appeared- for anyone who had even a basic understanding of business- totally out of control. Unfortunately, by that time it was too big and too powerful to slow down. The Wall Street guys, who were getting rich at this wonderful new game the politicians had created for them, also knew how to play the game of politics. They led the key Senators and Congressmen to the trough (follow the big money contributions right to the doorstep of Obama and McCain). Once they were all wallowing in it together, it was too late to fix it. So they all kept â€œpartying like it was 1999â€� and prayed the disaster would not occur until they were out of office, or out of the CEO suite.
So the crisis has come. The first thing to happen, of course, is the politicians pointing their fingers, calling the Wall Street guys â€œgreedy,â€� when they were only playing a game whose rules the politicians had established. Naturally, the politicians ignore the fact that in addition to being ignorant and clueless about business, they were equally greedy. How about the banking regulators that followed the politician's orders to encourage banks to suspend credit requirements so that low income applicants could own a home (they could not afford). Or â€œcommunity activist groupsâ€� like ACORN that stoked the fires. There is more than enough blame to go around.
Enough of how we got here, enough of the blame game. Let's look at the solution that is being stuffed down the taxpayer's throats- with little or no explanation, accountability or oversight- by the same people who caused this mess. They are trying desperately to convince us that they have the solution- even though they caused this whole mess and to make it worse, did not have the foresight to see it coming. Here's their big brilliant solution- give $700 Billion to a former Wall Street guy (the ex-chairman of Goldman Sachs Treasury Secretary Hank Paulsen), with an oversight committee made up of LAWYER LEGISLATORS. Then he'll use taxpayer money (yours and mine) to buy all the bad loans and bail out his rich Wall Street friends- using OPM (other people's money). Surprised? That's the only game that lawyers, politicians and Wall Street executives have played in their entire lives! What's wrong with this picture? EVERYTHING!
Now here's the part where it gets really bad- and the important thing to remember is that the financial guys on Wall Street knowing NOTHING about actually running a business. Now that we taxpayers own these billions of dollars (maybe a trillion) of bad loans, what are we going to do with them? The Wall Street guys say that's simple- you just hold the bad loans (or â€œpaperâ€� as they call it on Wall Street) until the market gets better and then you sell them. You see, for the financial types on Wall Street, the term "doing business" means moving money and paper around. That part is easy.
The hard part is what to do with the millions of defaults and foreclosures. Remember, there is a physical piece of property underlying these bad loans. When someone walks away, whoever holds the loan now owns a piece of property. When the banks and financial institutions own these mortgages, they have to take them over, fix them, and resell them. Who's going to do that when the taxpayers own them? Ah, here's where the politicians get involved again!
We are now looking at BILLIONS and BILLIONS more of our taxpayer money going to FOP's (Friends of Politicians)- mostly friends of the liberal Democrat-controlled Congress. Friends of Nancy Pelosi; Friends of Charles Rangel (who creates tax policy for the USA as Chairman of the House Ways & Means Committee, but recently was allegedly caught cheating on his own taxes); and of course, Friends of Obama- â€œcommunity activist groupsâ€� (like the corrupt ACORN) who are going to be awarded HUGE contracts and government handouts to deal with the foreclosures (the actual physical property). These are the same people who caused this catastrophic crisis in the first place- by demanding that government force bankers to loosen credit standards for low income Americans in the name of â€œequality.â€�
What will these community groups do with all these billions of dollars of our taxpayer money? Since they have even less business acumen than legislators, and will have absolutely ZERO incentive to return the taxpayers' money from these properties, they will do what they always do- offer great deals to their friends and cronies. And the people getting the benefit of this theft of taxpayer money in the form of â€œcan't lose sweetheart deals" will in turn give large contributions to the politicians who made it all possible. And you thought Wall Street was greedy? All the while, who is paying for all this- YOU, THE AMERICAN TAXPAYER! In this whole big mess it is the taxpayers- who bear none of the blame- who are the only ones on the hook for billions in losses.
So, what do we do? First it makes no sense to ask Congress to approve a bailout plan on 24 or 48 hours notice. I guarantee you that not one Congressman took the time to read the 400+ pages of this bloated piece of panic legislation. Or the financial acumen to understand the details of what they were reading, if they ever chose to read it. Think about that for a moment. Here we have the biggest taxpayer giveaway in history and none of our representatives bothered to read it or study â€œthe small printâ€� before voting on it. The devil is always in the details- so what exactly does the small print among those 400 pages say? I guarantee you it is a giveaway to special interest groups and a disaster for taxpayers.
My advice is to slow down, take a deep breath, and work on a plan that benefits the taxpayers on Main Street, instead of the politicians and their cronies on Wall Street. If this is truly so important that the fate of the entire U.S. economy hangs in the balance, why rush through a bad deal crafted on a few hours notice, and voted on without a discussion, debate or explanation to the American people?
My personal vote is to NOT do anything. Doing nothing is better than doing something bad that compounds the problem for generations to come. Let the free markets work. Let the companies who made the bad loans deal with them. If what the Wall Street big shots say is true, if these loans will rise in value over time, then let them hold them. If it's such a â€œsure thingâ€� that the values of these loans will recover, then the bankers should take the risk, not the taxpayers. Of course, if the bankers and Wall Street big shots are wrong or worse- lying to the American people- their companies will fail. But last I checked, that's the very definition of capitalism. I did not realize that the difference between capitalism and socialism is that, in socialism the government nationalizes profitable companies, while in capitalism the government nationalizes failing companies. I guess that I missed that point in my economics class!
To bail bankers and Wall Street out is truly un-American. It is to socialize Wall Street and the American banking system. To make things worse, to give Treasury Secretary Hank Paulsen what amounts to a blank check for his Wall Street buddies is a disaster for the American taxpayer- who bears no blame in this mess. The powers requested by Paulsen would mean yet another unprecedented and unconstitutional expansion of government by the Bush administration. But hey, what's the big deal about yet another violation of the constitution among friends?
I say NO to the bailout. I say NO to bigger government. I say NO to any more violations of the constitution. I say NO to believing that the government that caused this mess has the answers to solving it. I say NO to allowing big government and big corporations to bamboozle the American taxpayer into paying for a mess that we bear zero responsibility for. I say NO to voting for a bailout 400+ pages long, the details of which we know nothing about. I say NO to allowing ACORN and other â€œcommunity activist groupsâ€� to benefit by billions of dollars off the misery they caused. And I say NO to the hysteria on Wall Street that says rejection of the bailout will destroy the American banking and economic system. Perhaps it's the same Wall Street big shots and bankers who helped to cause this mess, that are manipulating the markets to freeze credit and drive stock prices down until they get a billion dollar bailout. I say let them (and the free markets) clean up this mess. Leave the American taxpayers out of it. The American economy has weathered worse, and it will weather this one as well. It's time to draw a line in the sand. My answer is NO!
I know what the politicians will say to my answer- that it is simplistic. Well yes, my answer is purposely simple. It was created with the American taxpayer in mind. What made it possible to think of such a simple, straight-forward, fair answer that doesn't fleece the taxpayer? Well that's simple too- I'm not a lawyer. I'm not a lobbyist. I'm not a union boss. I'm not a government bureaucrat. I'm not a politician. I'm not a â€œBeltway Insider.â€� I don't spend my days and nights thinking of ways to fool or fleece the taxpayers.
I'm just a S.O.B. (son of a butcher), small businessman, home-school dad and citizen politician from the common sense, low tax, limited government state of Nevada. And I hope to be your next Vice President of these United States. God Bless America, and the people that made this country great- the citizens and taxpayers.
Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: www.ROOTforAmerica.com