Posted on 10/09/2008 4:50:13 PM PDT by Tennessee Nana
Congressman Zach Wamp told the Chattanooga Rotary Club on Thursday as far as Congress was concerned, the bailout bill was never about the stock market, it was about the credit market.
Rep. Wamp said Treasury Secretary Henry Paulson came to Congress with a three-page explanation of the problem and a request for $700 billion, and it was Sec. Paulson who used the terms “Wall Street” and “bailout” in the same sentence.
Congress must protect the interest of the American people and the first bill, the Monday bill that he voted “No” on, did not protect those interests, Rep. Wamp said.
On the Monday vote, Rep. Wamp said, Congress was sending a signal to Wall Street that this situation was totally unacceptable and Congress was demanding accountability. He said he knew there would, most likely, be a second vote and therefore they had time to make this a better product.
Between the Monday vote and the Friday vote, Rep. Wamp said, a mountain of evidence was presented. If this could be likened to a jury trial, he said, the evidence would have been so overwhelming that a settlement would have been proposed and accepted.
“I don’t like (the situation) any more than anyone,” Rep. Wamp said. “I went to the floor (of Congress) and said nobody in my district hates this more than me.”
If the House had not voted it down on Monday, we would not have gotten some of the good reforms that we got in the Friday bill, he said.
A major reform in the Friday bill was an increase in FDIC insured funds from $100,000 to $250,000 for every depositor in America, Rep. Wamp said. The government of Ireland, in the midst of all of this, told their citizens they would stand 100% behind their deposits because they were afraid, as we were afraid, people would panic and pull their money out of the banks, he said.
The second reform that came from voting the measure down the first time was what is called market to market. The problem is, he said, that the financial services sector over the past decade has evolved into a mortgage-backed security sector and there are $11 trillion in funds pinned to those securities. These mortgage-backed securities were going upside down and were not worth what they were sold for, he said.
Rep. Wamp said the Securities and Exchange Commission stepped in, and in an effort to value them so they could be sold market to market, said the lowest common denominator (of a value that keeps going lower and lower), must be used. They could not use the market approach; they could not use the income approach; they could not use any other approach. They had to be valued at the lowest possible level and that value was then frozen.
Employers, employees and consumers then had a complete credit market freeze. That is why this has never been about the stock market, he said, it is about the credit market.
Rep. Wamp said he read one analysis of the crisis that said 1 of 2 steps must happen. “You can let the chips fall where they may,” he said, “or you find a lender of last resort.”
“There is only one lender of last resort and it is called the federal government,” Rep. Wamp said.
“We should listen to Warren Buffet about what to do,” Rep. Wamp said. “He knows more about (the market) than any single member of Congress.” Mr. Buffet said if this were a deal that he would make, he would make money on it. This is a good deal for the taxpayers and it’s a very necessary step at a critical time, Mr. Buffet is quoted as saying, Rep. Wamp said.
The fundamental question became, Rep. Wamp said, “Would Congress stand behind our economy or not?”
“I heard from large insurance companies, I heard from large pension funds, I heard from large foundations, and I heard from Mayor Ron Littlefield,” Rep. Wamp said. All were greatly concerned about the economic situation. All wanted to know if Congress was going to stand behind the economy or not.
Rep. Wamp told of a lady in Cleveland, Tn., with her son at her side and with special needs grandchildren, who told him “thank you” for his “No” vote but added, “Don’t leave Washington D.C. without doing something. Congress has to act.”
Freddie Mac and Fannie Mae, 10 years ago, began to extend credit to people who did not qualify, Rep. Wamp said. He said, over five years ago he applied for a loan to build his own house and the lender tried to get him to take a LIBOR loan (an adjustable rate, interest only loan). It would have saved him over $1,000 per month on the loan payment. The lender said, Rep. Wamp could buy a car with the savings. It was a sub-prime loan, Rep. Wamp said, and he did not fall for it. A lot of people did.
There is a lot of blame and there are a lot of lame excuses, Rep. Wamp said. He said he had members of Congress come to him the day he announced he was going to vote “Yes” and say, “Thanks for doing that, so I don’t have to.”
Rep. Wamp said a lot of people are concerned with what they are calling “pork” in the bill that he voted “Yes” on. It is unfortunate, he said, that the Senate added these items, but understand, he said, those were mostly items to correct some existing laws passed years ago that were bad laws. Another bill would have been forthcoming and it would have passed with those same “pork” items. It was a matter of taking 1 vote instead of 2, he said.
An example of that “pork”, he said, was the wooden arrows with a 35 cent excise tax. The law had been passed in 2004 intending to tax metal or alloy arrows used for hunting. Wooden arrows were never intended to be taxed. Wooden arrows probably don’t cost 35 cents to make, he said, and a poorly written law was taxing them 35 cents.
“Politically, it was really dumb to add to this package,” he said, “because it allowed the national media that is cynical and sometimes irresponsible, to say this was a sweet deal or this was pork. No, they (the Senate) just wanted to cast 1 vote instead of 2. They just added it and sent it back over to the House so we could explain it.”
“My view is, vote your heart, your conscience, and then go home and defend it. That’s what I’ve been doing, every chance I get,” he said.
“This latest rescue should remind us all how tenuous our fundamentals are; how delicate our entire system is; and that our way of life is not guaranteed to be extended from one generation to the next. It’s time for all of us to pull together and try to solve these problems and address the long-term sovereignty of our great nation,” Rep. Wamp said, in closing.
Bailout PING
Tennessee PING
Translation: CYA
Isn’t Wamp the only House GOP member from Tennessee to switch his “no” vote to “yes”?
I know my representative, Marsha Blackburn, did not.
Thanks for the ping.
I was just reading this article.
How are you TN???
I’m great...
How’s yerself ???
:)
Freddie Mac and Fannie Mae, 10 years ago, began to extend credit to people who did not qualify, Rep. Wamp said. He said, over five years ago he applied for a loan to build his own house and the lender tried to get him to take a LIBOR loan (an adjustable rate, interest only loan). It would have saved him over $1,000 per month on the loan payment. The lender said, Rep. Wamp could buy a car with the savings. It was a sub-prime loan, Rep. Wamp said, and he did not fall for it. A lot of people did.
_____________________________________________
Sounds like a great deal, eh ????
I like what Sarah said in her debate with “say it ain’t so” Joe Biden.
Our parents advised us to live within our means.
If only we could get predatory politicians to do the same.
Wamp is trying to rationalize his vote for the billionaire socialist bailout. He needs to be retired. He has the backbone of a chocolate eclair.
Great! It’s starting to rain up here in Northwest.
We had an elegantly sunny summer. Got a lot of
outdoor projects completed and now, we’re ready to
hunker down. It’s going to be a tough one if Obama
wins this election.
“It was a matter of taking 1 vote instead of 2, he said.”
That would have doubled their work load for the same amount of pork! (/sarc)
Lucky dog!
I am in a 2/3 Republican area, stuck with a Democrat.
Go jump in a swamp, Wamp.
It started to rain in Tennessee after Obama got here..
What does that mean ????
LOL
DING DING DING...no more calls folks. We have a winner.
L
Obummer!
Somebody tell me this is all a bad dream.
If not, tell me the Supreme Court will
rule the bailout unconstitutional.
Please, God! Please make it so!
Gee, congressman—when is it the responsibility of Congress or the taxpayer to “stand behind the economy”?
Now that the buffoonery of this “bailout” has been exposed, there needs to be an accounting and the guilty punished.
So what’s the new plan for doing that, Congressman?
If Gov, Palin comes out against the bailout and against Congress and against the nonsense “politics as usual” Gospel according to Wamp, we can still win this election
Against the standard bearer? I dunno if that would go over. He'd have to come out against it too, which would be flip-flopping. He's already dug too big a hole here.
And then he added a few more lame excuses of his own.
| I WANT CHANGE! FIRE CONGRESS |
“Against the standard bearer/”
Respectfully, yes. That’s precisely what I think must be done. Obama, Biden, McCain-insiders. The only outsider in the race- Gov. Palin. That’s a great adnatage for the McCain Camp.
In my small blog, I wrote: “ Although the campaign may view such a populist message as implicating Sen. McCain, it will nevertheless inure to his benefit. Yes, the media will challenge him by asserting that his own vice president is criticizing him as an insider. But, true to his maverick image, he can say-”yes, she is. But, that’s precisely why I wanted her with me. She has her own voice, and it’s the voice of the forgotten American middle class. And I’ll be the first to admit that there are times that those inside Washington become tone deaf as Mr. Obama, Biden and myself- But, that’s precisely why I choose Sarah, to be constantly by my side, shouting the voice of the people in my ear. While, I’m sitting in the Oval Office, middle class America’s foremost advocate will be right in the room with me.”
People will vote for Sen. McCain because he has at least 1/2 an outsider ticket-and 1/2 loaf is better than none. -:)
The market will keep on crashing UNTIL Bush goes to the Rose Garden and says he is unleashing the DOJ, the FBI, state AG’s, etc, etc etc.
Bush needs to say he is going after AIG, hedgers, Fuld, Raines and the FM crowd....and all of the greedsters who collapsed our economy, and that of the world.
When these crooks took hundreds of $millions out of these entitiies knowing they could not possibly pay back investors and taxpayers....they were committing massive crimes.......beyond pure greed.
Bush MUST announce at once that he is prosecuting these people.
TANKS,Nana,,,
This “bail-out” story seems to change every few days,,,
Big money/power grab goin’ on,,,
The DC crowd and the Fat-Kats won’t lose any money but
the Tax-Payer Will...:0(!Grrrrrrrrr...
Hanging, burning at the stake or crucifixion...the method doesn’t matter to me.
Sounds good to me——maybe throw in some of those nice medieval torture racks for good measure.
Heads on wooden stakes......mmmmm....that sounds really great.
LOL
Man50D, please see post 24 for my reply- Just my opinion, you’re probably right. _:)
I certainly hope y'all find the occasion to fix that this election season
:)
That's what I'd been hoping for when Palin was nominated. There may still be time to pull it off. A McCain/Palin ticket that was sold on that basis would be very powerful, since both McCain and Palin have unique strengths.
“Rep. Wamp told of a lady in Cleveland, Tn., with her son at her side and with special needs grandchildren, who told him “thank you” for his “No” vote but added, “Don’t leave Washington D.C. without doing something. Congress has to act.” “
He is making some sense. People dont want wall st bailed out, but they DO want govt to stop a meltdown. Congress was given a $700 billion pill to swallow and told if they didnt take it the US economy would die. What do you do? The financial meltdown was and is serious.
People like him were caught in the position of voting for a bill that had principles they didnt agree with or being party to letting the financial system burn down, cratering stock market and credit market-wise and with no serious plan to fix it and people would be demanding even more drastic (and wrongheaded) things.
As it is, we are still looking at the Fed and Treasury pulling out all the stops to avoid financial armageddon and it so far doesnt seem to be giving the markets any confidence. The good news is that many of the things the anti-bailout people were saying to try are being tried as well. Had the bailout failed, we be right about where we are no I think next week will be a different story.
Supercat, my friend, I think it may be the only thing they have left. She is the only person in the race that is BLAMELESS on the economy-
Way too late for that. It would be ‘erratic’ to say no to bailout now that it is a fait accompli.
It’s also irresponsible to say ‘no’ to something like that without proposing a credible alternative plan to unfreeze credit markets. If the proposal is to stand back and let the banking system collapse of its own accord, have a 5 year depression and rebuild from scratch. ... I dont think that will fly at this point.
You may be right. But for Sarah, it’s politically aafe. The bailout was loaded up with pork to buy votes- that’s typical, inside Washngton. People don’t understand about the credit market-they do understand that the stock market has dropped 2000 pts. Sarah can going after Fannie and Freddie and subprime and indict Democrats- without them coming back and pointing a finger at her. People like Sarah because she’s an outsider- it’s a compete waste to keep her an insider to protect McCain- when he benfits from her popularity. My opinon. -:)
First of all, show a serious commitment to prosecute the criminals who have stolen billions of dollars from investors.
Next, pass a law providing that anyone wishing to have a credit default swap paid must publicize its existence, amount, issuer, and nature. Additionally, when a credit default swap has triggered, that information as well must be made public.
Further pass a law that if the value of outstanding credit default swaps issued by a company exceeds the assets available to pay them, the assets will be frozen and allocated to the outstanding credit default swaps. When credit default swaps trigger, they will be paid based upon the allocated share of assets. If a credit default swap expires without triggering or is annulled (e.g. because it was paired with an equal and opposite swap), its share of assets will be reallocated to all the other swaps (including those already paid). Supplemental payments to already-paid swaps shall be made on a monthly or quarterly basis, depending upon amount.
Also pass a law allowing for consolidation by lottery of sliced-and-diced mortgage-backed securities. Although the law would have to be complicated to handle all cases, it would be best understood by a simple case: 100 people hold 1/100 shares of 100 mortgages. Five want to consolidate. Those five people get mortgages selected at random from the pool of 100. The other 95 end up with 1/95 shares of 95 mortgages. The probabilistic expected value for everyone is equal, and there's no risk of valuation fraud. Once individual mortgages are consolidated, their owners can then evaluate them to determine their worth and best course of action (keep collecting if they're good; foreclosure, renegotiation, rental, etc. if they're not)
Finally pass a rule providing that FDIC institutions which are underwater as a result of worthless paper, but which otherwise show an operating profit, may be allowed to keep going if they can demonstrate that they are likely to regain solvency.
I'm sure would be needed beyond those things, but they would seem to tackle more fundamental issues than the bail-out bill.
The irony of course is that by voting for the bailout he became a “party to letting the financial system collapse.” He should have listened to opponents of the bailout, such as Ron Paul, who said that a downturn was inevitable and no temporary plunge was worth the destruction of free markets, not the men who got us into this mess. He deserves no sympathy for his very, very poor judgement in voting for this great leap to socialism. He needs to be replaced.
.
Representative Zach Wamp has the most consistently conservative voting record of any politician from Tennessee. If he feels that he had little choice on this matter I believe it. Note how this crisis is now affecting foreign markets around the world.
The package had to be done to avert (or delay) a quick slide into actual Depression - as actions mean more to suppress panic responses (runs on financial institutions, etc.) that acerbate the problem. I feel kind of sorry for the few really good politicians like Wamp who are in a bad place at a bad time. But hey, go ahead and break out the torches, pitchforks and ropes if you must.
The people who should be facing just that response are Bill Clinton, Robert Rubin, Barney Frank, that puke Rains who bailed out of Fannie with 800 mil and his good buddy...Obama.
Have you checked the market?
How can a market function when nobody knows the rules?
..now he's trying to make the House Republicans **who voted for the people, the ones making the phone calls** look like the villains in this.
I find him disgusting!
I should have saved bandwidth....yours says it best!!!
Believe it or not, my Rep. Lincoln Davis (D) voted no! I'm shocked, shocked, I tell you! (and very, very glad that Wamp does not represent my district anymore).....
I've met Wamp on several occasions, including sitting across the desk from him in his office. He's far, far worse than anyone in the 3rd District imagines. He is a RINO on the fullest sense of the word.....
Also, Wamp's current claim that it wasn't Wall Street but the "credit" shortage that led to his vote strikes me as opportunistic revisionism.....now that the markets have tanked.
Actually, I stole them from Teddy Roosevelt....but thanks anyway!
Wasn’t ignoring or avoiding you; just returned from another 11 hour work day. Lots of that going around lately. If we who are willing to work are doing so to the maximum amount we can why are we having these problems? Because the oxen can never pull hard enough for the “entitled”, the lazy and the crooked.
Back to point - I haven’t been following Wamp closely during the last two years. He very well may have been afflicted by Potomic Fever and has to shave his emerging horn each morning. But! He was correct that it wasn’t BECAUSE of the stock market.
The stock market is a reactive entity and it’s responding to a financial vacuum in the mortgage markets created (and perpetuated) by Democrats determined to enable deadbeats to own homes at the expense of the nations’ taxpayers.
Let's assume you are right and it was entirely due to the credit shortage. If true, that does not reflect well on Wamp. To the extent there were credit problems, there are WORSE after the bailout was approved. This should be no surprise to anyone who knows economics. Inflating the money supply like mad has never solved anything and only creates more malinvestments. Again, it comes back to this. Wamp took the advice of the very men who causes the crisis in the first place including Bernanke, Paulson, and Frank. For God's sake, why? He can't rationalize his way out of that.
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