Posted on 09/17/2008 9:56:04 PM PDT by NormsRevenge
Republican lawmakers and conservative leaders are angry about the latest in a string of government bailouts announced less than a month after they renewed their pledge to control federal spending.
The Federal Reserve on Tuesday announced an $85 billion bailout of the insurance giant American International Group (AIG), surprising many lawmakers, both Democrats and Republicans, who had received little information in the preceding days.
Conservatives on and off the Hill said this week’s massive bailout violated free-market principles and encouraged reckless behavior in the future.
“I’m dubious,” said Sen. Jeff Sessions (R-Ala.). “I have not heard why its failure would cause catastrophic market dislocation. The question is, where do you stop? What company do you bail out next?”
Leaders from both parties faulted the lack of a communications effort by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.
Senate Majority Leader Harry Reid (D-Nev.) told reporters that he received no consultation from Paulson or Bernanke before he met with them late Tuesday. By that time the deal had been set.
“They were not there asking us what to do, they were there telling us what they were going to do,” Reid said of the meeting with the two officials. The Federal Reserve will lend $85 billion to the insurance giant in return for an 80 percent stake in the company, effectively taking it over.
The Bush administration’s action left many Republicans puzzled. They had applauded Paulson’s decision over the weekend not to bail out Lehman Brothers, the prominent investment bank that declared bankruptcy Sunday night.
“Many Republicans felt the signal sent by the Lehman Brothers action was a positive sign that the government wasn’t always going to be there to assume the worst of the risk,” said House Republican Whip Roy Blunt (Mo.). “The AIG decision confuses that signal quite a bit. I think it’s important that both Secretary Paulson and Chairman Bernanke or their designees come up and explain to us why that latest decision had to be made in light of the Lehman Brothers decision.”
Republican Conference Chairman Adam Putnam (Fla.) voiced the same concern.
“The communication lines are not operating effectively,” he said.
Rank-and-file Republicans offered harsher assessments.
“I really resent the privatization of profit and the socialization of loss,” said Rep. Brian Bilbray (R-Calif.), who noted that companies get to keep their profits when times are good but the taxpayer ends up paying for losses during financial turmoil.
Rep. Zach Wamp, a Republican, said voters in his Tennessee district don’t understand why the federal government needs to rescue big New York-based companies such as AIG and Bear Stearns Co., a bank JP Morgan Chase bought earlier this year with the help of a $30 billion government loan.
“I think we should all be incredibly concerned about this knee-jerk reaction from the federal government to bail out AIG,” he said, predicting a lineup of other troubled companies asking: “If you’re going to bail out AIG, what about us?”
Conservative lawmakers and thinkers say they are alarmed by the growing trend of federal intervention. In addition to providing massive loans to prevent the complete collapse of AIG and Bear Stearns, the administration unveiled a bailout plan for the mortgage finance giants Fannie Mae and Freddie Mac earlier this month. Congress also passed a housing bill earlier this year to rescue thousands of Americans facing home foreclosure.
I’m one conservative who is very pissed about these bailouts.
Senator McCain warned them that this was going to happen back in 2006. They never should have let the ‘RATS shut them down. I think if anyone can fix this mess it’s McCain/Palin. Obammie and his boys will only make matters worse.
If someone would have told me ten years ago that the United States would borrow money from the Chi-Coms in order to Nationalize one of America’s largest companies I would have said they were insane.
But that is exactly what we have done.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
The entire house of cards these clowns have built over the last 40 years is in real danger of collapsing.
I think that would be a good thing.
L
You know, I’m starting to question this AIG bailout also. Apparently, it took everyone by surprise (including McCain - who was made to look like a fool by the Bush administration) - taking a position one day (yesterday - against AIG bailout) and then being forced to say it’s ok today.
Why is the Bush admin keeping the McCain campaign in the dark about something as important as this - that they couldn’t keep them informed as to the prospects of what could happen with AIG???
And just why did the Republicans sit on their hands while this was happening?
I feel like we are becoming communist China.
but I saw all of this coming from miles away. Those of us who live on Main Street started feeling the stress in 2006 and 2007. It was eventually going to reach Wall Street. Parts of the country have already been in a deep recession. The housing market is in a depression. We are spending a fortune on oil. It took a lot of terrible decision making on all levels to get here. The people at the Federal Reserve need to learn, when you are in a hole, STOP DIGGING.
EVERYONE is pissed about these bailouts! A poll said 7% of people agree with these bail outs. I am furious! I blame a lot of people and not just Republicans. I want to know why they can not reverse some of these bail outs. People are so thrown off base right now, but everyone should be on the phone saying, “Hands off! Let them fail miserably and none of this severance BS!!” Let capitalism work.
Is there any doctor brave enough to face the filth, odor, and contamination that will flow out with any attempt to lance it?
At present, I only know that Obama is not the person to do so, he only wants to do more of the same, or worse, in the name of 'economic justice.'
I don't feel too hopeful at this point that anybody has a back stiff enough to do the job.
You’d have to ask them. Probably the money.
well, we don’t want an economic catastrophe...
Patch up the problem and look at the cause: easy money by the Fed and the Bush/Clinton which pushed easy loans to those with bad credit in order to increase home ownership.
Could it be because McCain is not going to be a continuation of Bush?
You’re seeing anger by Conservatives about this, and we must press the issue on the National stage. So far I haven’t heard anything from the Democrats, save for 0bama offering the normal socialist solutions.
We have to press the issue and include investigations of the congress on this, which is where the Rats are vulnerable. Expose them for the corrupt politicians that they are.
Yes it would be a good thing, at least to wake up American taxpayers. Imo.
Leaders...my ass! More like cowards afraid to make any decisions and take any responsibility.
These bailouts are unconstitutional.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
What the govt buys, the govt can sell back. Hopefully, if McCain-Palin can win, they can come up with a sensible plan to ‘divest’ to govt of all of this userption of private capital - BUT - with good sound regulatory oversight of FM&FM - before they can divest back off their books. Like a business who ‘spins-off’ the good and the bad, the divestiture plan can incorporate the same objectives.
everyone today is upset at the bailouts. But they sure weren’t complaining when they had easy money and flipping houses all the time. That wasn’t capitalism; that was pushed by the govt.
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