Scott Bradford: Off on a Tangent

$700B Bailout Fails in House

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Perhaps I spoke too soon. Despite the announcement that the president and Congress had reached agreement yesterday on an unprecedented Wall Street bailout, the bill went to the floor of the House of Representatives for a vote today and failed 228-205. It appears, much to my pleasant suprise, that sensible Republicans and Democrats joined together to vote against this reckless waste of your and my tax dollars.

Following the vote the Dow Jones Industrial Average dropped precipitously over 600 points. The Dow fluctuated up and down between a 400 and 600 point loss most of the afternoon before crashing again to a -777 point close. This is the largest one-day point drop in the history of the Dow, but it only accounts for about a 7 percent loss. Percentage-wise, this does not even rate in the top-10 of one-day losses.

The roll call on this vote is available from the Clerk of the House of Representatives web site . . . the title and description are misleading, since the bailout was apparently structured as an amendment to a previous and only-loosely-related bill, but this is indeed the vote tally for the bailout. Unfortunately my representative, Representative Frank Wolf (R-VA 10th), voted in favor of this ill-advised monstrosity.

Interventionism Lives

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Meeting their self-imposed deadline for figuring out how to waste 700 billion dollars of your tax dollars to bail-out the people and businesses who created our current economic ‘crisis’, the U.S. Congress and President George W. Bush (R) have reached a bailout agreement. Under the agreement, which is expected to formally become law this coming week, the government can use part of that $700b as free handouts and part as ‘investments’ where the taxpayers become partial ‘owners’ of some of these failing businesses.

Unlike Bush’s initial proposal, the new agreement would include limits on severance pay and other payments to the executives who created this mess. The bailout will be watched by two new government agencies charged with oversight, and the Department of Treasury is required to establish a government insurance program for the benefit of these failing businesses (with its costs coming out of the $700b figure).

In other news, largely ignored by the mass media, Congress has also passed a 25 billion dollar loan guarantee for failing U.S. auto manufacturers. This is the government’s largest intervention ever in the auto industry, eclipsing the 675 million dollar guarantee that saved Chrysler from its own idiocy in 1980. This is (potentially) more of your hard-earned dollars on the line trying to save American businesses that should instead be allowed to fail. Bad business decisions have consequences (or, at least, they should) and the government has no Constitutional or moral authority for intervening.

First 2008 Presidential Debate TONIGHT

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The first formal Presidential debate between Senator John McCain (R-AZ) and Senator Barack Obama (D-IL) will be held tonight at 9pm EDT. This is the first of three scheduled general election debates between the two major-party candidates. Third-party candidates are excluded from participation.

Tonight’s debate will be held at the University of Mississippi and will be moderated by PBS NewsHour host Jim Lehrer. The official topic of the evening is foreign policy and national security.

I strongly recommend that all Americans watch this debate, as well as the remaining Presidential and Vice Presidential debates between now and the November elections. For unfettered coverage, I recommend watching the debates on C-SPAN rather than any of the commercial broadcast and cable news outlets.

Fairfax County Bond Referendum, 2008

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Introduction

Virginia county governments are required to put bond issuance to a voter referendum in order to borrow money on behalf of the county. Bond issuance is usually used by governments to raise money for large capital expenditures, and those bonds are repaid to their purchasers at a later date with interest. Bond referendums in Fairfax County historically pass by a large margin, in large part because people think they are voting in favor of the agencies that will benefit (after all, who wants to vote against schools, parks, or transportation?). Many voters do not realize that bond issuance contributes to government debt and should be used sparingly.

Read more . . .

Rewarding Poor Choices

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U.S. banking firms, particularly in the mortgage industry, chose to offer mortgages to high-risk home buyers. Home buyers chose to take on mortgage payments they were unable to afford. Now, according to President George W. Bush (R), you and I—the American taxpayers—should rescue these companies and individuals from their own reckless decisions.

Thankfully, many members of Congress—conservative and liberal, Republican and Democrat—are drawing a line in the sand on Bush’s plan to spend $700 billion of your dollars on rewarding bad decisions.

The best course of action the government can take to stabilize the economy is to stop interfering. No rescues, no bailouts, no Mommy Government fixing all Americans’ mistakes. Bad decisions have consequences, and the best thing to do is let those consequences take their course. Yes, some businesses will fail. Yes, some homeowners who overextended themselves will lose their homes. Sorry guys; you reap what you sow. Maybe next time you won’t offer 1 million dollar mortgages to people who make $30,000/year. Maybe next time you’ll read the fine print and refuse to sign a mortgage that you can’t afford.

The government has no right to redistribute your and my hard-earned dollars to the very people and businesses who created this ‘crisis’. A 700 billion dollar hand-out won’t fix the ignorance and stupidity that led to these economic troubles, nor will it have any benefit for the vast majority of us who are actually doing just fine (because we made smart decisions). I don’t know what kind of ‘conservatism’ President Bush thinks he is practicing; a 700 billion dollar bailout of private businesses sounds more like Roosevelt-style economic interventionism.

Scott Bradford is a writer and technologist who has been putting his opinions online since 1995. He believes in three inviolable human rights: life, liberty, and property. He is a Catholic Christian who worships the trinitarian God described in the Nicene Creed. Scott is a husband, nerd, pet lover, and AMC/Jeep enthusiast with a B.S. degree in public administration from George Mason University.