Pixel Tracker

Wednesday, November 21 , 2018, 5:06 am | A Few Clouds 48º

 
 
 
 

Michelle Malkin: Chicken Little Carries the Day

Amid cries of "the sky is falling," Congress panics with the best of them. Unfortunately, this bailout bill will do little to help the rest of us.

Will 2008 be the year of the Chicken Little Congress? Or can the House of Representatives show the panic-driven Senate what it really means to be a deliberative body?

Article Image
Michelle Malkin
On Sept. 19, Treasury Secretary Henry Paulson put a gun to America’s head: Pass his $700 billion bailout of the banking industry and give him unfettered new powers to buy up an ocean of privately held toxic assets, or all hell would break loose. Treasury officials warned that the market would lose a third of its value if the bill were not passed immediately.

“We could see falls of 3,000 or 4,000 points on the Dow,” a Republican official heaved. “We may not have another day,” Senate Majority Leader Harry Reid, D-Nev., hyperventilated. “We can’t afford to do nothing,” echoed all the other Democratic Henny Pennys and Republican Goosey Looseys in Paulson’s sway. It’s a “crap sandwich,” sighed House Minority Leader John Boehner, R-Ohio, but the costs of inaction would be worse.

On Sept. 29, the House refused to bite. The Dow dropped nearly 7 percent — a “record fall” in points (778), but nowhere near the apocalyptic levels predicted by Paulson’s fear-mongers. Half of that drop occurred before the bailout rejection. The skies, however gray, did not fall. The world did not end. The dire predictions of Paulson & Co. did not come to pass. The next day, stocks — their barometer, mind you, not necessarily mine — rebounded. We’re about where we were in 2006. Stock market Armageddon? I think not.

Paulson’s monumental misjudgment is no surprise to those who have paid attention to him over the last year. This is the man who proclaimed the subprime crisis “largely contained” in April 2007; “near the bottom” in May 2007; and “largely contained” again in August 2007. This is the man who pledged that he had “no interest in bailing out lenders or property speculators” in October 2007 and couldn’t “think of any situation where the backdrop of the global economy was as healthy as it is today.”

This is the man who patted himself on the back for refusing to “put taxpayer money on the line” to rescue Lehman Brothers on Sept. 15 —  and then turned around the next day and engineered the $85 billion taxpayer-funded bailout of AIG. This is the man who vowed he had “no plans to insert money” into Fannie Mae and Freddie Mac — and then turned around and committed $200 billion in capital and credit lines to those corrupt, bloated, crumbling institutions.

This is the man who declared that “the worst is likely to be behind us” in May — and then got down on his knees in front of House Speaker Nancy Pelosi, D-Calif. to pass a Mother of All Bailouts plan whose dollar figure was plucked from thin air. (“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com. “We just wanted to choose a really large number.”)

This is a man, in other words, whose crap sandwich should be taken with a huge grain of salt.

Last Wednesday, at the behest of Paulson, the Senate scurried to put Mother of All Bailouts 2.0 on the table. All but 25 members swallowed. The “world’s greatest deliberative body” had no time to hold hearings, consider alternatives or study the history of similar failed bailouts around the world. The Do Something Now Or Else mob did, however, have time to quadruple the volume of pages and stuff the urgent emergency package with business-as-usual earmarks, goodies and sweeteners.

Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., both cited credit squeeze scare stories to rationalize the rush. McCain decried: “When small businesses and big businesses like Sonic (Drive-In burger) franchisees can’t borrow, it hurts the entire community.” The rest of the story? Sonic clarified that “during the past year GE Capital provided less than 10 percent of the lending to its franchisees ... in fact, many franchisees maintain access to other diversified sources of financing. Furthermore, Sonic has not received any notification from GE Capital, either directly or indirectly, that it will stop financing new loans to Sonic franchisees.”

Lost in all the End is Nigh frenzy were dozens of local and regional headlines across the country reporting that, in fact, the end is not nigh: “Wall Street Credit Crisis Rings Hollow on Main Street”; “No credit freeze on Kern’s Main Street”; “Community banks aren’t yet feeling pinch of Wall Street meltdown”; “Farmers still able to get banks’ loans”; “Small town Main Street doing better than Wall Street.”

Instead, The New York Times obsessed about the drop in auto loan approvals over the last year — to 63 percent from 83 percent in 2007. Catastrophe? No. If lenders are finally realizing they shouldn’t give money to bad risks, why is that a bad thing?

Getting credit is not a constitutional right. Preserving home ownership should not be a government imperative to be pursued at all costs. The House faced a choice: Put the gun down and give our economic problems the time they deserve to get fixed — or fork over untold billions to a thoroughly debunked Foxy Loxy and his den of wolves.

Alas, on Friday, the House pulled the trigger and passed the bailout, 263-171.

Michelle Malkin is author of Unhinged: Exposing Liberals Gone Wild. Click here for more information. She can be contacted at [email protected]

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made using a credit card, Apple Pay or Google Pay, or click here for information on recurring credit-card payments and a mailing address for checks.

Thank you for your vital support.

Become a Noozhawk Supporter

First name
Last name
Email
Select your monthly membership
Or choose an annual membership
×

Payment Information

Membership Subscription

You are enrolling in . Thank you for joining the Hawks Club.

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover
One click only, please!

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.
You may cancel your membership at any time by sending an email to .(JavaScript must be enabled to view this email address).

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.