I am stunned by the level of media cheerleading for the bailout. This is quite possibly the most serious example of journalistic dereliction of duty in my lifetime. Every news story I’ve read on the matter is grotesquely biased in favor of the bailout. While the editorial pages I’ve seen have been little better, at least some of them have passed along substantive dissenting views.
Nevertheless, one can learn some interesting facts from the news accounts; even cheerleaders often follow the game. I’ll take a peek at the Associated Press article currently leading at the web page of the Rocky Mountain News.
The article relates the statement of Senator Wayne Allard, who voted against the bailout:
“In considering proposals to stabilize the economy, taxpayers have always been my top priority,” said Allard. “In creating this $700 billion package, Congress held no hearings, nor did it use a process to provide a reasonable assurance that this proposal would even work. I am unwilling to leave a huge legacy of debt for generations to come without confidence that it would be worth the price.
“I have always believed that the government should live within its means and thus have opposed increasing the federal debt limit. The bill before Congress would increase the national debt to a whopping $11.3 trillion. I believe that Congress can find a way to unfreeze the credit markets without unfairly penalizing American families for the greed and mismanagement on Wall Street.” …
It would have been pleasant if Allard had correctly identified the cause of the crisis — primarily federal encouragement of risky loans — rather than blame the foggy “greed and mismanagement on Wall Street.” (Senator Ken Salazar, who voted in favor, says he’s “angry and frustrated” that “the economy has reached this point.” But “the economy” is the sum total of all the players, including the federal politicians who caused the crisis.)
But at least Allard points to the simple fact that all this money is going to come from… thin air. Meaning inflationary, deficit spending.
The AP relates: “Senators loaded the economic rescue bill with tax breaks and other sweeteners…” That’s grand. At the same time the federal government is going to be spending more money, it’s going to be taking in less money. Tax cuts without corresponding spending cuts are worthless — except insofar as they cloak redistributions of wealth.
What are the other “sweeteners?” Federal backing of more bank deposits. So that banks can mismanage their assets without scaring their customers. Various other forms of tax cuts (again without any corresponding spending restraints). “$8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.” “Help for rural schools was aimed mainly at lawmakers in the West.” Because what we need right now is even more deficit spending, even more forced wealth transfers. The article’s closing paragraph contains this gem: “The rescue bill hitched a ride on a popular measure that gives people with mental illness better health insurance coverage.” I don’t know the details of this, but presumably it’s some sort of mandate that will transfer certain insurance costs to other premium payers.
As the AP summarizes, “the long list of sweeteners [the Senate] added was designed to attract votes from various constituencies.” In other words, the $700 billion transfer by itself didn’t pay off enough special-interest groups.
And if all that weren’t comforting enough, Victor Davis Hanson offers a a heartening preview of the foreign-policy implications of America’s economic woes.
This thought has been crossing my mind quite a lot lately: certain things are starting to feel altogether too much like the decaying world of Atlas Shrugged.
But, hey, who is John Galt?