Remember when Grover Norquist said he wanted to shrink government so small that it could be drowned in a bathtub? And conservatives cheered, sneering at big-government liberals who want to steal money out of the pockets of the honest American businessman and give it to welfare queens so they can drive their Cadillacs and feed their 900 children?
After eight years of Norquist’s Party running Washington, how’s that working out for us?
The Bush administration seized control of the nation’s two largest mortgage finance companies on Sunday, seeking to shrink drastically their outsize influence on Wall Street and on Capitol Hill while at the same time counting on them to pull the nation out of its worst housing crisis in decades.
The bailout plan for the companies, Fannie Mae and Freddie Mac, a seismic event in a year of repeated financial crises followed by aggressive federal intervention, places the companies in a government conservatorship, much like a bankruptcy reorganization. The plan also replaces the management of the companies.
Whhhhhaaaaaaattttt? Isn’t this the mighty hand of Uncle Sam, reaching out to, gasp, REGULATE these corporations? But-but-but, I thought we had a free market here! I mean, since those companies were managed poorly and cannot meet their obligations, obviously they should fail. You snooze, you lose, greed is good, shit happens, right, Ronnie Raygun/Bush Part Deux?
[Treasury Secretary] Paulson said Sunday that it was important to rescue the mortgage giants because a failure of either company would cause turmoil in financial markets in the United States and around the world.
“This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement,” he said. “A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation.”
Uh-HUH. In other words, the institutions were allowed to get too big to fail, and the American people will have to pay the price of corporate mismanagement once again. Call me crazy, but I don’t think that’s shrinking government at all.
The article continues in a very interesting way. It quickly moves to defend free-market ideologues by saying they had cautioned against the backing of Freddie Mac and Fannie Mae by the federal government. Ha, ha, they were right! Just let the corporations do exactly what they want and let the chips fall where they may! Yet this argument is utterly ridiculous, considering that Bear Stearns, which also received a huge government bailout, was not officially backed by the federal government. And notice that at no time do these wise and prudent economic geniuses condemn the practices that actually got these lenders into trouble in the first place.
Thanks to the awesome government-shrinking philosophy of the Bushies, yet ANOTHER government program is being proposed to prop up these companies:
In addition, the Treasury Department will create a so-called Secured Lending Credit Facility, a backup source of borrowing for the companies in the event that they cannot borrow enough money on the open market to finance their main business of buying mortgages and reselling them as pools of mortgage-backed securities.
I would like to propose a radical idea: When you regulate corporations properly, government actually gets smaller. Here are two reasons why:
- Fewer monopolies. Freddie Mac and Fannie Mae hold or guarantee more than half of the country’s mortgages. If we had kept the Sherman Anti-Trust Act active (it was used to break up AT&T in 1982), this monopoly would never have occurred. Thus, companies like Freddie, Fannie, Bear Stearns and Morgan Stanley would never have gotten “too big to fail.” And you and I wouldn’t be forced to aid and abet them in their malfeasance.
- Better financial practices. The “bursting of a bubble.” Sounds so inevitable and passive, doesn’t it? Yet the housing bubble did not have to burst in such a destructive manner. The main reason for the far-reaching consequences of the plunge in housing prices is deregulation. Financial institutions were not always allowed to invest in mortgage-backed securities. Mortgage lenders were not always allowed to make loans of $800,000 to people making $50,000 a year, nor were they allowed to charge any interest rate they desired and put in clauses so convoluted that only a real estate attorney could possibly understand them. The regulations preventing these abusive practices were loosened in 1999, when Bill Clinton was a lame duck and the Republicans controlled Congress. And Republican Phil Gramm was a chief architect of this brilliant plan.
As a liberal, you might think I would be for “big government.” Not at all. I’m for focused government.
- I want my government protecting me from rapacious corporations, not protecting rapacious corporations from me. So, the FISA “Compromise” should never have been passed. AT&T and other telecoms knew exactly what they were doing when they agreed to spy on Americans illegally. They broke the law and if I want to sue them for it, I should be able to.
- I want the government to deregulate my private life, and regulate my public life. Hello, Government? Stay out of my fucking uterus and my emails. Get a warrant if you think I’m a criminal and have the ability to prove it. Thank you. Meanwhile, please put real criminals in jail, no matter what the color of their collars. Yes, Dick, George, Condi and Rummy, you committed war crimes. You deserve leg irons and orange jumpsuits.
- I want the government to be responsible to the bottom 90%, not the top 10%. Look, does Lee Raymond (ex-chairman of Exxon-Mobile) really need another chin? Make the corporations start paying their damn taxes. Make the oil companies pay the back rent on their leases. And for God’s sake, why is Warren Buffett paying less tax than his secretary?
These are the main issues that made me a Hillary Clinton supporter, and I believe that a lot of Americans, no matter what they call themselves, would concur.
This election has taught me that we voters must stop demonizing each other and work together to get our country back, no matter who wins in November. We are never going to agree on everything, but I believe we can agree on the important things.
And that’s what makes me a liberal, and a PUMA Democrat.