"If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions. Duty is ours, outcomes belong to God," said Rep. Mike Pence (R-IN) as he implored his fellow members of Congress to place a priority on solving a problem rather than just passing legislation.
Vote in accordance with convictions they did, demonstrating true leadership, and perhaps saved the country from a terrible deal.
Political opportunism led Speaker Nancy Pelosi (D-CA) to bash not only Mr. Pence and others like him for opposing the bail out plan, but also the last decade of pro-growth policies.
But the real reason for the "no" votes is that many recognized a bad deal for the American taxpayer—confirmed by the flood of calls from their constituents who don’t like the deal.
Call it representative democracy.
Simply put, the plan brought to the Hill, and even after it was “improved” over the weekend, was too much money, too much government, with no guarantee that any of it would work.
Homeowners faced with foreclosure, or those who have lost their homes, would have received virtually no help. Nor would homeowners with houses worth less than what they owe. Certainly the drop in home values would not have changed.
Of course, Congress can do something, and no doubt the average “main street” person wants something done—just the right thing. And the right thing is not a package that secures political futures or secures Wall Street tycoons.
So, how about beginning with a few things that could help?
- Why not temporarily suspend the mandatory use of the mark-to-market accounting standard for banks holding mortgage assets?
- Why not a “loan out” rather than a bailout? Loan companies the money they need at, say, 2 percent above the prime interest rate?
- Why not just an insurance package? One approach is to boost the size of accounts covered by the FDIC from $100,000 to say $250,000.
- Why not repeal the Community Reinvestment Act, or at least those provisions that require risky lending?
Main Street Americans are about as mad as we have ever seen them, and they didn’t want the deal on the table. That doesn’t mean no deal, just not that deal. Sometimes bad deals are simply just bad deals—everyone on Main Street knows that. Now the job is to get a deal the public can support.