This is the man who declared that "the worst is likely to be behind us" in May 2008 -- and then got down on his knees in front of Nancy Pelosi 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.
On Oct. 1, 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.
John McCain and Barack Obama 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 … [i]t 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 -- from 83 percent in 2007 down to 63 percent. 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 faces 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.
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