Economic proposal smackdown creates Super Bowl of US politics

Thursday night, key Democratic leaders spoke on C-Span about the “rescue” (aka “bailout”)  proposals. Harry Reid (D-Nev.) looked and sounded exhausted. Nancy Pelosi (D-Calif.) appeared to be short of breath. Barney Frank (D-Mass.) did his usual meandering , and lateraled a few criticisms at Sen. John McCain (R-Ariz.). Chris Dodd (D-Conn.) took his turn, cheerleading fellow Dems and insinuating McCain had put forth alternative plans. A flag should’ve been thrown at Dodd because McCain didn’t put forth any plans. These leaders were followed by a group of House Republicans who basically copped an attitude—because they can. Republicans are taking a cautious tack and this should come as no surprise. The basic creed of the GOP goes directly against government bailouts. And in the middle of all this, the Dems come forth with a new stimulus package totalling $56 billion on top of the $700 billion.

Pundits and analysts are lining up on both sides of the field in what has become the Super Bowl of U.S. politics, a financial tournament where the American people have much at risk and there seems to be no clear way to the goal post for either team. What to do?

Caution is necessary
For starters, it’s a good thing the process has now come to include caution, although I admit time is pressing. But if there’s a way to keep $700 billion in debt off the U.S. books in a single lump sum, I’d surely like to know about it. Liberals are bashing Republicans; conservatives are returning the favor. Newt Gingrich, former Speaker of the House, called the original proposal “stupid.”

Meanwhile, Democrats have come up with a new stimulus package, hoping another $56 billion will be dedicated to “Main Street.” Or at least that’s how Sen. Robert Byrd (D-W.Va.) chair of the Appropriations Committee describes it. I assume the senator who will soon be 91 years old managed to stay awake while offering his own remarks. I bring up his age only because of repeated attacks on McCain because of his and he’s a lot younger than Byrd. McCain’s got way more spring in his step than Frank, Reid and company. And why you would want to introduce a stimulus package right now is beyond me.

Who’s doing the posturing?
I’ve seen a number of Democrats on camera, including Sen. Barack Obama (D-Ill.) yesterday. Dems have pointed a finger at McCain, accusing him of   “politicizing the process.” Ironically, I haven’t seen McCain on camera at all, leading me to wonder who’s really doing the political playing. If McCain is playing politics, he’s not doing it on CNN or Fox. Meanwhile, votes for passing the Dem proposal have not materialized. And Dems are not going to pass a proposal requested by a Republican president without the Republican Party’s support in the House and Senate.

Plenty of fraud to go around
I’ll repeat an opinion I formed months ago about the mortgage lending business in general. We will confront astronomical fraud, just as we continue to confront the astronomical fraud in Medicare and Medicaid. It took me less than an hour to locate more than $125,000,000 in fraud in mortgage lending. Records are available to the public at the FBI website. The figure I cite came from only 3 field office reports. Imagine how much is there overall.

Thus far, all flags are thrown onto the Wall Street side of this battlefield. But I promise you this mess was not created by Wall Street alone. There are some seedy players behind the lines on the Main Street side of the field as well. This meltdown comes from mortgage lending at all levels, from the eager beaver real estate agent to the criminal creating fraudulent records to the lending institutions lured by prospects of high profits. And of course other factors such as mandates to banks to write high risk loans (or risk not being able to grow their business) also impacted this fracas.

Does accounting figure into this meltdown?
Another factor completely overlooked—removing penalties from auditors who screw up. Dodd himself was heavily criticized for what some perceived as his work on behalf of the auditing industry in 2002, getting a bill passed over President Bill Clinton’s veto that in part limited liability. Dick Morris described the limitation this way:  “Lawsuits accusing corporations of defrauding investors by making misleading forecasts would be restricted by creating a 'safe harbor' for most forecasts.”

It’s my opinion when a game carries extraordinarily high risk stakes, caution is a friend to wisdom. McCain was wise to go to Washington. He is one of the few in Congress who has “reached across” that famous aisle, sometimes to his own political detriment and he never met an earmark he liked.

 Right now, the Republicans in the House have the ball, and the Super Bowl prize isn’t a ring—the prize is the U.S. economy. Be glad this game hasn’t moved the ball too quickly down the field because every taxpayer stands to become a winner or a loser in this “rescue plan.”