Perspective on Financial Mess on Wall Street

The thing that's on everyone's mind seems to be the financial crisis on Wall Street and the $700 billion bail-out that is being proposed in Congress.

This morning I read two articles that to me bring clarity on the seriousness of the financial crisis and the need for John McCain to step up and provide decisive leadership.

The first article is by Governor Mike Huckabee called "Bail Out" who I've come to respect and who I supported in the Presidential primaries. The next is by Newt Gingrich who I believe is one of the most astute political observers in Washington. Feel free to forward these to your associates and friends. As always, give us your thoughts on the blog at the end of the Strang Report.


Bail Out, by Mike Huckabee
September 23, 2008 - 08:01 PM
http://www.huckpac.com/?FuseAction=Blogs.View&Blog_id=1899

Frankly, I’m disappointed and disgusted with my own Republican party as I watch them attempt to strong-arm a bailout of some of America’s biggest corporations by asking the taxpayers to suck up the staggering results of the hubris, greed, and arrogance of those who sought to make a quick buck by throwing the dice. They lost, but want the rest of us to cover their bets so they won’t be effected in their lavish lifestyles as they figure out how to spend their tens of millions and in some cases, hundreds of millions in bonuses and compensation which was their reward for not only sinking their companies, but basically doing the same to the entire American economy.

It’s especially disconcerting to see the very people who pilloried me during the Presidential campaign for being a “populist” and not “understanding Wall Street” to now line up like thirsty dogs at the Washington, D. C. water dish, otherwise known as Congress, and plead for help. I thought these guys were the smartest people in America! I thought that taxpayers like you and I were similar to the people at the U. N. who have no translator speaking into their headset - that we just needed to trust those that I called the power bunch in the “Wall Street to Washington axis of power.”

The idea of a government bailout in which we’d entrust $700 billion to one man without Congressional oversight or accountability is absurd. My party or not, that is insanity and I believe unconstitutional.

Will there be far-reaching consequences without some intervention? Probably, but we honestly don’t know since we’ve really never seen this level of greed and stupidity all rolled into one massive move. But may I suggest that letting “Uncle Sugar” step in and bail out the billionaires who made the mess will be far worse and will start a long line of companies and individuals who will demand the same of the government---which last time I checked means that they will be demanding it out of YOU and ME. This is not money that Congress is risking from THEIR pockets or future, but ours. Many if not most of us have already experienced lost value on our homes, retirement accounts, and pensions. Now they’d like for us to assume some further risks so they won’t have to.

What happened to the “free market” idea? Is that only our view when we WIN and when we LOSE, we ask the government to come in and take away the pain?

If you are a small business owner, is this the way it works at your place? When you have a bad month, a bad year, or face having to close, can you go up to Congress and get them to write YOU a fat check to take away your risk?

Some of what contributed to this disaster is too much government in the form of Sarbanes/Oxley. Some is due to the tax structure that created the hunger for companies to “game” the system. Some is the common sense that was ignored like loaning money to people who can’t pay it back.

Wall Street has become Las Vegas east, but at least in Vegas, people KNOW they are gambling and they don’t expect the government to cover their losses at the tables. In Wall Street, they do. And the American taxpayer burdens the responsibility.

If Congress wants to do something, here are some suggestions:

1. Eliminate ALL capital gains taxes and taxes on savings and dividends right now. Free up the capital and encourage investment. This is the kind of economic stimulus the Fair Tax would bring and if Congress is going to lose money, let them lose it with lower taxes, not with public dollar bailouts of private market mistakes.

2. Repeal Sarbanes/Oxley. It has failed. It was supposed to prevent this. It didn’t. Kill it.

3. Demand that the executives who steered their ships into the ground be forced to pay back the losses of their companies. Of course, they can’t, so let them work and give back to the government and they can live like the people they put on the streets or kept there. It makes no sense to put them in jail—that’s just more they will cost you and me. I’d rather them go out and earn money—just not get to keep so much of it this time. I’m not talking about limiting CEO salaries---just those of the people who now are up in Washington begging for help because they ruined their companies.

Attempts by Democrats and Republicans to blame each other is nonsense. They are both guilty and ought to own up and admit it. They all lived off big campaign contributions and the swill of the lobbyists who strong armed them into permission to steal. Enough of blame. Fix it!

This would be a start. If we don’t hold these guys responsible, we are all finished.

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Gingrich: McCain Must Oppose Bailout
http://newt.org/tabid/102/articleType/ArticleView/articleId/3733/Gingrich-McCain-Must-Come-Out-Against-Bailout.aspx

September 23, 2008 5:11 PM

ABC News' Teddy Davis Reports: Former House Speaker Newt Gingrich said Tuesday that President Bush's proposed bailout plan is a "dead loser on Election Day" and urged Sen. John McCain, R-Ariz., to come out against it, saying that the GOP nominee cannot be for it and maintain his claim to be a reformer.

"I don't know how he can vote for this and with a straight face go around and say that he's for real change and he's the reform candidate," Gingrich told ABC News.

Gingrich's comments were the latest sign that the presidential campaign could be upended by the Bush administration's $700 billion plan to buy up and hopefully resell troubled mortgage-backed securities.

If McCain were to come out against the bailout plan, Gingrich said that Republicans would rally to his side and it would become possible for the McCain-Palin ticket to style itself as "taking on the Bush-Obama establishment."

"Either McCain is going to go along" with Obama in supporting the plan, said Gingrich, "in which case the establishment will have the fix in . . . or you are going to see McCain decide, much in the way that he did in picking Palin, that, in fact, he is a genuine maverick, that he genuinely defends the taxpayers, and that this is a terrible bill."

"If the latter happens," Gingrich continued, "I think you will see the emergence overnight of a 'McCain Reform Wing of the Republican Party' and you'll see House and Senate members siding with McCain by overwhelming margins and then you'll be in a very different political environment. You'll have 'Bush-Obama ads' on the one side and 'taking on the Bush-Obama establishment' on the other side, and that will be, frankly, one of the more amazing elections."

Left unsaid by the former Speaker is the possibility that the bailout plan would simply die if McCain were to come out against it, which in turn, could deprive the McCain-Palin ticket of the opportunity to run against the "Bush-Obama establishment."

"If McCain doesn't come out for this, it's over," a top House Republican told ABC News' George Stephanopoulos on Tuesday.

Gingrich is against the bailout plan because he thinks it is "inconceivable" that the Treasury and Fed can manage Wall Street.

While coming out against the bailout plan, Gingrich forcefully rejected the contention that he favors doing nothing and laid out a conservative alternative.

Gingrich's four-point plan includes: (1) suspending immediately mark to market provisions (the accounting practice of valuing a financial position in an investment at its current market price) in the hopes of stopping the downward spiral in asset values and eventually replacing it with a three year rolling average; (2) repealing immediately Sarbanes-Oxley, the 2002 accounting law Gingrich described as "an enormous drag on small business"; (3) setting the capital gains tax rate at zero "matching the Chinese and Singapore" (to encourage private capital to flood into the market picking up properties without the taxpayers being at risk); and (4) passing an "extraordinarily powerful" energy bill ("to return $500 billion a year to the American economy that are currently going overseas").

Gingrich spoke with ABC News in Washington, D.C., after participating in a polling presentation sponsored by American Solutions, the group he established last year which works to identify issues that have a majority support among Republicans, Democrats, and independents.

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