Thursday, September 25, 2008

"Hell No" to Bush Billionaire Bailout

COAST calls on its members to contact their Congressmen and Senators immediately to oppose the latest $700 Billion bailout for America’s richest citizens proposed by President Bush. The vote in Congress presently is anticipated Thursday or Friday. To date, the actual language of the largest bailout bill in American history, which Brit Hume of Fox News says will be voted by the most unpopular Congress in American history at "historic speed," has not even been presented.

Jason Gloyd, COAST Chairman, called the plan "socialism for billionaires and the worst idea of our lifetimes," and said "it is the start of our fastest descent into a government-controlled economy in American history. Washington's interference in financial markets has created this crisis, and Washington's welfare for billionaires will just exacerbate the pain for middle class taxpayers and prolong the downward descent."

The new $700 billion requested by Bush would be on top of more than $415 billion already spent by the Treasury to bail out the failing businesses of billionaires: Bear Stearns ($30 billion), Freddie Mac and Fannie Mae ($300 billion), and AIG ($85 billion). With the new monies sought, the bailout total will exceed $1.1 trillion.

Auto Industry already seeks its (initial) bailout
COAST pointed out that if we bail out Wall Street, inevitably the auto industry, saddled with decades of poor performance, inflexible unions and horrible management putting out an inferior product, and will seek and obtain bailouts as well. See here how Nancy Pelosi and Harry Reid are already scheming for another $25 billion bailout of the poorest performing segment of the American economy. After them, other powerful segments of the economy, with expensive lobbyists handing out huge political contributions, will seek their Washington handouts as well.

Liberal, big-spending Democrats will correctly ask: "If we have $700 billion for billionaires, why can't we fund $1 trillion in new urban capital, why can't we fund $1 trillion in new healthcare spending, and why can't we spend $1 trillion on some new social program?”

Belief In Markets
COAST asserts that believing in free markets, believing in the strength of capitalism, means having the courage to allow poor performers to fail. "Admittedly, it is always a step of faith to allow the markets to find their own equilibrium," said Gloyd. "Bad businesses will fail, and smart businesses will succeed. But in the end, those who are hard-working, smart and thrifty will thrive. The only other option is allowing Washington politicians and bureaucrats to choose the winners and losers -- in exchange for political contributions and even outright graft."

Hear what others are saying about the Great Billionaire Bailout of 2008

COAST is by no means alone in attacking the horrible plan hatched by Bush bureaucrats:

"This is an appalling bad plan and an engine of corruption. It enriches some people by giving them more than they can get [in the market] and not enriching others. The idea that some bureaucrat in Washington is responsible for managing bad paper is socialism at its very worst. It's wrong in every way. It's wrong to take money and bail out Wall Street. It's wrong to give that kind of power to the secretary of the treasury. We don't know what the rules are. We don't know what the structure is. This is all going to be decided in secret by a handful of congressmen and the Secretary of the Treasury with no American knowing what's being decided, and yet it could shape this country for the next 20 years.” -Former House Speaker Newt Gingrich

“This massive bail-out is not the solution, it is financial socialism, it is un-American.” -Kentucky Senator Jim Bunning

"The government brought the economy down, they broke this, I don't think they can fix this. Forget this bailout and focus on pro-growth policies that help our free enterprise system work better. Lower our corporate tax rate, get rid of the capital gains tax. ... The government cannot manage this much money effectively without ineffeciencies and corruption." -South Carolina Senator Jim DeMint

"One of the perverse effects of this bailout proposal is that the worst-performing firms, and those who interjected themselves most deeply into mortgage-backed securities, credit default swaps, and special investment vehicles will be those who benefit the most from this bailout. As with the bailout of airlines in the aftermath of 9/11, those businesses who were the least efficient, least productive, and least concerned with serving consumers are those who will be rewarded for their mismanagement with a government handout, rather than the failure of their company that is proper to the market. This creates a dangerous moral hazard, as the precedent of bailing out reckless lending will lead to even more reckless lending and irresponsible behavior on the part of financial firms in the future." -Congressman Ron Paul

"Before we ask American families to make further sacrifices we need to make sacrifices of our own. Congress must learn the lesson of our current financial situation, which is that you cannot live beyond your means indefinitely. Congress has known about these problems for years, but we did nothing because we were so obsessed with short-term politics and earmarking to do the hard work of oversight and reform that was necessary to avert this mess....The answer now is not a mysterious formula known only to economists at the Federal Reserve, but a commitment among all national leaders to restore the fundamental market principles that made America the world’s leading economic power." -Senator Tom Coburn

"We are concerned that the plan could fundamentally change the role of government in the American free enterprise system." -Congressman Jeb Hensarling, Republican Study Committee Chairman

"The Club for Growth condemned the massive government bailout proposed by the Treasury and the Bush administration as unnecessary, unfair to taxpayers, and fraught with serious costs to the American economy." -The Club for Growth

122 Economists oppose the bailout for three reasons:(i) it is unfair, (ii) it's ambiguous, and (iii) it will have undesirable long term effects: "If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted." Read their letter here.

Read Walter Williams' editorial “Scaring us to death”

Read Republican Anger at Financial Socialism

Read here how the bailout will prompt inflation.

Politicians Rely Upon Fear
As always, politicians are attempting to instill fear in the citizenry to justify the massive increase in the size and scope of government. In Wednesday night’s speech, Bush said "we are in the midst of an historical financial crisis." Bush warned of “a long and painful recession” if Congress does not quickly enact his billionaire bailout proposal. He threatened taxpayers with “a distressing scenario,” including potential bank failures, job losses and inability for ordinary Americans to borrow money to buy cars or send their children to college.

“George Bush and the democrat Congress have cried ‘wolf’ too many times," said Gloyd. “We will not be cowed by fear time and time again to support Republian-sponsored socialism. We trust the markets.”

We have little time to have our voices heard. Please do not allow us to allow our direction to be dictated by fear. Please call your Senators and Representatives today to oppose the 2008 Billionaire Bailout plan:

Senator Sherrod Brown (D-OH)
(202) 224-2315 Washington office
(513) 684-1021 Cincinnati office

Senator George Voinovich (R-OH)
(202) 224-3353 Washington office
(513) 684-3265 Cincinnati office

House Minority Leader John Boehner (R-OH)
(202) 225-6205 Washington office
(513) 779-5400 Butler County office

Congressional Representative Steve Chabot (R-OH)
(202) 225-2216 Washington office
(513) 684-2723 Cincinnati Office

Congessional Representative Jean Schmidt (R-OH)
(202) 225-3164 Washington office
(513) 791-0381 Cincinnati office

Senator James Bunning (R-KY)
(202) 224-4343 Washington office
(859) 341-2602 Ft. Wright office

Senator Mitch McConnell (R-KY)
(202) 224-2541 Washington office
(859) 578-0188 Ft. Wright office

2008-09-29 Many thanks to everyone who took the time to contact their elected officials. Your efforts paid off. The vote in the house failed 228 to 205 and, unless they reverse themselves, we're not going to waste $700 billion propping up the losers who caused this mess.
Steve Chabot, Geoff Davis and Jean Schmidt all voted against it. John Boehner voted for it. The senate never got a chance to vote. Keep the heat on Boehner and be to sure to thank the others.

2008-10-03 We are eternally grateful to Congressmen Steve Chabot and Geoff Davis for holding fast and voting once again to torpedoe this terrible plan. Minority Leader John Boehner ignored his constituents for a second time and again voted for it. Jean Schmidt fell back into her old habits, breaking ranks from conservatives, and voted in favor of enlarging an already bloated government. Markets reacted to the news falling to their previous pre-bailout lows. We were going to have a recession either way. Only now we have a recession AND another $700 billion in public debt. Priceless.

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