Speaking on our behalf

A press release from Congressman Thaddeus McCotter’s office prior to the vote:

WASHINGTON, D.C. – Republican House Policy Chairman, Representative Thaddeus McCotter (R-MI), the first Republican member of Congress to publicly oppose Wall Street’s trillion dollar bailout, remains adamantly opposed to the legislation despite the Paulson bailout’s cosmetic changes:

“We are faced with the first financial panic of the global economy. Thus, the Congressional action taken today will set a precedent affecting the prosperity of Americans for decades to come. The proposed $700 billion dollar Wall Street bailout bill is not a Republican solution; it is not a Democratic solution; it is not an
American solution. The proposed $700 billion dollar Wall Street Bailout is a socialist solution – one that, by threatening hardworking Americans’ prosperity, unconscionably ransoms hardworking Americans’ money and reduces their liberty. As such, it is a generational threat to Americans’ liberty and prosperity.

Congress cannot re-inflate the bubble to save the American economy.”

I just thought the dude deserved a victory lap, since he certainly kicked some ass on behalf of America’s economic liberty today. And based on that last bit about what Congress can’t do, (as opposed to what it shouldn’t do), I’m guessing he’s more Austrian than Keynesian.

UPDATE – The congressman sends another email:

It is time for the President of the United States to:

Calm the Congressional and global investor panic his administration has exacerbated.

Demand the resignation of Treasury Secretary Paulson, who no longer serves a constructive role in the enactment of the legislation necessary to end this period financial difficulty and uncertainty.

Deputize and dispatch a new representative to the Congressional negotiations, such as former Treasury Secretary James A. Baker, III, who has credibility with both markets, Congress, markets and, most importantly the American public.

Rule out pushing a financial recapitalization model based upon taxpayers purchasing ‘toxic assets’ from financial institutions, which the American public rightful believes unjust.

I’m not keen on that Baker notion, but the rest of it is eminently reasonable, even if I would have preferred to see him call for something rather more TV-friendly than mere resignation for Mr. Paulson. The key thing is to understand that Congress should not do ANYTHING, because anything it does will make the situation worse. Well, anything it’s remotely likely to do, anyway. The reason Wall Street’s demise won’t harm the economy anywhere nearly as much as everyone seems to think is quite simple. Wall Street doesn’t fund any actual productive investment anyhow!

Entrepeneurship and freedom create wealth. Borrowing money doesn’t, they’re like steroids, enabling unnaturally fast development that will kill the user more often than not.

The text – of the late and unlamented deal

Here’s the text of the deal to which everyone, but a number of House Republicans, apparently, agreed last night.

UPDATE – notes on a Treasury call to most favored investors:

1) If even the Treasury is saying tranching is a formality, then it really is nothing. Not sure why Dems fought so hard for a fig leaf.

2) Waiting a couple of weeks because no one has any idea when or where the next bomb will blow up. In other words, all their doomsday scenarios about Black Monday were B.S. They screamed the check had to be written by Monday, but now they’re saying they actually have a few weeks before they need to cash it. Plus, this will allow them to “seek guidance” from GS, JPM, and other selfless public servants about where the money should be funneled.

3. The tap dancing is because they don’t want it to get out that they’ll be giving a sweetheart deal. The public won’t be following each individual transaction to see exactly what price is being paid. So ridiculously overpriced asset sales can be hidden in the details, and by the time some reporter (or blogger 🙂 combs through and analyzes the transactions, the deed will have been done. But if Paulson makes a statement that assets will be bought at par before the bailout’s even begun, that will be reported and might kill the deal.

4. In other words, we need to sweeten the pot to encourage banks to come “voluntarily”. Pardon my ignorance, but why the hell should we be begging banks to borrow from us? I thought a bailout should be the absolute last option for a bank. I.e., it should be so unpalatable, so unprofitable for a bank and its executives that they exhaust every private means of survival before coming for their public “reaming”. I wonder if foreclosed homeowners would rate their foreclosure process as “user friendly”.

5. Of course the exec comp provisions are a joke. Who do you think is going to be hiring all those banking cmte staffers and newly retired congresspeople next year during the inevitable post-election turnover? Do you really think they’re going to vote to limit their salaries? Remember that for lots of people on the Hill (including elected reps), govt work is merely time you spend accumulating credentials in preparation for your real life’s work in the vastly richer private world.

UPDATE II – 226 against to 207 for. It’s dead for now. But how long will it take Wall Street to convince Washington to pull a Brussels and start the vote-until-you-get-it-right process? My guess is that since stomping their feet didn’t work, now they’ll try holding their breath, in other words, doing their best to bomb the markets before swooping in with another emergency plan.

The question is, how much leeway do they have?

UPDATE III – There’s our answer. It’s the Brussels option. Congressman Boehner just declared “We need to renew our efforts.” Question: can America get a restraining order on these jokers? No one is going to come around simply because Wall Street’s representation has gone all stalkery on us.