PERLMUTTER: Bush's 'borrow-and-spend' party is over
By Rep. Ed Perlmutter, Special to the Rocky
Published September 24, 2008 at 12:05 a.m.
Financial markets can be fragile things. At their root, they are based upon the confidence of everyday people in Lakewood and Lochbuie, Denver and Durango, Golden and Grand Junction and elsewhere in Colorado and all over America. In this day and age, the confidence also includes leaders in China, sheiks in Saudi Arabia, and businessmen and women in Belgium and Brazil.
What creates this confidence is a question philosophers and economists have asked for centuries. From the outset, the confidence in America's markets was built upon the values of (1) sacrifice and thrift, (2) investment and innovation, (3) opportunity for anyone who wished to put their training, talent and best effort to work, and (4) a sense of community - or, "We are in this together."
Recently these values have been eclipsed by a philosophy that greed is good, immediate gratification is better, borrowing the norm, investing the exception, and every man for himself and a giant payoff for a select few while most people are barely breaking even with stagnant wages.
The last time this philosophy really took hold was during the Roaring '20s. A recent commercial touting the need for "bling" was reminiscent of the party atmosphere of the '20s. The Crash of 1929 was a stark reminder that the party cannot go on forever, and the hangover of the Great Depression resulted in misery for millions of Americans.
As a consequence of that crash, steps were taken by the Franklin Roosevelt administration to place safeguards and restraints within the financial markets to help rebuild confidence in them. At the same time, Americans of every creed and color returned to the basic values of thrift, sacrifice, investment, opportunity for all and community. The result was the creation of wealth on a national scale never before seen in the history of the world.
The restraints on the markets, by their very nature, limited some of the upside gain to reduce some of the downside pain. Most Americans concluded the downside misery of the '30s was just too great and the need for brakes within the financial system were warranted. For 70 years the restraints generally succeeded, and the financial markets operated with a fair degree of confidence even even through a number of economic cycles.
However, the George W. Bush administration, with its neo-con philosophy, either cut back, opposed, ignored or choked off the restraints on the markets, especially those of Wall Street, while borrowing billions of dollars from China and Saudi Arabia to finance tax cuts for the wealthiest of Americans while prosecuting the war in Iraq. The "borrow and spend" approach and the party atmosphere (exemplified by Bush's oil and gas royalty office in Lakewood) could not go on forever.
However, bailouts, takeovers and bankruptcies of unbelievable proportions demonstrate that the party is over.
Bush's Treasury secretary, Henry Paulson, is asking Congress for hundreds of billions of dollars to compensate for market "excesses," and wants the money within a week or two to restore confidence in the financial markets.
I will listen to Paulson and his plea on behalf of the Bush administration about this immediate infusion of cash and the purchase of billions and billions of bad loans to take the burden of this bad debt out of the markets. But I must say I have doubts about the foxes guarding the henhouse or about giving the Bush administration any more authority over anything. Thank goodness Social Security was not privatized.
A new administration, one I hope is led by Barack Obama, must restore some restraint in the financial markets, rebuild the country's infrastructure, create a new energy economy, and reduce foreign borrowing. The good news is, in tough times we Americans return to the values that make us great, and we do it together as a team, as one nation - just as our country's motto declares: E pluribus unum - "Out of many, one."
Democratic U.S. Rep. Ed Perlmutter represents Colorado's 7th Congressional District.
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September 24, 2008
5:32 a.m.
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Mike_In_Hartsel writes:
Perlmutter is just spouting the party line. The "borrow and spend" approach doesn't belong to Bush. It belongs to Congress. EVERY Congress since WWII has spent more and more. A Democratic Congress in 2009 will do the same and for anyone, especially a Democrat, to claim otherwise is a flat out lie.
September 24, 2008
6:21 a.m.
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LetsThink writes:
This Speakout was obviously written by a 'Liberal'.
What is his recommendation? To steal money (aka 'taxes') from the hard working and successful, and distribute it to those of us who want free handouts.
Yeah. That makes a lot of sense.
September 24, 2008
6:35 a.m.
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taoistblockhead writes:
From The 2008 Republican Party Platform, adopted earlier this month.
http://www.gop.com/2008Platform/Econo...
“We support energetic federal investigation and, where appropriate, prosecution of criminal wrongdoing in the mortgage industry and investment sector. We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself. We believe in the free market as the best tool to sustained prosperity and opportunity for all.”
September 24, 2008
6:36 a.m.
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wolf25 writes:
I believe that Perlmutter has forgotten that Bill Clinton signed the the Gramm-Leach-Bliley Act (1999) which replaced the Glass Steagall Act. Sorry, not the Bush Adminstration.
Fannie and Freddie were stacked with Democrat appointees, despite Bush Adminstration pleas to Congress to rein them in, they were rebuffed by Dodd D-CT, Reid D-NV, Peloisi D-CA and Frank D-MA.
Too bad the Republican's aren't running in Perlmutters district, he is a light weight and he should be replaced, Colorado deserves better.
September 24, 2008
6:38 a.m.
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taoistblockhead writes:
"If this were a dictatorship it would be a heck of a lot easier, just so long as I'm the dictator." –George Bush
But this staggering bailout - as perilous and costly as it will be - is only a stop gap. Broader lessons need to be drawn; larger and more permanent reforms are needed. One thing should be clear: the conservative era is over. The theology of market fundamentalism has proven to be a false idol once more. As Joseph Stiglitz has argued, the collapse of Wall Street is to the market fundamentalists what the fall of the Berlin Wall was to communism. It's over. The right has proved once more that it cannot be trusted to run the government it scorns. A trillion dollar debacle in Iraq. A trillion dollar bust on Wall Street. Hundreds of billions pocketed by Big Pharma and Big Oil. It is time for a reckoning.
September 24, 2008
6:40 a.m.
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taoistblockhead writes:
Dear American:
I need to ask you support an urgent secret business relationship with transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion USD. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gramm, lobbyist for UBS, who (God willing) will be my replacement as Ministry of the Treasury in January. As a former U.S. congressional leader and the architect of the PALIN / McCain Financial Doctrine, you may know him as the leader of the American banking deregulation movement in the 1990s. As such, you can be assured that this transaction is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred. After searching online I come across you as reliable and patriotic citizen.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully
Minister of Treasury Paulson
September 24, 2008
7:26 a.m.
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RJS07 writes:
Am glad that Ed explained that of COURSE, Congress had nothing to do with any of this. Exactly how stupid do you think we all are, Ed? You ALL need thrown out, and we need to start over....
September 24, 2008
8:23 a.m.
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INC writes:
wolf25 writes:
I believe that Perlmutter has forgotten that Bill Clinton signed the the Gramm-Leach-Bliley Act (1999) which replaced the Glass Steagall Act. Sorry, not the Bush Adminstration."
um look again at whom voted straight down the party line for that Gramm-Leach-Bliley Act. All republicans with veto proof majority...
this financial mess was brought upon us by the "borrow and spend" republicans.
of the two senators who are currently asking our support for President McSame and Biden, they both had a vote on that legislation?
McCain YES
Biden NO
see for yourself
http://www.senate.gov/legislative/LIS...
September 24, 2008
9:05 a.m.
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Danchan writes:
The mess our economy is in should be beyond all the partisan sniping.
A bunch of greedy jerks have taken a big steamer on America.
The FBI investigation will be a joke. Millionaire bankers are not going to go to jail in this country.
We need to find a better way of making sure these jerks are never in a position to hurt America's economy again.
Maybe some kind of Internet Wall of Shame to let stockholders know if these bastards are associated with a firm they might want to invest in so investers will know to avoid them.
Whoever you vote for, which ever party you agree with, we desperately need to keep these fat cats from ever being responsible for anyone's money ever again.
September 24, 2008
9:06 a.m.
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TC writes:
Wastn't the budget balanced under the Clinton Administration for the first time in memory? Didn't we have the biggest Bull Market in history?
Clinton was the ultimate fiscal conservative. He pretty much didn't do anything in office - except let the government shut down rather than accept a deficit budget. Twice. And get a BJ.
Borrowing money you don't have and spending it on things you don't need, damages the economy every bit as much as raising taxes.
It needs to be repeated that Bush is an idiot that has pissed away more money than any human being in history and who's only qualification for the job was that he was the punkass son of a former president. Oh yeah and he gave up his wicked ways - and he got born again. Talk about a flip-flopper.
September 24, 2008
9:36 a.m.
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VeryOpinionated writes:
Rep. Perlmutter: Since you want to place this financial mess at a political party's doorstep, let's see where it truly belongs (surprise - you placed it at Bush's doorstep!).
First, the trail of the money - who received the greatest amount of financial contributions from the Freddie/Fannie folks? From 1989 to 2008, Sen. Dodd received $165,400 in Fannie Mae and Freddie Mac campaign contributions, followed by Sen. Obama, who received $126,349 in such contributions since being elected to the Senate in 2004.
Even more ties - this time directly to Obama: In the aftermath of the U.S. government takeover, attention has focused on three Democrats with close ties to Obama who served as Fannie Mae executives: Franklin Raines, former Clinton administration budget director; James Johnson, former aide to Democratic Vice President Walter Mondale; and Jamie Gorelick, former Clinton administration deputy attorney general. All three Obama-related executives earned millions in compensation from Fannie Mae. All three have been involved in mortgage-related financial scandals.
Then there's an article at Bloomberg News titled "How the Democrats Created the Financial Crisis." Here's a take-away quote from the article: "A serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets. But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter."
Then, finally, there's Barney Frank. The WSJ laid blame directly at his doorstep (for the financial crisis). Here's some quotes from the article: "on the threshold reform issue -- limiting the size of the portfolios of mortgage-backed securities (MBS) that the two companies could hold -- Mr. Frank was a stalwart opponent. In fact, Mr. Frank was publicly arguing for an increase in the size of their combined $1.4 trillion portfolios right up to the day they were bailed out......For years, Mr. Frank and other friends of Fan and Fred opposed not only bills written to limit the size of their portfolios, but any bill that in their view gave an independent regulator too much discretion to order a reduction."
Finally, in 2003 President Bush proposed the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis, which was a new agency to oversee Fannie and Freddie. In reply, Barney Frank said that Fannie Mae and Freddie Mac were not "facing any kind of financial crisis."
So, Mr. Perlmutter, since you're so eager to lay the blame at someone's doorstep, where does it REALLY belong??
September 24, 2008
9:47 a.m.
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DenverDan writes:
Bush's 'borrow-and-spend' party is over.
Not if Mcsame gets voted in!
September 24, 2008
9:50 a.m.
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ghoax writes:
what people don't understand is that government debt is what provides the money in the system. unfortunately.
Government sells Tbonds to the Federal Reserve who prints the money to buy them, then uses the Tbonds as an asset to loan out 10 times the amount due to "fractional reserve banking" laws. The government spending the new money puts more fractional reserves in the commercial banks, who can loan out 10x more than that. Simply put 50bn in government debt via Tbonds is 500 billion in new, unbacked currency. You cut the debt, you cut the cash in the system...who in their right mind thought of that?
All of this brought to you by the democrats.
look up the Mandrake Mechanism...you'll see.
the problem is two fold, fix the fiat currency problem, then cut the spending.
if you cut spending under the current system, it cuts the amount of money in the system...
September 24, 2008
10:23 a.m.
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raysmom writes:
Ed- I have known you personally for many years, since my husband was a young attorney working for a friend of yours- an uber liberal woman who lied and stole and declared bankruptcy and made her millions all over again on the backs of others. Your friend.
I thought you were a bright guy until your last campaign. This Speakout shows how wrong I was. Ed, the revocation of the Glass-Steagell Act was signed Bill Clinton. The same Bill Clinton who supported allowing people who pay into SS the option that Federal Employees have to diversify 2% to 4% of their "contributions" into private funds, just like Bush prop'd. The Community Reinvestment Act, enacted in 1977 by Carter, laid the path for this abuse of subprime loans. Mr. Obama's ACORN received over 100 BILLION in those loans in the Act's first 20 years, with a default rate of 6 times higher than standard loans. Mr. Obama himself has received the second highest amount of funds from Fannie & Freddie, the first being Sen. Dodd. And Joe Biden, (D-MBNA), has a son who is a paid lobbyist for MBNA, he has accepted over 250 MILLION from them in campaign donations, and was the sponsor of the tougher Bankruptcy Laws that favor financials, and is responsible for 10,000 Lehmen execs now being eligible for sharing a 1 BILLION $$$ BONUS while people suffer. Where were you in 2003 & 2005 when John McCain was speaking before Congress about the dangers of Fannie and Freddie, and supporting reform? And when Barney Frank said, "These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis," He added, "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Such hypocrisy!
These foreclosed loans are FAR from "worthless"- you know, or you should, that like they did in the S & L fallout, that the gov't will recover at least 65% of this debt, maybe more. And this will create jobs for the many people who support this market, and will re-invigorate the local economies.
Your polarized propaganda, including using slang terms for conservatives, and liberal soundbites with no supporting facts, just anti-Bush rhetoric, is very disappointing to me. Maybe you should stick with your support of fetal stem-cell research as being irreplacable, as you did to get elected last time- oops, wait, they proved you wrong on that last year by creating the same cells in a lab, didn't they? Just can't get it right on anything anymore, can you. You have swung ridiculously to the left, Ed- and this comes from a Democrat and someone who used to respect you.
September 24, 2008
10:31 a.m.
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pak writes:
Read the Constitution. All spending bills come from the House. The Sub-Prime mortgages originally came from the Democrats who were forcing the credit system to offer sub prime loans to folks not qualified or who did not have jobs. This was an effort to get rid of community red lining. Then the Dems perpetuated the system by having Freddie and Fannie buy the mortgages and build a house of cards based on bad paper. Then Freddie and Fannie gave money to the Dems (Dodd and Obama for example) so they would have little oversight. The Democrats created this problem and now try to blame Bush and CEO's.
September 24, 2008
2:45 p.m.
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JohnHKennedy writes:
Perlmutter: "I must say I have doubts about the foxes guarding the henhouse or about giving the Bush administration any more authority over anything."
Thank God for that!
I was afraid that Ed was going to give Bush everything he wants, just like he and the rest of the incumbent House Democrats have done for two years.
Most of the Nation's problems can be traced to the expanded powers that Bush and Cheney have taken without the slightest effort by our state's Democratic Congressmen to act as an opposition party should. You know, to loudly and effectively oppose Bush. To support the Colorado Democratic Party's impeachment plank. To call for hearings to determine whether the crimes the voters are aware of, rise to the level of impeachable.
There has been almost no effort by our four Democratic Congressmen to hold them accountable.
Bush orders his staffers to ignore subpoenas and our Colorado Democratic Congressmen meekly go along with it. They refuse even to defend the power of the US House.
Oh, they all have some pet issue (like DeGette) on which they have opposed Bush, but the truth is on the major issues that relate to expanded powers and the murder of over 4,100 US Soldiers and the maiming of over 30,000 for the WMD Lies, our state's Democratic Congressmen have been silent and useless.
In Colorado, a battleground/swing state where a recent survey of Colorado Democrats on Democrats.com returned "96+% for impeachment", why aren't our Colorado Democratic Congressmen loudly demanding the start of impeachment hearings?
Our Congressman Udall wants to be promoted to the US Senate, but he refuses to call for hearings on Bush/Cheney crimes that most voters are sure occurred. I say that Udall should not be allowed anywhere near the Senate until he proves he can be trusted to honor his oath to protect our Constitution.
I will vote for Obama because McCain is voting for Bush, but I will "blank vote" Udall and DeGette. They refuse to call for impeachment hearings so the voters may never know the truth.
To "blank vote" a voter just don't make a mark "for" any candidate for the US House from Colorado.
Perlmutter for instance has no opposition and will be re-elected no matter what, so you can "blank vote" him to send a message that you think he should have called for impeachment hearings. The same with Rep. Salazar. He has no real opposition. And do you really want Udall in the Senate?
If liberal democrats are tired of being ignored this is one election where they can get Obama elected and still send a message to their Congressmen.
Giving Secretary Paulson unusual powers over the nations financial industry without oversight is no less un-constitutional than the other Bush/Cheney power grabs.
John H Kennedy, Denver CO
43 yr Democratic voter and Obama delegate to the Denver County Convention.
Democrats.com -Colorado Congressional District Impeachment Coordinator
..
September 24, 2008
2:57 p.m.
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VeryOpinionated writes:
JohnHKennedy (43 years of being an idiot). I guess Democrats like Udall and DeGette aren't extreme enough for you, eh?
All that aside, I'll bet we agree on one thing (at least I hope we do). We can't just go around "bailing out" an industry or company that gets into trouble. I hear that congress is about to pass a multi-billion dollar "bailout" of the auto industry. Where do you want to draw the line in the sand?
September 24, 2008
3:08 p.m.
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cowboy69 writes:
Mr. Perlmutter obviously does not know his economic history. The banking and lending industry troubles began under the influence of the Carter administartion. He wanted more people put in position to buy homes and therefore pressured lenders to relax requirements to qualify. The Clinton administration implemented a program to place government mandated fines on any lender that did not loosen the requirements even further. People forget that the Clinton's wrote allot of checks to minority voters. Socialized health care, more money to affirmitive action, etc. Today, Americans are paying the price for failed policy. Where do you think the Obama political platform was built. Bigger government, higher taxes to once again pay the tab.
September 24, 2008
3:33 p.m.
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fntsymtn writes:
Actually, to be "veto proof" the bill would have needed 66 yea votes in the Senate ... not the 54 that it got. There were 99 votes cast on that particular piece of legislation in the 106th congress and 2/3 of 99 = 66.
It wasn't veto proof, party line vote or not, Bill Clinton signed it into law. "The buck stops here" should have been exercised by Bill Clinton and that legislation should have been vetoed. It wasn't and we are where we are today.
September 24, 2008
4:45 p.m.
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tromiano writes:
Of course, Rep. Perlmutter must chime in with his infinite wisdom and inform all of us little folk what Washington democrats say every day: blame Bush! There's a world oil crisis? Blame Bush! An earthquake in China? Blame Bush! Global warming? Blame Bush! E-Coli outbreak? Blame Bush! Patriots loosing Brady for the year? Blame Bush!
*sigh*
It would have been refreshing to hear a congressman place blame on EVERYONE involved, including some of his own democratic colleagues. It would have been refreshing to hear him at least acknowledge that Senator McCain warned of this very thing in 2006. And it would have been refreshing to hear him take some of the responsibility on himself - that as a representitive of Colorado's 7th congressional district, he is part of a climate of complacency that seems to abound in Washington these days. Doing so would have taken humility and character, though - something that we unfortunately can't count on with him. Congressman Perlmutter, how can we ever hope to learn from our mistakes if we can't acknowledge all the factors that went into causing them in the first place?
September 26, 2008
1:15 a.m.
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r0ckyAurora writes:
I assume the "foxes" guarding the henhouse refers to the House Financial Services Committee (Barney Frank) and the Senate Banking Committee (Christopher Dodd). Keep these guys away from the debate about a solution! They're the foxes!
Ed, aren't you glad that Bush invited the Dems (majority party in both House & Senate) to the "borrow-and-spend" party? He couldn't have done it without you.
btw INC: The Republicans never had a veto-proof majority during the Clinton years.
September 27, 2008
5:39 a.m.
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Rangerjoe1 writes:
Lets just face the facts: All politicians are just crooks and theives.
When they go to far Left or Right, Lets just throw them out!!!
September 30, 2008
6:09 a.m.
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2Disgusted writes:
Set aside the fact that it was a Republican Congress that passed the law Clinton signed, it has been over 8 years since the law. Was anyone watching? Bush changed almost everything else left from Clinton; tossed aside the threat from terrorists until 9/11 because that was a Clinton priority. Bush watched and did nothing while more than doubling the National Debt primarily with three Republican Congresses. If the 2006 Senate Republicans truly wanted to fix this, they could have done it. They knew that Bush's meager economic plan needed stimulus. Greenspan left interest rates too low; the Fed failed to use the authority to regulate they already had, trusting the Free Market which is nowproving not so free with the price we will pay for it in th coming months.