Congressional ignorance on display, again

Posted by Mike Sylvester - 10/4/08 @ 2:13 pm - Filed Under Uncategorized

I am extremely angry at our Congress.

Here is a summary of our current financial problem in its simplest terms:

Both Republicans and Democrats REQUIRED our lending institutions to lower their lending standards so that they made loans to Americans who should never have been given loans.  Our lending institutions caved in and then lowered their lending standards even further.  This in turn forced the housing market to artificially increase due to the easy money available for home loans.  The SEC then allowed the five large investment banks to increase their leverage significantly which lowered their capital reserves in case of a downturn.  The housing market dropped due to a huge supply of new homes on the market and a slight downturn in the economy.  The entire situation should be blamed on Republicans AND Democrats; both are nearly 50% at fault for our current financial problems.

So the solution of the President of the United States, the leaders of both the Republicans and Democrats in Congress, the head of the Federal Reserve, the head of the Securities and Exchange Commission, the head of the Treasury Department, and a majority of elected Congressmen is to do the following:

Borrow another 700 billion dollars we do not have and give that money to the banking institutions who made the most “bad loans.”  Then in turn we hope that those banks will start loaning that money to people with “bad credit” again.

Statistically less Republicans voted in favor of this bill then Democrats; however, there are so many “big Government Republicans” that the percentages do not differ by an incredible amount.  Consider:

In the US Senate

  1. 18.4% of Democrats opposed the “bailout.”
  2. 30.6% of Republicans opposed the “bailout:
  3. Both Indiana Senators supported the “bailout.” 

In the US House the leadership of both Parties supported this “bailout” bill.  The first “bailout” bill was defeated narrowly.  Then the Senate added 150 billion dollars of additional spending and the second “bailout” bill passed easily with many members of Congress changing their votes.  Consider:

  1. 26.8% of Democrats opposed the “bailout.”
  2. 54.3% of Republicans opposed the “bailout.”
  3. Five of the nine Indiana Congressmen opposed the “bailout” including Democrats Baron Hill and Pete Visclosky as well as Republicans Dan Burton, Steve Buyer, and Mike Pence.
  4. Four the the nine Indiana Congressmen supported the “bailout” including Democrats Joe Donnelly, Brad Ellsworth, and Andre Carson as well as Republican Mark Souder.
  5. Only one Indiana Congressman changed his vote from the first “failed” vote.  That was Democrat Andre Carson, he changed from a no to a yes.
  6. Only one Indiana Republican Congressman supported this bailout bill; our own “big Government Republican” Mark Souder.  Does anyone remember the radio ads Mark Souder ran two years ago attacking Tom Hayhurst implying that Tom Hayhurst would vote with Nancy Pelosi?  Well, Mark Souder voted with Nancy Pelosi yet again… 

Consider this New York Times article.  Consider this post I put up a couple of days ago.  The New York Times is citing a different study then I did; however, the statistics are very similar.

According the study cited by the New York Times, last year nationwide 83% of those who applied for a new car loan in 2007 got the new car loan.  This year so far that percentage has dropped to 63%, the lowest since this statistic started being tracked in 1984.  More importantly consider the following statistic cited by the New York Times:

The squeeze is particularly severe for customers with less-than-stellar credit scores who need subprime loans at higher interest rates.  While 67 percent of those consumers were approved for loans in 2007, only 22 percent are getting them this year, according to CNW.  “The subprime market has, for all intents and purposes, dried up,” said Mr. Spinella.

So what this study shows is that people with good credit can borrow money to purchase new cars as usual; however, those with poor credit are being turned down for loans.

There are so many idiots in Washington DC that it makes me extremely angry.  They exist in large numbers in both the Republican Party and the Democratic Party. 

We are in a “credit crisis” because our lending institutions have finally figured out that they need to stop lending money to people who often times do not pay that money back AND because those lending institutions are now afraid to loan money to each other because they do not know which bank will fail next.  This has caused our lending institutions to issue far less loans to people with bad credit.  That is exactly what SHOULD happen in a free market and a capitalist country.

Our Congress has decided that they will borrow 700 billion dollars we do not have and give it to the lending institutions that made the most “bad loans” in hopes that those banks will turn around and loan that money back to those with “bad credit.”

What a group of morons.

Mike Sylvester

Comments

One Response to “Congressional ignorance on display, again”

  1. Bob G. on October 6th, 2008 2:48 pm

    The “Circle of Life” it ain’t!

    ;)

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