Coburn supports bailout bill

posted at 2:20 pm on September 29, 2008 by Ed Morrissey

Senator Tom Coburn (R-OK), as staunch a conservative as one will find in the upper chamber, has announced his support for the bailout bill.  Coburn won’t vote until Wednesday, but apparently wanted to get ahead of the media curve and address concerns from conservatives about free-market policies.  Here’s the statement he released earlier today, emphases mine:

“Taxpayers deserve to know that there is no guarantee this plan will work, but there is a guarantee that we will face a financial catastrophe if we do nothing.  If banks continue to fail and stop lending the average American could lose their job, be unable to secure a loan for a car, home or college education, and find their life savings and retirement in jeopardy.  Our economy depends on having liquid assets available for credit and lending just as an automobile engine needs oil.  If those liquid assets stop flowing, our economy will be seriously damaged and will require far more costly and lengthy repairs.”

“This bill does not represent a new and sudden departure from free market principles as much as it represents an emergency response to congressional actions that have ignored free market principles, and our Constitution, for decades.  If anyone in Washington should offer their resignation it should be the members of Congress who peddled the fantasy of free home ownership without risk.  No institution in our country is more responsible for the myth or borrowing without consequences than the United States Congress.”

“As much as members of Congress want to find scapegoats, the root of this problem is political greed in Congress.  Members of Congress from both parties wanted short-term political credit for promoting home ownership even though they were putting our entire economy at risk by encouraging people to buy homes they couldn’t afford.  Then, instead of conducting thorough oversight and correcting obvious problems with unstable entities like Fannie Mae and Freddie Mac, members of Congress chose to ignore the problem and distract themselves with unprecedented amounts of pork-barrel spending.”

“Taxpayers who want to ensure that this doesn’t happen again should send a very clear message to Washington that it’s time for Congress to live within its means and restore the principles of limited government and free markets that made this country great.  I will do everything in my power to ensure that this bill does not lead us down a slippery slope of European style socialism and slow economic growth.  I will also promise taxpayers that I will do everything in my power to block what I expect will be hundreds of attempts by politicians in Washington to continue business-as-usual borrowing and spending in the next Congress.  In a time of crisis, American families have to make hard choices between budget priorities.  So should Congress.  If politicians want to create new programs they should eliminate duplicative programs or reduce funding for less important programs.  The only way we can put this crisis behind us is for Congress to rejoin the real world of budget choices and consequences which, as we have seen in recent days, can be ignored for only so long.”

Coburn is right, and let’s hope we can make the lessons of this collapse plain enough that even the media can’t ignore them.


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as staunch a conservative as one will find…

Not anymore. He just bought into socialism, unwittingly or not.

Fletch54 on September 29, 2008 at 2:23 PM

Coburn should have made some calls to his friends in the House of Representatives.

Let’s stop sending money out of the country….Drill here, Drill now, let the oil companies fund their own drilling.

originalpechanga on September 29, 2008 at 2:23 PM

Coburn won’t vote until Wednesday

Looks like his Wednesday just got freed up.

e-pirate on September 29, 2008 at 2:26 PM

Its not that we don’t need a bailout, its that this is the WRONG kind of bailout.

Government should not be in business, which is what this bill does. It should be LOANING money to companies, which will be PAID back…

And it should get its own stinking stupid regulations (which helped cause this thing) fixed.

Romeo13 on September 29, 2008 at 2:30 PM

Coburn won’t vote until Wednesday, but apparently wanted to get ahead of the media curve and address concerns from conservatives about free-market policies.

Your mileage may vary.

Spirit of 1776 on September 29, 2008 at 2:30 PM

there is a guarantee that we will face a financial catastrophe if we do nothing

Sorry Tom. We need more proof than your feelings.

The emergency psychology isn’t working.

Since you enthusiastically endorsed McCain, your judgement has been in question anyway.

Valiant on September 29, 2008 at 2:31 PM

If we are going to keep us this charade of tagging everyone then let us use the right tags. This is out-and-out socialism. Coburn may be worried about people being able to get loans but this still amounts to socialism. Washington and Wall Street got us into this mess and they want to continue the practice of this administration and the last two Congress’ to throw good money after bad.

Coburn needs to be removed from office. Period. Anyone who votes in favor of this needs to be removed.

Trying to wear a white hat and tell us that the GOP is looking out for us by blocking money to ACORN is b.s.

I swear it is time for us to just join the EU and be done with it.

grdred944 on September 29, 2008 at 2:31 PM

I agree with Coburn, everything he says is accurate. The govt created this mess, destroyed confidence in the system, and they need to clean it up. As long as the bill contains no permanent grab on power, I think it is OK.

Kenrod on September 29, 2008 at 2:31 PM

He makes a good summary of what led up to the current problems.

But is seems odd that his answer to a problem caused by Congress is more action by Congress.

29Victor on September 29, 2008 at 2:33 PM

Interesting…. anyone think OK is probably a little ticked right now.

upinak on September 29, 2008 at 2:33 PM

I swear it is time for us to just join the EU and be done with it.

SCREW THAT!!

Fletch54 on September 29, 2008 at 2:34 PM

Kenrod on September 29, 2008 at 2:31 PM

Why can’t the market clean this up? Do we just have winners now courtesy of the U.S. taxpayer?

This is a permanent grab on power.

Valiant on September 29, 2008 at 2:34 PM

“Taxpayers deserve to know that there is no guarantee this plan will work, but there is a guarantee that we will face a financial catastrophe if we do nothing.”

If you cant guarantee a bill is going to work, then you have no business supporting it.

That is like running a draw play on 4th and 50, and saying it is still worth a shot to try it.

Quit the double talk. If the bill stinks, dont vote for it. Screw your re-election chances, and vote what is right, not what is PC.

Conveniently Conservative. A new name for these wanna-be conservatives.

TheHat on September 29, 2008 at 2:35 PM

Why not cut the ever-loving hell out of taxes?

There is more than just this bill to assuage the crisis, time to start looking at alternatives.

Bishop on September 29, 2008 at 2:35 PM

Leave the free market alone!

jencab on September 29, 2008 at 2:35 PM

Stay calm, folks. Everything is not always as it seems.

Connie on September 29, 2008 at 2:35 PM

Socialist RINO!

Big S on September 29, 2008 at 2:37 PM

Ed, why do you keep repeating this line of reasoning that this mess was primarily caused by the government forcing Fannie and Freddie into giving bad loans?

The private sector did the exact same thing, and it’s because experts actually believed that housing prices were legitimately rising (and that it wasn’t a bubble), and that it was worth the risk. Fannie and Freddie aren’t the only entities here in trouble; those entities who were free of any government influence made the same decisions and are stuck in the same mess.

tneloms on September 29, 2008 at 2:38 PM

By the way, did anyone else hear Brit Hume’s hypothetical earlier today – that if the Dems were sitting around figuring out what they could do to hand the election to Obama, deliberately bringing the economy down right now would sound like a real good idea?

Connie on September 29, 2008 at 2:39 PM

Where did the sudden outbreak of common sense in the House come from?

I can’t wait to see names matched with votes….

MrScribbler on September 29, 2008 at 2:40 PM

By the way, did anyone else hear Brit Hume’s hypothetical earlier today – that if the Dems were sitting around figuring out what they could do to hand the election to Obama, deliberately bringing the economy down right now would sound like a real good idea?

If only McCain would start explaining how this economy was REALLY brought down. All he has to do is point to a youtube clip.

digitalintrigue on September 29, 2008 at 2:42 PM

Where did the sudden outbreak of common sense in the House come from?

Plenty of Democrats in the house want to get re-elected. They’ve been hearing from their constituents en mass.

digitalintrigue on September 29, 2008 at 2:43 PM

You can see how your Rep voted here:
http://clerk.house.gov/evs/2008/roll674.xml

Syd B. on September 29, 2008 at 2:44 PM

Plenty of Democrats in the house want to get re-elected. They’ve been hearing from their constituents en mass.

Sounds like a bunch of racists over there in the DFL, who knew?

Bishop on September 29, 2008 at 2:45 PM

Ugh, one of my ‘R’ guys voted for it and the last person I would have thought to do so.

Bishop on September 29, 2008 at 2:47 PM

there is a guarantee that we will face a financial catastrophe if we do nothing

What does that mean precisely? Who would feel the catastrophe and in what way?

Buddahpundit on September 29, 2008 at 2:50 PM

Looks like someone spiked his tea with Kool-aid.

belad on September 29, 2008 at 2:52 PM

Taxpayers deserve to know that there is no guarantee this plan will work, but there is a guarantee that we will face a financial catastrophe if we do nothing

Maybe they could share this information with the American people. Please explain what this financial catastrophe is and why you are certain it will happen. Maybe then we would be with you.

huckleberryfriend on September 29, 2008 at 2:53 PM

This is going to pass, and it’s going to change the way the free market works, if only in name. We’re going to go through a contraction, maybe a recession, as a result. Republicans will be blamed, because Republicans are always blamed, reality be damned. Wall Street will be vilified, because Wall Street is an easy target.

I need to get back to work so I can keep my job when the firings start.

spmat on September 29, 2008 at 2:55 PM

Coburn is typically pretty spot-on, even if he is ultra conservative. While I’m not a huge supporter of him, he was the lesser of two evils when it came to vote. Normally, he’s so far right that it’s hard to reach across the aisle from way over there, so it surprises me that he would come out in favor of this bailout like he has–regardless of what McCain has said. I’d like to know what Inhofe’s reaction was to Coburn’s statement.

If McCain wins, I’m willing to bet that he’ll appoint Coburn to his Cabinet in some form or fashion.

jedijson on September 29, 2008 at 2:57 PM

Who cares what Coburn thinks? I normally like him, but isn’t he the only Senator liberal enough to dance all the way across the aisle to the far left liberal side that Obama resides on and partner on him with some stupid Google for Gov’t ridiculous thing that shouldn’t be part of legislation but should be done by government agencies. I puke everytime I hear Obama bring this up, its so unimportant to the bigger things in the world going on.

mngirl on September 29, 2008 at 3:08 PM

I would like to know what is going on behind the scenes that we are not being told. What have the ChiComs told Washington about this that is causing normally responsible people to sign on to this “stinking piece of crap”?

red131 on September 29, 2008 at 3:09 PM

How much coverage do you think Pelosi’s “blame Bush and the Republicans” speech just prior to the vote will get? That b*&%# threw away just enough votes for this thing to fail.

Sugar Land on September 29, 2008 at 3:10 PM

Sooooo…the best way to stop the failure to ignore fiscally conservative principles is to ignore them even more by passing this monstrosity?

It's Vintage, Duh on September 29, 2008 at 3:12 PM

The Rescue Package Will Delay the Recovery.

Tim Burton on September 29, 2008 at 3:12 PM

Plenty of Democrats in the house want to get re-elected. They’ve been hearing from their constituents en mass.

digitalintrigue on September 29, 2008 at 2:43 PM

I’ve been e-mailing my Democratic congresswoman, begging her to vote against any bail-out bill that includes provisions for the government to purchase debt other than mortgages (as the just-defeated bill did — the gov’t would have had the authority to buy bad mortgages, bad car loans, bad student debt, bad credit card debt, etc.), or that provided a slush fund for corrupt organizations such as ACORN, La Raza, etc.

My congresswoman is a first-termer, and she has some competition this time (unlike last election, when the Republican party refused to financially support the guy who won the Republican nomination and basically gave the election away).

She votes with Pelosi 90% of the time, but this time, she voted no on the bail-out. I can’t wait to hear her reasons. Was it because there wasn’t enough Democratic pork in the bill to suit her, or did she just hear from so many outraged constituents that she feared a yes vote would spell the end of her short career? It’ll be interesting.

AZCoyote on September 29, 2008 at 3:15 PM

I see that your girl Michelle Bachmann voted against the bill, Ed. Difference of opinion there, no?

Jaibones on September 29, 2008 at 3:20 PM

“As much as members of Congress want to find scapegoats, the root of this problem is political greed in Congress. Members of Congress from both parties wanted short-term political credit for promoting home ownership even though they were putting our entire economy at risk by encouraging people to buy homes they couldn’t afford. Then, instead of conducting thorough oversight and correcting obvious problems with unstable entities like Fannie Mae and Freddie Mac, members of Congress chose to ignore the problem and distract themselves with unprecedented amounts of pork-barrel spending.”

“Taxpayers who want to ensure that this doesn’t happen again should send a very clear message to Washington that it’s time for Congress to live within its means and restore the principles of limited government and free markets that made this country great.

Does not make sense. The root of the problem is Congress, so taxpayers who want to ensure this doesn’t happen again should trust Congress to “live within its means.”

For crap sake, Senator Colburn. You are smarter than this. Politicians in who create problems, as you admit was done here, never admit their mistakes and get re-elected. Nobody in Congress has taken the fall for the Fannie/Freddy/AIG mortgage crisis and they are unlikely to fall on their swords before November.

The heat of campaign season, 30 days before a Presidential election no less, is NOT the time to force feed legislation on the American people.

Spending hundreds of billions should require far more public debate and deliberation than has been allocated for this bailout bill.

9 of 10 Americans are paying their mortgage on time and our concern regarding the long term and ongoing systemic implications of such a massive government takeover are not trivial.

Senator Coburn has Washington has changed you that much?

Angry Dumbo on September 29, 2008 at 3:22 PM

Credit Default Swap Derivative Contracts, read up on them and you’ll understand.

This is far from just being about bad mortgages by deadbeats. Thats the root, but not the Catostrophic part. Its these Derived contracts and how they work.

Either these CDS’ contracts need to be annuled in some way or all the bad mortages need to be purchased which would stop this from turning into a Multi-TRILLION problem.

jp on September 29, 2008 at 3:23 PM

Calm Down, Oil <100 pbl, Gold <, Dollar Up. Why is the dollar showing gains?? As in gains not seen in 15 years. You would figure if we really had problems, folks would be un-assing Dollars and moving to something else. Folks, what you are seeing is crap. One month before an election. F&F are going to get pounded, but in a few days, someone is going to start figuring out what the assets they have are truely worth, and there will be buying. Someone (Buffet?) is going to make a killing. The market works that way for a reason. No bailout plan should be considered, that does not repeal the stupid ass decision to loan money to people who are not worthy of the risk…

CSMBigBird on September 29, 2008 at 3:29 PM

grdred944 on September 29, 2008 at 2:31 PM

“Coburn should be removed from office.”

You are insane. Coburn is all that stands between you and the barbarian socialist/marxists. You have the stupidity to conflate Coburn and his history of conservative support with the rest of the grifters – Dodd, Frank, Clinton, Biden, Kennedy, amd Reid? That’s like shooting the last soldier in the back, who is guarding you from the barbarians in the street. Boy will that feel good. Idiot!

Coburn is my senator. I’m proud of him. If you don’t live in Oklahoma, then shut the xxxx up. We do it right. He has been doing it right. Maybe you should clean your own nest first!

Old Country Boy on September 29, 2008 at 3:34 PM

This bill does not represent a new and sudden departure from free market principles as much as it represents an emergency response to congressional actions that have ignored free market principles, and our Constitution, for decades.

Coburn is Dead on here. While I’m not completely supportive of this bailout. You have to admit that something needs to be done here. This was a government made problem, and sadly, gov’t needs to fix it. Or actually, gov’t is the only one that can fix it.
I’m not sure I see it in this bailout though. But I haven’t gone through the whole thing yet.

Trov on September 29, 2008 at 3:40 PM

Ugh, one of my ‘R’ guys voted for it and the last person I would have thought to do so.

Bishop on September 29, 2008 at 2:47 PM

That may mean that things are not what you think they are.

Count to 10 on September 29, 2008 at 4:35 PM

CSMBigBird on September 29, 2008 at 3:29 PM

Be careful with that. Actual deflation is an economic killer. Investment is the lifeblood of the economy, and why would you invest if you get a better return risk free by stuffing your mattress with money?
Not realizing this is one of the things that caused the Great depression.

Count to 10 on September 29, 2008 at 4:39 PM

We are headed for a depression and the republicans here are playing their violins, putting ideology over the security of this country. I never thought I’d see that day. It is shameful. Commercial banks aren’t lending to each other, foreign investers are withdrawing from the market, but the repubs are letting the perfect be the enemy of the good enough. Certain repubs/conservatives here are willing to bet that the worst case scenario won’t happen, what will you say if it does materialize? “Never Mind”, like Roseanne Roseannadanna?

eaglewingz08 on September 29, 2008 at 4:47 PM

He is right about the cause.

What is he going to do about it?

Again, crickets.

PattyJ on September 29, 2008 at 4:51 PM

The lesson of the Great Depression is that the New Deal did not fix our economy, WWII did.

I feel I am on pretty solid historical grounds in saying this. For those who disagree, I would direct you to the recent release by Amity Shlaes entitled The Forgotten Man.

Applied to the current crisis, I would say that history dictates that continued government intervention into the markets only prolongs or delays the necessary correction. For those who argue for doing “something” are you certain what impact the plan will have on housing prices, inflation, unemployment, interest rates, etc. over the next several years?

As for today, the markets hate only one thing, uncertainty. Specifically the uncertainty created in the minds of foreign investors who watch CNN and the other cable networks which reported extensively over the weekend that a deal on the bailout was reached.

Shame on professional journalists who attempt to influence the news rather than simply report it.

Angry Dumbo on September 29, 2008 at 5:03 PM

Tragically, Rep. Coburn’s understanding of the free market is flawed if he believes that what the Congress and Administration intend is helpful, rather than harmful.

See Peter Creswell for a full explanation.

JDPerren on September 29, 2008 at 5:15 PM

Conservatism is not an economic suicide pact. In real life, nothing is pure. We can only hope that conservatism is resilient enough to choose practicality once in awhile, and still survive.

RBMN on September 29, 2008 at 6:02 PM

Spot on. Creswell quotes the CEO of North Carolina’s BB&T bank, John Alison who says, Paulson’s proposed $700 billion bank rescue aims to help “poorly run” companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley. Further, he adds Treasury “is totally dominated by Wall Street investment bankers” and “cannot be relied on to objectively assess” the impact of government policy on the financial industry…
“There is no panic on Main Street and in sound financial institutions,” Allison wrote. “The problems are in high-risk financial institutions and on Wall Street” …
The market should be allowed to eliminate “irrational competitors,” he said. “There were a number of poorly managed institutions and poorly made financial decisions during the real estate boom,” Allison wrote. “It is important that any rules post-`rescue’ punish the poorly run institutions and not punish the well-run companies.’

The NYT had an insightful article to this end this past weekend.

http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1&partner=rssnyt&emc=rss&o

The article explained how AIG’s collapse can be traced to its tiny 400 employee London unit which sold credit derivatives, which were insufficiently collateralized, yet the London AIG unit pulled in annual salaries that exceeded 1 million dollars per employee even after their firm was under criminal investigation.

The bad eggs are getting bailed out or rather taken off the hook. Not a good deal for taxpayers. However, the problem real problem is the bailout won’t work and the precedent is set that big politically connected firms will not be allowed to fail.

Angry Dumbo on September 29, 2008 at 7:00 PM

The lesson of the Great Depression is that the New Deal did not fix our economy, WWII did.

I feel I am on pretty solid historical grounds in saying this. For those who disagree, I would direct you to the recent release by Amity Shlaes entitled The Forgotten Man.

Applied to the current crisis, I would say that history dictates that continued government intervention into the markets only prolongs or delays the necessary correction. For those who argue for doing “something” are you certain what impact the plan will have on housing prices, inflation, unemployment, interest rates, etc. over the next several years?

As for today, the markets hate only one thing, uncertainty. Specifically the uncertainty created in the minds of foreign investors who watch CNN and the other cable networks which reported extensively over the weekend that a deal on the bailout was reached.

Shame on professional journalists who attempt to influence the news rather than simply report it.

Angry Dumbo on September 29, 2008 at 5:03 PM

Unfortunately, there is a huge amount of work shooting down Amity’s work. The fact is War is just a larger version of Bastiat’s Broken Window Fallacy. War, just as any other government spending does not and can not stimulate an economy out of a depression. It can stimulate a sector of the economy, but at the cost of all the rest of the sectors.

This isn’t a huge lesson, it is basic Austrian Economics 101. There ain’t no such thing as a free lunch.

I am still waiting to be explained how you or anyone thinks that the government that caused this can fix it. Have they ever fixed anything? Absolutely not.

The only bailout plan that will work without costing taxpayers and giving more power to the Federal Government: The Austrian Plan

Tim Burton on September 29, 2008 at 7:02 PM