It looks like the only “no” vote on the bailout around here was from Peter Roskam. Bill Foster and Melissa Bean again voted for the $700 billion Wall Street bailout.

The Daily Herald:

U.S. Rep. Peter Roskam, a Wheaton Republican, and U.S. Rep. Don Manzullo, a Rockford Republican whose district includes the Algonquin area, both voted against the measure for a second time on Friday.

“The tragedy here is that Americans were never given an alternative,” Manzullo said of the current proposal.

Manzullo is absolutely right. There was no alternative given. It was either the bill drafted by Wall Street lobbyists or nothing.

I’m reminded of a poem by Dylan Thomas.

The hand that signed the paper felled a city;
Five sovereign fingers taxed the breath,
Doubled the globe of dead and halved a country;
These five kings did a king to death.

The mighty hand leads to a sloping shoulder,
The finger joints are cramped with chalk;
A goose’s quill has put an end to murder
That put an end to talk.

The hand that signed the treaty bred a fever,
And famine grew, and locusts came;
Great is the hand that holds dominion over
Man by a scribbled name.

The five kings count the dead but do not soften
The crusted wound nor pat the brow;
A hand rules pity as a hand rules heaven;
Hands have no tears to flow.

I still think the appropriate bill would have given the Treasury a free pass to invest equity into struggling banks according to a suitable formula, say 80% and the remaining 20% would have to come from other investors (to achieve market-defined valuation). This would have resulted in an improvement in capital ratios comparable to taking bad debt off their balance sheets. It’s true that the government would then have ownership in many companies, but this would have been temporary, and the bill could have directed the Treasury to unwind its positions within a set number of years according to various formulae. It’s unfortunate that Wall Street interests (yes, that includes ex-Goldman CEO Hank Paulson) exploited conservatives’ fear of socialism to prevent a proper discussion of this approach.

So Congress opted to preserve the interests of Wall Street, whose executives and shareholders retain a hundred percent of their ownership in these firms despite running them into the ground and destabilizing our economic system. Talk about moral hazard.

Manzullo and Jim Oberweis were right on this issue. There should have been some hearings and an adequate discussion of alternatives. Instead, they took the bill that the Wall Street lobbyists gave them, and signed it into law.

Filed under: politics.
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