(We
Promise)
(And
We Really, Really Mean It This Time)
by Kerry Thomas
July 23, 2010
On July 21, President Obama signed H.R.
4173, the 848-page Dodd-Frank Wall Street Reform and Consumer Protection
Act, into law. In his 15-minute speech,
(transcript)
he promised “There will be no more tax-funded bailouts
-- period.”
In an all-too-familiar modus operandi,
Democrats in Congress worked with the President to convince 237 Congressmen and
60 Senators that this was yet another “crisis” that had to be “fixed” (before the
Democrats lose their majorities in November).
According to Congressman Barney Frank, “The central elements of the legislation are the creation of a Consumer Financial Protection Agency.”
This is just one of 13 new federal agencies created by this legislation,
while eliminating just one.
In
addition to the “central elements of the legislation” there are other parts
that seem to have no relation to fixing America’s financial problems.
One
example: Section 1502, Conflict Minerals, abrogates Congress’ Legislative
powers to the Executive branch, specifically to the Secretary of State, who is
now in charge of writing and enforcing regulation of certain minerals
(including gold) that come from the Democratic Republic of the Congo or an
adjoining country.
People who somehow come
into possession of these minerals will now have to submit an annual report to
the U.S. government that details the source and chain of custody of such
minerals. Such a report shall include
an independent private sector audit of such report.
What does the Democratic Republic of the Congo have
to do with America’s financial mess? My
guess is, probably as much as the other provisions of the legislation, which
isn’t much.
Wisconsin’s 8th District Congressman,
liberal Democrat Steve Kagen, enthusiastically voted for the bill. (roll
call vote no. 413)
Echoing the President’s remarks, in an email to
his constituents, Congressman Kagen had this to say (propaganda alert):
We did it! Today
is a day that will go down in history.
We took a positive step forward today when President Obama signed the Wall
Street Reform and Consumer Protection Act into law.
It’s official: there will be no more bailouts and no more bad loans to
people who can't afford them. Banks must now pay for their own mistakes -
not taxpayers; and the Federal Reserve has come under better control.
By providing effective oversight and holding Wall Street speculators
responsible for their own actions, faith will soon be restored in our financial
system. Most importantly, consumers now have someone working on their
side - putting people first.
I voted no to bailouts of Wall Street banks, because in Wisconsin we do not
reward people for losing other people's money. That's why I worked hard
on this new financial reform law, to make certain Big Banks everywhere will be
forced to pay for their own mistakes - not taxpayers.
My message to Wall Street is clear: People are more important than
profits.
And as of today, consumers will receive the protections they deserve.
I hope this news finds you and your family to be well. Let's continue to
work together, and we will build a better nation for all of us.
Together, We Will...
First observation: Congressman Kagen misrepresents his record
on the bank bailout.
When the $700 Billion Troubled Asset Relief Program (TARP) bank
bailout bill (H.R. 1424), more formally known as the Emergency Economic Stabilization Act of 2008, passed the House of
Representatives on March 5, 2008, Congressman Steve Kagen voted AYE (roll call vote
no. 101). After the Senate amended
the legislation and it came back to the House for final passage on October 3,
2008, only then did Kagen vote against the legislation. (roll
call vote no. 681)
Steve Kagen voted for the bailout before he voted against
it.
Second observation: There
is nothing in this legislation that addresses the mortgage mess involving Fannie
Mae and Freddie Mac. (A history of their
involvement in America’s financial meltdown can be found here.)
In September 2008, Congressman Barney
Frank (D-MA), who was the ranking Democrat committee member at the time (and is
its chairman today), said, “I think it is clear that Fannie Mae and Freddie Mac
are sufficiently secure so they are in no great danger… Fannie Mae and Freddie
Mac do very good work, and they are not endangering the fiscal health of this
country.”
On September 30, 2008, Ross
Kaminsky detailed how a Democrat coverup
for Fannie and Freddie led to the 2008 financial meltdown. His article is posted on discoverthenetworks.org.
According to the Washington
Times, “The government took control of [Fannie Mae
and Freddie Mac], and effectively much of the U.S.
mortgage market, in September 2008.”
Then, in December 2009, President Obama’s Treasury Department
removed the limits on Freddie & Fannie. There are no more limits restraining the number or value of mortgages
these entities can backstop with taxpayers’ money.
These two companies continue to rely heavily on taxpayer assistance.
Fannie Mae and Freddie Mac currently guarantee about
$5.5 trillion of outstanding mortgages and debts. These companies are under federal conservatorship, and the American
Taxpayers now have a 79.9% ownership in these companies.
There is
nothing in this new law that addresses the underlying financial problems with Fannie
& Freddie.
In an interview with Neil Cavuto, Congressman Luis Gutierrez
(D-IL) said the Democrats didn’t include any reforms to Fannie Mae or Freddie
Mac because they wouldn’t have gotten a single Republican vote if they had done
that. (The Congressman seems to have forgotten
that Democrats have the majority in both houses of Congress and don’t need a single
Republican vote to pass legislation.) Gutierrez
promised Congress would come back to address concerns with Fannie & Freddie
in the future. When asked when, Gutierrez
promised “soon.”
Third observation: Steve
Kagen says “In Wisconsin, we do not reward people for
losing other people's money.” Too bad Congressman
Kagen didn’t share this philosophy when he voted for the bank bailout before he
voted against it; or when he voted for the “stimulus bill” (roll call vote no. 70); or when he voted for the “cash-for-clunkers”
program (roll call vote
no. 348); or when he voted for “cap-n-tax” (roll call vote no. 477); or when he voted for ObamaCare (roll call vote no. 887).
I have a message for Congressman Kagen: “In Wisconsin, we do not reward people for losing other people's money.”