Lessons from bailout, stimulus boondoggles


I heard it said once that "there's so much good in the worst of us and so much bad in the best of us, that it's sometimes hard to tell the good from bad."

We have seen this principle unfold over the past months with the introduction of the so-called $787 billion stimulus package, the $410 billion omnibus bill and the $700 billion bank bailout fund.

In churches, synagogues, parishes, small businesses and households, we know we have to make good decisions, manage well and not live beyond our means or spend more money than we take in. Most of us make our financial decisions knowing if we blow it, there will not be an opportunity for a bailout.

Given that, there's a rift in Washington between House Republicans and one of their allies, Big Business.

When the Obama administration announced its rescue of Citigroup, Rep. Tom Price, R-Ga., called it corporate welfare. House Republican Conference Chairman Mike Pence of Indiana said, "Bailing out every failing business in America means we're burying generations under a mountain of debt."

House Republican Leader John Boehner said recently that he wasn't happy the U.S. Chamber of Commerce and the National Association of Manufacturers supported the stimulus bill that every House Republican opposed.

Well guys, wake up and smell the reality. The chamber is probably always going to do whatever protects their deal. Many of the companies that got us where we are today with their fraud, bad decisions and manipulation of market activity are chamber members.

I will remind my former colleagues that corporate welfare is not new. Why is it just now being raised as a concern? It existed before the bailout and before the stimulus, yet Republicans ignored it in the name of "job creation."

Americans have picked up on this, and it's another reason why Republicans have lost much moral authority.

Why would one be surprised that the National Association of Manufacturers and the chamber would support a stimulus bill that was 30 percent stimulus and 70 percent skunk?

While Republicans have turned a cold shoulder to Big Business in Washington, small business -- the real warriors in the trenches -- should also turn a cold shoulder to Republicans in Washington. The very people the majority of Republicans supported in the first bailout -- big banks like Citigroup, Bank of America and the like -- have turned their backs on small business.

Ironically, the institutions that government said were too big to fail are in turn saying that small business is too small to fool with.

Republicans should be defending their natural allies in small business.

Yet manufacturers and the chamber's support for the poorly crafted stimulus package is another example of "protecting my deal," or the practice of "If I can get something out of it, I'll support the deal, no matter how bad it is."

Bill Clay, a former congressional colleague of mine who retired a few years ago, once said, "In politics there are no permanent friends or permanent enemies, just permanent interests."

The great majority of business interest groups in Washington supported the stimulus. Why? In spite of 70 percent of the stimulus package being bad, it protected their deal.

Small business and the consumer continue getting the shaft at every turn. Not only have the Citigroups and Bank of Americas of the world shafted small business in lending, they take billions in federal loan guarantees and billions in cash, then turn around and raise interest rates on consumers.

Republicans are finally waking up and recognizing what I discovered long ago: that the virtues of some in big business can sometimes be as bad as the virtues of big government.

Because of this, there's always room for oversight. Not over-regulation of market activities, but oversight of the human abuse of market activities.

If you are a Republican or a Democrat and you disagree with me on oversight of human abuse of market activities, just consider Bernie Madoff, Fannie Mae, Freddie Mac and every other name that has had to take bailout money due to unsupervised human greed and unsupervised manipulation of market activities.

As a nation, we must not forget that true wealth is created by real gross domestic product, and not by falsified, fictitious equity.

Thomas Jefferson said in 1842: "I believe banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all properties until their children wake up homeless on the continent their fathers conquered."

The third president of the United States is speaking to us today from his grave.

J.C. Watts (JCWatts01@jcwatts.com) is chairman of J.C. Watts Companies, a business consulting group. He is former chairman of the Republican Conference of the U.S. House, where he served as an Oklahoma representative from 1995 to 2002. He writes twice monthly for the Review-Journal.

 

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