David Price: Lawmaker or Lawpasser?
By: BJ Lawson
I have tried to maintain a sense of decorum and respect for the August Institutions that comprise Our Nation’s Government. I have tried valiantly to speak respectfully of My Opponent, who has Served His Country as a Public Servant for twenty of the past twenty-two years.
But the cognitive dissonance required to maintain that respect is rapidly eroding.
Yesterday, my opponent was interviewed by Bill LuMaye, a popular talk show host on AM 680 WPTF. You can tell my opponent is running for re-election — he has been on Mr. LuMaye’s show about four times in the past two months. My opponent was asked to talk about the financial crisis, and the Paulson/Bernanke bailout plan.
Here’s where I have a problem: all my opponent was able to accomplish in thirty minutes was wringing his hands in sober tones about how terrible the current crisis is, stating how we need to do some kind of bailout, and then blaming The Administration for putting this questionable bailout plan in front of him.
I have one question for my opponent: Are you a Lawmaker, or a Lawpasser?
Do we hire you to watch out for our interests by authoring legislation, or to complain about the quality of legislation that you are provided by the Executive branch?
Why do you wring your hands and bloviate about legislation WRITTEN BY THE EXECUTIVE BRANCH, when the Constitution clearly states that Congress should be writing legislation?
If you don’t know enough to actually write legislation yourself concerning this topic, why should we value your opinions, and what gives you the right to complain?
Why are we paying you anything just so you can sit up in Washington and collect over $40,000 (since 2000) in PAC donations from banks and the American Banker Association?
Why are you echoing The Administration’s Sense of Panic and Urgency, when it is now being reported that this bailout plan has been in the works for a long time?
The White House today is drumming up extraordinary pressure on Congress to approve its plan to enact a $700 billion mortgage bailout fund, suggesting the markets cannot wait much longer and dispatching Vice President Cheney and other top officials up Pennsylvania Avenue to jawbone lawmakers.
But Bush himself continues to do little to explain his plan, and he has refused to be questioned about it.
Asked during a telephone briefing for reporters today whether Bush was speaking with lawmakers, White House Deputy Press Secretary Tony Fratto said the president is aware of their concerns but that Paulson is the salesman.
“It shouldn’t take much analysis to remember what happened last week, which was a very serious freeze-up in our credit markets,” Fratto said. “Our financial markets right now do not need uncertainty, they need increased certainty as to how this rescue plan is going to go forward — and that they can be sure that there is a plan to go forward — and that will begin the correction in our financial markets.”
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
In October of 2001, in an environment of fear and coercion by the Executive Branch, you voted for The Administration’s last-minute substitute version of the PATRIOT Act and shredded our Bill of Rights.
Now, as a consequence of your fear and ignorance, you are threatening to vote for The Administration’s bailout bill, known as “Cash for Trash” or “No Banker Left Behind” — thus shredding working Americans, feet first.
David, you’re fired.
September 24th, 2008 at 9:44 am
Wow.
September 24th, 2008 at 12:38 pm
Yay!
September 24th, 2008 at 3:10 pm
BJ,
Glad to see you taking the gloves off. Price has a lot to answer for, and letting him slide would be a disservice to the people of North Carolina.
-jcr
September 24th, 2008 at 4:32 pm
Future Congressman Lawson,
Get him good.
September 24th, 2008 at 9:14 pm
BJ:
Nice work calling out Price on his failings as a ‘professional’ politician instead of an effective one. But turnabout is fair play.
Would YOU be a Lawmaker or a Lawpasser? How would you change/modify/adapt the bailout plan to achieve the end that best serves the interests of the American people? Or would you let natural market currents run their course, whatever the consequence, and fall back to a financial survival of the fittest or last man standing?
Seems to me that if the credit crisis is indeed spreading to other sectors, something must be done, and while doing nothing is a course of action, it doesn’t seem like the right way to address this issue. I would rather see (I think) a concerted effort to contract (not absorb) a $700B increase in the money supply over several years than to sit idly by and do nothing.
All the finger pointing about how and why we got here is moot. We are here. How you would address this issue is a fair question, because if the smart people of North Carolina get their way, you may be in a position soon to do exactly that.
Best of luck to you.
September 24th, 2008 at 9:28 pm
Here is one way to ease the pain of the credit crunch is this historic credit bubble unwinds — we need to follow the Constitution, and allow monetary choice. That will allow competing currencies of all types — globally recognized money like gold and silver, as well as local barter currencies that will spring up organically as people work to produce, and bring valuable goods to market.
Our money system is effectively collapsing. We are damned if we do a bailout, and damned if we don’t. How will a bailout “help”? We got into this mess because of unsustainable lending (which equals unsustainable borrowing — for every lender there is a borrower).
How can we cure too much borrowing with yet more government borrowing, the proceeds of which are given to banks to allow them to lend more, when we’ve already borrowed TOO MUCH and can’t service the debt we have? (I know, lots of words… read it a few times and let me know if I made a mistake in there.)
For a graphical illustration, check out this blog post:
http://ukhousebubble.blogspot.com/2008/09/crushing-truth-about-us-household-debt.html
On the other hand, if we do nothing, we end up in a crippling deflation with not enough money.
But “not enough money” is actually a problem we can solve — we need to think locally, instead of globally. How can “money” be the limiting factor? In times like these, what is money except a medium of exchange that encourages people to trade with each other?
The proposed solution is at the end of this post from a few days ago:
http://blog.lawsonforcongress.com/2008/09/20/time-to-fight-the-real-war-on-terror/
and reiterated here:
http://blog.lawsonforcongress.com/2008/09/21/taking-the-pulse-small-is-possible/
Honestly, though, it’s really more of a safety net than a solution — empowering free American individuals to create value in their local communities is a safety net that will allow us to survive and prosper through the economic dislocation that awaits.
The economic dislocation will occur regardless of which path the Treasury takes. I hate to sound like a doctor instead of a politician, but we have no choice but to take our medicine, and it will get worse before it gets better.
I just hope we have enough insight to come out stronger on the other side, instead of sacrificing our remaining freedoms in a vain pursuit of “safety”.
BJ
September 24th, 2008 at 9:54 pm
That I think is your challenge. To get Americans to step away from everything they have known (right, wrong or indifferent) and abandon their safety net(s).
Even in a crisis people will cling to what is/was familiar. Advocating a return to a Constitutional approach of monetary choice and locally created value is one thing, implementing said return will be a daunting task - one that the average American will likely be unable to swallow whole.
I’m torn - cancer requires chemo and chemo sucks. But sometimes you have to damn near kill the host to cure the disease.
Then again, maybe we won’t get a chance to see if the bailout plan (if and when it comes to pass) works to any degree at all. We may implode within weeks.
September 24th, 2008 at 10:04 pm
Rick, the bailout plan will likely happen. Congress will be a lapdog, and the hypnosis of pending tragedy will likely blunt public opposition to this unprecedented corporate welfare program.
My hope, however, is that we can somehow, in some way, get the following one-liner accomplished legislatively:
Congress must unambiguously affirm that all voluntary barter transactions between individuals are tax-free.
Embracing that concept maximizes individual liberty and freedom during these challenging times, and will provide a real incentive to for communities to work together to speed our economic recovery.
You’re right — embracing the consequences of this change will not happen overnight. But gradually people will begin to realize that they are free to produce real wealth as individuals. That freedom to create value by serving others and bringing valued goods and services to market made us great once, and can do it again.
BJ
September 25th, 2008 at 3:29 am
BJ,
I’m not at all sure that the congress will roll over on this. The CNN poll showed 97% against the bailout, and I’m reading reports that the congress is getting thousands of phone calls telling them not to do it.
Add to that, the fact that president Bush has thrown his weight behind Paulson, and it looks like any Democrat who plays along is going to be taking a very big risk if they capitulate.
-jcr
September 25th, 2008 at 5:30 am
JCR, I hope you’re right — but “leadership” is reporting otherwise:
http://www.nakedcapitalism.com/2008/09/democrats-say-breakhrough-enables-them.html
Democratic Rep. Barney Frank said on Wednesday Democrats had reached an agreement to stem one of the worst U.S. financial disasters in decades, and that there would be enough votes to pass the measure and send it to President George W. Bush to sign into law.
Throw the bums out.
BJ
September 25th, 2008 at 10:17 am
This “financial disaster” marketing campaign is tactically the same fear mongering lying that has been used to ram through the so-called patriot act and the unconstitutional authorization to wage war on Iraq. The “patriot” act was gamed through Congress by dropping the document on legislators’ desks and scheduling the vote so quickly that they would not have the opportunity to read and understand it. It’s either 500 or 1000 (I’ve seen both counts) pages of legalese; try skimming that! Price voted for it not withstanding his oath to defend the Constitution. His party loyalty - Democrats and their leadership strongly supported it - trumped his oath and duty to his country. In Congress? Yes. A man? NO.
I called the Durham office. No one was available to answer the phone, it said, and there was no option to leave a message.
September 25th, 2008 at 12:47 pm
“Return our money to the people, for starters. Do people want to exchange and transact in gold and silver? Great. Do people want to do business in private local currencies that build self-sufficient communities? Great. Affirm that all barter transactions between individuals are tax-free, and let individuals build wealth by helping each other.”
This libertarian approach represents simplistic thinking that people can easily glom onto, but which really does not bear up under scrutiny. In any event, we need leaders who are going to work within the possible; that is, where compromises can be made in our democracy, to get things done. Leaving feasibility aside, these approaches are never going to happen because the votes are not there to make them happen. We need ideas that are within the realm of possibility.
September 25th, 2008 at 2:36 pm
Roger — I understand your skepticism surrounding monetary choice. We haven’t had these conversations in about 100 years, so the concepts can seem foreign.
Community currencies have worked in the past, and do work today — just look at the folks in Ithaca, New York who have been circulating Ithaca Hours since 1991… despite the burden of taxation on these transactions. Internationally, the idea is gathering steam in Germany:
http://news.bbc.co.uk/2/hi/europe/6333063.stm
Regarding “what to do”… I will explore this more fully in an upcoming post. The “inconvenient truth” is that the excess debt in the system must be liquidated. If we want to “feel good” by trying to “do something”, there are a number options we could consider short of the current plan, which is destined to collapse the currency.
Here are some possibilities to consider, none of which require pistol-whipping the American people:
http://www.hussmanfunds.com/wmc/wmc080922.htm
http://bigpicture.typepad.com/comments/2008/09/fixing-housing.html
http://market-ticker.denninger.net/archives/591-Congress-is-IGNORING-YOU-CALL-AND-FAX-NOW!!!.html
Finally, a letter was released by John Allison, CEO of my bank (my favorite bank), BB&T. I will be post Mr. Allison’s letter in my upcoming post, as his perspective is valuable. This is a Wall Street panic, and it proposed bailout does NOT deal with real issues facing community banks. In fact, it punishes well-managed institutions like BB&T.
Finally, though, I am above all else realistic and pragmatic. The bailout is apparently going to pass despite the overwhelming opposition by the people:
http://www.nakedcapitalism.com/2008/09/paulson-plan-officially-on.html
I’m sorry I can’t wave a magic legislative wand and make this problem go away. Anyone who says they can is lying to us. In fact, they’ve been lying to us for the past 95 years.
BJ
September 25th, 2008 at 6:51 pm
Regarding our current currency structure, a bare minimum would entail a push to re-establish a gold standard. For most of our brief history as a nation, our currency has been tied to gold. Much of the inflation that has occurred has happened after 1971 when we closed the gold exchange window to foreign dollar holders. If the Constitutional use of gold to back our currency is re-established and the Federal Reserve is abolished, it will fix our money supply and allow goods and services to be priced based on supply and demand. We create the productive capacity to create more apples? Apples fall in price. Deflation is a GOOD thing, it means that your economy (the ability to produce more goods and services) is expanding while the supply of money (a medium of exchange) remains fixed. By allowing these foppish bankers to inflate our money supply, we allow them to create purchasing power from thin air that we all must pay for via what Ron Paul would call the “inflation tax”. Return to a constitutional gold standard, and return the power to the people.
September 25th, 2008 at 11:42 pm
Darryl,
Strictly speaking, falling prices are a separate thing from deflation. Inflation and deflation are changes in the money supply, and a general rise or fall in prices is a result of inflation or deflation.
Changes in prices of individual items are simply the normal information flow to tell us about supply and demand, and we use prices to prioritize allocation of resources.
In a free market, the prices of many items will fall over time, as production becomes more efficient due to capital investment, new inventions, and so forth. Other items will rise in price over time, as they become scarce, or more desirable to buyers (antiques and collectibles, for example.) Still other items will fluctuate in price in response to immediate conditions (day-old bread is cheaper than fresh bread). Fuel oil is more expensive in the winter than the summer, and so on.
Crooks like Mr. Greenspan and Mr. Bernanke like to point to “price stability” as some kind of measure of their success in allegedly combatting inflation, but they gloss over the fact that if prices are stable instead of declining over the years, then the Fed, the banks that own it, and the recipients of newly-allocated fiat money are skimming the savings that we would otherwise benefit from.
-jcr
September 26th, 2008 at 1:04 am
BJ,
What will happen in your district if Price votes for the bailout? Will your campaign get a big boost if he does vote for the bailout? Or there are many voters who just don’t care?
-Edward
September 26th, 2008 at 8:26 am
I suggest taking Cap Gain Tax to 0%. This will spur an influx of money into the market. The savings from Taxes can be used to off set losses or buy insurance against bad debt. Then have a fire sale of all GSE assets and debit (good and bad..someone will buy them) and dissolve all GSE’s (Fanny and Freddie). This will get the government out of the mortgage business and return lending to the free market without demands being placed on it.
The other part of the deal that is not getting attention is that JUDGES should renegotiate mortgages based on what people can afford. I say NO. I don’t remember anyone bailing out my parents when they made bad decisions. I don’t see how the responsible people should bail out irresponsible people regardless if they are in $700k homes or $100k homes. If they over extended themselves they have to face the music. The AMERICAN DREAM is to PURSUE happiness it is not guaranteed. I say what does not kill you will make you stronger and failure can make people stronger but they must be allowed to fail.
Congress is also talking about another stimulus package. This should not go forward either.
September 26th, 2008 at 8:35 pm
At least part of the answer to your questions BJ, at least as I see it, is that David Price puts party and a whole host of special interests before his constituents and what’s good for our country. He makes a very obedient lap dog to Nancy Pelosi, but this isn’t representation. Sadly, he really would rather have us pesky citizens all go away so that he can pursue his own and his mistress’ agenda.
September 27th, 2008 at 6:41 am
Back before the income tax, the main criterion used to measure the health of a corporation was the amount of the dividend it was paying to its shareholders. Today, dividends are a lousy deal, due to the double taxation.
What if there were no tax on corporate dividends, since the corporation had already paid the taxes on its earnings? Any person with the money to buy a single share could get started on developing a regular property income. If they reinvested their dividends, they could compound their holdings.
The effects of this change could be enormous, and the biggest benefit would be for small and family businesses and their owners.
BJ, you’ve been through the process of starting a company. You know why it’s not practical today for a small company to go public. What if one of our local investment options was to buy shares to help your neighbor start a grocery store or a body shop? Gee, it might become possible again to start a business by raising capital from small investors instead of starting out with a loan from a bank!
I say, eliminate the taxes on corporate dividends, and break down the barriers to public trading of small companies. Let thousands of new businesses begin. Yeah, a lot of them will fail, but a lot of them will succeed, too.
-jcr
September 27th, 2008 at 8:33 pm
Please win so we can have more “Ron Pauls” in Congress
September 30th, 2008 at 2:57 am
Well BJ, looks like I guessed right about the congress rolling over on the bailout bill. Of course, I don’t believe for a minute that the weasels will accept their losses and allow the liquidation to happen without a few more rounds.
It does seem to me that losing this first round puts Paulson, Pelosi and the rest of the perps in a much weaker position. The market was down about 7% today, which isn’t nearly as big a hit as it took in October of ‘87. As I write this, the Nikkei is down around 3%, and the Hang Seng is close to that, so the world didn’t blow up as they claimed.
Another thing that weakens the pro-robbery caucus is that having lost once, they can’t really scare any dissenters with the fear of having to vote alone.
We must keep up the pressure of course, and the greatest pressure we can bring against future robbery attempts like this is to defeat the bailout supporters at the polls in November. We need to make “Bailout” a dirty word in politics.
-jcr