Courageous Voices in Opposition to Bailouts

It might appear that everyone in Washington is onboard with irresponsible taxpayer bailouts of Wall Street that could surpass the trillion dollar mark.

However, there are some courageous voices raising concerns, questions and alternatives. For example:

• On September 22, the Associated Press reported: “Indiana Rep. Mike Pence is urging his Republican colleagues to oppose the financial bailout being worked on by the Bush administration and Congress. ‘Republicans should demand that Congress take time in deliberating the merits of any legislation until the facts and competing solutions can be fully debated,’ the Columbus Republican said in a letter he started circulating on Capitol Hill on Monday. ‘We should demand consideration of free market alternatives to massive government spending, and we should fight to pay for the solution through budget cuts and reform instead of more debt or taxes.’”

• The Hill noted on September 22:

House Republican Study Committee “Chairman Jeb Hensarling (R-Texas) expressed skepticism in the Treasury Department’s proposal on Friday, saying he was ‘unconvinced that this is the proper remedy for our nation at this time.’

“In a statement Saturday, Rep. Mike Pence (R-Ind.), a former RSC chairman, came out against the idea of a government bailout. ‘Congress must not hastily embrace a cure that may do more harm to our economy than the disease of bad debt,’ he said.

“In a ‘Dear Colleague’ letter circulated on Monday, Rep. Scott Garrett (R-N.J.) attached three articles written by economists at the Brookings Institution, the Heritage Foundation and the University of Chicago that all offer alternatives to the administration’s plan.

“‘As in most cases, there is not just one solution to a public policy problem,’ Garrett wrote. ‘It is my hope that the ideas below will provide some interesting analysis to the problems faced by the U.S. financial markets and generate thoughtful debate as we consider this monumental legislative proposal.’”

• The Hill also noted on September 22:

“Sen. Richard Shelby (Ala.), the senior Republican on the Senate Banking, Housing and Urban Affairs Committee, is standing out during the current Wall Street crisis as a critic of top federal officials and their bailout plan. ‘I don’t believe, at this point, up to this point, that the Fed and the Treasury have a comprehensive plan’ regarding which companies to help out and which not to aid, Shelby said…

“Asked whether the government should try to fix the crisis at any cost, Shelby stated: ‘If we say “whatever it takes,” that means there’s a blank check of the treasury, future generations, to pay for the mistakes of a lot of people.’

“‘Now, I realize that there are problems in the financial sector, but who brought them on? And we’re going to bail these people out,’ Shelby added. ‘Will we benefit ultimately? Maybe. But at a price — a big, big price.’”

Let’s hope that these lonely voices eventually carry the day.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council