The House of Representatives?

I’m disappointed with the $700 billion financial bailout passed by Congress and signed by the President. It seems to me that the fat cats on Wall Street and the big banks used scare tactics to get what they wanted. The House finally blinked this morning and passed the revised proposal, which still wreaks of greed, no matter how many sweet-smelling modifications they attach.

I remain perplexed about the provision to increase Federal Deposit Insurance Corporation (FDIC) protection from $100,000 to $250,000. Most Americans will never see six figures in their savings accounts, a fact that seems lost on most members of Congress.

The FDIC’s insurance fund is at a historically low level, according to the Wall Street Journal, with only about $1 backing every $100 of insured deposits. Isn’t this the kind of fast and easy voodoo economics that blew the bottom out of the mortgage market?

The three largest banks in the country are now even bigger (Bank of America, J.P. Morgan/Chase, and CitiBank) following the Wachovia and Washington Mutual bailouts. Many independent community banks are likely to be gobbled up by the big three. Does that really make anyone on “Main Street” back home feel better?

Perhaps most disturbing is the fact that House members largely ignored what their constituents were telling them to do – listening instead to the financial whiz-kids and geezers on Wall Street. Too many members of Congress, particularly the old timers, are beholding to financial institutions that stand to gain by the bailout. Take a bow Barney Frank.

And to claim they passed this bailout for the folks back home on Main Street is unbelievable.

We really do need "change"

We shouldn’t be surprised by the financial meltdown at Lehman Brothers, AIG, and Merrill Lynch. Banks involved in the “sub-prime” mortgage crisis took a big hit. They were loaning money to folks who couldn’t really afford the huge mortgage payments they were assuming. There wasn’t enough collateral or ability to re-pay the loans, and the sheer volume of this risk began a snowballing of no confidence in those mortgage papers.

Others involved in this chicanery, from investment banks to insurance companies, are now feeling the impact.

For decades, “financial institutions” have been sending out credit cards to anyone with body temperature, not to mention canines, felines, and other varied critters. Dealing with high volume, they worried very little about individuals who found themselves upside-down in indebtedness they could ill afford. South Dakota was a witting enabler for the charlatans purveying this crap.

Mortgage lenders, fueled by a government and social environment that suggested everyone should own a nice home – whether or not they could really afford it – were warmly greeted by the masses and gained good traction.

Alas, that good traction eventually lost ground quickly on the slippery slope of sub-prime loans. By that time, the greedy lenders determined that their customers wouldn’t be able to re-pay the burgeoning collective debt encompassed in the sub-prime loans. The jig was up.

We all recognize that our federal fiscal health is on the critical list. Why would we expect otherwise, when federal policies promote “spend, spend, spend,” within both government and the private sector? Didn’t we all just love those “stimulus” checks this year?

The notion of “saving” rather than “spending” went out of vogue more than 30 years ago. It’s time we embrace the common-sense approach that you shouldn’t spend more than you have.

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More than that, we should hold our government accountable to adopt fiscal policies that reflect common sense. Perhaps that’s too much to expect of the U.S. Congress, but we shouldn’t give up the struggle.

Where's "the rest of the story"?

I was sorry to see the Rapid City Journal provide lots of ink as something of an apologist for Congressional earmarks (Tue. 4/15/08). Their front-page story by Kevin Woster and a sidebar regarding just how “essential” earmarks are for South Dakota missed the point many of us would like to see explored further. I expressed that view in my Oink-Oink posting a couple of weeks ago.

Earmarks tend to avoid the rigors and scrutiny of the budget process, and they are far more subject to the whims of individual senators and representatives – particularly those in power. That’s why it seems half of the public construction initiatives in West Virginia are named for Senator Robert Byrd.

“Whims,” of course, can be a part of political horse-trading. A less delicate way of describing them would be political pay-offs.

Even when visiting the Congressional Pig Book web site, which is stuffed with information about questionable earmarks, I am surprised at the apparent legitimacy of many projects. Certainly, most of those described in the Rapid City Journal seem worthy of funding – particularly to us South Dakotans.

But what about projects that smack blatantly of favoritism and appear to be highly questionable? Just how do they compare with projects that were "cut" from the formal budgeting process?

Perhaps the Rapid City Journal would do well to dig a bit deeper on all earmarks within their circulation area. At the very least, explore the “short-cut” process that goes with earmarks, and shine a bit of journalistic light upon this unsavory process.

Worthwhile projects should be able to withstand the rigors of the budgetary process – whether they’re in West Virginia, Alaska, Mississippi…….or South Dakota.