Back at the House

HC Blake

An Ungovernable Congress?

By, HC Blake

A rather ear-pricking remark was made that the most powerful government in the world was ungovernable due to Congress’s rejection of the bailout bill and world markets on the brink of collapse. And I agree in part, the United States has been ungovernable. We’ve created a housing bubble on subprime mortgages, sold these unscrupulous packages to the rest of the world, borrowed to consume and printed trillions of dollars to fund an illegal war. Borrowing, printing, consuming - very ungovernable, indeed. In fact the words, avaricious buggers comes to mind. Well now, the bubble has burst and unlike the merger of acquisitions and dot com bubbles, this time we have truly slimed the rest of the world.
However, Congress’s rejection of the bill has never been more governable than through all of America’s years of boom. After all, we are not a dictatorship - yet, ‘managed’ so that Congress pushes through a bill that gives a quick shot in the arm so that we can all go back to our consumer fix of cappuccinos at Star Bucks. Perhaps that’s a bit simplistic, but that is what all this is about, isn’t it? Easy credit, easy living – and now we are seeing America brought to its knees in credit.
The bill was rejected by twelve members of Congress, a few of whom I have been watching quite closely. Two of the main problems with the bailout are, first the easy payoffs and more off- the- hook practices for Wall Street that will basically tax the poor to feed the rich. And secondly, where will the United States get the $700billion? The Federal Reserve will have to no doubt print it. And basic monetary policy shows, the more dollars you print the more debased the currency becomes. The threat of signing this bill is that the dollar could go broke. What will the world do then? As Senator Chris Dodd said at the opening of the congressional hearings, ‘there is no second act with this. No other alternative plan. We have to get this right.’ And yes, the markets are bad now, but as US economists Jim Rogers, Peter Schiff and twice Nobel Prize winning Joseph Stiglitz have said, the markets will recover.
The difference between what is happening now and the great depression of the 1930s is that the Fed is trying to fix the problem by creating credit. However, the more credit created out of thin air, the more debased the dollar becomes. Republican Congressman Ron Paul, who is on the financial committee and opposed to the bailout, has pointed out that Paulson’s bill would only perpetuate a credit system coming to an end. So what’s the solution? Stop creating credit, bubbles and spending trillions of dollars to police the world? The Federal Reserve has already printed several billion dollars to pump into the economy over the past few days – and the markets are still down. How would printing another £700billion relieve the markets anymore? It is a shot in the dark. Would you want the British government and shadow government to flagrantly push through a credit crunch bill that could effectively ruin your pound and economy? Because that is the possibility that America could have been faced with if this bill had been pressured through.
It seems that this ungovernable group, are exercising their congressional responsibility by making sure that the most prudent decisions for the long term welfare of Americans and world markets are made. If anything, the world is watching the example of a truly democratic governing body in practice – though it ain’t perfect and a solution is needed quickly in order to help clean up this mess we created in the first place. But, Congress should not supinely agree to a flawed bill that has worldwide irreversible repercussions.
Call me a sentimental Yankee, but I haven’t gotten the cynical British thing down yet. Though I get the sneaky feeling that middle Britain and the government just might feel their renegade roots if faced with such a decision. Though they probably would have never created this mess in the first place. But who knows, this all might be over within a week. Right, Mr Kaletsky?

Verity

I stopped reading at the third sentence, when the words "illegal war" jumped out at me.

Anyone whose reasoning is so faulty has nothing to say to me. If a democratic government wishes to prosecute a war, and its assemly of democratically elected representatives votes "aye", that war is legal.

There is no unelected supranational governing body empowered to make international "laws".

The UN needs to be dismantled and consigned to history for many well-rehearsed reasons - not least that some naive idiots think it is some kind of unelected supranational cosmic governing body more powerful than elected national governments.

Paul B

Whilst agreeing with Verities sentiments about the "illegal war" and the UN, HC Blake makes some good points, similar in a way to Simon Jenkins column in last sundays-Sunday Time.

I too have a sneaking regard for those Congressman & women -whatever their motivations- whom voted down the bail out bill. It maybe to curry favour with their voters back home, however, maybe those voters back home understand the situation much better than the supposed great and good-it wouldn`t be the first time great & good have treat the proles with contempt & disdain would it. Im glad that the Congressman haven`t just supinely rolled over, and that they have asserted the will of the people. Bravo to them

Matt

''I stopped reading at the third sentence, when the words "illegal war" jumped out at me.''

Same here.

David Lindsay

The Republic strikes back.

When will this Kingdom?

Yes, including against the War Junta just as much as against the closely connected Fleet Street/City Cabal.

Verity

Paul B - I agree with you. The Reps voting against the Bill were Republicans. Only after it was clear that it wasn't going to pass did some Democrats start reneging and changing their votes.

I think around 10 Dems managed to change their votes before the closing, with Nancy Pelosi pleading with them and looking as dramatic as she is able given the power of Botox to freeze the features.

Paul Dunn

Well done H C Blake, an excellent piece. In support of your view it is a fact that the war in Iraq was pre-emptive. It was subsequently unconstitutional and therefore in essence illegal. Quite why Verity would stop reading after 3 sentences suggests a rather tunnelled vision. With regards to the bailout may I suggest a little research to those in doubt? Try C-span.org, google Macy Kaptur, google Ron Paul. Do get informed. See just why they have rejected the bailout. Feeding an addict the very cause of his addiction won't cure much, - he has to go cold turkey eventually. And horrible it will be! The free market can adjust in time, if it is allowed to stay free, and that is precisely what those congressman and Senators are fighting for.

Augustus

I realise that we are seeing democracy in action here, but I still can't get my head around the volatility of the procedure. Given that the pending election is going to influence those Representatives who may have to account for their decisions back home, the threat of deep recession, with all its dire and prolonged consequences if the Bill is not passed must make the decision a no-brainer. If modern-day financial wizardry has not been properly and soundly controlled and regulated, resulting in a financial catastrophe of such ridiculous proportions, it is obvious that society is going to be affected in a big way. As any government's job is to keep society on the rails, it must surely be a politician's job to take the best course of action available. Although the bailout is huge, it must at some stage produce a return, and it should be the viability of the expected return which they ought be concentrating on, rather than the idealogy of the package itself.

Conservative Cabbie

Verity

Have you seen the video of the kids singing in praise of Obama? Sickening and fits in well with your theory of a 'Dear Leader' syndrome,

http://www.youtube.com/watch?v=TW9b0xr06qA

TGF UKIP

But what about all the other billions (trillions?) out there financing all the esoteric derivatives with, at best, the notional value at which they were last traded, and are probably never to be traded again.

Then again, what about all the billions (trillions?) out there that financed all those highly leveraged private equity deals based on absurdly optimistic notions of returns.

Seems to me there is lots more to come yet and this $700 bn package is, in the totality of it all, entirely irrelevant.

The Bush family and the House of Saud are said to be close, so how long before Saudi buys Wall Street for next to nix and then who will be more uncomfortable with whom - the Arabs with the New York Jews or vice versa?

Verity

Not without one helluva lot of horse trading and the final Bill will look nothing like the dog's breakfast of yesterday.

Also, you have to bear in mind the number of Dems who bailed out when it looked as though the Reps weren't going to let it pass.

The more the Reps let this unravel, and the more the clue arrows point at ACORN, and thus Obama, the better.

Verity

Conservative Cabbie - Yes, I've seen it. I am absolutely stunned that this is not against the law. In fact, it probably is. If I were a parent at that school - if it's a school; we weren't told - I'd be down at the School Board working on getting everyone involved sacked.

Even if it were some private organisation, this is a nightmareish use of children.

Conservative Cabbie

The debate moderator for the VP debate is a PBS anchor called Gwen Ifill. Funnily enough, on inauguration day, Jan 20th, she is releasing a book called "Breakthrough: Politics And Race In The Age Of Obama". So who do you think it would be in her best interests to win the election? Well that's a toughie, this is definately one for the conspiracy theorists.

Link:
http://michellemalkin.com/2008/09/30/a-debate-%e2%80%9cmoderator%e2%80%9d-in-the-tank-for-obama/

Paul B

There`s a surprise, a public service broadcasting journo being a leftie, well I never.

Conservative Cabbie

Paul B

The point is not that she is a leftie per se. As you say, no surprise there. The point is that she stands to benefit financially from Obama winning the election with the sale of her book. A definite conflict of interest.