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EDITOR OF REDSTATE

Judd Gregg and Bob Corker Sell Out GOP on Bailouts

By: Erick Erickson (Diary)  |  May 5th, 2010 at 05:00 AM  | 

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Judd Gregg (R-NH) and Bob Corker (R-TN) are throwing their own side under the bus on financial deform. It all involves the Federal Reserve.

While saying they are working to ensure the federal government stops bailing out businesses, Corker and Gregg are working over time to defeat an amendment offered up by Senators Vitter and Sessions that would actually stop bailouts.

You need to understand what the Federal Reserve’s 13(3) authority is. Under (13)(3), the Federal Reserve bailed out (or salvaged if you prefer) AIG and Bear Sterns. It is the primary vehicle through which the Fed bailed out the “too big to fail” entities.

Vitter and Sessions are offering up an amendment to the financial deform legislation to “ensure that any stabilization efforts made through the Federal Reserve’s 13(3) authority are made through clearly defined rules that ensure the loan is made against quality collateral to solvent companies. The stabilization efforts are prohibited from allocating credit or artificially propping up certain segments of the economy. And, the Board of Governors and Treasury will establish procedures in advance to prevent the monetizing the losses on the Federal Reserve’s balance sheet.”

Gregg and Corker are trying to kill that.

What’s more, Gregg is ridiculing those who simply want to audit the Federal Reserve. Yesterday, Gregg said, “we have a lot of Fed haters around here, I guess those people must not be fans of sound monetary policy….”

Actually Senator Gregg, a lot of us are deeply considered about sound monetary policy and want to make sure we have the money the Fed claims it has and, if so, exactly how it intends to use it.

The danger here is simple: most Republicans do not actually understand what is in the financial deform legislation. Gregg and Corker are capitalizing on that to undermine the Vitter and Sessions amendment.

They want to keep being able to bailout companies without any oversight or accountability.

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COMMENTS

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  • bk

    The WH pulled the rug out from the original negotiations taking place, giving Reid orders to lock out the GOP because that would be good as a November issue. Then in his usual preening manner, McConnell leads a filibuster for a couple days before announcing that his side is completely caving in.

  • eheassler

    This is why the Dems keep handing the GOP it’s head on a platter in the Senate,. With only 41 seats, only one Senator has to bolt to prevent the GOP from stopping a bill. What I would like to know, is what is in it for Gregg and Corker. To throw one’s GOP colleagues under the bus, there usually has to be political or personal gain involved. So, what did the sleaze Harry Reid offer them?!

  • america1st

    While he generally keeps a low profile, in attitude Gregg is one of the silk stocking crowd; he knows better than his constituents – just ask him. This has been true throughout his political career in both state and Federal offices. His tenure as a Senator has been the result of the advantages of incumbency, a lack of primary challengers and the fact that, like many RINOs, the general election alternatives have been utterly unpalatable.

    Despite my distaste, I do respect his honesty. He may not advertise his leanings, but neither does he attempt to disassociate himself from his positions depending on the audience. NH could have done worse (witness shaheen), but we’ve done *SO* much better, also (Smith, Sununu).

    Bottom line: this is business as usual for our senior Senator.

  • RedBeard

    What are they afraid we might discover? And more pertinent, why are they afraid?

    Letting the Fed run “sound monetary policy” like a black op is hardly what we need right now.

  • gamechange11two

    You mean sound monetary policy like this, Mr. Gregg?

    http://www.chartingstocks.net/2009/03/chart-of-the-us-money-supply-1917-2009/

    Really, sir, you are defending the indefensible.

  • Jim

    Putting aside the moral and economic reasons why the Fed’s policies have been so destructive to our economy and enabled unprecedented growth of government, especially in the last 10-15 years, this is a no brainier from a political standpoint. There is a widespread popular support for clamping down on the Fed (auditing it and finding out what is going on there. This is yet another example of what is so wrong about the current GOP leadership in the senate and why it needs a wave of new conservatives to mix things up.

    The Fed has given us nothing but sugar-high economic booms and harsh hangover busts , and you really need to be out-of-touch to defend that group of thugs right now.

  • Swamp_Yankee

    I haven’t made up my mind on auditing the Fed and I haven’t read the amandemnt, but I have heard Gregg talk at length about the subject.

    Bashing The Fed is popular right now. And the danger is not The Fed, but the empowerment of Congress.

    Its similar to to the election of judges. Both sides have merits. On he one hand, judges should be accountable. On the other, they should be free to decide without political pressure. The audit the Fed bills have the effect of injecting politics into monetary policy.

    I think Gregg is most concerned with keeping The Fed indpependent. He doens’t trust Congressional powers. The anti-bailout position has become more populist then conservative. Subjecting The Fed to populism is a dangerous line to cross. Also, even though it is a GOP amendment. It is still a Democrtic Congress. They will drive those “rules” governing The Fed.

    These are murky waters.

  • Swamp_Yankee

    This short clip shows some of Gregg’s concern of the putting the “camel’s nose under the tent”

  • earlgrey

    called regularly. I don’t know what else to do, but he is up for Re-election in 2012.

  • WarEagle01

    They desperately want to get back to the good old days, when being a Republican in the Senate meant routinely caving to the desires of your Democrat betters, thus ensuring the continued flow of invitations to all the really “cool” cocktail parties. It’s all about “bipartisanship” with these clowns–a bipartisanship that is never, ever, reciprocated by the Democrats.

  • mnewcomb

    I’m not sure everyone commenting understands that the Federal Reserve does not actually ‘have’ any money at all. It has to create money to do anything. All the money they ‘loaned’ out and used to buy toxic assets was created by the push of a button. Regular folk have to work 40hrs a week for a few tends of thousands of dollars a year… the guys at the Federal Reserve push a button and poof, one trillion dollars appear to buy up all their buddies toxic assets…

    Can I get a solid confirmation from any of the above sorta-kinda-leaning-towards the pro Federal Reserve secrecy position folks that they do in fact realize that the Federal Reserve creates money out of thin air and this is where inflation comes from? At a minimum, could they at least say it is a tiny bit unfair that someone can create all the money they need while the rest of us have to work for it?

  • Swamp_Yankee

    Congess controls our fiscal policy and I’d give them an ‘F’. The Fed controls our monetary policy and I’d give them a ‘D’. More transparency is needed. Not regulations. Letting the ‘F’ crowd control the ‘D’ crowd isnt that sound to me.

    Its not as if the Fed is creating that money for themselves, so its not ‘unfair’. Their decisions may not always be sound, but neither are the decisions of Congress and the whims of the people.

  • hickorystick

    by the democratic process are they? no, they will look the other way and let someone else do their dirty work. a 1970 dollar is worth a nickel. I don’t know how to find the tax rate by reverse interest, but it has been cut in half in value 4 times in as many decades. Andrew Jackson was right about some things.

  • mnewcomb

    The Federal Reserve prints/creates money.
    Loans it to banks for .25%
    Banks buy treasury bills at 3.5%+.

    Why would banks lend any money to average Joes when they can sit back and earn 3%, just buy funneling money from the Federal Reserve to the Treasury?

    “Its not as if the Fed is creating that money for themselves,”

    Yikes…

  • tenndon

    Just phoned Corker’s DC office. Guess what? Corker has given his office nothing to say about the Vitter-Sessions amendment. They even say there is no such thing as this amendment.

    Corker is turning into a RHINO of the first order.
    Too bad he’s not up for re-election this year.

  • Flagstaff

    statements from folks who should know better. Or should they?

    The problem isn’t with the Fed, and it isn’t with the people. It’s with Republican Congresscritters who don’t realize when to stand and be counted. The ones who don’t know you can’t make deals with Democrats, because when you do, they get what they want and you get to smile pretty from the second row.

  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

    I’m not really for such blanket restrictions on “bailouts” either. more later

  • Jim

    …politics has been part of monetary policy since the founding of the Fed in 1913. The idea of an “independent Fed” is a false premise. The Fed is a creation of Congress, has a legal tender laws that make it a compulsive monopoly, and is pretty much accountable to no one. They fund this massive leviathan of a government, and there have been a lot of cross-overs between the executive branch and the Fed personnel (Tim Geithner being the latest example).

    I think it is safe to say that most who are pushing for more transparency at the Fed are not advocating giving Congress control over monetary policy. It is not just populism. There are many sound economic, constitutional and moral reasons to hold the Fed’s feet to the fire. I contend that the true free market position is to get the government (Congress, the Fed, or any other bureaucracy) out of “monetary policy” and let the market set interest rates.

  • surendra

    Corker bought this election with his money. Ed Bryant would have stood up for the Constitution and Conservatives. This is the kind of stuff McCain will if do if he is reelected, go back to the middle. I have called Senator Corker’s office and I urge people to keep calling his office. The phone number in Nashville is 615-279-8125 and in Washington is 202-224-3344 Read Erick’s post and make sure they know we are getting informed and NO MORE OF THIS.