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John Boehner Calls TARP Opponents Knuckle Draggers

By: Erick Erickson (Diary)  |  August 15th, 2012 at 07:51 AM  | 

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Considering that so many tea party activities first became inspired to get active because of the Republican push for TARP, and were then emboldened by Barack Obama’s stimulus plan, we can say, I think, that John Boehner is calling tea partiers knuckle draggers.

That’s unfortunate.

Now, I’m sure he doesn’t think of it that way. He’s just talking about TARP opponents — also known as the conservative base of the Republican Party.

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COMMENTS

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  • http://scipio62.livejournal.com/ scipio62

    It didn’t come out for three years, but the Federal Reserve bailed out (loaned money at extremely low rates, all of which has since, we are told, been paid back) the ten biggest banks before TARP passed. Although I disagree with what the Fed did, since it was basically a CYA move to distract from their own failures, it did “stop the bleeding”. TARP ended up being a slush fund to funnel taxpayer dollars to those banks run by Democrat supporters (ie., the bank run by the husband of the disgraceful Maxine Waters). TARP was rendered, therefore, pointless. Naturally, nobody knew it at the time since Bernanke and the Fed hid their actions until much later, although I’m sure there were plenty of people in the Bush administration and in Congress who did know what went on and have kept quiet about it.

    You know, had the Bush administration, especially Paulson, followed the law, two things would have happened: the big banks would have been broken up, and the recovery would be complete.

    The FDIC is allowed by law to take over any struggling bank (not just those marked “FDIC-insured”), replace its management, then buy and sell off the good assets in order to put the bank back on solid footing or have it liquidated; it’s own version of the bankruptcy code. The FDIC uses the premium dollars of FDIC-insured banks in order to do this, and gets a positive return on the ultimate sale of the assets. With the biggest banks floundering, however, I doubt the FDIC had the funds to do to them what they could do to other banks. That’s where the Fed could have come in; instead of bailing out the banks, they could have loaned the money to the FDIC so that the agency could break up the banks, using the sale of assets to pay back the Fed. Considering there is very little in the law that states what the Fed can do, I have no doubt this would have been legal.

    It also would have been proper, the bleeding would have been stopped without TARP, and the real recovery, as opposed to Obama’s non-recovery recovery, would have begun right away and be nearly or fully completed. Of course, this would have ultimately been distasteful to the politicians, especially Obama, who relied on campaign funds from these big bank bankers.

  • commonsenseobserver

    In preventing a collapse of the financial system and the entire economy, making Main Street pay for Washington’s carelessness.

    But I do also think that as with all policies, implementation makes all the difference. Was the same for the auto bailouts, the wars, No Child Left Behind etc.

  • http://en.wikipedia.org/wiki/Elizabeth_Jacobson get2djnow

    When I first saw “Forrest Gimp” I didn’t understand what was meant by the phrase stupid is as stupid does. Thanks John for helping me out with that.

    Sorry, I’m too angry about this to add a more civilized comment to the discussion, but as former military, I’m proud that I withheld my less civilized comments.

  • ss396

    And now we no longer have Ryan next to him to keep his sorry in line. I already dread the year-end taxageddon negotiations.

  • blooch

    —-er, worse names than that. And are “Knuckle-draggers” a subset of “Hobbits or vice versa?

  • craigbardo

    Perhaps, politically inevitable but your comments suggest that TARP was necessary. How many “toxic assets” have been purchased by the toxic asset relief program? Aside from the moral hazard (now fully realized), how exactly did this program help the economy?

    You also suggest that implementation is the issue, not the premise of government involving itself in un-enumerated activities. This has been the refrain of the left since the days of Trotsky.

    I see that you support Romney-Ryan, who co-incidentally both supported TARP, the auto bailout and in Ryan’s case, limitations on banker compensation and Boehner’s increase in the debt ceiling. Romney is also the progenetor of Obamacare and has yet to renounce his own mandate, preferring a 10th amendment defense of the indefensible.

    I will also vote for Romney-Ryan because they are not radical leftists but make no mistake, the success of statists in America has only come with the assistance of accommodationists, who are at best naive.

    Boehner’s ability to keep his position is as distressing a development as the fact that we’ve gone to war with a left of center candidate. At least, he had the sense to pick a lieutenant that can translate for him what animates We The Knuckle Draggers.

  • http://online.logcabin.org/about/ suzieQ

    Boehner knows that Romney is going to win. Anyone who has been paying attention knows that Romney is going to win. And Boehner is returning to old habits. Remember, TARP, the auto bailout, the PATRIOT act, and Medicare expansion all occurred under Bush. Romney is already running ads explaining how he plans to expand the social safety net. Boehner knows the days of spend freely are coming again. Unfortunately, we allow our own to get away with behavior we would never allow from the other side.

  • tnguy

    ….of voting for (R) in the general, no matter how noxious the principles of the person in front of the (R) may be.

  • proudmarinemom

    .

  • Kyle-MI

    Justify your answer with what they did from 2008 to 2010. Primaries are the time to change, period.

  • WY_Cowboy

    Period. They have been more than a disappointment. John Boehner is a terrible Speaker. He sees his job as just getting through the day without upsetting the media in any way shape or form.

    And now Ryan is leaving the House to be the VP . . . That’s good, but bad, bad, bad for the House.

    If the House leadership stays in place, we very could be subject to Speaker Wasserman Schultz in a little more than two years. Okay, maybe not her . . .

  • tnguy

    If, for example, you vote for Boehner in the general, you’re just making it that much harder for him to be unseated in the next primary. Tossing out Dick Lugar is the rare exception to the rule. And you know it.

    We can rail on Obama all day long, but the truth is, he isn’t the problem. We are. We had enormous national debts in medicare, SS, and publicly held debt before Obama was ever elected. It was GWB who signed TARP, and GWB who signed medicare part D, adding trillions to our national debt in one stroke of his pen. If we had practiced conservative principles the last 20 years, Obama couldn’t have sniffed the presidency. But instead, we continue to elevate big gov’t moderates in our party, instead of alienating them.

    You want to justify something, justify your own position. It’s a proven failure. Because your way of doing things put a marxist in the White House, pathetic men like Boehner and McConnell in our leadership, and marginalizes great men like Jim Demint. If anyone needs to justify anything, it’s those who continue to argue as you do. Voting for big government republicans like Boehner and McConnell makes it difficult to draw the distinction between republicans and democrats to the gigantic % of the population that is generally ignorant of politics.

    Until we see the beam in our own eye, we’re just spinning our wheels.

  • http://en.wikipedia.org/wiki/Elizabeth_Jacobson get2djnow

    That’s just a load of carp, & it stinks. A cynical man would question your Conservative bona fides, I’ll leave that to Neil. I will say that you’re displaying a special kind of rectal cranial syndrome. There is NEVER a time to vote for D in the general. We defeat our squishy friends in the primaries, or we elect them in the general. PERIOD.

  • exitsfunnel

    As someone who hated TARP more than any piece of legislation in my lifetime including Obamacare, which would probably come in a distant second, it’s never been clear to me how Ryan gets a pass for not only voting for it, but being a very vocal supporter. I don’t want to talk bad about the guy now that he’s on the ticket, but I really don’t think that he’s everything that a lot of conservatives want to pretend that he is.

    -exits

  • tnguy

    ….where I advocated voting for a democrat, ever. And I notice you don’t even try to refute a word I wrote, because you can’t.

    No one can read my posting history and question my conservative beliefs. On the other hand, this post from you alone is enough to call yours into question. You’re the one ok with Bush’s enormous gov’t expansion and call big gov’t republicans who have aided and abetted Obama your “squishy friends”, not I. I’m more likely to refer to them as traitors.

  • gekster

    from:
    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/13/paul-ryan-voted-for-the-bailouts-but-hes-since-soured-on-them/

    excerpt:
    Ryan?s pro-bailout votes have raised the hackles of many conservatives, and he breaks from Mitt Romney on the auto bailout, which the former Massachusetts governor opposes. Over the past few years, however, Ryan has soured on the same bailouts that he voted for, arguing that they?ve been diverted from their original purposes and manipulated by administration officials for political purposes.

    In his 2013 budget, the House Budget chairman accuses the Treasury Department of having diverted TARP from its original purpose of ?providing targeted assistance to unlock credit markets? and turning the program ?into an ad hoc, opaque bailout and a slush fund for large private institutions.? Although Ryan?s budget acknowledges that TARP ?succeeded in halting a systemic panic,? the budget also concludes that TARP has ?morphed into crony capitalism at its worst.?

  • JSobieski

    The application of mark-to-market rules was triggering a death spiral in mortgage backed securities. Coupled with regulatory rules on capital requirements and the fact that FDIC would be on the hook for deposits, the possibility of a death spiral was real (we can argue about how likely it would have been).

    Large bankrupcies are very very messy—an rely on banks to provide DIP (debtor in possession) financing. Cascading failures by large banks would have resulted in extremely messy, time consuming, and expensive bankruptcy proceedings involving numerous DIP providers. As someone who has some experience in bankruptcy court, it would have been horrible.

    Bankruptcy is designed to deal with individual problems, not systemic catastrophes.

    At a minimum, without TARP the availability of credit would have essentially stopped.

    I opposed TARP then and oppose it now—but much of the TARP money has been repaid, some at a profit. The biggest problem with TARP was not its substance, but the political ramifications.

    TARP opened the door for people to talk about stimulus programs in the hundreds of billions.

  • acat

    First, was Ryan speaking on the initial proposal, or was Ryan cheerleading the deviances from the proposal? The way it was *originally* written, it was bad .. but what Bush actually did was just despicable.

    Second, if we make votes for TARP a test, then we lose a lot of potential candidates *at this time*. Rolling several more iterations of actual moderate-GOPers out the door would be more effective. Demanding purity on TARP strikes me, at this point, as in opposition to the good.

    Mew

  • JSobieski

    than buying up individual distressed assets.

    Talk about moral hazards and political pressure—do you think people whose mortgages were purchased by the government would ever go back to a state of normalcy (i.e. make payments). Every foreclosure would be a political issue.

    By analogy, compare:
    student loans given directly by the government

    vs.

    student loans given by the government THROUGH banks/financial institutions

    It is less disruptive to capitalism (and easier to undue) what TARP actually was compared to TARP as originally sold.

  • Locked and Loaded

    is that Bonehead’s inclination to put down others is based on his magnanimous view of himself and the others who just did what they had to do to “save the world economy.” Yeah, right.

  • renny

    Why would Romney have Ryan as veep if Romney has ideas about expanding an excessively over-stretched safety net? Romney himself has already said the “poor” are already highly protected–it’s the middle class that has borne the brunt of this Great Recession, because those are the people with jobs and houses to lose.

    Boehner should be more concerned that the 2012 election will produce many more tea party Congress people and maybe he will be out of a job.

  • exitsfunnel

    Maybe legislation authorizing funds to purchase some portion (even a large portion) of the troubled assets would have been defensible (though not to me). But that’s not what TARP was. TARP was essentially a $700B blank check for Pualson / Bernanke to do whatever they wanted to with no real oversight and completely immunity from prosecution with respect to the use of such funds. This was an unprecedented (at least in recent history) power grab.

    Obamacare is evil but at least I understand it. (or at least I would if felt like reading 950 pages of legalese). I would take 100 Obamacares over another TARP blank check written to the masters of the universe.

    -exits

  • exitsfunnel

    if that was meant as a defense or not, but those are all things I would expect a republican to say after having voted for the bailouts he voted for. I’m sure he looked quite serious as he was saying them.

    -exits

    ps – I really didn’t intend to get into a pissing match in this thread, because generally speaking I do like Paul Ryan, if not nearly as much as most conservatives. It’s just always been a mystery to me, how he gets the passes he gets.

  • exitsfunnel

    The problem is that the way it was originally written was: here’s $700B, do whatever you want and don’t worry, there won’t be any consequences. I don’t have a lot of sympathy for lawmakers who vote ‘aye’ on a piece of legislation like that and than complain ex post that the money wasn’t spent how they think that it should have been.

    -exits

  • exitsfunnel

    For what it’s worth both Obama and Biden both voted for it as well, so I’m not sure why you think that that would clear my conscious.

    -exits

  • gekster

    vote for Obama and Biden and have a clear conscience.

    I’m sure you will fell better about yourself.

  • gekster

    enough problems that it appears you prefer the alternative.

    The primaries ore over, so it’s time to get on board or get out of the way.
    We are on a mission to get rid of the disasterous duo, so either help in that cause or step aside and let others do so.

    (not a complaint, an observation)

  • aesthete

    TARP was a one-time event that was necessitated by the mess that the financial system was in (due in no small part to prior government action). It could have been smaller and better structured, but our entire economy would have come crashing down without it.

    The auto bailouts, on the other hand, were in no way necessary to the functioning of the economy, nor could they be said to be a one-time event: everyone and their mother knew about the anemic Big Three and the government support they’ve received throughout the years. Detroit is a ghost town. There was nothing redeeming about the auto bailout, and no catastrophe awaited the US economy in lieu of action. It was a purely political payoff to unions and various constituencies on the left, given its structure.

    Paul Ryan voted for both TARP and the auto bailout, unfortunately.

  • acat

    The way it was originally written, the way this cat supported it, was for the government to buy items of value that had quickly dropped in value – primarily mortgage-based securities – and retain them for a time while their value recovered.

    I don’t like that, but .. given the housing bubble had popped, and the government had caused it, I didn’t object to the government fixing it.

    I did object – loudly – to the use the funds were actually put to…. and as far as I can tell, that puts me and Rep. Ryan in about the same spot.

    Mew

  • gekster

    vote for the other guy.

  • acat

    The only possible “other guy”, on the issue of TARP, is Johnson.

    Mew

  • aesthete

    that you not take any criticism of Romney/Ryan as an endorsement of another person.

    I don’t think Romney/Ryan can turn water into wine or raise the dead, either, and I don’t mind saying so — does that mean I should vote for the other side? Sure would get lonely in Romney/Ryan’s campaign tent if the only people allowed inside are the ones who unquestioningly hail them as perfect avatars of conservatism.

  • gekster

    So what is your solution.

  • aesthete

    Have you looked at my posting history? I’ve been highly supportive of Ryan, and support his Roadmap and/or Simpson/Bowles as the best way forward for fiscal sanity.

    My “solution” is for people to be aware of the facts, and to have an informed conservative opinion — all the better to engage politics with.

  • gekster

    that ended with this:
    Paul Ryan voted for both TARP and the auto bailout, unfortunately.

    Maybe I’m seeing more than what is there.
    I’ll leave it at that.

  • montani

    Because they get in the way.

  • Kyle-MI

    and gave us Obamacare as well as a number of liberal Supreme Court Justices. Your type of voting gave us the same problem with Bill Clinton for two terms. Explain to me how he was better than a second term of George H.W. Bush no matter how squishy he was.

  • JSobieski

    “Paul Ryan voted for both TARP and the auto bailout, unfortunately.”

    This sentence can be broken down into two component parts:
    (1) Paul Ryan voted for both TARP and the auto bailout- (undeniably true)
    (2) Those votes were unfortunate (a view held by most people on this site)

    The fact that you seem to want to imply a third unstated proposition (that such failures mean one should support Obama or a third party candidate) is your problem.

    Aesthete, I, and others on this site have waited a long time to have someone as “wonkish” on our side obtain the megaphone of a Presidential campaign.

    It will be a pleasure to hear Paul Ryan on the stump every day through November 4th (and hopefully days thereafter).

    I am a huge fan of Paul Ryan, but that doesn’t mean there aren’t flaws.

    The lesson of GWB is that we can’t provide blind support to our leaders—even when they are incredibly decent human beings.

  • gekster

    I just think it’s a little to late to start checking the horses teeth.

    and as I posted above,
    “Maybe I?m seeing more than what is there”.

  • montani

    But we are in the middle of the silly season. Normally reasonable conservatives get overly excited about the horse race. Is Romney better than Obama? Sure. Is he good enough?

  • gekster

    Really?

    Obama; business is the reason we are worse off because of what they do.
    Romney; business is what propels the economy and makes us better off because of what they do.

    You really have to question that?

  • montani

    But is he good enough?

    That’s the question for conservatives, the severe kind and all other kinds. We’ll have to see. Will we get the business leader who makes tough decisions and turned the Olympics around or will get the Governor of Massachusetts? I don’t know the answer to that.

  • krish

    I see most people get easily fooled by Ryan’s words but his record of supporting every republican big spending program is at odds with his big talk!

    Does he make the Romney better! Of course!

    I am tired of the republican hacks in this forum trying to muzzle everyone who brings up Ryan’s record!

    No need to bring up who is on the other side…we all know & are going to pull the lever for R. But, at least we do it without trying to portray the Republican candidates are pagans of fiscal responsibility as some of the republicans claim & also some conservatives who get fooled by the charm & words of Ryan!

    At least, we are voting knowing fully well who we have as the republican nominees!

  • tnguy

    And you know it. Most conservatives, in spite of their disgust with him, went to the polls and voted for McCain. But since beltway republicans have spent most of the last 20 years looking like democrats, what’s the difference to the uneducated voter? None. So the majority of moderates and those with no staunch beliefs voted for obama. Courtesy of you and your ilk. All because many conservatives, evidently including you, lack the courage to stand up for what they believe.

    That we have continued to hold our nose and vote for liberal and moderate republicans is the only way we have gotten the nominees we have for several cycles. It’s the reason party leadership acts embarrassed by Jim Demint, instead of Demint being party leadership.

    Everyone here complains about republican leadership in both houses, yet votes in almost every case to maintain the status quo.