Dems run away; McCain shows leadership

I’m sorry…my jaw is ON THE FLOOR at this headline:
Democratic Congress May Adjourn, Leave Crisis to Fed, Treasury

The Democratic-controlled Congress, acknowledging that it isn’t equipped to lead the way to a solution for the financial crisis and can’t agree on a path to follow, is likely to just get out of the way.

Lawmakers say they are unlikely to take action before, or to delay, their planned adjournments — Sept. 26 for the House of Representatives, a week later for the Senate. While they haven’t ruled out returning after the Nov. 4 elections, they would rather wait until next year unless Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke, who are leading efforts to contain the crisis, call for help.

One reason, Senate Majority Leader Harry Reid said yesterday, is that “no one knows what to do” at the moment.

I suppose you might call it “admirable” of the Democrat leadership to admit they have no idea what to do about the economy just now; some might say, “well, if you’re not going to lead, get the hell out of the way!” But running away in fear of making a mistake does not exactly show leadership in a time of crisis. When the nation is in crisis, you don’t run away because things have become difficult. It sends a terrible message to the nation – “run, run! Save yourselves!” By Jesus, do these people not understand the absolute fundamentals of leadership?

If the Democrats have forgotten how to lead, then they need to look to NYC Mayor Rudy Giuliani on 9/11, and pattern some leadership based upon how he responded to the challenges of that day. It’s the most basic lesson of leadership, but the one that matters the most: When there is a serious problem, you acknowledge the gravity of the situation, and then – even if you are discreetly looking for outside expertise to address the crisis – you STAY WHERE YOU ARE and you deal straight with the nation, and keep them apprised of the rescue and recovery operation. It’s okay to admit you don’t know anything…but you tell the nation, “we’re going to come through this, and we’ll be the stronger for it; we’re going to work together to make sure everything that needs seeing to is seen to. We are here; we know this is bad. Trust us to understand what you need. Yes, this is frightening for us, too, but we are here to lead; we will not abandon you.”

The Democrats are saying they can’t do that. They’re saying they have not the tools to lead. To obstruct, yes, to vilify, yes, to blame, yes…but not to actually lead us out of an economic ground zero. They’re admitting they can’t lead us out of the hole; they’re just running to make sure they can stay safe.

I am very glad to read Reid’s admission that “No one knows what to do”…except it’s not really true. I’m going to reprint the address John McCain just made today in Cedar Rapids, Iowa, today. Please read them in full. The man is showing leadership. He is not telling you “we don’t know what to do.” He is not telling you “there are no answers.” He’s telling you this is going to be hard, but we’re going to get through it. He is being Rudy Giuliani on 9/11. Read it. Let’s finally get serious, shall we?

And keep in mind that while John McCain is offering leadership, Barack Obama – who has a closeness to this economic crisis that is uncomfortable – is in Nevada telling people to “get in the faces” of other people about the election; he’s running such dishonest ads about McCain and illegal immigration that even the press has noticed. Obama could not get the AIG right yesterday; had Palin made his errors there would be sneers of “she’s not ready to lead.” But Obama blew it yesterday, and the press shrugged and smiled over it. Now, Obama is doing flip-flops.

Joe Biden, meanwhile was rallying for the higher taxes in a way that seemed a bit buffoonish to me. “Low taxes are unpatriotic!” Sigh. It may well take a tax increase somewhere to to fix this mess. But it seems to me cutting corporate taxes is the only way to save jobs at this point.

Here are McCain’s remarks (H/T Lorie Byrd) – if you care about what is happening today to our economy, put your personal leanings aside and read it.

ARLINGTON, VA — U.S. Senator John McCain delivered the following remarks in Cedar Rapids, IA, today:

I’m happy to be introduced by Governor Palin, but I can’t wait until I introduce her to Washington. Let me offer an advance warning to the big spending, greedy, do nothing, me first, country second crowd in Washington and on Wall Street: change is coming.

We need reform in Washington and on Wall Street. The financial markets are in crisis. Times are tough. Enormous strain is being put on working families and individuals in America. I know that the events unfolding can be difficult to understand for many Americans. The dominos that we have seen fall this week began with the corruption and manipulation of our home loan system. The reason this crisis started was the abuses that took place within our home loan agencies, Fannie Mae and Freddie Mac and within our home loan system.

Two years ago I warned this Administration and Congress that regulations for our home loan agencies, Fannie Mae and Freddie Mac, needed to be fixed.

But nothing was done.

Senator Obama talks a tough game on the financial markets but the facts tell a different story. He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them. He put Fannie Mae’s CEO who helped create this disaster in charge of finding his Vice President. Fannie’s former General Counsel is a senior advisor to his campaign. Whose side do you think he is on? When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn’t lift a hand to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments. That’s not change, that’s what’s broken in Washington.

There was no transparency into the books of Wall Street banks. Banks and brokers took on huge amounts of debt and they hid the riskiest investments. Mismanagement and greed became the operating standard while regulators were asleep at the switch.

The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino. They allowed naked short selling — which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.

The Chairman of the SEC serves at the appointment of the President and has betrayed the public’s trust. If I were President today, I would fire him.

We cannot wait any longer for more failures in our financial system. Structures like the resolution trust corporation that dealt with the failed savings and loan industry were designed to clean up the system and worked. Today we need a plan that doesn’t wait until the system fails. I am calling for the creation of the mortgage and financial institutions trust — the MFI. The priorities of this trust will be to work with the private sector and regulators to identify institutions that are weak and take remedies to strengthen them before they become insolvent. For troubled institutions this will provide an orderly process through which to identify bad loans and eventually sell them.

This will get the treasury and other financial regulatory authorities in a proactive position instead of reacting in a crisis mode to one situation after the other. The MFI will enhance investor and market confidence, benefit sound financial institutions, assist troubled institutions and protect our financial system, while minimizing taxpayer exposure. Tomorrow I will be talking in greater detail about the crisis facing our markets and what I will do as President to fix this crisis and get our economy moving again.

Senator Obama has never made the kind tough reform we need today. His idea of reform is what his party leaders in Congress order him to do. We tried for bipartisan ethics reform and he walked away from it because his bosses didn’t want real change. I know how to make the change that Senator Obama and this Congress is afraid of. I’ve fought both parties to shake up up Washington and I’m going to do it as President.

Those same Congressional leaders who give Senator Obama his marching orders are now saying that this mess isn’t their fault and they aren’t going to take any action on this crisis until after the election. Senator Obama’s own advisers are saying that crisis will benefit him politically. My friends, that is the kind of me-first, country-second politics that are broken in Washington. My opponent sees an economic crisis as a political opportunity instead of a time to lead. Senator Obama isn’t change, he’s part of the problem with Washington.

When AIG was bailed out, I didn’t like it, but I understood it needed to be done to protect hard working Americans with insurance policies and annuities. Senator Obama didn’t take a position. On the biggest issue of the day, he didn’t know what to think. He may not realize it, but you don’t get to vote present as President of the United States.

While Senator Obama and Congressional leaders don’t know what to think about the current crisis, we know what their plans are for the economy. Today Senator Obama’s running mate said that raising taxes is patriotic. Raising taxes in a tough economy isn’t patriotic. It’s not a badge of honor. It’s just dumb policy. The billions in tax increases that Senator Obama is proposing would kill even more jobs during tough economic times. I’m not going to let that happen.

I have seen tough times before. I know how to shake-up Wall Street and Washington. I will get this economy moving. I will lead us through this crisis by fighting for you, and when I am President we will be stronger than ever before.

McCain is not telling us to “get in” each others “faces.” He’s trying to lead, if we will let him. The Democrats have admitted they don’t WANT to lead on this issue. They’ve never wanted to do more than jeer from the upper chambers. And Sarah Palin – she may not be your cup of tea, but she clearly knows how to use the broom that has stymied Nancy Pelosi. I’m saying, let McCain lead. The Democrats don’t want to. Their cowardice is a disgrace.

Compare and Contrast: Obama’s response and McCains’s.

Ace Reminder: Yes, Bush did try to stave off this economic crisis in 2003 and the Dems blocked it. You could look it up. In the NY Times.

Also, if you want to look back on how we got here, read this piece from City Journal, (H/T Jonah Goldberg).

Also read this interesting email response that that article, by one of Goldberg’s readers.

It’s time, finally, to get serious. James Pethokoukis lists four ways to make things worse and turn a recession into a depression.

I’m not the only one whose jaw is on the floor at the Democrats turning tail and running away:
Obi’s Sister: Quotes a rock tune!
Kim Priestap at Wizbang has more thoughts
Treacher: Obama doesn’t like free speech.
Ace says McCain needs to cut this ad
Sarah Palin: talking REAL reform
Red State: Dems: Exit, Stage Left.
Snapped Shot: The UH-word cloud of Obama. But he’s much, much smarter than anyone else.

About Elizabeth Scalia
  • Obis_Sister

    Me, too, and have been since yesterday when I first read about it. They are tucking tail and running! I hope every single yellow-bellied coward Democrat is voted out of office.

    There’s one thing they may be more terrified of than actual accountability – it’s that Palin will be President of the Senate when they win in November.

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  • s1c

    Somebody needs to find a the Monty Python clip with Sir Robin and post that up with a big picture of Reid and Pelosi.

  • Acer Palmatum

    Brave Sir Harry ran away – No!
    Bravely ran away, away – I didn’t!
    When danger reared its ugly head
    He bravely turned his tail and fled – No!
    Yes, brave Sir Harry turned about
    And gallantly he chickened out
    Bravely taking to his feet
    He beat a very brave retreat
    Bravest of the brave, Sir Harry

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  • Kevin

    What McCain calls “MFI” and others call “RTC II” has major drawbacks. The original RTC liquidated both loans secured by real estate and real estate itself, all of which were assets owned by failed savings and loan associations. Today’s distressed assets are in large measure complex collateralized debt obligations and mortgage-backed securities that have been sliced and diced into “pieces” with various characteristics, and those “pieces” have been sold to investors throughout the world. In addition to the difficulty that many have encountered in even determining who owns what, in the final analysis what RTC II or MFI will have to market are essentially worthless junk bonds which investment banks and other holders are unable to currently unload at any price. I’m skeptical, but will await the details as McCain’s camp provides them. The current situation is complicated, and what none of us want to see is a “simple solution” that wastes more tax dollars without accomplishing its intended purpose or, God forbid, makes the current bad situation even worse.

  • Obis_Sister

    It gets even better.

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  • nightfly

    I’m wondering if this isn’t just politics as usual. A bad economy helps their guy – so Dems do nothing, the economy stays in the tank until after the election, hooray for Obama! Not so hooray for us, the represented, but short of our votes what do they care?

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  • TheHobo

    “…do these people not understand the absolute fundamentals of leadership?”

    That is rhetorical, correct?

    This whole thing stinks. The Congress has done NOTHING in the way of making proper law this year. They seem to wish that the country goes to Hades just to prove a point. Do they honestly think that Obama is going to be able to correct some of the issues facing:

    The banks
    Investment community
    Foreign policy
    ad naseum?

    I think they have jumped so far into La-La Land that they believe this naif can do anything.


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  • gs

    Thanks for posting the McCain speech.

    At the beginning, I nodded approvingly as he described his efforts to rein in Fannie Mae. By the time I got to the end…ahem…let me defer to Professor Bainbridge

    I’m a critic of President Bush, but I’ll give him this: now that the economy is in the emergency room, he has the sense not to interfere with the surgeons.

  • kdl

    Wow, this is so much gibberish you should be embarrassed. The Repubs have been in absolute control of the White House and Congress for eight years and you blame everything on the Democrats. In 2006, the Democrats won a slight majority in Congress. For those of you who do not know your government, you need 2/3rds to over ride a veto. Bush did not veto anything until the Democrats were in the slight majority. That is not leadership, that is obstructionism. Let’s move beyond the Karl Rove, Dick Cheney administration to an America we all can be proud of again. Take your heads out of the sand, be proud Americans and admit Bush led us down the wrong path. Have the courage to listen to God and not be distracted by the sillieness of Palin/McCain. Have the courage to make a better America. Have the courage to be humble and admit the last eight years have hurt our country. God Bless America. God Bless our Troops. And God…bless you misguided fools.

  • ferrous

    What still disturbs the heck out of me is how quickly John McCain ALWAYS throws George W under the bus. GRRRR!!!!!!!!!!!!!!!!!!!!!!!!

    Buddy, two years ago, you were THREE YEARS LATE TO THE PARTY!

    He’s better than Obama obviously, and except for that one bit that pretty much soured me on the rest of the message, it was a great speech. But come on. Please please please! STOP with this attacking the President theme when the President is actually doing things right!!!! I so wish I could vote Bush for a third term.

  • Bender B. Rodriguez

    in the final analysis what RTC II or MFI will have to market are essentially worthless junk bonds which investment banks and other holders are unable to currently unload at any price

    I confess that I do not have much expertise in financial markets, but I suspect that much of it has become little more than a pyramid scheme, which does nothing but artificially inflate the prices of paper assets in order to sucker people into buying them. There is NO reason that the mortgage industry, of all industries, should ever need a “bail out” of any kind. Unlike stocks or bonds or other pieces of paper, mortgages are forms of SECURED debt. Mortgages are more than IOUs. They are secured by the actual physical properties.

    If, instead of this repulsion at the idea of foreclosing — when many of the properties are held by investor-flippers who gambled and lost, not by little first-time homeowners — and instead of banks buying back the properties that they are themselves foreclosing, they actually sold them, then a good deal of the problem would resolve itself. True, property values would decrease as the properties sold at a lower price, but that is only because the previous flood of investors and mortgage banks competing with real people to buy properties created something less than a true free and open market and artificially boosted prices and created the bubble in the first place.

    One thing we do NOT want to do is accept a bunch of money from China or neo-Soviet Russia so that we either owe them or they own American assets.

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