TARP

Richard Mourdock in striking distance of Dick Lugar

It’s been a really bad month for Sen. Dick Lugar (R-IN). He was ruled to be ineligble to vote last week in Indiana, and now new polling, though from a Democratic firm, shows that he is not just vulnerable in the Republican primary; but also the general election:

Sen. Dick Lugar (R-Ind.) is barely leading his primary opponent, state Treasurer Richard Mourdock, less than two months before the primary, according to a Democratic poll released today.

The numbers showed the six-term Senator in rough shape but still ahead of Mourdock, 45 percent to 39 percent.

Lugar faces the toughest re-election campaign of his career in the May 8 primary. Since the start of this cycle, Republicans viewed him as vulnerable in a primary, but polling of his race has been scarce in part because Indiana law restricts automated calls, including polling.

Rep. Joe Donnelly (D) will run against the winner of the GOP primary, and Democrats view Lugar as a more competitive candidate in the general election. Donnelly’s campaign released the GOP primary poll numbers in a memo from his pollster, Global Strategy Group.

The pollster also noted that Lugar’s lead has been cut in half from a similar poll in October, which showed Lugar leading Mourdock by 12 points, 48 percent to 36 percent.

Lugar isn’t going well right now. The residency issues aren’t the only thing that have voters skeptical of him. He’s record in the Senate is terrible. He’s been almost assured to do the wrong thing, including backing TARP, Medicare Part D, and expanding other big government programs.

RedState joins calls to retire Orrin Hatch

Sen. Orrin Hatch (R-UT) is definitely feeling the heat. He’s tried to pass off his record as “conservative,” but it’s hard to hide many of the votes he’s cast in favor of bigger government, including his support for TARP, Medicare Part D, bailouts for Fannie Mae and Freddie Mac, and many bloated budgets.

Hatch is working feverishly to not wind up like his former colleague, Bob Bennett, who was sent packing during the Utah GOP convention in 2010. Mike Lee eventually went on to replace Bennett in the United States Senate. He’s picked up endorsements from influential conservatives like Sean Hannity and Mark Levin, and even got Mitt Romney to cut an ad for him. But grassroots groups, including FreedomWorks and the Club for Growth, and Tea Party activists haven’t been deterred.

And yesterday over at RedState, Erick Erickson joined the calls to put an end to Hatch’s political career in Washington:

On many of those votes over the years, Orrin Hatch was no different from any of the other Senate Republican leaders. We’re now past $15 trillion in debt and Orrin Hatch voted for a good bit of spending contributing to that debt. Some of it was necessary, but much of it was not.

Occupy Wall Street almost out of money

Don’t look now, but Occupy Wall Street’s 15 minutes of fame isn’t just fading quickly. The Associated Press reports that they’re also low on money:

A finance report shows the group that galvanized the nationwide movement against economic inequality six months ago had about $45,000 left in its main account.

That’s for the week of March 2. Weekly donations plummeted to about $1,600.

The report on the group’s General Assembly website says at “the current rate of expenditure” the Occupiers will be “out of money in THREE WEEKS.”

Yeah, this is me not caring. Don’t get me wrong. They had a couple of legitimate points in their message, such as the TARP bailout being a bad deal for taxpayers and criticism of the government. But their solutions to were terrible because they would’ve place further reliance on the government and would have used force to take more from taxpayers through taxation.

The grievances that Occupy Wall Street put forward certainly do deserve a spot in the marketplace of ideas in the public discussion, but I reject them almost entirely. But my personal experiences with them make me, on the whole, take them much less seriously.

Unsurprising Fact of the Day: Bailouts encourage risky loans

Many of us that opposed TARP, the 2009 bailout of financial institutions, for a couple of different reasons. The main reason being that bailing out business for is counter to the belief in free markets. In other words, we don’t believe in the concept of “too big to fail.”

The other reason being is that it was bad policy. Once you’ve put the concept of “too big to fail” into public policy, you’ve set that as a precedent for the future. It doesn’t discourage bad lending behavior, so when the next crisis comes along — and it will, taxpayer-funded bailouts will again be the answer for politicians. And this is what a new study from the Federal Reserve Board shows via James Pethokoukis:

The Troubled Asset Relief Program involved a major infusion of government funds into the U.S. banking system in an attempt to stabilize financial markets. The program was developed by congressional mandate; however, the purpose of the program was not entirely clear from the beginning. The program was originally portrayed as an effort to reduce the risk profile of banks by increasing bank capitalization.
[…]
However, the public response to the program also generated a significant push for banks to convert the funds into loan originations. Based on this purpose, banks were being encouraged to make more loans in an economic downturn which may have induced looser lending standards (Guner, 2008).

The results from the event study illustrate that the average risk rating at large TARP recipients increased more than at large non-TARP recipients following the capital infusions. Conversely, the risk of loan originations by small TARP recipients appears to have decreased relative to non-TARP recipients.

Gingrich’s papers show criticism of Reagan

Newt Gingrich likes to portray himself as a “Reagan Conservative,” someone that believes in and pursues limited government policies. But the Washington Post reports that Gingrich was critical of Ronald Reagan’s views and wasn’t at all an advocate of a limited government:

In an unnoticed 1992 speech, Newt Gingrich in a single utterance took aim not only at a beloved conservative icon but also at a core tenet of the conservative movement: that government must be limited.

Ronald Reagan’s “weakness,” Gingrich told the National Academy of Public Administration in Atlanta, was that “he didn’t think government mattered. . . . The Reagan failure was to grossly undervalue the centrality of government as the organizing mechanism for reinforcing societal behavior.”

A review of thousands of documents detailing Gingrich’s career shows it wasn’t the first time he had criticized Reagan, whom he regularly invokes today in his campaign for the Republican presidential nomination. When Gingrich was in the House, his chief of staff noted at a 1983 staff meeting that his boss frequently derided Reagan, along with then-White House Chief of Staff James A. Baker III and Robert H. Michel, the House Republican leader.

Reason’s Chrysler ad parody

The ad Chrystler ran during the Super Bowl featuring Clint Eastwood — dubbed “Halftime in America — has prompted some criticism from conservatives who see it as an endorsement of the auto bailout and President Barack Obama.

Eastwood, who describes himself as a libertarian, denied that the ad was meant to lend any support to Obama, rather to promote the Detroit. According to Eastwood, earnings from the making of the ad went to charity.

It sounds innocent enough on Eastwood’s part, and I think making his part out to be anymore than it was is misguided. However, the criticism of Chrysler, which was bailed out by taxpayers, is understandable as they are running an ad with a name and face familiar to Americans to make us feel good about the fact that they took billions from the government because they couldn’t compete on the open market.

Over at Reason, Remy gives the ad the humorous treatment that only he can give:

MF Global’s Corzine raised $500,000 for Obama

While President Barack Obama often rails against corporate greed and expresses a desire to hike taxes on “millionaires and billionaires,” Wall Street executives — the very same corporatists that conluded with Washington to bring us TARP — are sending a substantial amount of money to his campaign. Justin Elliott explains over at Slate:

The consensus view of President Obama’s State of the Union address is that it was a “populist pitch” that sought to, as the Wall Street Journal reported, “tap widespread anti-Wall Street sentiment and voter anger about economic disparity without scaring independents.”

That take on the Obama reelection campaign strategy is in line with what we’ve been hearing for months out of the White House, which previewed the concept to the Washington Post as early as October, just as the Occupy movement was getting underway.

The tension or perhaps contradiction with this strategy is that, as I’ve been documenting, this administration and the Democratic Party are not fundamentally anti-Wall Street institutions. They have deep ties to the financial services industry.

Aspects of that relationship that have surfaced recently include: Obama’s hiring as a top campaign aide of Broderick Johnson, who had been pursuing a lucrative career lobbying for the big banks; the fact that executives of Bain Capital have contributed generously to Democratic campaigns in recent years; and so on.

Taxpayers still owed $133 billion in TARP money

Back when the Congress was taking up the Emergency Economic Stabilization Act, which created the Trouble Assets Relief Program (TARP), as financial markets were taking a tumble, many free marketers warned that taxpayers would lose billions. Many members of Congress tried to play down the losses or said that taxpayers would even profit.

If only that were the case. However, the watchdog that oversees the TARP program says that taxpayers are still owed nearly $133 billion:

A government watchdog says U.S. taxpayers are still owed $132.9 billion that companies haven’t repaid from the financial bailout, and some of that will never be recovered.

The bailout launched at the height of the financial crisis in September 2008 will continue to exist for years, says a report issued Thursday by Christy Romero, the acting special inspector general for the $700 billion bailout. Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last as late as 2017, costing the government an additional $51 billion or so.

The gyrating stock market has slowed the Treasury Department’s efforts to sell off its stakes in 458 bailed-out companies, the report says. They include insurer American International Group Inc. (AIG), General Motors Co. (GM) and Ally Financial Inc.
[..]
It will also be challenging for the government to get out of the 458 companies as the market remains volatile and banks struggle keep afloat in the tough economy, it says.

Congress authorized $700 billion for the bailout of financial companies and automakers, and $413.4 billion was paid out. So far the government has recovered about $318 billion. The bailout is called the Troubled Asset Relief Program, or TARP.

Washington Examiner labels Gingrich as a Washington insider

We’ve noted Newt Gingrich’s anti-conservative points on multiple occasions, mostly recently my post yesterday on his support of an individual mandate for health insurance coverage. This isn’t the only stain on his record, it’s merely one of them. We could easily point to his support of Medicare expansion or TARP as further evidence. We could also point to Stephen Slivinski’s article here from last month explaining how Gingrich betrayed the revolution that brought Republicans to power.

Cronyism in America

See Video

The latest video on from our friends at Economic Freedom, featuring Don Boudreaux (George Mason University), Susan Dudley (George Washington University) and Bradley Schiller (University of Nevada-Reno.

 
 


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