We've Already Seen This Movie?

As I watched Federal Reserve Chair Ben Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chair, Christopher Cox make the $700 billion bailout pitch to the Senate Banking Committee; I could hear the words of former Republican Senator Everett Dirksen, "A billion here, a billion there, and pretty soon you're talking about real money."

The Dirksen quote obviously needs to be adjusted for inflation, but the point still stands.

As Secretary Paulson urged the Senate Banking Committee to act swiftly on the $700 billion proposal that was a mere 2 1/2 pages in length, he is lobbying for what undoubtedly will be the standard bearer for those that subscribe to the moral hazard theory.

The moral hazard would be the proposed bailout would actually encourage risky behavior in the future because the institutions in question would believe they would not be required to carry the full brunt of the losses.

For decades, we've lived under the political paradigm that government was the enemy, if the testimony of Bernanke, Paulson, and Cox had in credibility this week; government has been upgraded to friend status, second only to the dog.

But no one on Capitol Hill or Wall Street can be more definitive and maintain credibility beyond "I don't know" as to whether this bailout will work. The taxpayer is being asked to purchase assets for more than they are worth, with the hope that some day the value of these bad assets will increase.

But the present economic issues of tightening credit, housing crisis, highly leveraged financial firms, and overall consumer panic has condensed many of the conditions in 1929 and the ensuing presidential election in 1932 into a few short weeks.

The total debt that America's government has incurred over the past several weeks, along with the present proposal before Congress, if passed, will surpass the Gross National Product in all but 20 countries.

How can John McCain or Barack Obama keep their campaign promises as the current administration ties their economic hands behind their back? How can America sustain its current military obligations in Iraq and Afghanistan?
Can you say, "So long universal healthcare?"

For the past two years we've been confronted with an economic crisis that with a wink and a nod were told this was probably the bottom, when in reality they were merely false bottoms; and no one knows if the current $700 billion bailout request is indeed the floor.

But as the sub-prime housing debacle burst onto the front pages, Fannie Mae and Freddie Mac needed to be saved, and Lehman Brothers went broke, and AIG was restored at the 11th hour, what is abundantly clear is that America's economic future is anything but.

I was very pleased to see the Senate, largely in a bipartisan manner, greet Bernanke, Paulson, and Cox, with skepticism and questions. Though all three men, representing the Bush Administration are very able professionals, their presentation relied on the playbook similar to the one used for the Iraq invasion and occupation.

The sense of urgency emanating from the administration by presenting a $700 billion plan with no alternative or oversight, was all too reminiscent of the pre-Iraq presentations by Rumsfeld, Wolfowitz, and Bremer, that this week's hearings before the Senate Banking Committee made the boy who cried wolf look like the epitome of the "Straight Talk Express.

It was never the intention of the Framers for Congress to rubber stamp whatever comes from the executive branch, which is one of the tragic lessons of Iraq.

While I have no doubt that Congress' concern for Main Street is legitimate, I cannot ignore Wall Street has paid for the privilege to be heard first. During the 2008 election cycle, the mortgage bankers and brokers industry have invested more than $31 million in contributions and lobbyist. This will ensure the $700 billion proposal will receive a fair hearing.

But the administration has zero credibility on these matters; and the failure of Congress to utilize its constitutionally mandated authority as a co-equal branch of government would affirm their own incompetence.

Moreover, they've already seen this movie, and the lap dog never comes out looking good in the end.

Byron Williams is an Oakland pastor and syndicated columnist. He is the author of Strip Mall Patriotism: Moral Reflections of the Iraq War. E-mail him at [e-mail] or visit his website byronspeaks.com