When calls to Congress were running 99 to 1 against TARP, and members chose to support the banks and ignore their constituents, we warned of the impending backlash. Now it has arrived in force, and incumbents are quaking from Maine to Hawaii. The New York Times has the details in a new story this morning.
Photos of the guilty inside.
---
WASHINGTON — The vote in 2008 to bail out Wall Street was framed as the only way to avert an economic meltdown and relieve financial institutions of their most poisonous holdings. For many members of Congress, it turns out that the vote itself was toxic.
Nearly two years after Congress approved the , the Bush administration’s $700 billion program to rescue the banking system at a moment when it appeared close to collapse, lawmakers from both parties who backed it remain haunted by the vote.
Republicans for months predicted that a backlash against the Democrats’ big health care law would be the defining issue in this year’s Congressional campaigns. But the bipartisan TARP vote has become a more resonant issue in a year when anti-incumbent, anti-Washington sentiment is running strong.
Democrats who voted for the bailout — which was championed by their own leaders along with President and Senator of Arizona, then the Republican presidential nominee — are now facing attacks from Republican challengers on the campaign trail. Republicans who voted for it are being accused of promoting big government and fiscal irresponsibility by candidates and other conservatives.
Emotions can run high over the subject. Lawmakers report being buttonholed over bailouts by confrontational constituents, and Senator , Republican of Utah, was jeered at a party convention by people chanting “TARP, TARP, TARP.”
“It became a litmus test of fidelity to free enterprise principles,” said Representative Bob Inglis, a South Carolina Republican who was crushed in a primary last month partly because of his vote in favor of the plan.
- "I did a 99-county tour, and in every single county the bailout came up."
Across the country, House and Senate challengers are hammering incumbents in both parties who voted for the bailout, in many cases lumping it together with the $787 billion economic passed months later under , as well as federal aid to automakers.
In Texas, Representative Chet Edwards, a 10-term Democrat, is facing a stiff challenge by Bill Flores, the former chief executive of an oil and gas company, who has assailed Mr. Edwards for his support of the bailout and also the continuing taxpayer subsidies for the mortgage giants and Freddie Mac.
“Chet Edwards votes for every bailout and against ending any bailout!” Mr. Flores wrote in an e-mail message to supporters, saying Mr. Edwards’s position runs counter to his efforts to convince voters that he is a “really a fiscal conservative.”
In Utah, Mr. Bennett, who was denied his party’s Senate nomination in his bid for a fourth term, was branded “Bailout Bob.”
- “People would walk by my booth and say ‘TARP, TARP, TARP, TARP!’ But when you tried to talk to them about it, they did not know any of the details,” he said in an interview. “They confused TARP and the stimulus plan. They confused TARP and the omnibus bill. They confused TARP and the president’s budget.”
---
---
DB here. No confusion at the Daily Bail, Senator Bennett. TARP was a gift to bank bondholders at the expense of taxpayers and their children. Failed banks were propped up and their creditors escaped at 100 cents on the borrowed buck. Paulson, Geithner, and Bernanke made sure there was no pain for that exact group that deserved it most -- the reckless investors who provided the capital that allowed the banks to make highly-leveraged investments in toxic mortgage securities.
And Sen. McCain deserves a special place in bailout hell, considering that Paulson said recently that it was McCain's support that saved TARP from defeat, though McCain is now playing dumb and claiming that he was misled. The reality of course is that McCain is naturally dense, and had no idea what he was doing from the outset. Finance and John McCain go together like Chavez and Rush Limbaugh.
---
---
Video: Pelosi tries to save TARP after the first failed vote -- September 2008