PrintOctober 2, 2008
Rescue: The Conservative Conundrum
There were two fabulous "conservative versus conservative" debates this morning on the financial rescue plan. Watching these two short exchanges between conservative idealogue and former Congressman Dick Armey as he parried with first Senator Bob Corker of Tennessee and then former Chief of Staff and Governor John Sununu is extraordinarily informative. Both exchanges got a bit testy, a bit direct and since all three men involved are credentialed to speak on the issue it was very educational.
For the past few weeks I have been in a lonely place; on the opposite side of maybe the biggest economic issue of our lifetime from most conservative politicians, talk show hosts, writers and bloggers. This has been very uncomfortable since I agree with the base philosophy from which they argued. Their arguments did not seem consistent with reality as I understand it, however. Discussions centered around tax payers bailing out Wall Street millionaires, which is not the point.
For my love of talk radio and conservative ideologues in Congress, I have yet to hear a single member of congress, host or caller who mentioned, let alone understands, the term "credit spread" and how that affects their jobs, 401Ks, mortgages and vehicles. Let me say that when banks will not loan to each other overnight, they will not loan to you. Further, they will not loan to whoever it is that buys goods or services from whoever it is that employs you. I submit it is instructive to connect some dots here on Main Street.
Some 25 years as an entrepreneur had me convinced that we were headed for a credit meltdown months ago - and that drastic action was needed. All of the financial pro's I consult with also believe this. In addition, this convction is shared by folks named Paulson, Bernanke, Bush, Welsh, Buffet, Cramer, Kudlow, Frank, Cashin, Forbes, Lindsey and Pickens to name a few. That is a widely diverse list philosophically and it is likely the first time all of these men have agreed on anything. And to quote Warren Buffet, we are "headed for an economic Pearl Harbor." The arguments, unlike those made by many other conservatives, resonated with what I had observed happening in the market.
So while the plan that will come out of a Democrat controlled Congress will certainly be very flawed, the idea that we have to use the defibulator to re-start the economic heart muscle now makes sense to me. With the patient alive, we can then go back and change the diet and unclog the arteries later. No one knows for sure if it is this close to shutting down Main Street. I just tend to think being half-right is safer than being all wrong.
Agree or not, the debate video's above at least shed a lot of light on the issue.
