Monday, September 29, 2008

Momentum

Congress doesn't get it. There are times you don't listen to Rush, Hannity, and even your constituents (especially when they are whipped into a frenzy by the aforementioned talk show hosts and they know less about the details than you do). There are times when you show leadership. Today was one of those times, and they missed the boat.

While people may have been concerned about the nature of the bailout, I pity congress when people begin to blame them for job losses and decimated 401(k)s. To be sure, there were flaws in the bill. On any bill this size, there will be. It was rushed, and perhaps more time should have been allowed for review and vetting of the bill.

The focus now has to be on a better bill and better communication. Here's my six step formula for success:

1) Don't make promises in terms of timing for a new bill; this just sets up unrealistic expectations and messes with the market.
2) Don't align the bill with President Bush (or Nancy Pelosi, for that matter).
3) Don't give the Tresury Secretary cart blanche.
4) Don't trust leadership to deliver the votes.
5) Listen to the people and address their key concerns.
6) Explain how this crisis will soon impact everyone's pocketbooks in ways much more significant than a tax increase.

The downside of allowing this economy and our banking infrastructure to slide further is tremendous. The downside on this bill -- while potentially large -- is unknown and frankly far in the future. Congress needs to do something. History will not look kindly upon them if they do not get their act together soon.

Perhaps more information will emerge in days to come that will change my mind about the need for action -- I certainly am not a fan of rushed decision making except when absolutely necessary, and I hope congress is right and I am wrong in this instance. That said, I certainly hope that Congress is hard at work in the meantime to come up with a new bill and that investors in our momentum driven market hold together until then.

P.S. Leading the charge for classless communication on this effort was our own Rep. Paul Broun. While some of his points may be valid, his graphic imagery strikes one as anything but classy. I'm so glad my own representative is unwilling to eat cow feces (yes, you have to read it to believe it).

7 comments:

ET said...

Couldn't have said it better myself. Not to mention that the lethargy on Congress' part will inevitably have repercussions throughout the world, not just in the US. If we go down, we're making sure everyone else comes with us. My Real Estate Finance professor said it best: "You guys are lucky because people will be reading about this week in history textbooks in a few years. And y'all are living through it!"

Brian said...

I wouldn't mind it as much if congressmen had made the decision for the right reasons. But for a lot of them, it was just an anti-Bush, anti-Wall Street vote, when they should know better. If they called their local community bankers, I bet they would have gotten different answers than they expect.

I hope in the next round that local chambers of commerce, bankers, and local financial planners -- the folks managing small accounts for most Americans -- get more engaged and explain to these folks how their inaction is hurting smaller institutions and average Americans, likely in ways they don't even realize yet.

Cody said...

Mr. Broun's comments are scary, bordering on the ignorant and insanely sublime! If only he were the only one, but Congressional Republicans finally stand-up to Bush at precisely the worst possible time!

If Congress waits to Thursday or Friday -- as expected -- the "rescue" plan will only increase with time, as small, local businesses and banks will be the first to close it's doors. It will be the same constituents that flooded the Congressional offices with messages to oppose, that will bear the immediate brunt of inaction by Congress.

If I had not been at a meeting recently where GOP Members of Congress were huddled together talking about how this issue benefits them politically and for the election, I wouldn't have believed it. Unfortunately, that is the discussion here. Many Reps want to wait to Election Day passes and then pass a bill.

Capital funds in the financial system is what is needed to avoid a financial stall. The same funds that will make it's way to Main Street in a matter of weeks.

I agree with you Brian, that to do nothing is an option that we don't want to experience. But, until Congress decides that country is more important politics, it won't happen.

LTHALE said...

Brian- You might be interested in David Brooks' op-ed in the NYT today. He has alot of similar things to say.
Found your blog during the local elections. I enjoy it! See you in carpool.

Brian said...

I actually wrote Rep. Broun urging him to do something on the bailout on Friday via e-mail. I got a response Saturday but missed it until tonight. Wanted to post for all to see; I like the way he slams the democrats and then in the next paragraph he says it is time to put partisanship aside:
-------------------------
September 27, 2008

Dear Mr. Brodrick,

Thank you for contacting me with your comments regarding the bailout proposal. I appreciate the benefit of having your views on the issue.

I am trying to find a common sense market-based solution to this problem, as I believe we have to do something to avoid a total economic collapse. However, we have yet to see a legislative proposal regarding these issues.


I am working with the Republican leadership to try and find a way to solve this problem that will not put tax payers on the hook, does not reward the people who have caused this to occur, and one that will strengthen our economy.

I believe a sound economic and market-based solution is possible if we can get it considered by the Democratic leadership. They have blocked all of our efforts thus far. They seem to be playing politics with this issue, dragging it out over a long period of time. I even wonder if they actually want to see these severe economic problems to continue or maybe even get worse, thinking that it may help them politically.

We must put partisanship aside and find solutions to protect the hardworking American people. Rest assured that I will continue to work towards that end. Please let me know of any suggestions that you might have.

Thank you for contacting me with your thoughts and concerns,

Sincerely,

Paul Broun
Member of Congress

Christopher T. Anderson said...

Very well said. I dare say better than my posting here.

Brian said...

You gotta see what Time did with the cow feces story..... they also pointed out that one of the district's largest employers, Pilgrim's Pride, stands to lose in a big way as a result of these shenanigans.

http://www.time.com/time/business/article/0,8599,1845992,00.html