Wednesday, February 4, 2009

Reality Dawns: Why Congress Loves The Banks

While I was over at FireDogLake reading Ian Welch's article about the stimulus bill, the mystery of why Congress has done the things it's done regarding our financial crisis finally was answered, at least for me. Specifically, I'm referring to pouring $700 billion dollars down the crapper that we call our banking industry, while wringing its hands about anything that might create jobs for people who don't have them at the moment. A commenter there started me thinking by writing this:

As go Republicans, so go bluedogs.

Talking point: you vote against this bill, and this economy goes down, it will be hung like an albatross round your neck, and you will find yourself in a bread line with everyone else, after the next election cycle.

Hit The Phones To Stop a Depression: Comment #37

Now, let me first emphasize that there's nothing dumb about this comment. This is the way it should work in a democracy - if you screw up badly enough, you should pay a price. The problem is, that's not the way it works in early 21st Century America.

Here's why. Let's start by looking at this list, which is courtesy of Open Secrets:

OpenSecrets: Congress Lowest Net Worth 2007 (click to enlarge)
Click to enlarge

This is a screenshot of the twenty-five Congressmembers with the lowest net worth in 2007. My guess is that most of the folks with negative net worth had campaign debts to retire. You'll notice that before you get out of the lowest twenty-five, you're already encountering people with net worths in the millions. Thanks to the way they've calculated the average net worths here, I'm sure that there are at least a few "regular Joes" who are in Congress but aren't on this list. Nevertheless, few of these folks will be hurting should they be out of a job. Even if you're millions in debt, odds are you have some way of paying that off pretty quickly. People who have millions to lose, in general, had millions to begin with.

Let's look at the top of the charts now, shall we?

OpenSecrets: Congress Highest Net Worth 2007 (click to enlarge)
Click to enlarge

These people have no worries whatsoever in a recession, or even a depression, as long as the banks stay solvent. I don't know what the FDIC limit is, but I'm sure that all of these folks have way more money than is covered.

Based on this, what I'd recommend when you're talking to your congresscritter, is don't appeal to their fear of not being re-elected and ending up on the dole. As Tom Daschle has demonstrated, that's not a problem even if they don't have money. They'll be fine as long as the banks are solvent. Nor are they likely to be guilt tripped by the observation that they're just fine, and the rest of us are getting screwed. They're probably OK with that. I'm not sure what appeal will work, but those won't.

But when they're talking about how important it is to keep the banking system afloat, just remember where their interests lie.

UPDATE: Eli and Joe Trippi offer another motivation for Congress to really love them some banks and jilt the rest of us.


Anonymous said...

i don't know who wrote this piece, but it's the first thing I've read about the whole bailout that makes any sense.

as mo dowd suggested: aux barricades!

Cujo359 said...

When I see Mo Dowd on the barricades, I'll take her seriously. Meanwhile, I'm just trying to tell people what approaches won't work. Telling rich people that making sure the rest of us are OK is more important is an uphill struggle, to put it mildly. Shaming them or scaring them won't work. Too many are too feckless to be shamed and too stupid to be scared.

My thought is that we need better people in Congress. I've been writing that for quite a while now, but it doesn't seem to have sunk in yet. At least, it hasn't in a way that translates into people informing themselves about what their own congresscritters are really up to.

But, as Mr. Rumsfeld might observe, you can't fight a depression with the Congress you want, you have to go with the Congress you have. Shaming them or scaring them won't work. Anyone have a better notion?