Locked in a tight race with Jeff Merkley, Gordon Smith made a gutsy – and risky – move yesterday in voting for the $700 billion Wall Street bailout bill in the Senate.
The bill – a modified version of the one narrowly rejected by the House last week – passed by almost a 3-1 ratio, with 74 senators voting yes and 25 voting no. Sens. Barack Obama and John McCain both voted for it. (Ted Kennedy, battling brain cancer, was the only senator not present and voting – an indication of how important this vote was.)
Oregon’s other senator, Ron Wyden – who’s not up for re-election this year – voted no.
“First, the bailout package provides help to large institutional investors who took foolish risks,” Wyden said in a statement. “Rather than extending assistance to get credit flowing at appropriate levels again to shore up confidence in our markets, it is likely that much of this money will go to those who don’t deserve a taxpayer bailout for their miscalculations. Wealthy investors, who ought to know better, shouldn’t be allowed to gamble with taxpayer money.
“Second, the Senate in this package is still failing to address any of the regulatory lapses that created an environment ripe for greed-driven abuses. There should, at a minimum, be a commitment to votes on reigning in the worst abuses that led to this crisis.
“And third, there is not one bit of assistance in this package for homeowners struggling to make ends meet. My constituents don’t understand that, and neither do I.”
Smith explained his vote by saying the bailout is needed to avert a national economic meltdown:
“This plan isn’t perfect, but it does five things important to every Oregonian. First, it will stabilize financial markets and financial institutions and ensure access to loans for businesses, families, farmers and students. Second, it extends hundreds of millions of dollars to Oregon’s rural counties to fund schools, police, fire and other critical services over the next four years. Third, it holds Wall Street accountable for their mismanagement and ends golden parachutes for CEOs. Fourth, it protects taxpayers and homeowners by allowing them to ultimately profit from their investment and protects them from unfair foreclosure. And fifth, it will begin to restore consumer, homeowner and investor confidence in our economy.”
That didn’t stop the Merkley campaign from pounding Smith with some populist rhetoric: “Republicans in Washington are demanding a blank check to fix the mess they created and that is completely unacceptable. Real families are hurting in this economy and George Bush is only concerned about CEOs on Wall Street. Gordon Smith rubber-stamped the Bush policies that led to this mess, and I urge him to reject any blank check that puts special interests on Wall Street ahead of families on Main Street.”
Smith’s vote is fraught with peril because the bailout – even the modified version – still deeply divides voters. According to a CBS News poll, “Americans overwhelmingly see the financial crisis as hurting everyone, with 92 percent saying it hurts the nation as a whole. Just 39 percent, however, say the bailout would help everyone, while more than half of those surveyed think it would help only Wall Street.”
Reluctantly, The Eye has to say we think Smith did the right thing. Bashing Wall Street is politically popular – and Wall Street definitely deserves to be bashed. But while “screw the greedy bastards” is an appealing slogan, it’s not an adequate solution to a crisis that threatens to engulf the whole economy, from Wall Street in New York to Wall Street in Bend.
The bashing of The Eye may now commence.
This article appears in Oct 2-8, 2008.
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Spot on, HBM.
On democracy, Winston Churchill once said, “it is absolutely the worst form of government, except for all the other forms of government.”
The bailout package shares a similarly dubious distinction. Does it suck? Of course it does. But it sucks less than any of the alternatives, including inaction.
The choice is not inaction or a bad plan. The choice is formulating a careful and thoughtful response in order to be both helpful and practical. By adding in 150 billion dollars in earmark pork spending just shows how low our representatives view our tax dollar’s worth. To them it is showing what kind of money they can bring back to their districts instead of telling the banking industry to shove. Bad economic times are no excuse to socialize a for profit industry. No Profit, business fails in my book.
Update: The House passed the bill this morning, 263-171. Among Oregon’s representatives, Walden, David Wu and Darlene Hooley voted for it and DeFazio and Blumenauer voted against.