TARP Votes Biting Back into Mid-terms?

Today’s NBC Article Bailout’s Hangover Just Won’t Go Away, was one of a growing pile of pieces on how the Democrats aren’t handling their position on TARP and Wall Street very well, compared to the Republicans, some of whom are making a big deal over it in their mid-term campaigns. I find it equally bizarre that:

a) The Democrats don’t have a general retort to the GOP and Tea Partiers painting them as the morons who gave Wall Street a platinum-coated bail-out, and

b) Certain Republicans are acting like their party took such a clear stand against TARP.

Both parties helped Wall Street back on its feet, under a Republican president, in October 2008, just as both joined hands to repeal Glass-Steagall in 1999 under a Democrat. (With notable individual exceptions.)

First, I must once again, point out that TARP was only a small portion of the multi-trillion dollar bailout and subsidization of Wall Street (for more details on why, read It Takes a Pillage, or check out my bailout tallies). But that aside, since TARP was the only Congressionally approved component of the massive financial bank stimulus package, I thought I’d take another look at how its vote went down.

TARP, aka ‘The Bailout” according to most of the media, because it’s just too complicated to talk about all the other assistance given to the banking system in one sound-bite, was the cornerstone of the Emergency Economic Stabilization Act of 2008. The EESA was the pile of verbiage that had to be adopted by Congress in order to make it seem like this was more than a reckless giveaway to stabilize the most powerful banks, and not the American economy (or at least not as measured by defaults, foreclosures, bankruptcies or job losses).

Yes, we heard from Tim Geithner, Ben Bernanke, Hank Paulson and Andrew Ross Sorkin – that things would have been so much worse without it - the Great Depression on Steroids. Yeah, helping stupid banks that created and leveraged assets they couldn’t sell was a much better strategy than helping all those stupid people who bought homes they couldn’t afford – hell, if the latter was done, who would be reaping all the bonus money? Still, it’s astonishing that the Democrats are losing ground in the polls on this issue, when both parties screwed up with respect to playing hardball with the banks that screwed the rest of the country.

Leading up to the 2008 election, 74 Senators: 39 Democrats, 34 Republicans and 1 Independent (Joe Lieberman) approved the EESA that validated TARP; (notably this included Democrats Christopher Dodd, who later co-authored the benign financial “reform” bill, Barack Obama who was prepping Geithner to be his Treasury Secretary a month later,  both New York Senators, Hilary Clinton and Chuck Schumer, Harry Reid, and Joe Biden. The GOP rosters included John McCain (R-AZ). So, from a technical, mathematical standpoint – 80% of the Democrats approved the Act that spawned TARP (and enabled the Fed to pay the banks interest on the monies they then hoarded with the Fed instead of lending or using them for customer debt restructurings afterwards – a figure that rose to approximately  $1 trillion today in excess reserves from nearly nothing before the Act passed).  But, 70% of the Republicans also voted for the package.  That 10% difference in approvals is hardly earth-shattering, more than anything it shows the blind adherence to the notion that Wall Street must be bolstered to keep the entire universe from shattering apart.

A total of 25 Senators;  9 Democrats, 15 Republicans and 1 Independent (Senator Bernie Sanders) voted No. So of those against it, 60% were Republicans, and 40% were Democrats or Independent. Still, that’s only 30% of the Senate GOP and 20% of the Democrats. The Democrats should have been more opposed to TARP, or at the very least argued for TARP with MANY MANY strings, this is true. But, it’s not like the GOP was viscerally opposed as  a general stance either.

The Democrats who voted No on TARP up for reelection are:  Russ Feingold (D-WI) and Ron Wyden (D-OR).  The Republicans are: Richard Shelby (R-AL), Mike Crapo (R-ID)and Jim DeMint (R-SC).