Senator Bunning Blasts 'Financial Socialism'
By Cliff Kincaid
September 25, 2008
John McCain claims to be a straight talker, but it is Senator Jim Bunning, Republican of Kentucky, who on Tuesday, in front of Treasury Secretary Henry Paulson and Federal Reserve Board chairman Ben Bernanke, labeled the Paulson/Bernanke $700 billion Wall Street takeover plan "financial socialism." He also called it "un-American."
Bunning's comments, which have been reported widely, have alerted many Americans to the proposed radical transformation of the U.S. economy that is being pushed by the Bush Administration and mostly Congressional Democrats on Capitol Hill.
Bunning's views are consistent with the 2008 Republican platform, which declares, "We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself. We believe in the free market as the best tool to sustained prosperity and opportunity for all."
Two weeks ago, in an interview with Bloomberg News, Bunning had denounced the federal takeovers of Fannie Mae and Freddie Mac, saying that Paulson was acting like China's finance minister. "No company fails in communist China, because they're all partly owned by the government," he said. "I sincerely believe that Henry Paulson and Ben Bernanke should resign. They have taken the free market out of the free market."
At the Banking Committee hearing, Bunning called (web site) the new $700 billion Paulson plan "an attempt to do what we so often do in Washington - throw money at a problem." He added, "We cannot make bad mortgages go away. We cannot make the losses that our financial institutions are facing go away. Someone must take those losses. We can either let the people who made bad decisions bear the consequences of their actions, or we can spread that pain to others. And that is exactly what the Secretary proposes to do - take Wall Street's pain and spread it to the taxpayers."
Senator Richard Shelby, ranking Republican on the committee, said that they had been given "no credible assurance" the Paulson plan will work. "We could very well spend $700 billion and not resolve the crisis. Before I sign off on something of this magnitude, I want to know that we have exhausted all reasonable alternatives," he said.
It is not exactly clear where Republican presidential candidate John McCain stands. On September 15, he said that he was "glad to see that the Federal Reserve and the Treasury Department have said no to using taxpayer money to bailout Lehman Brothers, a position I have spoken about throughout this campaign." On September 22, however, McCain endorsed the much larger $700 billion federal takeover plan, with some conditions.
In a development that has badly embarrassed the Republican presidential candidate, McCain senior adviser Steve Schmidt attacked the New York Times as an arm of the Obama-for-president campaign, after the paper had reported financial links between McCain campaign manager Rick Davis, a former registered lobbyist, and failed mortgage giants Freddie Mac and Fannie Mae.
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