God. Help. Us. All.

“I may lose my race over this,” Rep. Sue Myrick (R-N.C.), who also voted for the bill after opposing it. “But that’s OK. Because I believe in my heart I’m doing the right thing.”

You should lose your seat, because you know you’re not doing the right thing.  You’re doing the easy thing.

This is, almost to the tee, EXACTLY how I felt last night after this vote.

Oh, where to begin?

How does one construct an essay when one sees the national government rapidly turning this country into a nation with which one is just not familiar? I mean, this isn’t America anymore…. Is it? Could it possibly be? Is this the nation with a limited government designed by James Madison and his brilliant cohorts?

And this is one of a plethora of reasons I felt that way:

The Senate is supposed to serve, in James Madison’s analogy, as the “cooling saucer” for the hot tea served up by the House–but in this case, it is the House that has remained cool and refused to panic. That’s because the hysterical demand for a bailout didn’t come up from the people; it came down from the elites in Washington and Manhattan. The House is reflecting the sensible skepticism coming up from the folks on Main Street who don’t want to pay the bills for bailing out Hank Paulson’s former colleagues on Wall Street.

This is the rollcall vote:

Desperate for innovative solutions. Ben Bernanke is really thinking outside of the box…and continuing the same mindless monetary policy the Federal Reserve has followed for years:

Print…more…money:

The Fed has been extremely creative about using its existing legal authority and massive pool of resources to try to stabilize the financial system during the past 14 months. Just yesterday, it announced it would triple the size of a special program through which it injects cash into banks. It also vastly expanded a lending program for foreign central banks to make $620 billion available to pump into the financial systems in other large countries.

When will they ever understand? Destroy our currency and destroy our economy. I’m not an economist. I don’t even play one on TV. But this seems just maniacal.

Here’s a rather simple explanation on why the bailout as poppycock from the get-go.

An email that went out a few days ago sent to me by my friend, Chris (no the other Chris):

Dear Fools:

We need your help.

Treasury Secretary Henry Paulson has put together a plan that is actively under debate and allows the Treasury to invest in assets that are crushing bank balance sheets. We view this plan as being an important step in allowing the global financial system to recapitalize itself. We agree with financial intellectual titans Warren Buffett and Bill Gross, as well as both presidential candidates, that the Paulson Plan needs to be passed and will benefit Main Street.

We believe that if the Paulson Plan is done correctly, American taxpayers will profit not only from the return of lending capacity to our banks, but also from these troubled investments. However, the plan should embrace the tenets of free-market capitalism. The government should demand equity stakes in the banks.

We think taxpayers deserve to benefit from a deal soundly rooted in free-market principles. We, the undersigned, encourage you to call the people who represent you in the House and Senate and demand that the approved deal include provisions for equity ownership. Go to www.house.gov and www.senate.gov to find the phone numbers for your elected representatives.

Finally, even though these are extraordinary times, we stand by our belief that the best way to build long-term wealth is through equity ownership. Just look at who is doing a lot of buying of late — Warren Buffett.

We encourage you to take a few minutes — now! — to call your elected officials and let them know that there needs to be an equity component for taxpayers.

Onward,
Tom Gardner, CEO and Co-Founder, The Motley Fool
Scott Schedler, President, The Motley Fool
Bill Mann, Senior Advisor, Motley Fool Hidden Gems, Pay Dirt, and Global Gains

P.S. We have opened a discussion board where Fools can gather to talk about this important issue. Please come and share your opinions.

I sincerely thought this was a joke, given the greeting, but then realized that Motley Fool addresses its mailing list that way in general. I never thought I would read someone explain how “rooted” they are in Free Market principles, and in the same breath push Government equity ownership in banks as the lynch pin issue required for the bailout to be “Free Market”.

The issue here is two-fold: First, the Government getting a return on investment does not equal taxpayers getting a return on their investments. I don’t think anyone has believed that for years. Second, there is no evidence that the Government WILL get a return on its investment. Actually, there is ample evidence that it will NOT.

Like Ron Paul said yesterday, (paraphrasing) “Typically, the reason assets are illiquid is because they’re not worth anything.”

The Government proposes to “create” a false market on useless assets; banks are waiting for them to do it so they can get them for next to nothing; and the “taxpayers” are supposed to make a profit? And in addition, the real pushing point is that all of this will be OK if the Fed has an equity stake in the entities they’re buying useless assets from.

Paulson must indeed think that we are fools.

Just so everyone knows the score.  Our Virginia delegation voted against the bailout plan 6 to 5:

Virginia’s congressional delegation was sharply divided, with six voting against the package and five in favor. Bobby Scott was the only Virginia Democrat voting against the bill. He joined Republicans Robert Wittman, Thelma Drake, Randy Forbes, Virginia Goode and Robert Goodlatte.

Voting for the legislation were Republicans Eric Cantor, Frank Wolf and Tom Davis, and Democrats Jim Moran and Rick Boucher.

If I recall correctly, Eric Cantor was one of the Republicans front and center really pushing this thing.

But since my Representative is Frank Wolf, that’s who has some explaining to do to me (OK, not me in particular, but his constituents in general).  And check THIS out.  His former primary opponent, Vern McKinley (whom Mr. Wolf trounced 9 to 1), reportedly warned about Freddie Mac and Fannie Mae more than 10 years ago:

“Although Freddie and Fannie are privately owned, they are what is known as government-sponsored enterprises (GSEs). GSEs don’t have to follow all the rules that true privately owned companies do: they don’t have to register their securities with the government, their securities receive special treatment for investment purposes, they don’t have to pay state and local income taxes and–most important–their government sponsorship gives them the aura of a fully guaranteed government entity. That final benefit means they save billions in borrowing costs, just as lenders are willing to offer low-interest student loans that are guaranteed by the government. That savings alone allows the GSEs to pocket about $2 billion per year, according to estimates by the Congressional Budget Office and the Treasury Department.”

“Allowing Congress to grant such special privileges is a bad idea. Those privileges, which are granted solely to Freddie and Fannie, crowd out other potential competitors in their market. Privately owned companies should not receive such preferred borrowing status, because it redirects investor funds into the middle- and upper-income housing market at the expense of other potential investments. Finally, the failure of either Freddie or Fannie could saddle taxpayers with a huge liability.”

“Congress should immediately revoke all the benefits of government sponsorship: clearly, Freddie and Fannie can be profitable without them. Eliminating special privileges will force mortgage markets to be truly competitive and will eliminate the possibility that the current system of government sponsorship will someday lead to yet another taxpayer-funded bailout.”

Just think what difference it would make if we had a few more Republicans in the House (and Senate) actually acting like Republicans.  Well I’ll say one thing, there were many today who did, and I thank God for them.

From Rep. Boustany’s website:

Washington, D.C. – U.S. Representative Charles W. Boustany, Jr., (R-Southwest Louisiana), today voted against a $700 billion bailout for overextended financial institutions both in America and abroad.

“My first responsibility as a member of Congress is to the American taxpayer, and today, I am proud to defend the hard-earned dollars they send to Washington,” Boustany said. “Our financial markets are critical to economic growth. This bill is not the prudent way to protect responsible mortgages and pension plans. Congress can still act in a smart way to allow the market to correct itself, but taxpayers will not be put on the hook, if I have a say about it.”

Boustany voted against the Financial Markets Stabilization Bill, a Wall Street bailout including $700 billion for the Treasury Department without significant direction by Congress.

A bi-partisan group blocked the bill, which was defeated 205-228.

Thank God.

Stock Market plunges 600 points.  This thing is obviously far from over.

To save Johnny the trouble of navigating the perilous waters (no pun intended) of embedding a YouTube Video.

This is very disturbing, but illustrates volumes. Watch it to the very end and see President Clinton admit the obvious:

Hopefully, as Johnny put it, this will mean the beginning of the end of Barack Obama, given that Frank Raines is one of his top financial advisors.

…is:

“encouraging every member whose conscience will allow them to support this.”

Well what else does anyone need to say?

A very intriguing article on the History News Net blog by Bob Higgs, regarding the age-old concept of using a “crisis” to gain more power in the hands of Government.

Aw, hell, just read the whole thing.

But here’s the conclusion:

For now, however, the important point to recognize is that the sky is not falling. Lenders continue to lend at high rates, and the economy continues to operate reasonably well. If people panic and allow Congress to exploit the hyped-up fears of the moment, however, much worse outcomes may be brought about, not the least of which is another giant leap in the size, scope, and power of the federal government–a direct threat to our economy and our liberties.

Hat tip to: Cafe Hayek.