Who convinced Coburn?
Sen. Tom Coburn was on with 1170 KFAQ's Pat Campbell this morning explaining his decision to vote for the $700 billion bailout. It was strange to hear Coburn acknowledge that this bill might not work, that this bill didn't address the underlying causes, but that we had to do something. He compared it to using a defibrillator on a heart attack patient; you deal with his high cholesterol levels after you've saved his life.
But how did Tom Coburn become persuaded that the current situation is a financial heart attack and that the bailout is a financial defibrillator?
Coburn mentioned that he heard from the heads of all the biggest banks in Oklahoma. He specifically mentioned, by title but not by name, the chairman of the Bank of Oklahoma. (That's George Kaiser, if you didn't know.) He heard that banks won't lend to each other, that people with 650 credit scores couldn't get car loans, that businesses were having their loans called by banks who needed the money on their books.
A couple of days ago, while folding laundry, I was struck by similarities between the mortgage bailout and the BOk / Great Plains Airlines bailout. In both cases, I have the sense that the bailout is not to stave off dire consequences for the general public, but dire consequences for big shots who made bad decisions.
Recall that in the Great Plains situation, BOK made a bad loan after two initial refusals, based on private assurances from then-Mayor Susan Savage that the City of would make the bank whole if the loan went bad. That's according to former Councilor Jim Mautino:
In another video on that same entry, Jim Mautino mentions being called to the office of Stan Lybarger, president of BOk. Mautino took city attorneys Larry Simmons and Drew Rees with him to the meeting. Lybarger told them that he had twice turned down the Great Plains loan, but relented because then Mayor Susan Savage gave him "assurances." This would be the same Savage who gave "assurances" to the City Council at the time that transfering AFP3 to the Tulsa Industrial Authority would not expose the City to any liability in the Great Plains financing deal.
Tulsa city councilors were warned that the city's credit rating would suffer if the city didn't pay back the loan. I suspect that the real worry was that some BOk executives would suffer legal consequences if this bad debt hadn't been paid off before a certain deadline. A federally-insured bank isn't allowed to make risky loans for political reasons.
In the current "crisis," we're hearing from a lot of Wall Street types of impending doom, but we're not seeing an unreasonable tightening of credit on Main Street. My suspicion is that this bailout is really about protecting fat cats from the consequences of their bad decisions, and the fat cats are doing a fine job of spooking Congress into a stampede.
I think Coburn was sincere in stating the rationale for his vote. It may be that the bank officials were shooting straight with him. Then again, he was taking his cues from someone who supports bigger government and higher taxes and is a bundler for Barack Obama.
MORE: Whom did Coburn convince? (Emphasis added.)
Just talked to a Republican leadership aide. Here's what he had to say about the big margin today. He cited three factors:1) Up to the point of the Monday vote, members were only hearing from people adamantly opposed to the bill. After the vote, that changed. They began to hear from employers, bankers, and opinion leaders back in their districts who told them how much it would hurt the local economy if they didn't act to try to calm the credit markets; 2) The strong Senate vote helped. Members could say to themselves, "Well, both my state's senators voted for it." And Sen. Tom Coburn's strong support for the measure carried a lot of weight with House conservatives; 3) The inclusion of the FDIC increase gave members something positive and easy to understand to talk about in explaining the bill. The purchase of illiquid assets isn't easy to explain, and if you can explain it, doesn't sound very appealing to anyone. The FDIC provision was easier to portray as a proposal to help "Main Street," with local bankers complaining and worrying about large withdrawals.
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I agree very much. Yes credit is getting tight for some as lenders try to figure out which way is up.
In some cases, people just cannot afford a new car or that half-million dollar house because they cannot show a likely ability to repay it and the lender can see that they will be upside down in it for the life of the loan.
It looks an awful lot like the bailout is just a means to let banks and brokers continue along the same path but avoid the pain of past bad decisions.
The Senate tacking on all this pork as tax credit earmarks is about as close to "Mr. Smith goes to Washington" as I have seen in a long time.
I too have to wonder why Tom Coburn cannot stick to his guns on this, reagrdless of the bankers.
Every congressional representative from Oklahoma but Frank Lucas needs to be voted out of office on November 4th. Senator Tom Coburn needs to be voted out of office in 2010. Any person in the congress that voted Yea on this bill in either house needs removed from office either via ballot box or via prosecution.
This is a direct attack on the foundation of this country. Everything about this bailout is unconstitutional.
We are closer to 1860 than we are to 1929.
One thing that I have noticed about reports on Senator's Coburn and Inhoffe. Sen Coburn say's the businesses in Okla.told him they wanted him to vote for the bailout and yet Sen.Inhoffe has indicated the the businesses have told him not to vote for the bailout out. For me,these two gentlemen have some explaining to do.
Mr Bates .Sir, you have hit the nail on the head so to say. This bailout has many fundamentals in it as if the BOK and great plains airlines were what we were bailing out again.
The good news is that it's unlikely that the bailout will work, so the people who voted for it will probably be voted out of office at some point. The bad news is that the bailout is unlikely to work. "Dow 3,000", anyone?
The bailout will be remembered as too much, too late. To push Buffet's analogy, sometimes you spend a lot of money on extraordinary measures to revive the patient but you lose him anyway. Then all you have are hospital bills that insurance refuses to pay and you can't.
Who's doing the hard work of preparing for the bailout's failure?
To David O'Connor.
Senator Inhofe much like Congressman Lucas voted "no" because of the way the bill was being rushed through. It didn't go through any committee processes. It didn't get the normal vetting that legislation like this gets. Senator Inhofe said, and I'm paraphrasing, that he had talked with businesses and banks in Oklahoma and there didn't appear to be a liquidity issue here.
Senator Coburn on the other hand spoke with the big three money institutions in Oklahoma and they told him that something MUST BE DONE!!! Because see they were embroiled in the mess and needed to be bailed out. Once again the Federal Government has covered the bad decision of the money men. And we the tax payers are on the hook.
I want someone to tell me how I file a lawsuit against every congressional member that vote yes on this legislation. I don't want to sue the federal government. I want to sue them personally. And also included as defendants will be Franklin Raines, Jim Johnson and the current heads of Fannie Mae and Freddie Mac. So any lawyer looking to get famous, that thinks they have enough legal expertise to bring this action against each individual member of congress that voted yes for this bill. Drop me a note at bblackwell@gmail.com
At a bare minimum, I want Barney Frank and Chris Dodd to go to jail for their malfeasance in this entire mess.
Michael,
If you get the chance to speak with any of the Congressional Reps from Oklahoma that voted for this bill or with Senator Coburn, or if you have the chance to talk with those that will interview them ask them to please justify the stuff that is contained in the bill as it passed as it is listed in this article.
http://news.cnet.com/8301-13578_3-10057618-38.html?tag=nl.e433
I want to know just exactly who from Oklahoma voted for this monster, how they voted, and when they are up for re-election. Anyone know any good links?
Next, I would like to know how we can work to change some policies in Oklahoma so that we can vote for third party candidates or have write-ins. I want to vote for Bob Barr. Not that I think he will win, but because I just cannot vote for bad people anymore. I cannot take this lack of choice in Oklahoma any longer.
Coburn was my favorite senator. But he has shown himself to be the typical Republican coward by caving in to Oklahoma bankers. On an even more personal note, he was the doctor of a very good friend who passed away about ten years ago. Coburn was THE SENATOR for me...and now he's turned yellow. He failed the biggest test with this latest bill. He even supported McCain during the primaries--WITH ALL THOSE CHOICES WE HAD!! He's gone, in my book. I'm voting for someone else.
Coburn voted yes. He faces re-election in 2010. Inhofe voted no and is up for re-election this year.
On the House side: Sullivan, Boren, Cole, and Fallin voted yes; Lucas voted no. All five are on this year's general election ballot.
Sullivan's Democratic opponent, Georgianna Oliver, denounced Sullivan's vote on the original bill, and said she would have voted in favor.
Hi Michael,
Just wanted to let you know that today I took the time to let Congressman Lucas and Senator Inhofe know how much I appreciated their vote NO on the bail out. I was so disappointed in Coburn. I am seriously thinking about letting the others know how much I didn't appreciate their YES votes. I know I am only one person, but I won't be voting for anyone that voted yes in this fiasco!
Thank you for your wonderful blog!
John Sullivan will get a pass on this vote but only because we are passed the primaries. Come his 2010 run, I will be working for anyone that is running against him. I'm extremely disappointed in the other 3 that caved, but they are not my elected representative. I may just throw my hat in the ring against Sullivan in 2010 if I can get the financial support to run a campaign, but then again with the angst I'm seeing from people Sullivan may not make it out of this election.
Coburn is done for me. You can be the "GREAT PORK WARRIOR" and then claim, this is as good as we're going to get because the Dems are in control. No, you can say..I cannot in good conscious support an "Emergency" rescue bill that has become a Christmas Tree. And that is that.
And besides that. Look at how much good our 810 billion has done. Credit markets are still seized up like a kid that's eaten 3 peanut butter and cheese sandwiches.
Please excuse my spelling lapse in the previous post. It should have said "I cannot in good conscience.." not what it said.
It was a John Belushi moment from Animal House..."DID WE QUIT WHEN THE GERMANS BOMBED PEARL HARBOR?!?!?!? NOOO!!!!!"
I was on a roll and didn't catch the incorrect word usage.
Senator Coburn will be "explaining" himself at Langston University on Monday October 20th at 2:00 pm.