Friday, November 14, 2008

Conaway Quiet on Success of TARP, but Effusive about Process

Rep. Mike Conaway, R-TX bragged about America's red and blue political parties coming together to deal with the financial crisis. He failed to say anything about the logic behind the "most significant measure passed by the 110th Congress." Nor did Mike address Treasury Sec. Hank Paulson's trashing the plan he and Fed Chief Ben Bernanke sold to the House.

Yesterday, Hank said "no" to the purchase of toxic assets. preferring direct investment in financial institutions, also known as taxpayer funded recapitalization. So what changed, Representative Conaway? As a CPA, my Congressmen is in a unique position to translate high fa looting financial talk. But the cat got Conaway's tongue, especially on the surprise tax cut the Treasury Chief decreed.

Free wheeling Hank Paulson wants to steer money to nonbank financial institutions, insurance companies and other providers of consumer credit. He plans to buy equity in conjunction with matching private investment. Look for private equity underwriters (PEU's) and sovereign wealth funds (SWF's) to join Treasury in the new program. Will Uncle Sam guarantee the match, as well? Between all the programs, America now runs a huge $3 trillion sovereign debt fund.

While the list of financial firms getting aid expands, American auto makers are reeling. The deepening recession has them on the ropes. Conaway voted for the big money boy bailout bill, but is drawing the line on auto's.

At a time economic stimulation is in order, Mike returned to his conservative roots. He wants lower spending and to reduce the size of government. That could prolong the financial pain.

Mike's correct when he said Republicans lost independents. Hint, we're still confused. Consistent logic or theory is not apparent.

My vote was for honesty. Conaway is yet to earn it, as he nears his third term.