Year
of the Bailout
The 2008 Republican
Liberty Index of Congress continues to show a
shift of the political spectrum from a
"left-right" orientation, as was
exhibited during the middle years of the Bush
Administration, to an "up-down"
orientation. By "up-down," I refer to
President Ronald Reagan’s saying that the real
choice we face is not "left" or
"right," but "up" to the
maximum liberty consistent with order, or
"down" to the abyss of an all-powerful
government.
During the middle years of the Bush
Administration, Republicans voted better on
economic liberties and Democrats better on
personal liberties. With the War in Iraq, the
corrupting tendency of power, and the social
conservative agenda in ascendancy, libertarians
who might have been inclined to support
Republicans became increasingly conflicted.
Support for Republicans eroded and they lost
their majorities in Congress, state legislatures
and Governors in 2006, and they lost the
Presidency in 2008.
In 2008, with Democratic majorities in
Congress and with Republicans in Congress acting
increasingly independent of the President,
Republicans looked like veritable Champions of
Liberty. But, this might only mean that they
oppose increasing the speed of the nation’s
movement toward socialism.
Constructing the
Index
As always,
construction of the 2008 Liberty Index involved
the identification of 20 roll call votes on each
of two dimensions of freedom: economic liberties
and personal liberties. In the process of
deciding upon the lists of votes, I relied on
advice from a small group of people each of whom
is a current or past officer of the Republican
Liberty Caucus. The final decisions were mine
and do not necessarily reflect the opinions of
the Republican Liberty Caucus.
As always, identifying 20 votes is relatively
easy with regard to economic liberties. My lists
of economic liberty votes for each chamber cover
a wide range of issues. These include spending,
taxation, and industrial, labor and trade
policy. The most prominent votes of the 2008
session involved the bailouts of the FHA, Fannie
Mae and Freddie Mac, the mortgage industry, and
the automobile industry. I’ll say about these
votes below.
My personal liberty votes include some
personal liberties associated with conservatives
such as the right to keep and bear arms, and
some associated with liberals such as the rights
of the accused. It also includes some orphan
liberties such as the right of adults to decide
what they do when in private. We uphold the
family, local government and free association,
and we oppose government-funded speech (i.e.,
propaganda).
The personal liberties votes with which I
have to work reflect the agenda of the session
and may not be representative of a Congressional
member’s true voting tendency. I cull many of
these votes from proposed amendments to bills,
and, in particular, from proposed amendments to
appropriations. During much of 2008, the House
of Representatives operated under rules for
considering bills that allowed few if any
amendments and government was funded mostly by
continuing resolution, which had the result of
limiting my choices.
The Bailout Votes
T he most crucial
votes of 2008 involved bailouts of the Federal
Housing Authority, Fannie Mae and Freddy Mac
(the two federally-chartered mortgage bankers),
the mortgage industry, and the automobile
industry. The underlying problem, it became
clear, was that, with the collapse of the
housing bubble, many mortgages were
"underwater." That is, the values of
the homes securing the mortgages were less than
the mortgages. In these cases, the borrower
often has little interest in making mortgage
payments. And, defaults by many threaten to
collapse the values of houses in general,
resulting in a spiraling-down of housing values.
The first bailout votes involved a
recapitalization of the Federal Housing
Authority, which had become insolvent due to
problem with the low- and zero-down payment
mortgages that it had guaranteed. The next
bailout vote involved Fannie Mae and Freddie
Mac, two depression-era mortgage banks created
by the federal government which - although
somewhat privatized - continue to enjoy the
perception of a federal guarantee. Thus far, we’re
talking about $300 billion for the FHA and $100
billion each for Fannie Mae and Freddie Mac.
The third bailout vote involved the creation
of a $700 billion authorization to borrow, known
as the TARP fund, for the U.S. Secretary of the
Treasury to be used to buy various and sundry
damaged assets, such as mortgage-backed
securities. And, the fourth bailout vote was to
lend billions of dollars to the domestic
automobile manufacturers.
Including loans from the Federal Reserve to
induce JP Morgan Chase to acquire Bear Stearns
and to keep AIG afloat, and various
Congressional add-ons to the TARP bill, and we’re
talking of $1.5 trillion. And, to paraphrase the
late Senator Everett Dirksen, a trillion here
and a trillion there, and soon we’re talking
about real money.
The idea of all these bailouts was to prevent
damaged assets from being dumped onto the
market, causing their values and the values of
similar assets to fall, perhaps causing a
financial panic, and perhaps even a deep and
prolonged recession. Thank goodness for the
sudden revival of Keynesian economics in
Washington or else – who knows – the stock
market might have collapsed, our domestic
automobile companies may have gone bankrupt and
we might have fallen into a severe recession.
Selected Issues
A mong the other
interesting roll call votes used in this year’s
Liberty Index were several concerning foreign
aid. In the Senate, roll call vote #181 was an
amendment to a bill that would greatly the
expand AIDs Relief by eliminating its tie to
meeting the conditions set forth in the
Millennial Challenge (e.g., democratic
governance). The amendment would have maintained
the program as an instrument of U.S. foreign
policy, as opposed to converting it into an
international entitlement program. The amendment
failed 64 to 31. In an analogous vote in the
House, roll call vote #197 would have
established a condition for debt relief to be
democratic government. Only 41 Democrats voted
against establishing this criterion, although 2
others voted "present."
In the House, roll call vote #414 was to ban
the sale or importation of "non-human
primates," this year’s manifestation of
the animal rights agenda. It passed 302 to 96.
In the Senate, this measure was subsumed into
roll call vote #189, which did not survive a
filibuster vote, 52 to 40. Monkey business thus
remains legal for yet another year in the United
States.
In the House, I have roll call votes on U.S.
involvement in both the Mexican drug war (#393)
and the Colombian drug war (#499), both of which
passed overwhelmingly.
Also in the House, I have both an amendment
(#600) toughening up a proposed DC gun ban ban
(that’s right, to ban the D.C. gun ban) and
the vote on passage (#601). As sometimes
happens, the crucial vote is on the amendment,
although both votes are meaningful.
Top Scores: House
I n the House of
Representatives, Congressman Ron Paul of Texas
returned to the top spot, with a combined
average score of 96. In a seven-way tie for
second place were: Congressmen Flake (AZ),
Franks (AZ), Lamborn (CO), Broun (GA), Price
(GA), Foxx (NC) and Hensarling (TX). In a
four-way tie for ninth place were: Congressmen
Rohrabacher (CA), Feeney (FL), Marchant (TX) and
Bishop (UT). Virginia Foxx becomes the first
female to score as high as second in the Liberty
Index.
Technically, Congressman Rush of Illinois
finished last (or, first from the pro-government
point of view) with a combined average score of
zero. However, he was absent from Congress for
much of the year and only registered a few roll
call votes. Finishing next to last was the
troika of Scott (GA), Cleaver (MO) and Nadler
(NY). Close behind them were Gutierrez (IL) and
Meeks (NY).
The lowest-scoring Republican was Gilchrest
(MD), with a 26; and, the highest-scoring
Democrat was Cooper (TN) with a 42.
In the area of economic liberties, 18
Republicans scored perfect 100s, while 68
Democrats scored perfect 0s.
The toughest votes for Congressmen who
otherwise voted correctly were (in order): the
Mortgage Bailout, Earmarks and AIDs Relief. The
toughest votes for Congressmen who otherwise
voted incorrectly were (in order) the Mortgage
Bailout and the Progressive Caucus Budget.
In the area of personal liberties,
Congressman Paul registered a perfect 100,
followed by three of his fellow Texas
Republicans, Carter, Gohmert and Marchant.
Thirteen Democrats scored 7 or 8.
The toughest votes for Congressmen who
otherwise voted correctly were (in order):
Colombia Drugs, FISA and Detainee Interrogation.
The toughest votes for Congressmen who otherwise
voted incorrectly were Detainee Interrogation
and Debt Relief.
Top Scores: House
O ver in the
Senate, we have a two-way tie for first place,
with Senators Coburn of Oklahoma and DeMint of
South Carolina both scoring 76. These were the
only two Senators classified as
"Libertarian." Finishing tied for
third were Senators Kyl and McCain of Arizona,
with 75’s, and finishing fifth was Senator
Ensign of Nevada, with a 74.
From the opposite perspective, Senators
Lautenberg and Menendez of New Jersey shared the
Party of Big Government’s gold medal, with
scores of 20. Sharing the Party of Big
Government’s bronze medal were Senators Boxer
of California, Klobacher of Minnesota and
Schumer of New York, with 22’s.
On the economic component of the index, three
Senators achieved perfect 100s, Senators Ensign,
Kyl and DeMint. Most of those who did well but
fell short of perfection were tripped up by the
farm votes. Other tough votes for otherwise
free-market Senators involved the Fannie and
Freddie Bailout, Earmarks, Auto Company Bailout
and Flood Insurance.
From the socialistic perspective, there were
a total of 13 perfect zeros. Another 14 would
have scored zero but for the Flood Insurance
vote, which – while it would promote the cause
of socialism – would be environmentally
problematic. Another three would have scored
zero but for the Income Tax vote which was
mostly window-dressing. In the Senate, the
so-called Blue Dog Democrats were simply Running
Dogs for the radical left-wing of their party.
On the personal liberties component of the
index, there is little to say about the scores
of individual Senators. Almost all the action
was between the 40 yard lines. Some of the votes
on one measure were, nevertheless, curious.
Foreign Policy
Issues
In the 2003
Liberty Index, I counted the vote to authorize
the use of force in Iraq as an anti-liberty
vote. This was my personal call and did not
reflect any official stance by the Republic
Liberty Caucus. Every year since then, I have
called for an exit strategy. From 2003 until
2007, I observed a shift of the political axis
from something like a libertarian versus
authoritarian ("up-down") direction to
a conservative versus liberal
("right-left") direction. And, I have
observed the deterioration and eventual loss of
the Republican political majority.
By 2008, the Democrats were calling if not
for an immediate withdrawal from Iraq then for a
timetable for withdrawal. At the time, Senator
(now President) Obama was the leading proponent.
So, why is it that so many Democrats did not
vote "aye" on the Iraqi Mission vote?
Is it that Senator Obama and other Democrats,
like Senator Kerry, vote "aye" when
they mean "nay," and "nay"
when they mean "aye" on war
resolutions? Or, is it that they wanted the
issue for the election more than the wanted a
resolution of the issue?
Over on the Republican side, four Republicans
crossed over to the Liberty Index position,
every Republican Senator and these four in
particular having voted to authorize the use of
force in Iraq five years prior. These were
Senators Hagel of Nebraska, who had become an
outspoken critic of the war, Voinovich of Ohio,
Dole of North Carolina and Smith of Oregon. The
latter two were in tough re-election campaigns
that they would eventually lose.

Clifford
F. Thies e-mail
Past Chairman, Republican Liberty Caucus
Professor of Economics and Finance,
Shenandoah University
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