On Monday, four of Minnesota’s representatives in the U.S. House — Democrats Collin Peterson and Tim Walz, Republicans Michele Bachmann and Jim Ramstad — recklessly joined 224 of their congressional colleagues in voting down the package. Certainly, the plan was imperfect. But instead of fixing it with an eye on the ultimate goal — relief for Main Street and Wall Street —they chose what was politically expedient over what was right. Crisis leadership it was not. Friday brings an opportunity for these four congressional reps to correct course and push the rescue plan through.
Will they lead, this time, or continue to wring their hands and object? Their statements and actions have not inspired confidence over the past few days. And quite frankly, the positions staked out on the issue by candidates vying to replace Minnesota’s congressional members (all are up for reelection this year) have often disappointed.
A shameful amount of time has been spent on the blame game. Partisans have pointed the finger in every direction: greedy executives, unethical mortgage brokers, irresponsible homeowners, the Bush administration and the Clinton administration — which has been singled out for enforcing a 1977 law intended to end discriminatory lending practices. The reality is that this was a perfect storm of mismanagement on multiple levels. There’s also been an astounding lack of understanding about the real-world effect of the financial meltdown: Some candidates have professed doubt that the credit crunch is real, and some have credulously suggested that simply tinkering with banks’ accounting will fix the moribund economy.
Unfortunately, unlike Las Vegas, what happens on Wall Street does not stay on Wall Street. On Thursday, Star Tribune writer Dee DePass detailed a local example of how dried-up credit has hurt car dealerships in the Twin Cities and across the nation. AutoNation, a national company that owns Tousley Ford and is the biggest American dealer, reported that its lenders are turning down nearly a third of potential buyers with good credit ratings. Headlines elsewhere detailed how small businesses — the backbone of the U.S. economy — are increasingly cut off from the credit needed not only for growth, but for day-to-day operations such as payroll, inventory and transportation.
This week, everyone from investor Warren Buffett to the conservative Heritage Foundation warned of the credit crunch’s consequences. "The banking system is frozen up. We’re heading into a recession and if we don’t do something, this thing is going to get a lot worse,’’ said Nariman Behravesh, chief economist for the Massachusetts-based forecasting firm Global Insight. Just how bad could it get? Behravesh sees a potential recession as severe as that of the early 1980s. "I don’t rule out the possibility that we could see unemployment of 10 percent.’’
The bill passed by the Senate (both of Minnesota’s senators voted with the majority) is an improvement over the one rejected by the House earlier this week. New additions include more protection for bank deposits, additional tax breaks and one provision with Minnesota roots: parity for mental health coverage, a crusade that Paul Wellstone began and Jim Ramstad continued.
Minnesota’s congressional representatives are right to be angry about the financial fiasco. But venting and inaction solve nothing. Pass the rescue plan — add more improvements if need be — and get the economy stabilized. Then take that energetic ire and focus it on the other issues — health care reform, energy independence — that need attention lest they too threaten the nation’s foundation.