Bush offers sympathy, but no help, in bridges, credit

Before he left on his three-week stay at his daddy's home in Maine, our president today (Aug. 9, 2007) expressed sympathy for people caught in the Minnesota bridge collapse, sympathy for people caught in the credit crunch and sympathy for the regime in Pakistan.

He had sympathy for everyone except the American people.

Congress wanted to raise the gas tax a nickel a gallon to pay for fixing the nation's bridges, many of which need repair or replacement. He said he couldn't back that proposal because of the way the money is distributed. Each member of Congress wants to bring back money to his or her district in order to do the repairs there. He said the nation couldn't have that because the money should be distributed to the states, as it has been, and the states should decide how it is to be spent.

A couple of points, if you please.

The collapse of the bridge over the Mississippi River between Minneapolis and St. Paul and the subsequent reports on the state of the nation's bridge infrastructure give mute testimony to how badly, not how well, the present system works. We obviously need to try something new, and instead of using the Executive Branch's resources to work with Congress on finding a better way to maintain the bridges, Bush sends out a scold saying he suggests the Congress examines the way it does things.

Thanks, George. That's really helpful, especially since you are scolding the Congress for doing the things you do best: taking care of your friends.

I'll bet the president really feels for people killed, injured or even inconvenienced by the bridge collapse in Minnesota. But feelings don't get anything done.

The actions that are needed, raising the gas tax and ending the Iraq war, are far from his mind. Raising the gas tax will, in the next three years, raise $20 billion of the nearly $200 billion experts say we'll need over the next 20 years to fix the bridge and tunnel problem, according to the Associated Press.

The gas-tax hike may have a nice side effect: It may cut down on some of the driving we're doing as a nation and maybe persuade some people to give up the gas-guzzling SUVs for more reasonable transportation and may even get some of us out of our cars into van pools, buses, trains and the like.

But Bush cannot have that because it may impact on his great and good friends in the oil industry, from whence comes the Bush fortune and the Cheney fortune,. Then there's the Carlyle group. The Carlyle Group had on its board George H.W. Bush (until 2003), James Baker III and members of the Bin Laden family. (yes, that Bin Laden family) sold their investments in the group in 2001. Funny thing about that.

Ditto on the credit crunch. Bush won't do anything to reduce the profits of the bankers who are allowed to do things like jack up your credit card interest rates if you were late in paying another creditor. The mortgage brokers (I call them mortgage pushers) are still trying to intice people to take out mortgages with draconian terms for houses they cannot afford on their best day.

Some of these pushers had been willing to lend to anyone, even if they had no credit, because of the advent of mortgage securitizers who didn't insist on the safeguards mandated by the big three: Freddie Mac, Fannie Mae and Ginny Mae. A securitizer is a company that buys mortgages from originators (mortgage bankers, brokers and the like) with money raised by selling stock backed by the mortgages. Unlike Freddie, Fannie and Ginny, these securitizers didn't require a 20 percent down payment and credit-worthiness in the mortgages they package. The interest rates were higher than the issues sold by the big three, so some investors, including hedge funds, bought in bigtime. I guess those interest rates don't look so great now. Some of the buyers didn't have a choice because they invested in mutual funds purchased for them and perhaps in 401(k) plans.

Although those forced to sell their stocks now may end up being hurt financially, most investors who can afford to stay in the market only take paper losses.

As one investor told me in October 1987, as the market took a nearly 600-point hit (in 1987 dollars), "I haven't lost a dime until I sell." People who can't pay their mortgages don't have that option.

Car dealers are no better as credit pushers. Come buy a car even if you have bad credit, no credit, don't know anything about credit. Don't drive around in that clunker (even if it's the only thing you can realistically afford). Come to us and we'll put you in a new or great used car.

All this is coming back to haunt not only those whose recklessness caused it, but everyone who relies on the financial markets, which means most of us due to 401(k) and other investments we are now required to rely on for our retirements, because companies have been getting away with no longer offering defined-benefit pensions.

So the sharp drop in the stock markets affects all of us, not just a few Wall Street fatcats. And Bush ruled out direct help to those caught by the mortgage and other credit pushers. Thanks, George. Keep your sympathy.

What does the war in Iraq have to do with all of this? The cost of the Iraq war for less than a year would pay for the complete renovation of our entire transportation infrastructure, that's what.

Finally, Bush told the boss of Pakistan he had better act on any intellegence received about Al-Qaida.

Excuse me, but the real fight against the people who knocked down those buildings in New York and are trying to knock us all down is in Afghanistan, but Iraq. We should be in that fight with all our resources, not wasting them in Iraq, where the legislators are cooling their heels on vacation in Jordan and other relatively safe places.

Al Qaida is in Iraq because we are. They weren't there under Saddam Hussein and neither was Iran. But we kicked out Saddam and are wondering why all these warlords are rushing in to fill the vacuum left by his ouster.

So have a great vacation, George. Get some rest. If the Congress and the American people ever grow some guts, you may need it.

Until next time...