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John Boehner's 2008 Mud Sandwich Speech: Vote for TARP

Gary North
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Sept. 16, 2011

Fool me once, shame on you. Fool me twice, shame on me.

There will come a day when the banking system is in another crisis. The Secretary of the Treasury will join with the chairman of the Federal Reserve and make the pitch that Congress must intervene with bailout funds. If John Boehner is still Speaker of the House, he will not cooperate. The banks will not get the money. Here's why.

On September 29, 2008, House Minority Leader John Boehner gave a speech. That speech came to haunt him. It was his "mud sandwich" speech in favor of the Bush-Paulson-Bernanke TARP bill. (TARP = Troubled Assets Relief Plan.)

Public opinion polls revealed that voters were strongly opposed to this big bank bailout. Congress knew this at the time. A few politicians went public about the emails they had received. They reported that 90% to 95% of these voters were opposed.

Boehner pulled out the rhetorical stops. I especially appreciated this: "These are the votes that separate the men from the boys and the girts from the women. These are the votes . . . these are the votes . . . that your constituents sent you here to decide on their behalf."

Oh, yes. "On their behalf." Except they overwhelmingly opposed TARP. Boehner recommended that the House, in a bipartisan move, look their constituents in the eye and raise the middle finger . . . "on their behalf."

The House raised it to Boehner the next day. It voted down the bill.

So, the bill went to the Senate, which modified it. Meanwhile, the stock market had fallen by 7% in one day. The House voted for it on October 3. Bush signed it.

The big banks sighed a sigh of relief.

I suspect that, behind closed doors, bankers in the large banks looked at each other and said, "the dumb clucks bought it."

Only about half of the authorized $700 billion was ever used. The money had an interest rate, so most banks ignored it. They did not use it. The big banks did.

In August 2009, a Congressional Oversight Panel reported that the troubled assets were still on the banks' books.

This music video expressed the voters' perception of the TARP law. It is a funny video. "I Want Some TARP." I doubt that Boehner thinks it is funny. He and his peers are its target.

Boehner had been hung out to dry by Paulson. He had given his emotional speech, which his peers ignored wisely for a few days. His peers' first impression of TARP was correct. But then they relented. I wrote at the time that they would, and they did.

Boehner remembers. Geithner will not be able to fool him a second time. He called on his peers to eat their mud sandwich in the name of their constituents' interests. He will not give another speech on behalf of the banks with these rhetorical grabbers:

"We have a product that may work."

"Just think about what happens if we don't pass this bill."

". . . the brink of an economic disaster."

". . . mud sandwich."

"I did not come here to vote for bills like this."

These words occur to me: "You dumb cluck."

Hank Paulson rolled John Boehner the way a waterfront hooker rolls drunk sailors on shore leave.

Watch his speech.

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