A year ago, Congressman Ron Paul was just beginning to turn heads on the national electoral stage, owing to his presidential campaign's unexpected success at raising money. Congressman Paul was briefly applauded by media elites — until the full meaning of his message began to sink in. For Congressman Paul, as almost everybody knows by now, is an uncompromising foe of Big Government, and the greatest champion of the Constitution in Washington for at least a generation.
The Federal Deposit Insurance Corp. seized Washington Mutual Inc. (also known as WaMu bank) on September 25, and then brokered an emergency sale of the firm’s banking assets to JPMorgan Chase & Co. for $1.9 billion. As a thrift bank, WaMu’s business was focused mainly on taking deposits and originating home mortgages.
Anger is on the rise all across the country concerning the proposed government bailout of the mortgage industry. The $700 billion dollar price tag, at a time when Americans are already suffering from ionospheric fuel and food prices and are awaiting winter heating bills with trepidation, has stirred resentment among those whose taxes will have to foot the bill for such extravagance.
Treasury Secretary Henry Paulson is on the verge of becoming the most influential man to hold that post since Alexander Hamilton, and the most powerful Secretary of the Treasury in U.S. history, if the massive bailout legislation being contemplated in Congress is passed. In the words of the Christian Science Monitor, the legislation "would transform Paulson's office into that of temporary overseer of America's entire financial system" with "the power to buy virtually any financial instrument from any institution, as a means to relieve it of bad assets and pump credit back into the economy." It is hard to imagine that even Alexander Hamilton, who was something of a supporter of big government relative to most of the other Founding Fathers, would support such a revolutionary change.
Adding to the woes of Americans reeling from the fallout stemming from the national housing and mortgage crises, recent Wall Street events such as the bankruptcy of Lehman Brothers, the sale of an ailing Merrill Lynch to Bank of America, and the government’s $85 billion bailout of American International Group have had ripple effects extending throughout the entirety of the nation’s credit market.