Freezing pay appears to be a popular theme among Democrats to campaign on, as an overwhelming number of voters support such a freeze… even though it’s a rather meaningless gesture in the face of endless stimulus spending and a debt-to-GDP ratio quickly approaching 100%. And I suppose the argument could be made that higher pay would lead to better quality members of congress who couldn’t be as easily influenced by lobbying interests. But if Kilroy was truly interested in saving taxpayers money at the margins, why would she abuse the franking privilege, spending $377,713 of your money in 2009 on what is indistinguishable from campaign material.
And her supposed opposition to TARP is the same sort of “hollow gesture,” as she was not in congress to vote against TARP (even though she supported the original concept of absorbing toxic assets on the campaign trail), but instead voted for a resolution that has no chance of passing, in order to put together this sort of TV ad:
The House passed a resolution of disapproval Thursday designed to block release of the second half of the $700 billion financial bailout fund. But the vote will have no substantive impact.
The House by 270-155 passed the resolution, but the measure has virtually no chance of becoming law. The Senate last week rejected a similar resolution, thus allowing the Obama administration to tap the remaining $350 billion in the Troubled Asset Relief Program (TARP) created last fall.
The remaining funds will be released on Jan. 27.
The program has been widely criticized by members of both parties, and Thursday’s vote gave House members a chance to vent their dissatisfaction and align themselves with the sentiments of their constituents.
“This is kind of a big public opinion poll for the House,” said House Financial Services Chairman Barney Frank , D-Mass., who helped craft the bailout law.
Frighteningly, Kilroy, a former organizer for the American Socialist Party, was put by House Democrats in an important position during the creation of the massive financial Dodd-Frank financial regulation bill, where she played a roll in provisions that scared credit rating firms into demanding that their ratings not be used and could have truly labeled as wildly “anti-stimulus”:
If politicians were as accountable as CEOs, half of them would be fired for incompetence. Witness last week’s land speed record for unintended consequences, as a liability provision in the Dodd-Frank financial reform brought new issues to a screeching halt in the $1.4 trillion asset-backed securities market.
These securities are bonds backed by auto loans, credit-card receivables and the like. Shutting down this entire market to new offerings was an amazing Congressional feat, given that the same federal government has put tens of billions of taxpayer dollars at risk to revive the same market.
The financial genius behind this section of Dodd-Frank is Representative Mary Jo Kilroy. The Ohio Democrat inserted a line in the bill that removes the exemption for credit raters like Standard & Poor’s and Moody’s from being considered “expert” advisers in judging securities offerings. This makes them closer to underwriters or accountants in vouching for an issued security, and it means that their consent is required before their ratings can be included in a registration statement filed at the Securities and Exchange Commission.
Coincidentally—and Ms. Kilroy has said this was her motivation—the provision also sharply increases the potential liability for credit rating firms. Both S&P and Moody’s cited this enhanced liability in announcing that they would not consent to participating in SEC asset-backed securities registrations. Fitch, DBRS and others followed suit.
Oops. Billions of dollars of deals were scrapped, as issuers were barred from proceeding without ratings information and the raters weren’t willing to participate. A June press release still appears on Ms. Kilroy’s website, proudly noting that her amendment “adds teeth to Wall Street reform.” Did it ever.
The market remained frozen until late on July 22nd when the SEC staff rushed out an announcement that they were suspending enforcement for six months of its rule that ratings information be part of securities offerings.
It is truly the political silly season when even Kilroy wraps herself in this sort of heavily poll-tested, conservative-sounding rhetoric. But Columbus residents shouldn’t never forget how far out of the American political spectrum Kilroy really is: