Bunning could look prophetic

By RONNIE ELLIS
CNHI News Service

September 27, 2008 02:29 pm

— If I were a trained economist, I’d offer some insights into the financial crisis our country faces. But I’m as confused and frustrated as anyone else.
The public is perhaps more angry than fearful. As Congressional leaders, the President and his Treasury Secretary scramble to prevent financial collapse and bail out Wall Street, there is resentment on Main Street about a taxpayer rescue of financial titans who got us into this mess.
But one Kentucky politician may get an unlikely boost. Sen. Jim Bunning supported a 1999 deregulation measure – along with majorities in both parties and both chambers – which is now seen as at least partly responsible for some of the current problems in the banking industry. In that sense, he’s not unlike most of his colleagues.
But he also consistently criticized the Federal Reserve Board, its chairmen Alan Greenspan and Ben Bernanke and Treasury Secretary Henry Paulson. He warned repeatedly they were mismanaging the economy and he opposed federal bailouts of Bear Stearns, Freddie Mac, Fannie Mae and AIG. He’s warned those were preliminary to requests by others including America’s big three automakers, Ford, GM and Chrysler.
I’m unqualified to comment on economic policy. Like a lot of people, I thought Bunning was just being Bunning when he criticized the Fed. But now it looks as though Bunning just might have been right. (I suspect the Senator will be pleased to hear a member of the media admit his ignorance and inconsistency. I know about as much about economics as I do about pitching in the major leagues – which isn’t much. He’ll like that one, too.)
Bunning may have strengthened his political position for his avowed intention to run for a third term in 2010. A lot depends on what happens, but even as people on Main Street fear the security of their savings and investments, they are angry and frustrated about paying taxes to bail out the huge institutions Bunning didn’t want to bail out. They may look favorably on his record on the issue the next time they see his name on the ballot.
If the bailouts work and the economy is stronger in 2010 while the government recoups its money, it could work against Bunning. But even if Congress agrees on a plan (which hadn’t happened when this column was written), it isn’t likely to produce financial recovery in two short years given the magnitude of the crisis. So Bunning might look prophetic to voters in two years.
Conversely, it looks as though the issue is hurting his fellow Republican Senator, Mitch McConnell. McConnell’s lead over Democratic challenger Bruce Lunsford shrank in the latest SurveyUSA, WHAS-TV poll, down to 3 points. The reason is in the cross-tabs, where there’s been a 15-point swing in Lunsford’s favor on the economy in the past month.
It’s hard to see how voters won’t hold Republicans politically more responsible than Democrats. It happened under a Republican administration and that key deregulation passed when Republicans controlled Congress. The crisis seems to be hurting McConnell in the short term. But it may in the long run benefit Bunning.
Ronnie Ellis writes CNHI News Service and is based in Frankfort. He may be contacted by email at rellis@cnhi.com.