The Republican candidate for the U.S. Senate who is challenging Democratic incumbent Tom Harkin’s re-election says lawmakers were too hasty in passing a bailout package for Wall Street. Republican Christopher Reed of Marion says the markets have been in "free fall" ever since the bailout bill passed.
"That was a knee-jerk reaction to a potential problem and seldom in life does a knee-jerk reaction become the right solution to a problem," Reed says. "We needed a cooler-heads-prevail situation, look back and sit back and look at the problem." According to Reed, several Nobel laureates had different ideas for fixing the problems in the financial industry.
And Reed says the money should have been lent rather than given to companies which engaged in "bad behavior" that put them in financial jeopardy. "Congress and the Senate did not want to hear anything and they took that path and they ran with it and we’ve been in a market free fall since," Reed says.
Reed is also critical of the idea advanced by presidential candidate John McCain, a fellow Republican who has called for having the government stabilize the housing market by buying up mortgages and renegotiating the terms of the loans so borrowers can stay in their homes.
In addition, Reed opposes the Bush Administration’s decision to buy up stock in some troubled banks and rescue the A-I-G insurance company. "I don’t think the American government should be in the business of buying mortgages and being shareholders in businesses," Reed says.
Harkin voted for the Wall Street bailout. "The choice was either do something or do nothing and nothing was not an option," Harkin says. "Here’s what I was hearing from Iowa: you know, we’re an agriculturally-based state. Farmers rely heavily on credit, especially in the winter. When those crops come in, farmers have got to start borrowing for fuel, and for fertilizer for seed corn and for machinery and equipment…and already credit was starting to tighten up for farmers in Iowa."
Harkin says the bill wasn’t perfect, but something had to be done. "Principal Financial in Iowa employs 9,000 people in this state, and I talked to them. Wells Fargo employs 12,000 people in this state. These are good jobs," Harkin says. "These are our fellow Iowans. Their jobs are on the line."
Iowa’s other U.S. Senator, Republican Chuck Grassley, voted for the bailout bill, too. "Senator Grassley had worked very hard to get through the production tax credit for wind energy and the extension of that and the extension of the biofuels tax credit, plus there were some tax benefits in there for the victims of the floods in Iowa. Senator Grassley got that in there — very important to the state of Iowa," Harkin says. "I got a provision in there that will help build ethanol pipelines to Iowa to the east coast which oil companies have been opposed to for a long time, but I finally got it in there."
Harkin and Reed made their comments last night during an hour-long "conversation" on Iowa Public Television.