Baird explains bailout's importance

U.S. Rep. Brian Baird, D-Wash. gives a history lesson to senior students at Hockinson High School Tuesday morning as part of a educational visit. Students read with congressman Baird parts of the U.S. Constitution. (The Columbian/Troy Wayrynen)

HOCKINSON — U.S. Rep. Brian Baird didn’t mince words Tuesday when he told a classroom of Hockinson High School seniors what would await them should Congress fail to deliver a huge financial bailout plan soon.

“You’ll be screwed,” Baird said, drawing a nervous laugh from his audience.

Business loans, home loans, car loans — and, of course, college student loans — would dry up immediately, the Vancouver Democrat told students.

“The whole (lending) chain is frozen up” because lax regulation has allowed shady accounting practices that have massively overstated the value of assets now gone bad, Baird said.

Baird wasn’t fazed by Monday’s defeat of the bailout package in the House of Representatives.

“We’ll tweak the bill, and it will happen. I’m confident we will pass something next week,” he said. “I think the consequence of failure is so grave, cooler heads will prevail.”

But what if Congress still remains at loggerheads, unable to seal a deal? Baird was asked.

“Bruno. Bruno’s a very large guy with a baseball bat,” he joked.

More seriously, Baird said Monday’s record 778-point stock market plunge reflected unfounded fears that lawmakers will “bicker and not pass something,” he said. “That’s not gonna happen.”

Baird was invited weeks ago by Hockinson teacher Julie Christian to address her combined Contemporary World Issues class. She had a personal “in”: Some years ago, Baird was her Psychology 101 professor at Pacific Lutheran University.

After leading students through a quick but passionate overview of the U.S. Constitution, the five-term congressman fielded students’ questions for 40 minutes.

No surprise: Aside from a few alternative energy and natural resources queries, the proposed $700 billion bailout was foremost in mind.

If it were up to him, Baird would “impose a fee or tax on the superwealthy or Wall Street to pay for this (package), up front,” he said. But that bill wouldn’t win enough House votes to pass, he said.

Baird said the current version was vastly improved from the original “two-and-a-half page” proposal rushed to Congress by Treasury Secretary Henry Paulson, or “what I call a ransom note.”

“I think we’ve got a pretty good bill” that protects taxpayers from absorbing further market losses, he said. He acknowledged many Americans are convinced the bailout helps only the wealthy, but warned of a much wider economic collapse if Washington, D.C., fails to act.

“This is the worst crisis since the 1930s, it really is,” Baird told students. “It’s that spooky, and it’s more spooky the more you read.”

The bailout is only the first step toward reforms needed to right financial wrongs. Increased regulation of lending and fiscal markets will follow, he said. “This bill’s just the first bite of this apple.”

Asked to predict, Baird said the stock market would rebound quickly after a bailout deal. The U.S. economy, not so much.

“I think we’re in for a long financial difficulty,” he said. Current numbers such as a $500 billion federal deficit, a $9 trillion debt (soon to be $10 trillion) and a $60 billion monthly trade deficit paint a daunting picture, he said.

Baird said increased federal revenues — i.e., taxes — and reduced entitlement payments are needed to trim the huge imbalance. “The only alternative is to saddle your generation with more debt, and I won’t stomach that,” he said.

What Americans could do most effectively, and immediately, to improve their plight is to conserve energy, he said: Shorter showers, driving a few miles per hour slower and the like will boost the economy and the planet.

“Our priorities are out of whack. You need leaders to say, ‘you just can’t have it all,’ ” he said.

Howard Buck covers schools and education. He can be reached at 360-735-4515 or howard.buck@columbian.com.