VOL. 123 | NO. 212 | Wednesday, October 29, 2008
Corker Justifies Bailout Vote
By Andy Meek
ACT OF NECESSITY: U.S. Sen. Bob Corker, R-Tenn., told a group of business leaders at the University of Memphis this week that the financial bailout package enacted into law earlier this month was “the right thing for our country to do.” -- PHOTO COURTESY OF THE OFFICE OF BOB CORKER
As lawmakers scrambled over the last several months to deal with the fallout of the plunging U.S. economy, Tennessee’s junior senator quietly established himself as a force to be reckoned with among key decision makers.
Republican U.S. Sen. Bob Corker shared one example with a crowd of business leaders at the University of Memphis Monday a few hours after a private conversation earlier that morning with U.S. Treasury Secretary Henry Paulson.
Corker had groused to Paulson about an article he read in Monday’s Wall Street Journal that reported cash-strapped automakers General Motors and Chrysler were interested in seeking help via the federal government’s recent financial bailout package. The former Tennessee state commissioner of finance usually talks to Paulson by phone on the weekend, but this week did not get to do so until Monday.
Corker mentioned that conversation this week in response to a question about the possibility of rescue plans for other U.S. industries besides the financial services sector.
“I’m going to show some cards here: I hope they’re way, way on the back burner some place,” Corker said of any other rescue ideas. “That may disappoint you. I read an article this morning where there was some discussion about an injection into GM and Chrysler.
“Once you start down that path, what industry is it that we do not deal with? To be honest, that’s what my conversation with Hank was about this morning – that I don’t think that was the spirit with which (the bailout) was put forth.”
Collateral benefits – and damage
Corker’s appearance at the U of M FedEx Institute of Technology this week was part of a swing through the state to reassure and educate Tennessee voters and the business community about Washington’s response to the economic upheaval.
From the U of M, Corker headed north to a meeting of the Lauderdale County Chamber of Commerce and then to Dyersburg State Community College.
Prior to the forum in Memphis, Corker also met privately with Memphis-area bankers including First Horizon CEO Bryan Jordan. Memphis-based First Horizon National Corp., the parent company of First Tennessee, announced late Friday afternoon that it’s set to get an infusion of $866 million in capital from the Treasury, money that’s part of the federal government’s plan to put $250 billion directly into banks across the country.
Corker referred to his encounter with Jordan in answering a questioner during a brief Q-and-A Monday about the possibility of unintended consequences associated with the financial rescue package enacted into law this month.
Like the rest of his remarks, Corker’s answer was a frank assessment of the situation. “There are going to be unintended consequences. Candidly, there’s going to be some unfairness that occurs,” Corker said. “Bryan (Jordan) …. and I met this morning for a long time. The fact that (First Horizon) announced a capital injection of senior preferred shares – they’ll get it in a couple of weeks – they now seem to be preferred banks, along with Regions and SunTrust. And those institutions not receiving investments are almost perceived to be weak. So there’s unintended consequences we need to work through.”
On hand for Monday’s session were movers and shakers including Tennessee state representatives Curry Todd and Paul Stanley, both Memphis Republicans, as well as fashion designer Pat Kerr Tigrett.
At one point, Corker handed the microphone to U.S. Rep. Steve Cohen, D-Memphis, who described his vote in support of the bailout bill as one of the most difficult in his 29 years of public service.
“It was very, very difficult,” Cohen said. “I voted for it on both occasions and felt like if I didn’t we’d be repeating the mistakes of (former Treasury) Secretary (Andrew) Mellon and President (Herbert) Hoover.”
In describing his own support of the bailout, Corker told business leaders in the audience about a balcony behind the U.S. Senate chamber where he often retreats to contemplate tough legislation. It’s a spot where he can usually be alone, and for some of those votes, Corker will get to the Senate early so he can spend some time in his secluded spot.
But his vote in support of the financial bailout was not one of those kinds of votes, Corker explained. “I want you to know, look, I’m a free market guy. I started in business when I was 25 with $8,000,” he said. “At the end of the day, I thought this was the right thing for our country to do.
“What I saw happening – certainly we had excesses on Wall Street, and certainly we had people borrow money who should have never borrowed money. But what I saw happening was the seizing, just the stopping of the functioning of our credit markets. So at the end of the day, I supported the bill.”