On the recordJuly 22, 2010
Elizabeth Warren is a smart person. There are things I agree with her on, and there are things I disagree with her on. But on that point, I absolutely agree. If we think about the moral hazard issue, that means a business that wants to run its business the way America generally has run business--on their own, they don't want to be involved in government support--they would be at a disadvantage. That is the other moral hazard. An institution in Tennessee or South Dakota that wants to go out and lend more money to small business and goes out and raises equity to do so, that equity is going to cost more than this. So a bank that chooses to take advantage of a government program actually has an advantage over a company that wants to run itself the way most Americans want to see small business and companies run. There are all kinds of moral hazards. I know the notion of small business attracts a lot of people. I hope people on both sides of the aisle will think about this, realize how insidious this is, think about the next idea that comes after this. Again, it is another government investment into the private sector. We have gone from systemic risk to auto companies, to suppliers of auto companies. Now we are looking at going into small business. We sure have gone the gamut here. It is time to go the other way. Tennesseans have spoken loudly about the fact that they don't want to see any more government involvement in the private sector. It is time to stop it now.
