Matt Bevin, who is challenging Mitch McConnell in the Kentucky Republican primary, has made McConnell’s support in 2008 for the Troubled Asset Relief Program (TARP) a centerpiece of his insurgent campaign. It’s an understandable move on Bevin’s part. McConnell has a strong conservative voting record. Without the TARP vote, Bevin would be reduced mainly to generic complaints that McConnell is too “establishment.”
But now it turns out that Bevin, an investment fund manager at the time, also supported TARP. In addition, he supported the Federal Reserve’s decision to begin buying commercial paper issued by banks.
Politico, says it has obtained an October 28, 2008 report for investors of Veracity Funds — signed personally by Bevin as president of the fund — praising the federal government’s unprecedented intervention in the U.S. financial markets. Bevin told investors:
Most of the positive developments have been government led, such as the effective nationalization of Fannie Mae and Freddie Mac, the passage of the $700 billion TARP (don’t call it a bailout) and the Federal Reserve’s intention to invest in commercial paper. These moves should help to stabilize asset prices and help to ease liquidity constraints in the financial system.
Bevin also said:
The government actions to date have been reasonably swift and substantial. The Federal Reserve seems to understand the magnitude of the problem and the underlying issues involved.
It isn’t surprising that Bevin’s fund supported TARP. In the panicky days of 2008, the merits of TARP as an emergency measure seemed obvious to most in that industry. Nor have subsequent developments conclusively refuted this view.
It’s one thing for a candidate seeking Tea Party support after the fact to lambaste TARP. It was another thing for a U.S. Senator, being told by a Republican Secretary of the Treasury that the U.S. financial system would collapse without TARP, to oppose the legislation in real time. It also turns out to have been another thing, at least in Bevin’s case, for the head of an investment fund to have done so.
The broader lesson here is the importance of context. It’s easy to go picking through the voting record of someone who’s been in Congress for 20 years or more to find votes that today are deemed non-conservative. But there is little reason to assume that, in real time, the folks doing the “picking” would have gotten every vote “conservative” by today’s standards.
Bevin, it seems clear, would not have.