Pork for the Bankers
This bail-out of such massive proportions that it actually (not virtually, not euphemistically, not metaphorically) is the largest single non-defense expenditure ever is about to pass into law, and hence history.
Our Employees, the alleged "representatives" that we pay to go to Washington to be wined and dined by lobbyists, get phenomenal health benefits not available to you and me, and other unimaginable perks are about to give away Hundreds of Billions of dollars to salvage a mess on Wall Street that was foreseen by many, many folks for several years. Atrios, DFH that he is, called it the Big Shitpile and warned of the bills that would be due one day; Paul Krugman, that silly trivia-obsessed professor, warned of problems with the Big Shitpile (well, in fairness he never called it that) for quite a while but few listened, preferring to just discount his writing in the Times as an extreme liberal writing in an effete, elite paper. Now our Employees want to give away the Republic to salve the conscience of the Most Unpopular and Worst President Ever, for some reason I can’t figure out.
I think that once again, our "Majority" of Employees is getting rolled again -sigh- by this president and his uncanny ability to make them do whatever the fuck he wants close to an election. Could these problems have been addressed years ago? Absolutely, but that would have required actual "work", and attention to detail. It also would have meant appointing lawyers and accountants and others who were not motivated by a political agenda, and were interested in making sure that the laws worked, the rules were followed and companies and their executives followed not just the rule of law but it’s spirit as well in their decision-making.
We will in all likelihood be bailing out these institutions and paying inflated prices for worthless good, allowing executives, lobbyists and policy wonks to escape with a profit. It’s being allowed to happen by a combination of apathy on the part of the electorate, and the disservice that the media has done in not explaining exactly what the stakes are in the bailout as it’s being enacted. As folks do find out and understand the scope of the legislation and money involved, they are in fact (as one Congressman reported) voting for it on a 50/50 split… "No!" and "Hell, No!" being the votes cast.
If there was a better awareness of the issues and the ultimate cost of this legislation, it would be far less likely to be enacted… the question is, how are the low-information voters who could easily sway this by screaming about it to their Employees going to be reached before it gets to the desk of Preznit De Regulator, a man who never met a bad, higly politicized plan he didn’t support.
Scream loudly please, and pass it on….
Or we’re going to be paying more than just $700 billion dollars, we might be paying with the very fabric of the Republic.
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Aloha, Jo Fish!
Speaking of which, while all the hullabaloo over over the Bailout was occurring, Congress passed a $648 Billion Continuing Resolution for the DoD!
reading the bill now. somehow it became 110 pages (lots of white space though).
http://www.theopenhouseproject…..lout-bill/
I don’t think it’s apathy as much as it is a lack of understanding of the workings of the economy coupled with feeling utterly helpless against a government dead set on working against us. You can’t fight city hall, so to speak.
Heh, Thomas.loc is getting slammed, eh?
Light their ass Jo.
Is it time to talk Revolution? No current party has the courage to stand up and say NO! I hear that 9 out 10 emails and calls to our Washington employees are against this, yet these Yahoos smile for the camera and say we got a deal! When we have taxation without (true) representation the patriotic American response is to revolt against the power system. It feels to me like we may be there now
yes, but john at the openhouse project has mirrored the bill. that’s the one i downloaded.
It’s brilliant, the capstone of Bush’s work over these past eight years. History is going to ask just how he was able to convince the people to transfer a trillion dollars — A TRILLION DOLLARS, it boggles the mind to think what that could buy! — from the masses to the elites. And people keep calling the guy stupid!
Tough civil words fail me now.. I wanted to leave a note with Nancy http://speaker.house.gov/. Could someone try that link and tell me if it loads for you? I can’t seem to get in now. Maybe that is a good thing. /s
Steny Hoyer on C-Span, talking about Cash for Carlyle/GoldmanSachs Trash. “We are working with our Republican colleagues.”
America 2008. A confederacy of dunces led by a league of morons.
-G
Not working for me either.
It mirrors the onslaught that the inboxes for all our critters had experienced the other day, all protesting the bailout… Speaks volumes about the tin ear they have for ‘We the People’…!
I wrote a letter last week, faxed Monday, against the Paulson proposal, but I support the Democratic additions. So at this point, you don’t really know what’s popular or unpopular. I was appalled by the three page proposal, but with oversight, and from what I understand might happen, too many people will be hurt if something isn’t done about the credit markets. I also know that the bill isn’t ideal, but it has to pass which means that it can’t be ideal.
Case in point, of what I just mentioned…! ;-)
IMHO, the the government should not:
– buy any derivatives — stick to mortgages and bonds.
– buy any instrument that was not AAA rated at the time of its last sale — folks buying other stuff knew they were speculating.
– give money away — insist on receiving like (market) value in equity in the entity whose trash is being purchased.
It’s true that lots of businesses depend on credit to meet their payrolls. I imagine most people want to get paid.
So, how was the great depression cured? We’re told that it was cured by war procurement for WW II. But it was the bombers and aircraft carriers that cured the depression. They could as well have been dumped into the ocean, or never built at all. Rather it was the money paid to the working class of the United States. That created a demand side to the economy, and the upper-class got to compete for the wages of the working class.
The Great Depression was cured via trickle-up (demand-side) economics.
first thing i’m checking is the definitions.
from the original paulson proposal:
from dodd’s proposal:
current bill:
The irony is that the real credit crunch is between the large banks, none of them trust the other’s accounting practices, of which they’ve utilized themselves…!
She should have said, “We are working in collusion with our Republican collaborators”.
Part of the reason they are drooling at the prospect of attacking Iran?
so let’s see if i have this right.
we went from “mortgage-related assets” (paulson) to “troubled assets” (dodd) to “troubled assets” but must consult with the fed and inform congress.
is that everyone else’s reading also?
as the 110th congress has taught us – oversight done their way has nothing to do with accountability. :(
also, even if action is urgently needed – that does not imply that this action is needed, or even that it would be helpful.
this is the essence of the shock doctrine. that in a moment of crisis, the crooks use our panic to push through plans they have long had, in order to rob us in ways we would never have tolerated absent the crisis.
i don’t think it’s a tin ear, i just think it’s tuned to voices they think matter. which are not ours.
Sorr if already posted, MSNBC reporting that Pelosi wants at least 100 GOP votes in the House.
It looks to me like the bill starts to fix the big issue. Treasury is required to get either warrants or debt instruments from anyone who wants to dump their trash in a direct sale. It doesn’t seem to apply if the trash is bought in an auction process. Krugman thinks that weak companies won’t be able to sell in auctions, and will have to get the Treasury to buy directly. We get equity for what amounts to a recapitalization of the weak. The stronger companies will sell in auctions, at prices that should enable us to make money. Krugman seems to hope that we might even get a better deal in the next draft.
I wanted the bankruptcy change, but it can wait for next year.
The limits on executive compensation are pretty well written.
What leaps out immediately and glaringly in all 3 versions are the words
“The Secretary is authorized…..without limitation”.
Give me the $700 billion – I’ll hire Krugman, Ian, Hugh and other such notables and give them authority without limitation. After paying their salaries to solve the crisis, we’ll still have more than $699 billion to get regulation implemented and the measures needed to resolve the current problems and then we can work on rolling back FISA, the healthcare crisis, honest elections and honest journalism, the patriot act and other activities more important than funding paulson’s buddies.
Agreed! 100%. Shock doctrine applied to the U.S. of A.
Please explain to me in detail what exactly will happen if we do not hand over $700 billion. “It will cause chaos” is not enough for me.
No honor among thieves!
And all of the corrupt ceo thieves are going to walk away with their millions of dollars in salaries, too. There will be little, maybe no, accountability.
I saw at ABC Blotter that Waxman is questioning the former Chief of Lehman Brothers next week. Apparently, all e-mails, memos, etc. have been disposed of. Nothing between ceos for the past six months.
I guess that tells the story of when this plotting started…6 months ago. I am sure that this will be the official story at every one of these banks.
CHiP, $11B for insuring low-income children, that was a ‘budget-busting dealbreaker’ last fall, right? Can’t you just wait for the deficit hawks on the right to miraculously recover from their 8-year amnesia? Sorry but snark is all I have these days…
Selise, the definition hasn’t changed much. The major change is that troubled assets originally included any mortgage-related security issued before September 17, 2008. Now it only includes those issued before March 14, 2008.
Also, the Treasury can buy other parts of the Big Shitpile, but effectively only with consent of the Fed Chair, and congress, operating through its committees.
Looks like they went with Franks’ version instead of Dodd’s. A lot of very loose language.
Will someone read the Wall Street bailout plan outloud for me! It’s too long! LOL Just kidding.
yeah. i’ve been pissed off about that.
not sure how much of this i can read right now. so infuriating.
Bush told you…”This sucker might go down”. Taxpayers aren’t entitled to the truth…just stupid and meaningless words.
But don’t forget to also scream that Progressives will support Democrats, no matter what!
$700 Billion is not nearly enough money wasted for anyone to even think about not endorsing any Democrat running for office and condoning their actions by voting for them….is it?
I thought he was talking about that pretzel in his hand.
She is actually a he, Steny that is. But you might like to watch “Let’s Play Wall Street Bailout”. She is actually being critical of this financial rescue of troubled assets. She will not vote for it.
If only Steny had her, what’s the word? Integrity.
Banks won’t lend money, so people (and businesses) who rely on credit won’t get it. I’m an attorney who has represented people and entities which, for whatever reason (divorce, bankruptcy, etc.) couldn’t get credit. It’s not pretty. Economists all over the board agree that this is an imminent possibility, including economists who are very critical of this administration, such as Paul Krugman. If a business can’t get credit, it sometimes can’t meet its payroll. People not getting paid is a very bad thing, unless they’re independently wealthy, which most of us are not.
Are you referring to the one he allegedly choked on a few years ago?
That is a visual that is funny, if a tad crude.
I agree and don’t like it.
What good does it do for the government to purchase one end or the other of a credit-default swap. It’s a liability to the guy who sold it, so why pay him for it. It’s a semiannual cash drain to the guy who purchased it. If the seller is good for covering his loss, the purchaser has no problem. If the seller isn’t good for covering the loss, the swap is worthless.
What good does it do for the government to purchase some a mixture of slices of troubled mortgages. The government should should be fixing the underlying problem, i.e., the troubled mortgages.
Buying derivatives is going to needlessly piss away the public’s money, and enrich bankers.
George Bush will make a statement tomorrow morning at 7:30am about the new found money Wall Street will be receiving and we all know what that means! He will be going to bed early tonight wearing his green fuzzy footed pajamas and will have Laura make him a cup of hot chocolate so he’ll sleep good. Spit.
i disagree. the date is not the only thing that has changed – the type of asset that can be purchased no longer has to be mortgage-related. that is now left to paulson to decide.
paulson:
now:
or is there some other language i missed?
also, you write:
i read the above as saying consultation with the fed, not consent. and transmittal of determination to congress, again not consent.
oops…I misunderstood..I thought that Pelosi said it. Read a little slower would be my advice to myself.
If you’ve ever worked in a food pantry, you see that some people live paycheck to paycheck, and if there is no paycheck, there’s hunger. I’m not interested in seeing people go hungry. I’m willing, based on a number of economists, both liberal and conservative, to take the risk of supporting this bailout. I wasn’t willing to support Paulson’s original unconstitutional proposal and wrote a letter demanding that they amend it, which they did.
i never saw any actual language for frank’s proposal – just the summary statement (more like talking points, imo).
there are things that could be done that would actually help. i don’t think this bill does that. it’s not an issue of acting or not acting – it’s an issue of doing something helpful vs making the situation worse.
I actually think this is good for US goverment. Let me explain. I believe in free market and market always over done. This time, our goverment is actually stand side by side with Warren Buffert. Right now, the market is so negative. I tink we are getting a good deal.
Bill Gross thinks so as well. He is the king in bonds. I think, at the end, we will sell the bonds and make back all the money lost in Iraq.
PL
This betrayal of the people’s will is the subject of ON OF MY FAVORITE MUSICALS!
Okay. Now read this previously posted (sorry don’t remember who) article about past bank crisis around the world and how they have been handled.
http://www.rgemonitor.com/roub…..s_of_banks
The question is, should we give $700 billion of our money to this plan, or should we take another approach that has worked in the past?
And no matter what happens with the bailout, we are all going to suffer a lot. Why not fix the problem?
Interesting, so Bush can now say, “See Americans? All that killing we did and stealing of your money we did…it actually didn’t cost you a cent! You can go back to loving us now.”.
maybe this bill is better than i think it is, i’ve only just started reading.
will try to read some more if i don’t get too pissed off.
We agree about not wanting to see hunger and suffering. But just because Bush says this is the way to save us all from chaos doesn’t make it so.
Sorry for the crude.
Economists disagree as to what the best solution is. Something needs to be done quickly, and even if in the short term all this does is cause credit to flow, more thoughtful arguments can be made later. Congress isn’t going to sit around and find the best solution – if you think they are, you’re dreaming. Clearly, there are other things that could be done, but it’s my understanding that some of them are incorporated (or at least authorized) in this legislation – things that, modeling the Swedish solution, might actually work with a competent government. Unfortunately, among the many disagreeing economists with their various views, we’re not going to find the silver bullet with this volatile Congress one month before an election. I guess the question is, how much time do we have? I don’t know, but if some of these predictions are correct, we don’t have much. Massive economic disruption – such as massive numbers of people not being able to buy groceries – isn’t worth the risk.
Anyone heard anything about Martial Law being declared, possibly as a tool to ram this legislation through? Portland Indymedia just posted this, with clips of Congress… http://portland.indymedia.org/…..099.shtml.
Trying to figure out who this Devoy person is, and why there don’t seem to be any alt-press reports on this…
Please don’t be politicial. Let me apology first to say anything about Iraq.
I am talking about market. Market tends to overdone. The mortgage backed bond is 15 cents on the dollars now and there are 95% home owner still paying mortgage. I think US goverment is getting a good deal on these bonds.
It’s not just Bush – it’s the Democrats, most of whom I trust. I objected and opposed Paulson’s original proposal.
Don’t be political? Political? Are you serious? This is a political situation whether you want to believe that or not.
I thought the bond market was tanking?
Christy’s upstairs…
i’m obviously not being very clear. will try again.
what if there are two options:
1. massive numbers of people not able to buy groceries.
and
2. massive numbers of people not able to buy groceries. AND we’ve just wasted $700 billion so we can’t afford to give them as much help as we’d like to.
you seem to be making an assumption that this proposal is going to help. i’m not convinced of that – if you have some reason to give me, i’d love to hear it. but “some economists” doesn’t do it for me.
and, in 2 years, the Democratic Congresspeople will be back, expecting your vote again, and someone may raise the issue of the $700 billion bailout, how the banking system and the economy cratered anyway, and how the real cost is already over a trillion dollars, and they can simply say:
“oh were misled on that, everyone thought we had no choice and it was sure to work, don’t blame us they tricked us!”
Just like they did after voting for hideous war of aggression against Iraq.
That line worked well for Hillary Clinton, John Kerry, and so many others because they pay no price for it – there can’t be a price, because they are Democrats, who must be supported, no matter what.
Anyone expressing this line of thinking in Democratic Party online outreach forums like FDL however pays a price of having their comments moderated and deleted.
Sites that cling so close to the Democratic Party line on this and other issues run the risk of tying their credibility tightly to the Donkey.
Not looking like a good place to be, just sayin’.
why do you trust the democrats?
here is one reason i do not – fisa.
And that is where we disagree. This has been the most spectacularly misguided (to be polite) Congress ever.
Many eminent economists agree that this plan MIGHT work. Do you have a plan that will, without doubt, work? Who is the economist with the plan that will pass Congress that you think will work?
I can’t see anything that buying derivatives will do to “shore up” the real-estate market. Purchasing troubled real estate, however, might help, but I’m not sure that it would help as much as other uses to which the same money might be put.
Hear! Hear!
Thanks for the humor..my visual was cruder than yours…
There are lots of reasons to be pissed off at Congress, but for the most part, I do trust the Democrats. I know what proposals have been put forth in the Congress, and this one seems much more reasonable than those put forth by the Republicans. Suppose we do nothing and the worst happens. What confidence do you have that all of the suffering people’s needs will be addressed by anyone, since you don’t trust anyone currently in Congress now? You want a revolution? Who’s going to lead it and who’s going to support it? Right now, it’s a crapshoot whether we can even get intelligent people into the White House – who do you have lined up who will have the support to save our country? Answer this please.
can you give me some links?
i want a plan that includes transparency, accountability and re-regulation.
without those things, i don’t see any reason to think that there won’t be self-dealing and outright theft – as we have been seeing already. i’m not signing up to have the american people robbed.
Some links to what? To economists who support this plan?
Pelosi’s news room page today:
“All this is done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street. And in doing so bring stability to the markets as we try to turn around our economy”.
Not much explanation for $700B.
I lost some..should read our economy and protect our taxpayers…
yes. i’d like to take a look at their reasoning to see if it makes sense to me. thanks.
Well, here’s Krugman: http://krugman.blogs.nytimes.c…..-politics/
Krugman update: http://krugman.blogs.nytimes.com/
George Washington’s Blog, on Sept 25, has a list of 192 Economists…including Nobel Prize Winners who slam the bailout. He has links worth a read.
since you claimed many, can you cite some more? thanks.
http://www.miamiherald.com/new…..01956.html
This article basically says that some economists (Galbraith for one) think the plan sucks but also think it will buy some time and are unwilling to discount the possibility of collapse. Sorry – they might be able to withstand a collapse, but there are plenty of people who can’t.
Why would we believe the biggest liar in America, who also gets off on torture. He is a psychopath from a family of psychopaths. This problem could and should have been solved years ago. But it will not be solved in three days.
The question is, Who gets the pain? It should be that thief Paulson and his cronies at GS.
so, censorship of my point re-enforces my point, requiring more censorship of any mention of the censorship.
Again, tying your brand ever closer to the Democratic Party brand, perhaps also an expression that cannot be allowed.
Mod note: Your comments are all there. if you don’t like it, then by all means please don’t let the door hit you on the way out.
in neither of the krugman links you gave me, had krugman seen the current proposal.
oh noes oh noes oh noes!
George Washington Blogspot is not a site Democrats are permitted to read!
TINFOIL HAT Alert! ’nuff said!
thats really all you need to know, never mind all the hundreds of people, experts in many fields, on record there or in links …
as we all know here at FDL, on a certain subject, which cannot be mentioned, the stories of Pres Bush and VP Cheney are to be believed utterly …
from your link:
http://i4.democracynow.org/200…..scheer_and
See Dean Baker’s comments. Although he talks about punitive action, he agrees that the bailout is necessary and that collapse is imminent.
Also from the article I linked to: “My sense is it will delay a disaster, given that you only have three months left in this administration. But it will not cure the problem in the (financial) industry or prevent the shakeout and downsizing of the industry,” Galbraith said.”
In other words, it will delay a disaster until responsible people are in office who can actually implement real change.
If you people on FDL want to play chicken with the economy and people’s lives, you’re entitled to your beliefs. NOBODY is going to implement Galbraith’s or any liberal economists suggestions in this political environment, and if it’s true that something has to be done fast or people might not eat, I’m in favor of it even if it’s expensive. Also, nobody says that the actual cost will be $700 Billion – everyone believes that there might be a large amount of that lost, but it’s not being thrown completely down the toilet.
The problem of “freeing up” credit can be solved by the government guaranteeing certain class of loans… or making X dollars available to qualified retail banks for secured loans.
If CitiBank won’t lend to BoA I couldn’t give a feck.
Oh my god – the piggie in the picture looks like an ambulatory sausage.
i don’ read this as baker saying the bailout as currently proposed is necessary. he says we should imposed conditions.
I have a plan…
The problem is the markets are frozen… because there is a liquidity problem and the gov is going to buy junk to insert cash (liquidity) into the frozen markets so BANKS can deal with BANKS…
If Main Street needs cash, the government can lend to qualified borrows at reasonable terms. Cash injected into economy. Big Banks who gamble go down. Bye bye.
i don’t want to play chicken. do not assume this about a lack of concern for what this will mean in peoples lives. i may be wrong, but that’s not the issue. the question is this – will people be better off? we disagree on that point.
Gloria…
Tell me what is the problem we face… and how does this bill solve it?
Spot on.
I stand corrected..I will henceforth believe all of the lies from Cheney, Bush et all…Sort of like the oath that Palin must have taken…
the 700 billion to a trillion will both have negative effects on the economy and will make it harder to take real action later. This is not a case of chicken, it is a case of “this is a bad bill and 700 billion is too much for 3 months.”
In 8 months you’ll be wondering why nothing can be done, and why your friend who got sick is going to die because he can’t afford his insurance co-pays and the government won’t help.
But hey, maybe Paulson bought a pony farm.
http://economistsview.typepad.com/
I don’t think the plan is ideal, and I wish we had more progressive people making the decisions. I’m worried that enough people think that there’s an imminent crisis for people who can’t meet their payroll, etc. if they can’t get credit from their banks that people will suffer. Remember, that it’s entirely possible there are “scare” scenarios being advertised, it’s also possible that a less dire scenario is being described so as not to influence the markets to tank. I don’t think anyone knows. You might (well) be right that the bailout won’t really help much or at all, except to delay the inevitable. But I’d rather delay the inevitable with the hope that responsible people will be in charge when the pain really starts happening. Because there’s no way between now and inauguration day that the Bush administration is going to allow the optimal solution. This is a compromise – nobody’s in a position to do anything other than that.
As you may have noticed, some of us do not have power to play chicken with the economy. This is a CREATED NEO-CON EXPERIMENT, to bankrupt everyone but the corporate “elite”.
The debts created by the corporate elite, GS, Carlyle Group, will be paid by us all. However you are suggesting that we reward these criminals.
Isn’t the big issue re-applying regulations and throwing those who abused the system in jail? This just pumps in money that they can steal again.
Most people don’t think that all 700 Billion will disappear. I’m not one who thinks we’ll “make money on it”. But I also don’t think we’ll lose 700 Billion dollars.
Okay, wait for your ideal plan – I’m for it. When’s it coming and who’s going to support it but you?
That’s a great video. I wish all our representatives would speak up like that!
Come on Gloria…
Tell me what is the problem we face… and how does this bill solve it?
I provided a simple plan for Main Street Credit.
That was funny.
I think most FDLers agree something has to be done. The problem is that this looks like (we’re not a 100% sure) a nine-month? bandaid. In other words in six to nine months, we’re going to be hearing the same arguments. It’s not only going down the toilet, it’s not plugging the leaks.
$700 billion is about one and a half times the annual Defense budget. If we’re going to do this, we have to know it’s going to work. Also, whomever is responsible for this, and there are many, should be going to jail. The fact that that isn’t happening is of deep concern.
Another issue is that a lot of the House wingnuts want to bail on the bailout. That gives them the political high ground if this thing doesn’t work. From a purely political perspective, we can’t let that happen.
Banks won’t lend money to each other. It’s a crisis of trust, not liquidity! They’ll still loan to us. Just stop by Best Buy. They’re still selling on credit.
Actually, in the short term, you do have the power to either support the bailout or support doing nothing. Or, perhaps you support doing nothing until you wait for something wonderful to happen in place of the bailout and hope that you get paid so that you can buy groceries while you’re waiting. That’s what I’m worried about. It might not happen that way – everything might be okay if we wait, and if I could know that for sure, I’d be for that. But if small businesses don’t get credit to meet their payrolls, they won’t be able to pay their employees – that’s a fact. If employees don’t get paid, they will have a period of time where they will have to figure out how to get government assistance (?) or whatever it takes to feed their families. Some people are warning that this situation is imminent. I don’t want to reward millionaires. I would love to punish them (although ex post facto laws are not allowed under the Constitution – so if what they did was legal, we can’t make it a crime retroactively). It would be cool to watch the perpetrators bear the burden of their actions. Let’s do it! Let’s have a revolution! Care to show us how that will work out?
fyi – house rules committee is in emergency meeting, but not apparently on a rule for the bail out bill?
does this mean passage is not a done deal?
Why can’t they meet their payroll?
And they planned and plotted for months and all of a sudden, the week before the recess…the sky is falling, the sky is falling…
One of the pivotal issues is what price the government will pay, or how they will determine what price they will pay. That’s incredibly complicated. It’s the complexity of the securities that is driving Treasury to pay a Wall Street firm, such as PIMCO, to handle the transactions. It’s like paying the James Younger gang to guard your local bank.
If you have a budget and work within your cash flow you don’t need that much credit.
CC Cards should be a convenience that are paid at the end of the month so you don’t have to carry cash… or use a debt card. Same for a small business.
I think your plan would work fine – who in the Bush administration is going to implement it? Somebody might do it in January. It sucks that we’re stuck with the Bushies, but we are. And there’s no guarantee that we won’t still be stuck with the fascists in January. This is the best we can do in the short term in my opinion, and in the opinion of many people.
I’m not an economist, SanderO, so explaining to you how the bailout will work in a blog comment isn’t something I’m capable of. I’ve certainly read many articles which lead me to believe that the cash infused in the credit markets will encourage (in the short term) lending to continue. I don’t think the bailout is the best solution, but i don’t have confidence that our government at this time is capable of acting in the best interests of the middle class. I don’t think Congress is capable of coming up with legislation that would override a presidential veto that would address the problem in its optimal way. I don’t, by any means, think the bailout will solve our economic crisis for the long-term – I’m hoping it will get us through until January when I HOPE we have a new administration.
Don’t get me wrong, you make a good argument. But lots of FDL pups have expertise, not available on the cable tee vee.
If the issue is so critical, we should take sufficient time to get facts and solve a problem. This Hiway or My Way by neo-con monsters is an old movie. Remember Sept, 2003 when the neo-cons rolled the Democrats to start a Mesopotamia genocide?
have you never worked or seen a small company? Small companies often have to borrow in order to meet their payroll. Not all small companies have enough profit in the bank to cover expenses at a given time. I know from my own experience about companies and businesses like this, including engineering firms, architectural firms, etc. They work on projects, and need to be paid, but sometimes there’s a gap between when they’re paid and when they have to pay their employees. It’s quite common.
This is from March 2007: Paulson: Subprime mortgage fallout ‘largely contained’
Do you really want to trust Paulson to solve this?
Cool – hope your business always works that way! Hope you always get paid when you send out a bill! You don’t know how businesses work, obviously. There are many businesses that don’t have that kind of cash flow. Sounds good though!
You might want to take a quick look at the last question that Ethan Canin answered at the end of the book salon today…especially think about ‘infiltrate political discussions anonymously’…#71 if you are interested…
Ooops, Sept. 2002.
Of course there was Jan. 2007, when the neo-cons rolled over the Democrats and the American people. It was My Way or cut and run, in Irak. But it was actually two more years of quagmire.
CNBC’s Jim Kramer is all in favor of the bailout.
Jim Cramer: “Bear Stearns is Fine!” Tues, 3/11/08
I am an architect, worked for architects and work in a small non architecture firm presently and am aware of the cash flow issues. Many business have receivables which unlike money in the bank they can’t write a check on… unless they “factor” them or sell them at a discount to someone else who collects the full amount.
But the bridge loan or cash flow problem for small biz can be handled by dropping a few billion in the SBA and making it available to companies with less than 200 employees .. pick your number. Simple.
Why enable Wall Street by paying for their bad behavior?
No, I don’t trust Paulson at all, but we still have the Bush administration in office because the morons in our country elected him. We have to get through the next three months, at least, with the same morons running our government. Do I trust Paulson? NOT AT ALL. That’s why last weekend I wrote a letter to each of my Congressman saying that I did not support the blank check that Paulson proposed, but that if a bailout was needed, there needed to be oversight and safeguards. Do I trust the government now? Not entirely, no. Do I think the bailout could possibly be unnecessary or a mistake? Yes. Unlike the Iraq war though, which I also didn’t support, the only thing we have to lose with the bailout is money; what we might lose without the bailout is people’s health and possibly lives. Could it be bullshit? Possibly.
I strongly suspect that what you fear could be imminent if the plan isn’t passed will happen whether we pay the $700 billion or not. The current system is not sustainable.
I’m for that. Who in Congress is proposing it?
My concern is that Wall Street is completely out of control. The solution is to reign in all these weird ass financial shananigans and get banks back to basics.
Get out of the risk management and credit swaps and hedges and BS.
If banks were simply banks the credit problem goes away.
I agree. I’m hoping, as I said, that we have a more humane administration in place when and if the worst happens. I don’t think that 700 Billion will disappear into the ether in the meantime. Some of it will be invested badly.
No one in congress proposes this because BANKERS, LOBBYISTS and WALL STREET write the legislation.
TERM LIMITS
No for-profit companies allowed to lobby congress.
Take back democracy…
I totally agree with that. But that will take a change in the political atmosphere. I don’t like this bailout – perhaps I’ve wrongly bought into it, but there are enough people who’ve studied this situation who have scared me into thinking that it’s a necessary stopgap until we have a more favorable regime in Washington.
I agree with your general outlook, but look at our current reality.
Bailout 101: Patch the Hull Or Taxpayers Will Be Paying Forever
This is an, as per usual, excellent post from Ian. If there were “dialogue” in detail about these kind of issues, I would not be so skeptical. Job one is to find the leaks and patch them. It’s useless to pour money until that has happened.
You may remember Dynergy and Enron’s banks lost a lot of money, AFTER, it was clear that Enron was already in serious trouble. They loaned money which just leaked out, because Enron had no cash controls. It’s a lot easier to control one company than a financial system. I can’t solve a problem, until I know what it is.
What is your definition of a humane administration and what do you think it is going to do?
gloria, I’d be a lot less negative, if Dems would have said fine, you pull out of Iraq and Afghanistan, we’ll lend you 700 billion. That’s the low-hanging fruit. That would make fiscal sense. Democrats are just caving on this big time.
I am not a capitalist… and those that do want this believe in free market capitalism. They believe in the “market”.
These last few months show that the market is like a teenager without parents… no self control and will self destruct.
They don’t want to control the market place and the players. Why was it so hard to limit CEO and executive pay? How can they justify incomes of 100s of millions?
These people are completely unethical. Why are they being rewarded and bailed out? How about taking over these institutions and sweeping out all the management and putting them on trial?
Or let’s slash the entitlement called DOD and the billions for re fuieling tankers or the new subs and carriers and bombers and so forth.
Show some responsibility fer chrissake.
The execs at the top 5 wall street firms were paid over 3 billion in compensation in the last few years… the SAME PERIOD WHEN ALL THIS CRAP WAS UNRAVELING.
“The entire system is based on appearances, not truth finding. In the same vein as a company CEO who can’t reveal the true problems his company may be in, because his first duty is to protect the value of the shareholders, politicians simply can’t speak the truth.”
I was interested in reading the piece to which you referred, unfortunately the link didn’t work for me; however, I did managed to locate this http://portland.indymedia.org/…..0099.shtml using the site’s (portland.indymedia.com) search feature. Is this the article you meant? (and If not, would you mind trying to repost the link? Thanks! : ))
I am a Democrat and I believe that a humane administration is one that would do a number of things to help people who are hurt by whatever economic crisis happens (because a recession, if not a depression, is coming). I don’t think that all of a sudden we’re going to have Scandinavian socialism, because most people in our country don’t support it. There are huge numbers of people in our country who don’t care if our Vice President has any knowledge whatsoever of issues affecting our country or the world. That said, I still believe in our Constitution and our current form of government and hope that we can elect people who are intelligent enough to handle a national emergency, disaster relief, etc., and who (in less worrisome times) would enact laws that allow people to obtain affordable health insurance, that raise our standard of living, and stay out of unnecessary wars.
I don’t have time to expound on any other aspects of my political philosophy, but I am working for Barack Obama, and hope fervently that he gets elected. And no, his position on FISA, which was not determinative, did not cause me to hate him or to believe that he would not lead a humane administration.
Hey Jo I don’t know if ya noticed but that nice fat PIG in your picture is in the process of taking a nice big fat crap! As I am sure all of you know that is about all we peons will get out of this Bail out for the fat cats that got this country into this mess!
One other thing I have been seeing over and over again is the dam Rethuglians trying to put6the blame on a law passed under Jimmy Carter that required that banks to lend to people of color! Not that they make loans to people who are not or under qualified. This is the bullshit talking point they are spewing. This needs to be refuted at every turn and put the blame where it belong on Greespan and the non regulated mortage market that Greenspan said “Would take care of itself” Greenspan and these talking head Rethuglians need to be put in their place!!
Selise, my info is that “House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid just announced that the current version of the financial rescue bill is online at both financialservices.house.gov and speaker.house.gov” ; I ‘ve been trying for hours to load either site but neither will load even though valid url’s.
Especially frustrating given “Another message from the speaker: Don’t expect any changes to win more votes.
“The bill is frozen,” she said. “It’s on the Internet, the public is looking at. That’s the bill we will bring down to the floor.”(Pelosi’s words)
So what is it that you are looking at?
I agree with your support of Obama. I think other Democrats, those who weren’t the Democratic nominee for President, especially Steny Hoyer, could have been less enthusiastic about dismantling the 4th Amendment. I will continue to support the Democratic party, but am trying to make it more liberal.
Pelosi and Reid could have gotten us out of Iraq by now. They have not held this administration accountable in any meaningful way. I am sorry to say this, but I think your hope in them is misplaced. This crisis is as good a chance as liberals will have to forge alliances with unions, the black caucus and others who want more and better answers before we fork over a trillion dollars. IMHO, 700 billion is just a head fake.
There is the real commercial activity and the financial echo of it.
On the commercial side we’re making less and spending a lot more effort passing pieces of paper around to “make money”. But, we’re also using our financial skills to deal with foreigners who ARE making things. So, to some extent all that paper reflects reality. But, here in America we’re making less and that means consumers here have less and less cash.
Where we’re having a problem, and this is no mystery or surprise, is that we’re buying cheap goods from abroad, but not balancing that by manufacturing enough and selling it abroad. So, we don’t get back enough cash to pay for goods. Well, we have been, but the wallet is getting tighter and tighter, so it’s harder to buy all we want.
Add on top of that the constant sucking sounds of NAFTA and OPEC gobbling up tons of cash abroad and it means we’re having to print more and more dollars to keep the boat afloat. Ask why the Fed isn’t printing the M3 money supply?
In the 1984 presidential campaign, former Vice President Walter Mondale (D-Minnesota) warned of this problem and NOBODY listened — to their own regret and indicating their stupidity.
What do we do about it?
On energy Democrats want to end the OPEC problem by using other energy sources. Republicans say they want to, but they’re making it difficult, so progress is slow. It’s so significant that I expect major progress despite partisanship.
On world trade Barack Obama wants to review our trade treaties and try to improve on them. I think Dems in general want to increase world trade and the weak dollar makes that more possible. It could be harder what with Bush trying to blow everything up and making it harder for the next president to have decent trade relations with anybody but Exxon.
A recession is coming..not here? And Obama’s position that insurance companies will stay in control of health insurance? None of the candidates are showing any signs of being more humane.
Without putting the Gless-Stegall Act back into force and getting rid of the Federal Reserve, the ordinary person will always be trapped into endless debt.
ooops that was for Gloria
see my link @3
the openhouse project is mirroring the bill. apparently thomas was getting clobbered by many many people all trying to download it at the same time.
…just a down payment, I think…
…None of this would be happening if they would have impeached.
…The illusion of a two party system.
The citizens of the USA have already paid with the fabric of the nation. What the USA was is over.
If we knew who created this mortgage mangle mess, then it might be easy to say ‘bye bye’. But, if they are as much victims as are home owners in foreclosure, then why not help them?
I haven’t yet looked at the plan, but the bullet points about it look fair. If banks were dependent upon asset rating services that called CDOs AAA when they contained ARMs that were going to blow up, then it’s the rating services which have to take that blame. Don’t blame people who play by the rules.
Banks won’t loan to banks when the collateral CDOs contain toxic mortgages of uncertain value. Without bank loans the blood flow stops and the economy stops and Great Depression II begins.
This bill injects cash into troubled firms in exchange for some ownership and protection against bad CDOs.
It also lets Treasury buy CDOs, so they can renegotiate mortgages to revive them for resale.
Got it; I’m only up to page 26 but I have objections already-screw this garbage.
(c) NECESSARY ACTIONS.— Lets Paulson hire his cronies without anyone objecting
(e) PREVENTING UNJUST ENRICHMENT.—This subsection does not apply to troubled assets acquired in a merger or acquisition, or a purchase of assets from a financial institution in conservatorship or receivership, or that has initiated bankruptcy proceedings under title 11, United States Code.
(b) TIMING.—Regulations or guidelines required by this section shall be issued as soon as practicable after the date of enactment of this Act.—-”as soon as practicable”?
“assets that will improve the ability of the Secretary to improve the loan modification and restructuring process and,where permissible, to permit bona fide tenants who are current on their rent to remain in their homes under the terms of the lease.—sounds good but what is ‘permissable’ and what of the people who do not have a lease but rent on a month to month basis?
“Give peace a chance.” — Lennon
Fight for peace!
And so much for restricting how much the Exec’s at these institutions earn:
SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE
11 GOVERNANCE. says NOTHING about their salaries.
as far as i can tell, this version was written to make sure i have no fracking clue what they are doing. i’m going to need an assist to work through this one.
This section SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
4 AND CENTRAL BANKS. –allows assests bought by Barclays of England to dump their crap on U.S. taxpayers (think Lehman).
I’ve read enough -including http://www.rgemonitor.com/roub…..s_of_banks
to see that this is in fact a ripoff of the American taxpayer; there are several other plans that are better than this. The question is:
“Is this a deal with the Bush Admin so that the bill passed last week by the House -and the similar one the Senate couldn’t invoke cloture on this past week- gets passed by the Senate this week?
I don’t think you understand the problem.
The banks loaned the money for Wall Street and hedge funds to buy mortgages on incredible margins. Wall Street and the hedges created too thinly capitalized securities. The banks, pension funds, mutual funds, all kinds of institutions bought those securities. No one wants to take the loss, and they want the taxpayers to bail them out.
The debt of the poorly underwritten mortgages isn’t the real problem, but it’s important to recognize that it was caused by the initial pyramiding, aka success, of the mortgage backed securities. It was that success that created a market for “bad loans.”
It’s the leverage built into the mortage backed securities that’s the real problem.
Krugman’s take:
http://krugman.blogs.nytimes.c…..g-to-tarp/
Apparently credit is the ‘crack’ of the ‘new financial order’ and the addicts can’t imagine life without it.
Bless you Mr. singer and you’re sewing machines with a kudos to Sears Roebuck.
The New York Times had an informative article in the Business section yesterday…Behind Insurers Risk..