House Passes Bailout

Update: On the second try, the House approved the Bailout bill.
Whether it succeeds or fails, elected officials and business leaders alike said it stands to fundamentally alter the relationship between government and the private markets perhaps in ways that are not immediately clear.

Passage was hardly a victory for the Bush Administration: [More....]

But it was a hollow victory for the administration. After long favoring a hands-off approach and relentlessly pursuing deregulation, the administration found itself interceding repeatedly in the private market this year to avert one calamity after another. And finally after it proposed perhaps the biggest intervention in history, Mr. Bush found himself abandoned by fellow Republicans in the House.

What's in the bill?

The final agreement called for the $700 billion to be disbursed in parts: $250 billion at first, to get the program started, followed by $100 billion at the discretion of Mr. Bush and the remaining $350 billion upon request of the Treasury with Congress empowered to block the last installment by acting within 15 days.

....The deal provides for tight oversight by two boards, including an independent Congressional panel. And requires the government to use its status as an large-scale owner of distressed, mortgage-backed securities to take more aggressive steps to prevent foreclosures.

The bill also seeks to limit the pay of executives of some companies that sell bad debt to the government, including restrictions on so-called “golden parachute” retirement plans.

It also provides several taxpayer protections, including a mechanism for the government to take an equity stake, in the form of stock warrants, in some of the firms that seek government help, which will give taxpayers a chance to make money should the companies profit in the months and years ahead.

And, if the rescue plan has lost money after five years, the bill requires the president to submit a plan to Congress for recouping the losses from the financial industry, perhaps through fees or a tax on securities transactions.


The House is expected to vote shortly on the Bailout bill. I haven't been following it. C-Span is streaming the debate here. Here's a place to discuss it and all the ramifications.

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    Everyone seems to think (5.00 / 2) (#2)
    by Steve M on Fri Oct 03, 2008 at 11:58:40 AM EST
    that the bill will pass today, but I honestly don't get what they think has been done to make it so much better, other than adding in all these pointless tax breaks and pork.  If you thought it was a bad bill on Monday, you should think it's a bad bill today.

    There was a great moment earlier where some Republican was ranting against all the pork in the bill, saying that he was very angry with 20 Republicans who had cooperated with the Democrats to prevent all the pork from being stripped out, promising that "in the words of John McCain, we will make them famous and you will know their names."

    When he finished, Barney Frank got up and said, "I would just note that if you want to make people famous for adding these provisions to the bill, the first name on your list is going to be John McCain, who voted for this bill in the Senate."  Heh.

    Pelosi says the bill is better but (5.00 / 1) (#4)
    by oculus on Fri Oct 03, 2008 at 11:59:58 AM EST
    neglected to say why.  

    It's better because (5.00 / 1) (#18)
    by coigue on Fri Oct 03, 2008 at 12:09:52 PM EST
    they are getting word that the credit crunch is having an effect, not because the bill is actually better. (See...Schwatzenegger's letter to congress about having to freeze funds due to lack of credit)

    better means, better chance of passing.


    It's likely not better. But when the market (5.00 / 1) (#8)
    by tigercourse on Fri Oct 03, 2008 at 12:03:16 PM EST
    dropped like a rock after it didn't pass last time, the House might have gotten the message.

    It's the same bailout bill as before. (5.00 / 2) (#40)
    by lizpolaris on Fri Oct 03, 2008 at 12:35:02 PM EST
    Now it's just been laden with pork so it's worse than the one they voted down.

    It should be voted down again but I think the scaremongers are winning.


    What's up with (5.00 / 1) (#68)
    by kredwyn on Fri Oct 03, 2008 at 12:55:06 PM EST
    the wooden arrows?

    Why don't you beleive the scaremongers? (none / 0) (#56)
    by Manuel on Fri Oct 03, 2008 at 12:47:34 PM EST
    California may need a bailout from the Fed if the credit climate does not improve.  If we start having governments not being able to meet their bond obligations, we'll be in serious trouble.  There is a reasons governors backed the bill for the most part.

    It is actually a worse bill IMHO (none / 0) (#59)
    by Maria Garcia on Fri Oct 03, 2008 at 12:50:01 PM EST
    If I were even more cynical than I already am I would think that they planned it this way all along---vote it down initially so that they could sneak some last minute pork through right before the election under the guise of "compromise."

    That last bit from Frank (none / 0) (#5)
    by andgarden on Fri Oct 03, 2008 at 12:01:23 PM EST
    was an obvious point. The Rep was Steve LaTourette of Ohio.

    Is there anything really better today? No, but it was essential on Monday and ever more so today.


    Though the point about the FDIC limit (5.00 / 1) (#7)
    by andgarden on Fri Oct 03, 2008 at 12:02:51 PM EST
    is good. There are also apparently mortgage improvements.

    The FDIC limit hasn't been raised (5.00 / 1) (#81)
    by litigatormom on Fri Oct 03, 2008 at 01:05:35 PM EST
    since FDR's presidency. Do you know how much $100,000 dollars in the 1930s would be worth today?  I don't know either, but it's millions of dollars.

    So increasing it to $250,000 is a good thing, but we're still far behind giving people the protection that was intended by the original bill.


    Minor point (5.00 / 1) (#83)
    by Pianobuff on Fri Oct 03, 2008 at 01:09:06 PM EST
    the 100,000K limit was established in 1980.  In the 30's, it was running around 10K, I believe.

    Oops (none / 0) (#91)
    by litigatormom on Fri Oct 03, 2008 at 01:14:03 PM EST
    I misread something, obviously. But $100k in 1980 dollars is still worth more than $250k today, no?

    I haven't researched it personally... (none / 0) (#95)
    by Pianobuff on Fri Oct 03, 2008 at 01:17:13 PM EST
    ...but I seem to recall someone on the news saying that 250k was roughly an equivalent inflation-adjusted number.

    Quick snippet from Wiki:

    The Banking Act of 1935 established the FDIC as a permanent agency of the government and provided for deposit insurance up to $5,000. The Federal Deposit Insurance Act of 1950 increased the insurance limit to $10,000, gave the FDIC the authority to lend to any insured bank in danger of closing if the operation of the bank is essential to the local community, and authorized the FDIC to examine national and state member banks for their insurance risk.[6]

    The FDIC deposit insurance limit was increased to $15,000 in 1966, and in 1969, to $20,000. In 1974, Congress increased the limit to $40,000.[7][8] The current deposit insurance limit of $100,000 was enacted in 1980 by the Depository Institutions Deregulation and Monetary Control Act of 1980.[9]


    Actually, it was last raised in the 1980s (none / 0) (#135)
    by scribe on Fri Oct 03, 2008 at 02:46:38 PM EST
    When it started out, it was something like $10,000, then $20,000 in the 60s, $40,000 in the 70s.

    Yes, more mortgages will be paid and (none / 0) (#159)
    by BrassTacks on Fri Oct 03, 2008 at 08:37:40 PM EST
    there will be more tax cuts and the AMT will be gone.  

    I have NO clue why democrats think this is better.  

    Why was Nancy Pelosi smiling?  


    Well (none / 0) (#10)
    by CST on Fri Oct 03, 2008 at 12:04:11 PM EST
    I bet a lot of people that voted against it last time thought it would pass anyway.  And when the market crashed the next day, they realized that they would be held responsible in the event of another crash.

    I don't think it is fair... (5.00 / 1) (#25)
    by kdog on Fri Oct 03, 2008 at 12:20:46 PM EST
    or right to hold Congress responsible for the  fluxuations of the stock market...that's just gamblers being gamblers.  Gamblers feel confident it goes up, when they get skittish it goes down. The people who buy and sell stock are accountable there.

    I do think we should hold Congress accountable for the bills they pass or don't pass....the original house bill was bad, this one with all the tax breaks is worse.  Ya just can't keep increasing spending and reducing tax revenue...it is suicide, imo.

    Unless of course you trusted Dick Cheney when he said the debt doesn't matter...I think it matters.  If Cheney is right then f*ck it, borrow a couple trillion and send every American a check for 50 grand.


    The stock market anticipates events (none / 0) (#58)
    by Manuel on Fri Oct 03, 2008 at 12:49:26 PM EST
    They sent the message that if we did not do anything the economic situation would deteriorate in short order.

    I believe... (5.00 / 3) (#65)
    by kdog on Fri Oct 03, 2008 at 12:54:29 PM EST
    the economic situation is long overdue to deteriorate regardless, even the bailouts proponents admit as much.

    The 700 billion dollar question is do we go 700 billion in hock in an attempt to soften the inevitable blow...we could give Wall St. 700 googleplexes and credit will still be harder to come by, and at higher rates, and the value of our homes still need correction.  Because credit has been far too easy to get, and home prices went too high too fast.


    Are you opposed to any intervention? (none / 0) (#75)
    by Manuel on Fri Oct 03, 2008 at 01:00:32 PM EST
    What do you think should be done?  Doing nothing is not an option unless you just want to see the whole thing burn down.  Is that how you are feeling?

    I'm not convinced.... (5.00 / 2) (#87)
    by kdog on Fri Oct 03, 2008 at 01:12:31 PM EST
    the whole thing burns down.  I was playing cards last night (180% ROI for me, btw:), one of our regulars is a small business owner who just got an increase in his credit line this week for an expansion of his business...fwiw.  

    Assuming it would burn down, I think air-dropping 700 billion dollars in cash over high foreclosure areas would be more effective than this crap.  Or having the govt. loan the money directly to citizens and businesses at low interest and cut out the middleman.


    Kdog: Re cutting out the middlemen... (5.00 / 1) (#114)
    by oldpro on Fri Oct 03, 2008 at 01:56:23 PM EST
    Remember when Bill Clinton tried to cut out the middlemen (banks) in his proposal for lowering student-loan interest rates?  He was right 'on the money' as they say, since those loans were guaranteed by the federal government and carried no risk to the lenders.

    Now might be the exact time to revisit that idea!  I will talk to my senators about it...yup...timing is everything.



    I got (none / 0) (#115)
    by eric on Fri Oct 03, 2008 at 01:58:40 PM EST
    some of those loans.  Direct Loans, they were called.  Definitely preferable to letting the banks profit from a no risk loan.

    Free markets then? (none / 0) (#102)
    by Manuel on Fri Oct 03, 2008 at 01:36:15 PM EST
    Nothing need be done.  The markets will sort themselves out.  There will be a recession but the markets will have learned their lessons.  Is that a fair summary of your position?

    How about regulation reform and government investment in healthcare, energy, and infrastructure?


    Generally.... (none / 0) (#110)
    by kdog on Fri Oct 03, 2008 at 01:46:01 PM EST
    I go libertarian, so yeah that's about right...let the market figure it out.  The banks can't refuse to lend out money forever, it's all they have to sell.

    I don't believe we have a free market though, I like to call it a rigged market...rigged in favor of big business and big money.

    Regulations to ensure a fair deal for all...yes, within reason.

    I'm on the fence regarding healthcare, NHC sounds good on paper, but I worry about how long it will take before the govt. tells you what you can eat, drink, smoke.

    All for investments in energy and infrastructure, gladly put my tax dollars towards that.


    Health insurance companies are doing this now. (none / 0) (#174)
    by sallywally on Fri Oct 03, 2008 at 09:24:35 PM EST
    It's called "personalized health care" and it's the Big New Thing in health insurance. Companies are giving their employees insurance that goes by this name now.

    I retired from the communications dept of a big state university medical center about two years ago, and right at that time employees had to fill out our "personal health assessment."

    Fortunately for me, we got a $50 Borders gift card and I got to be gone the day after that and pleasantly occupied at Borders!

    Under personalized health care, they offer you all this help to eat right, exercise, be mentally healthy, etc., etc., etc.

    And the corollary is (not so eventually) that you will be charged more for your benefits if you don't eat right, exercise, lose weight, become younger than your age, be cheerful and cooperative ("positive") etc. etc.

    That's called "personal responsibility." It's a
    time-tested Republican idea.

    At least the govt would not be knocking you off the insurance rolls or firing you for not being a Good Healthy Positive Team Player.


    This screws Obama (none / 0) (#161)
    by BrassTacks on Fri Oct 03, 2008 at 08:39:31 PM EST
    when he's President.  There is NO WAY he can what he promised with this bill reducing taxes AND paying off Wall Street.  

    I have no idea (none / 0) (#62)
    by CST on Fri Oct 03, 2008 at 12:53:10 PM EST
    If this is a good bill or not, which is why I have sorta refrained from commenting on it.  But my point was about why some lawmakers may change their vote this time.  I wasn't passing judgement that that was a good/bad thing.

    I don't blame the Wall street stock dump on Congress, I think it's pretty clear that it would happen eventually with or without the bailout, although probably at a slower rate with a bailout.  I don't think we've hit bottom yet, although the bailout may raise the bottom up a bit.  But I do think that congress people are sensitive to perception.  And it's clear that Wall Street freaked out after no bail-out.

    Honestly, to me, traders on Wall Street seem like chickens with their heads cut off, 400 point drop followed by 300 point rise, followed by 700 point drop, followed by 500 point rise, etc.... etc...  All the while dropping at a steady rate in ubsurd fashion.

    I think the debt matters.  I also believe Clinton though when he said in the end we may make money off this bill.  Unlike, for example, all the money being spent on bombs.  Although I grant you 700 billion is one hell of a gamble.


    Nobody knows CST... (5.00 / 3) (#73)
    by kdog on Fri Oct 03, 2008 at 12:58:15 PM EST
    I sure as hell don't.

    Somebody will end up making money on this bill, I'll eat my boxers if it is your average American taxpayer:)

    Speaking of bombs...I'd be willing to compromise and support this bill if it was immediately offset by a 700 billion dollar reduction in defense and/or drug war spending.  


    Perhaps the greatest sellout (5.00 / 2) (#6)
    by joanneleon on Fri Oct 03, 2008 at 12:02:44 PM EST
    in the history of this country.


    They ignored the opinions of experts outside of Wall St.  They ignored the flood of calls from their constituents.  They care only about themselves and their GD elections.  They claimed there was no time for a better plan.  Already they're making noises about how things will still be very difficult for us, but would have been more difficult if we didn't pass this bill.

    Some House members sold their votes for things like wooden arrows.

    The last disastrous act by the 110th Congress.  At best, this may push the worst of it out of Bush's presidency and into Obama's.  In fact, many experts say this plan won't work, and it will only make things worse.

    And don't listen to the lies about how this will help homeowners in distress.  It gives Paulson the ability to bail out some home loans at his discretion.  What do you think Paulson, former head of Goldman Sachs, will do with the money?

    He'll say "let them eat cake".  A few crumbs may pass to the little guy.  But this is not about Main St.  Our so-called leaders are lying like they've never lied before.

    God help us.

    They ignored the economists that you agree with (5.00 / 2) (#9)
    by andgarden on Fri Oct 03, 2008 at 12:03:58 PM EST
    and listened to the ones that I agree with.

    I think calling it "traitorous" it ridiculous. There's a reason why most of the opposition is coming from the right.


    One of the experts they're ignoring (5.00 / 2) (#12)
    by joanneleon on Fri Oct 03, 2008 at 12:06:25 PM EST
    has been predicting this for years, and has gone to authorities trying to warn them.

    Nouriel Roubini.  And he is by far, not the only one, and those in opposition are not all from the right.

    At least be honest about this.  I've had enough lying for one week.


    One of the experts you are ignoring is (5.00 / 2) (#20)
    by tigercourse on Fri Oct 03, 2008 at 12:10:12 PM EST
    Warren Buffet, who strongly supports passing this bill.

    Warren Buffett (5.00 / 2) (#24)
    by befuddledvoter on Fri Oct 03, 2008 at 12:16:22 PM EST
    does support the bill.  I watched him being interviewed on charlie Rose the other night. He definitely is in favor.  I really was interested in what he thought.  He said plainly this needs a GOVERNMENT bailout.  Private money cannot do it.  It is much too large.    

    Sure, well if only the taxpayers (5.00 / 3) (#46)
    by lizpolaris on Fri Oct 03, 2008 at 12:38:19 PM EST
    were getting the type of favorable terms that Bershire Hathaway shareholders will get.

    Government action is needed - just not this bailout bill.  Even Warren agreed it wasn't the best option of what to do.


    Warren Buffett will also (none / 0) (#181)
    by of1000Kings on Sat Oct 04, 2008 at 12:32:07 AM EST
    be making money off of this bill...

    just for starters it helps to save his investment in G&S...

    but Buffett makes money off of everything in this economy, so what's new...

    but it just goes to show that Buffett might not be the best source for unbiased information...


    also, Buffett supports the deal (none / 0) (#182)
    by of1000Kings on Sat Oct 04, 2008 at 12:37:05 AM EST
    if the government buys the assets at their current 'firesale' market price, and not the hold-to-maturity price...

    but the banks will just blackmail the government into paying the price the banks want them to pay, otherwise they won't sell...

    so my guess is that these assets will be bought for more than what they are worth, considering the government is involved...

    thus, the banks are making money off of this, more than they would in a free market...

    bonus for the banks, yay!


    Look, your position lost. I'm sorry. (3.00 / 2) (#16)
    by andgarden on Fri Oct 03, 2008 at 12:08:50 PM EST
    The bill sucks, but nothing that can pass is going to be any better. And yes, something has to pass.

    Accusing me of lying because you're upset isn't going to change that.


    We will lose... (5.00 / 2) (#33)
    by kdog on Fri Oct 03, 2008 at 12:30:03 PM EST
    no doubt, look at the players...the people never stood a chance.

    "Mr. and Mrs. Jones on Main St." (5.00 / 2) (#54)
    by oculus on Fri Oct 03, 2008 at 12:43:51 PM EST
    Can you support that statement? (5.00 / 1) (#143)
    by joanneleon on Fri Oct 03, 2008 at 03:24:36 PM EST
    When you say that most of the opposition came from the right, I'm not sure if you are talking about the economists or the House members.

    Either way, I don't see how you came up with that conclusion.  I'm looking at the numbers from the vote on Monday and the vote today, and I don't see how you get there.

    When I said dishonest, I was talking about that statement.  If you can show me how "most of the support came from the right," I will gladly retract my comment.  When I used the word traitor, I was referring about Congress, not you.


    It is strange (none / 0) (#51)
    by eric on Fri Oct 03, 2008 at 12:42:33 PM EST
    that most of the opposition is coming from the right.  Because I am very far to the left and oppose it very strongly.  But I don't think we oppose it for the same reasons.

    Personally, I don't like it because it is reverse-Robin Hoodism.  They are taking money from the taxpayers, who can scarcely afford it (and our children) and giving it to wealthy people.  Yes, I know the argument - If we don't do this the economy will collapse, or something terrible like that.

    You know what?  I don't care.  I see a lot of human suffering in this country and nobody cares about that.  Maybe if some more people start suffering, they will see what the rest of us have been complaining about.  Maybe it takes a big crash/crisis/recession complete with unemployment, failed banks, and soup lines before we can get this country to make some real changes.  The best thing that ever happened to this country since it's founding was the New Deal, and that wouldn't have happened but for the Great Depression.

    So I say let it go - let capitalism operate.  People so worship the free market in this country - let's see what it brings us.


    You know what's wrong with that Eric? (5.00 / 2) (#66)
    by Maria Garcia on Fri Oct 03, 2008 at 12:54:42 PM EST
    The suffering will fall disproportionately on those that are already suffering. Thus has it ever been, thus will it continue to be.

    At least we know.... (5.00 / 1) (#82)
    by kdog on Fri Oct 03, 2008 at 01:05:46 PM EST
    we can hack it...being broke ain't nothing new for people who have been suffering all along.

    "Freedom is just another word for nothing left to lose."


    I didn't mean you..... (5.00 / 1) (#93)
    by Maria Garcia on Fri Oct 03, 2008 at 01:15:34 PM EST
    ...I'm old enough to remember the 70s when mentally ill patients were kicked out of hospitals in droves and driven into the street. The middle and upper income people that you think should suffer some of the pain tend to tighten their belts and exhibit even less compassion when they can't afford their fancy cars and big TV sets.

    I don't mean me Maria... (5.00 / 1) (#98)
    by kdog on Fri Oct 03, 2008 at 01:26:19 PM EST
    I don't consider myself broke or suffering...others might, but not me:)

    I was talking about the homeless, the unemployed, the under-employed.  What more do they have to lose?

    We've already seen soup kitchens and charities hurting for a year or two now...all I can do about it is still offer a dollar to someone with less if I've got five, or a sandwich if I have two...same as it ever was.


    They have their lives to lose..... (5.00 / 1) (#104)
    by Maria Garcia on Fri Oct 03, 2008 at 01:38:34 PM EST
    ..and their futures, especially the children. It just really sucks that every lesson our culture has to learn is always at their expense.

    The children..... (5.00 / 2) (#116)
    by kdog on Fri Oct 03, 2008 at 02:00:57 PM EST
    That's my main concern...I know if you believe the doomsday talk we'll all be out of a job before we know it and on a bread line....in all sincerity I can live with that, doubt it will happen, but if it does I will survive, and so will the rest of us.  It will be hard but we can overcome....I wouldn't bet against us.

    What I cannot accept is not leaving future generations a shell of a once great nation so massively in hock they have no hope of ever getting out from under.  I feel like no one can see beyond their 401k and their latest home appraisal...iow, selfishness.


    Well (5.00 / 2) (#123)
    by Steve M on Fri Oct 03, 2008 at 02:17:34 PM EST
    Aren't we patting ourselves on the back a little too much here, by assuming that you and I are tough enough to hack our way through any difficulty, but our kids won't be?  I'm actually not all that impressed with the grit and determination of my own generation.

    It is an assumption.... (5.00 / 1) (#130)
    by kdog on Fri Oct 03, 2008 at 02:29:33 PM EST
    to be sure, I'm just not in the habit of betting against myself.  If you can't believe in yourself, what the hell can you believe in?

    gotta agree here (none / 0) (#163)
    by BrassTacks on Fri Oct 03, 2008 at 08:48:16 PM EST
    I am an old boomer and I call us the ''most selfish generation ever".  We are the "me, me, me" generation.  We always think that it's all about us.  We thought that in the 60's and we still think that.

    My parents and grandparents worked their butts off for everything they got.  My kids and grand kids are more like them than my boomer generation.  The young people expect to work hard for what they get.  Heck, none of them think they will ever see a dime of social security, much less welfare.   The boomers are the most selfish, self centered, generation, ever.  


    Wow dude (none / 0) (#192)
    by Militarytracy on Sat Oct 04, 2008 at 10:36:55 AM EST
    I want your kids.  We couldn't get our daughter to work any sort of job in high school.  The world was hers for the asking and when we saw how skewed she was we attempted even harder to help her find situations for incentive.  She pronounced us horrible parents who were abusive and now she's out in the real world and instead of earning her keep still pronounces us horrible abusive parents.  I saw this among many of her friends as well, a large group in this generation seem extremely out of touch with reality to me.  Not all of them though.  The girl across the street is different, but chose a different group to hang with.

    It really rankles me (5.00 / 3) (#126)
    by Fabian on Fri Oct 03, 2008 at 02:22:55 PM EST
    that the mentality seems to be "Save my assets, even if it means sticking it to the younger generations.".

    Where do people think that money comes from?  Future revenue is where.  Who is going to supply that future revenue?  The currently retired?  No.  The nearly retired?  Probably not.  Those who are just beginning their careers and anyone decades from retirement?  Bingo!

    I'd rather beef up Social Security and other safety nets that help the truly needy.  (And I just dare any politician to propose privatizing Social Security.)


    The Debt and the Deficit (5.00 / 2) (#133)
    by Manuel on Fri Oct 03, 2008 at 02:34:15 PM EST
    are creations of the right to fight against government intervention and investmet in our common heritage.  The way to beef up Social Security (if it needs it which isn't clear) is by keeping the economy strong.  Future revenue will come from future economic activity provided by well trained, knowledgeable, healthy citizens.

    Yeah, that works in theory (none / 0) (#144)
    by Fabian on Fri Oct 03, 2008 at 03:32:56 PM EST
    until globalization comes along and siphons off those well paid jobs.  They you have educated, trained, healthy people who are unemployed or underemployed.  The middle class can only be sustained if we have a solid manufacturing industry.  The knowledge jobs can be outsourced in a blink of an eye.  The service industry can't be outsourced easily, but it doesn't pay jack either.  The minute we give up our manufacturing to outsourcing, then what is left?  Military spending?  Agriculture?  

    Credit is a problem.  But it's only a short term problem.  In the long term, we are in deep doo doo unless we turn our economy around.  


    Here are some areas where we can lead (5.00 / 2) (#149)
    by Manuel on Fri Oct 03, 2008 at 04:13:04 PM EST
    Clean energy.
    Medical technology.
    Financial services.
    Enviroment friendly construction.
    Recycling technology.

    Also, last time I looked, our transportation infrastructure including roads and trains is in serious need of investment.

    We are still the world's largest economy and we control a large share of the world's capital.  It isn't good for things ro remain that way long term but the change should be due to the standard of living going up in other places not our standard of living going down.


    Capital and Trade Defici? (5.00 / 1) (#160)
    by Fabian on Fri Oct 03, 2008 at 08:38:47 PM EST
    It's really depressing to not only see our dollars flowing out, but jobs as well.

    I think globalization is here (none / 0) (#193)
    by Militarytracy on Sat Oct 04, 2008 at 10:40:57 AM EST
    I think that during this current economic meltdown we will have to deal with globalization in some respects with some countries joining us.  From what I've read that will include India now.

    Well (none / 0) (#134)
    by Steve M on Fri Oct 03, 2008 at 02:34:33 PM EST
    to be fair, a lot of the reason people try to accumulate and preserve assets in the first place is for the benefit of the younger generations.

    For example, one of the temptations of lower taxes is that it can look like a choice between (1) hanging onto your money so you can put it into your kids' college fund, or (2) handing it over to the government and trusting them to put your kids through college for you.


    Social security is not needs based (none / 0) (#164)
    by BrassTacks on Fri Oct 03, 2008 at 08:50:27 PM EST
    It is not only for the truly needy.  It's also a retirement plan for those who pay into it.  But don't tell my kids and grandkids that, they all think it's just another tax.  None of them believe that they will ever collect SS.  They're probably right.

    I thought the same thing in the 70s. (5.00 / 1) (#175)
    by sallywally on Fri Oct 03, 2008 at 09:32:20 PM EST
    Now I'm 2.5 years from collecting SS.

    I'm already there (none / 0) (#179)
    by BrassTacks on Sat Oct 04, 2008 at 12:08:24 AM EST
    My income is not considered when they figured how much I'd get each month.  I get it, whether I need it or not.  It's based on how much I paid in, not how rich or poor I am.  

    This was also on NewsHour yesterday (none / 0) (#190)
    by coigue on Sat Oct 04, 2008 at 10:14:18 AM EST
    Do they get that outside of California? Huh???

    Governor Schwarzenegger Sends Letter Urging California Congressional Delegation to Pass Emergency Economic Stabilization ActGovernor Arnold Schwarzenegger today sent the following letter to the California Congressional Delegation:

        October 1, 2008

        Dear Members of the California Congressional Delegation,

        It's now very clear that the financial crisis on Wall Street is affecting California - its businesses, its citizens' daily lives and its state government's ability to obtain financing to pay for critical services.

        This is how serious the situation is: our State Treasurer warns that the credit market has already frozen up to the point that it chills even the State of California's ability to meet its short-term cash flow needs.  Additionally, without immediate action from you and your colleagues in Congress, California will be unable to sell voter-approved bonds for the highway, school, housing and water construction projects that our state is relying on to help carry us through this difficult economy.  The state of our already-slow economy makes the financial situation even more urgent.

        It is daunting that California, the eighth-largest economy in the world, cannot obtain financing in the normal course of its business to bridge our annual lag between expenditures and revenues. This means California may soon be forced to delay payments for critical services, such as teachers, law enforcement and nursing homes.  The same thing would happen to California's counties and cities.  That is, unless Congress acts quickly to restore confidence in our financial system.

        I am writing to urge you to vote in favor of the Emergency Economic Stabilization Act.  This plan is critical to the well-being of every community in California and across the nation.  Swift action in Congress is needed to restore confidence in our financial system.

        Let's be clear, this plan is not a "bailout" for Wall Street.  To the contrary, the plan is about protecting Main Street.

        We are currently witnessing the initial consequences of depositors and investors withdrawing assets from a financial system in which they have lost confidence and putting them in FDIC-insured accounts and federal obligations.  That means there's little money for normal commerce, and what money is available is too costly.  This dramatically reduces economic activity, translating into fewer jobs, lower wages, reduced savings and threatened pensions.  If the stabilization plan fails, these outcomes will materialize in scale.

        California's businesses, both large and small, also face the prospect that banks will not be able to renew loans.  It goes without saying that, when people and companies can't get the money to buy cars, inventory goods, plant crops, expand business and go to school, economic activity slows down, leading to job losses, wage reductions, savings declines and pension failures all along Main Street, California.

        The situation is urgent.  The crisis we face demands swift action and bipartisan leadership. Congress must pass this economic stability plan without further delay.


        Arnold Schwarzenegger

    Huh Brasstacks? Care to express your sorrow over my lost job now?


    Yeah, they MAY have to do something soon, IF (none / 0) (#196)
    by BrassTacks on Sat Oct 04, 2008 at 09:07:18 PM EST
    the credit doesn't free up.  Good thing part of that $700 BILLION is coming.  Nothing has happened YET.  

    Sorry you didn't get the job, for whatever reason.  


    So the poverty rate in (5.00 / 4) (#94)
    by eric on Fri Oct 03, 2008 at 01:15:40 PM EST
    Detroit might go from 1 in 3 to 1 in 2? Children are already there.  Who is bailing them out?

    We could create one heck of a social safety net for 700 billion dollars.  We could fix every deficient bridge in this country for a mere $188 billion.  Imagine how much health care we could provide - how many schools we could build!  And it would be spending money on real things, complete with real jobs.

    Instead, we are giving away $700 billion to make it easier for the wealthy to borrow money from each other?


    750 bilion (5.00 / 1) (#129)
    by Manuel on Fri Oct 03, 2008 at 02:29:21 PM EST
    works out to about $2000 for every one.  That won't buy much of a safety net.  What we need to do is invest in jobs and infrastructure.  The way our economy works, we need credit to flow.

    Don't forget, it also bails out people in homes (none / 0) (#165)
    by BrassTacks on Fri Oct 03, 2008 at 08:51:26 PM EST
    that they can't afford to be in.  

    They're not giving it to wealthy people (5.00 / 2) (#85)
    by litigatormom on Fri Oct 03, 2008 at 01:11:30 PM EST
    They are giving it to financial institutions in order to free up credit.

    Will individuals at those financial institutions benefit as a result? Well, certainly in the sense that the institutions may survive, they may keep their jobs, they may even keep their inordinately large salaries. But the alternative was to sit back and watch as runs on the banks started happening. That wouldn't be good for anyone -- particularly working and middle class people who don't have some of their savings in krugerands or gold or foreign real estate.

    Sometimes you have to pick the lesser of two great evils. This is one of those times.


    Fox Guarding Hen House-Makes Out Like Bandit (5.00 / 3) (#107)
    by jawbone on Fri Oct 03, 2008 at 01:41:54 PM EST
    NYTimes article, front page, about the Day Oversight of Big Banker Boiz Died.

    ...decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency's failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
    They [Paulson and the Merry Banksters*] wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

    The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

    A lone dissenter -- a software consultant and expert on risk management -- weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.

    One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told -- those with assets greater than $5 billion.

    "We've said these are the big guys," Mr. Goldschmid said, provoking nervous laughter, "but that means if anything goes wrong, it's going to be an awfully big mess."

    Wow, Goldschmid was prescient, knowing even then it would be called Big Me$$.

    There's audio of the meeting at the article site--55 minutes.

    Read the whole article and see why McCain demanded Cox be removed as chairman of the SEC.

    It's a very good thing for Paulson he's Treasury Secty--easier to cover up and make out.

    But, as Kevin Phillips said on Bill Moyers' Journal a couple weeks ago, this is a case of the aronists coming back in their firemen's outfits to put out the fire...all the while pumping more gasoline on it. This is a dangerous, terrible Big Me$$. The Big $h*t Pile Atrios wrote about for so long has become a monumental Me$$.

    Were they traitorous to think only of their short term advantage and profits? Probably not--just unethical, short sighted, and terribly dangerous to the rest of the country, perhaps the world. How do they make reparations for such an outcome?

    And what happens to our role as the money capital of the world? Our credibility? Our dollar?

    This is gruesome--and many economists think this Paulson Fix Is In, even the New! Improved! More Expensive! legislation is not going to resolve the problem. Especially since now the bad actors who created the mess now get to value their toxic waste "assets" and sell them...to us.


    I agree with most of your concerns... (5.00 / 3) (#124)
    by santarita on Fri Oct 03, 2008 at 02:18:41 PM EST
    I hope that Congress pays a lot of attention to what Paulson does.  I don't know why he and his staff were not more on top of this evolving situation and I don't know why they didn't have contingency plans.  I'm not even sure that they have contingency plans now.  

    That article in the NY Times impressed me for a different reason, though.  Private institutions will do all that they legally can to make money.  And they will always advocate for looser regulations and laws.  That's the nature of capitalism.  It's up to the regulator to say no when no should be said.  That article makes it clear that Cox fell down in his responsibilities.  But failure of the regulatory agencies is the hallmark of this Administration.  One of the government reforms I'd like to see is somehow insuring that regulators do their jobs.  Maybe some kind of criminal penalties should be attached.


    Of course both financial institutions (5.00 / 2) (#137)
    by litigatormom on Fri Oct 03, 2008 at 03:04:55 PM EST
    and their management/employees benefitted financially in the best from the government's regulatory laxity. Greed may not be good, but it is what drives the markets, and the government is naive to think that the market will not always push right up to the line (if not over it) to make as much money as the rules allow. Which is why the line has to be clear, and not that far away.

    It is galling that market players who benefitted in the past from doing all the stupid things the regulators let them do now need a bailout. But the bailout isn't just another form of Reaganesque "trickle down" economics. The credit markets are practically locked down. Main Street, which includes small and medium sized businesses, can't operate without it for a long time -- or in some cases, even a short time. The Paulson-Dodd-Frank bill isn't what I would've liked to see, but I don't think we had the time to write the perfect bill -- we certainly couldn't wait until Obama is inaugurated.  Hopefully, Obama's people are already thinking of ways to amend or augment the plan and will be ready to submit it to Congress as soon as Obama takes office.


    It's not taking a dime from (3.00 / 2) (#99)
    by gyrfalcon on Fri Oct 03, 2008 at 01:30:49 PM EST
    the taxpayers, and you know it.  It's not going to wealthy people, ti's going to the financial institutions that are at the core of our economic infrastructure to keep them from collapsing.  And the odds are high that the government will end up actually making a profit on the deal.

    And give me a &^%^$%# break about how it won't matter much if the economy collapses.  Go live on the street and beg for food if it will help you feel even more self-righteous, but you have a hell of a nerve trying to drag the rest of us down there with you.


    Well, I'm not getting any of the money (5.00 / 3) (#108)
    by eric on Fri Oct 03, 2008 at 01:45:17 PM EST
    and people begging on the street aren't getting it.  Who is?  Maybe these people?

    I think it is you that have a hell of a lot of nerve asking people that are struggling to finance this boondoggle.


    Why do so many people here seem to (5.00 / 1) (#112)
    by tigercourse on Fri Oct 03, 2008 at 01:50:28 PM EST
    think that peoples lives will improve in a deep recession or depression? "A hell of a lot of nerve"? Do you at all get what happens if credit freezes, banks and businesses fail, unemployment jumps, etc. etc? These aren't good things.

    Like the late 70's?.... (none / 0) (#118)
    by kdog on Fri Oct 03, 2008 at 02:02:33 PM EST
    we survived.

    Like Japan in the 90's?...they're surviving.


    No (5.00 / 2) (#139)
    by litigatormom on Fri Oct 03, 2008 at 03:06:00 PM EST
    Much worse than the 70s. The 70s was an ordinary recession. This isn't ordinary.

    The late 70's was nothing compared to this. (5.00 / 2) (#140)
    by desertdude on Fri Oct 03, 2008 at 03:08:59 PM EST
    This is above and beyond anything experienced by most people alive today.

    We are still headed for a deep recession though (none / 0) (#194)
    by Militarytracy on Sat Oct 04, 2008 at 10:44:22 AM EST
    This is what I don't understand about your arguments.  This bailout will not prevent that but if one listens to you you seem to think it will.  It will not.

    No, "those people" (3.00 / 2) (#150)
    by gyrfalcon on Fri Oct 03, 2008 at 04:17:55 PM EST
    aren't getting the money.  One. More. Time.  It's the financial institutions, you know, like, um, banks and stuff, that are getting the money-- in return for ownership of stuff they can't sell right now but which will have value when things settle down in a few years, and also in many cases in return for part ownership of the companies.  We call that "equity."  It will make money for us in most cases.

    Also One More Time.  People who are struggling, and people who are not struggling, are NOT financing this.  Your taxes are not going up, although taxes on the wealthiest in this country will, as they should, though not to finance the "bail-out."

    You've made yourself a really nifty bunch of straw men to scream at, but they're entirely figments of an overheated imagination without any facts at all attached to them.


    Where does the money come from?...n/t (none / 0) (#152)
    by kdog on Fri Oct 03, 2008 at 04:50:26 PM EST
    The government floats bonds (none / 0) (#153)
    by gyrfalcon on Fri Oct 03, 2008 at 06:11:32 PM EST
    and people buy them, both here and abroad, because even at a very low interest rate, they're the safest thing on the planet next to a stash of gold bullion buried in your back yard.

    The bail-out money isn't even counted as an expense in the budget against the deficit because what the government is buying with that money is liquid assets.  It doesn't go on the balance sheet until the assets are turned back into cash at some point in the future.  Then they become either expenses or income, depending on whether the price they fetch when the government sells them is more or less than it paid for them.

    The generally accepted expectation is that the government has an excellent chance of actually making money on all this, if Treasury does this well, but at any rate, that any actual loss would be no more than a small fraction of the $700 billion.


    From a big printing press in the sky :) (none / 0) (#195)
    by Militarytracy on Sat Oct 04, 2008 at 10:45:01 AM EST
    they're not getting money now (none / 0) (#180)
    by of1000Kings on Sat Oct 04, 2008 at 12:27:06 AM EST
    but they made a heck of a lot over the course of the bubble (banks, mortgage firms, brokers, etc) that created this mess...

    and what do we see, the money they were pocketing really wasn't there, and now it needs to be made up...


    Voting for this bill does nothing to help (5.00 / 1) (#11)
    by tigercourse on Fri Oct 03, 2008 at 12:06:08 PM EST
    congress people get elected. Quite the opposite. A vote for this bill is politically brave.

    I hope you're right (5.00 / 2) (#15)
    by joanneleon on Fri Oct 03, 2008 at 12:08:44 PM EST
    and I hope people lose their offices over this.

    If the people who vote for this lose (5.00 / 2) (#22)
    by tigercourse on Fri Oct 03, 2008 at 12:11:52 PM EST
    their office, the Democratic congressional bench will become more conservative. It's the more conservative Dems who oppose this bill.

    Hm (5.00 / 4) (#27)
    by Steve M on Fri Oct 03, 2008 at 12:24:23 PM EST
    I could swear I saw a lot of folks opposing the bill on Monday like Dennis Kucinich, Marcy Kaptur, and a majority of the Congressional Black Caucus.

    If you'll look at the list, you will see that (5.00 / 1) (#31)
    by tigercourse on Fri Oct 03, 2008 at 12:29:52 PM EST
    the majority of Dems voting against it are more conservative. The reason is that they are in districts where they might face a close race this year, and are afraid that this vote could hurt them. Those who aren't in close districts or running for reelection, voted for it to a much larger degree.

    I have no explination for why many in the Black caucus voted against it.


    And Feingold.... (5.00 / 2) (#39)
    by kdog on Fri Oct 03, 2008 at 12:34:54 PM EST
    in the senate had the guts to call a dog a dog.

    Feingold in not infallible. (5.00 / 1) (#44)
    by tigercourse on Fri Oct 03, 2008 at 12:37:31 PM EST
    Of course not... (5.00 / 2) (#53)
    by kdog on Fri Oct 03, 2008 at 12:42:50 PM EST
    but this time he's right:)

    And he's right more often than most of our so-called leaders...one of the very few who did the right thing on the Patriot Act if you recall.


    Barbara Lee of Oakland CA (5.00 / 2) (#47)
    by coigue on Fri Oct 03, 2008 at 12:38:50 PM EST
    (African American rich city that hosted the Black Panthers)

    Mike Thompson of Napa

    These aren't conservatives.


    Nuh-uh. (none / 0) (#43)
    by coigue on Fri Oct 03, 2008 at 12:37:26 PM EST
    Not where I live.

    In most places, yes (5.00 / 1) (#19)
    by andgarden on Fri Oct 03, 2008 at 12:10:06 PM EST
    But it's not because the revolutionary left opposes it that voting YEA is politically dangerous. It's because of the populist right.

    From the group that brought you "NO AMNESTY FOR ILLEGALS" comes "STOP THE BAILOUT."


    andgarden knock it off (5.00 / 5) (#26)
    by Militarytracy on Fri Oct 03, 2008 at 12:22:56 PM EST
    it isn't the revolutionary left, it is the balanced left and people looking at the whole picture.  This bailout solves little for mainstreet unless they've really really changed a few things.  If they haven't changed things a lot this bailout makes things worse for mainstreet in the end when this current "panic" is over.  Stop ragging on people and doing this name calling bull because others dare to know the whole truth and demand something better for themselves and their children.

    Excuse me MT (5.00 / 1) (#28)
    by andgarden on Fri Oct 03, 2008 at 12:26:04 PM EST
    But I'm saying what I believe.

    You have some criticism for the people throwing around words like "traitor" right?


    Fine, say what you believe and leave it there (5.00 / 5) (#32)
    by Militarytracy on Fri Oct 03, 2008 at 12:30:02 PM EST
    You know good and well that the people who comment here often aren't the "radical left".  I'm not running around calling you a bleeding heart welfare for corporations new age sellout K street Wall Street Democrat am I?  Knock off the name calling

    Your objection to name calling (5.00 / 2) (#37)
    by andgarden on Fri Oct 03, 2008 at 12:33:16 PM EST
    is not consistent.

    But in any case, you are free to call me what you want.


    To be a "traitor".... (5.00 / 2) (#45)
    by kdog on Fri Oct 03, 2008 at 12:38:04 PM EST
    you need not do something that sells your country out today tomorrow, you can do something traitorous that sells your country out in 10, 20, 50 years.

    Personally, I think the shoe fits.


    This bill only needs to do one thing (5.00 / 2) (#29)
    by tigercourse on Fri Oct 03, 2008 at 12:27:02 PM EST
    for it to help mainstreet. Prevent a credit freeze. That's it. As Warren Buffet said, the bill isn't a panacea. But it's passage might mean we are only in a recession, not something much worse.

    Now that is total bull (none / 0) (#35)
    by Militarytracy on Fri Oct 03, 2008 at 12:31:55 PM EST
    This bill only focused on bailout will extend the current recession out longer. Thats the truth and that really really hurts Mainstreet.

    What exactly is your reasoning behind (5.00 / 1) (#38)
    by tigercourse on Fri Oct 03, 2008 at 12:34:03 PM EST
    that assertion?

    Lyndon LaRouche no doubt (5.00 / 1) (#41)
    by andgarden on Fri Oct 03, 2008 at 12:36:13 PM EST
    No Roubini also (none / 0) (#188)
    by Militarytracy on Sat Oct 04, 2008 at 10:01:05 AM EST
    and you already know that and I can't believe what a low life you have become lately.

    The credit squeeze (none / 0) (#70)
    by desertdude on Fri Oct 03, 2008 at 12:56:53 PM EST
    is already underway and is global in scope. I'm afraid this is akin to putting a finger in one of the holes found in the dike...

    The fact that it's already underway (5.00 / 1) (#74)
    by tigercourse on Fri Oct 03, 2008 at 12:59:26 PM EST
    only heightens the urgency of passing legislation. It should have been passed Monday.

    As we're seeing from what is happening in California, we can't allow the squeeze to become a total drying up of credit.


    a few days may not matter as (5.00 / 1) (#90)
    by desertdude on Fri Oct 03, 2008 at 01:14:00 PM EST
    this credit cycle is already unwinding. Confidence has already been shaken. Some echoes from the past: "To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection - a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end... It is probably due to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression." - F. A. Hayek, 1932

    Of course the present liquidation is already in progress.


    Who is the balanced left? (5.00 / 1) (#36)
    by Manuel on Fri Oct 03, 2008 at 12:32:01 PM EST
    What I consider the balances left realizes that this is a necessary first step.  We need to do more and we will, in January.

    Didn't the phone calls say (none / 0) (#14)
    by oculus on Fri Oct 03, 2008 at 12:08:09 PM EST
    vote for it after the market dived?

    Voice vote?  Yayes and Nayes.  Electronic vote to follow.  


    Oh, for the days. . . (5.00 / 1) (#21)
    by LarryInNYC on Fri Oct 03, 2008 at 12:10:26 PM EST

    when words meant things.

    I think the bailout's syphilitic.  Or sycophantic, I'm not sure which.  But it really doesn't matter, does it?


    Nobody claims this helps home owners directly (5.00 / 1) (#48)
    by Manuel on Fri Oct 03, 2008 at 12:39:29 PM EST
    This bill is about unfreezing credit.

    "Credit Freeze" Mantra (5.00 / 3) (#113)
    by ks on Fri Oct 03, 2008 at 01:56:10 PM EST
    Pffttt.  So financial firms don't want to lend to each other because they're unsure of the crap securities they ALL have on their books? Crap that they created and profitted from handsomely over the years until the over-leveraged scam fell apart?  So now the govt MUST bail them out by actually buying the crap the firms created or else they will be too scared to lend money to each other and might fail and the trickle down affect of not lending and failing might screw over the rest of us?  I see.  Just wonderful.    

    The only silver lining here (5.00 / 1) (#141)
    by litigatormom on Fri Oct 03, 2008 at 03:11:31 PM EST
    is that maybe, just maybe, the public has finally seen the fallacy of the Reagan/Bush notion that prosperity can only be achieved by unfettered markets. You noticed how that last night Palin, echoing McCain's mantra, talked about government getting "out of the way" of businesses and people even more than she claimed that McCain would "reform" Wall Street? We've been hearing that crap since 1980. And the public bought it. People have been voting against their economic interests for years, waiting for that golden moment that Reagan promised when the golden shower would finally trickle down on them.

    "I get on my knees and pray, we don't get fooled again."


    Yes... The NY Times Article Talking About ... (5.00 / 3) (#145)
    by santarita on Fri Oct 03, 2008 at 03:35:11 PM EST
    the SEC's decision to loosen regs in 2004 should be required reading for anyone interested in learning lessons from this implosion.  Lack of oversight by the regulator does no good and self-regulation does no good.  Throw Cox in jail.  

    Of course the push to loosen up mark-to-market rules so that financial institutions' financial statements don't look so bad suggests that we still haven't learned our lessons.


    FWIW, Cox has repented big-time (none / 0) (#154)
    by gyrfalcon on Fri Oct 03, 2008 at 06:15:45 PM EST
    He had a statement out the other day saying he's finally figured out that "self-regulation" is an oxymoron, does not, cannot work.

    He might actually be a good guy to hang onto for the next admin.  No crusader like a reformed addict, no?


    He's an Orange County Republican... (none / 0) (#155)
    by santarita on Fri Oct 03, 2008 at 06:38:34 PM EST
    he would revert to form after a few months.  

    Yes, it isn't pretty (none / 0) (#125)
    by Manuel on Fri Oct 03, 2008 at 02:22:19 PM EST
    The markets got themselves in a fix through unregulated greed.  I believe that one of the functions of government is to intervene so we are not undone by unchecked fear.  Government is needed to smooth things out.  

    The Greatest Sellout Happened ... (5.00 / 1) (#132)
    by santarita on Fri Oct 03, 2008 at 02:33:26 PM EST
    When the Bush Administration appointed partisan idiots to be regulators.

    The bail out bill is just one of the consequences of the lack of regulation and supervision.

    The bill stinks but what stinks even more is the horrible choices presented to us at this point.  What's behind Door #1 is worse than Door #2 and Door #3.  Let's not make a deal - unfortunately the government has to intervene in some fashion.  And this is not the end of the intervention.


    The bill is actually (5.00 / 2) (#34)
    by eric on Fri Oct 03, 2008 at 12:30:26 PM EST
    worse than last time because it is now festooned with all sorts of tax breaks and other crap.  They even tacked on the Wellstone mental health parity bill, which is something that I agree with but was clearly just put on there to attract a few more votes.  I doubt Paul Wellstone himself would vote for this monstrous bailout of the wealthy just because his bill was attached.

    Patrick Kennedy Just Spoke On Behalf of One... (5.00 / 1) (#50)
    by santarita on Fri Oct 03, 2008 at 12:41:47 PM EST
    of the Pork Provisions (Mental Health Insurance Parity) and thanked Chris Wellstone.

    Oh, man (none / 0) (#103)
    by gyrfalcon on Fri Oct 03, 2008 at 01:37:27 PM EST
    How I wish people would find out the facts before announcing their judgments.

    The bail-out was tacked onto the Mental Health Parity thing, not the other way around, as a parliamentary maneuver so the bill could originate in the Senate and be passed there first in order to goose the House into voting for it.


    Whatever (none / 0) (#106)
    by eric on Fri Oct 03, 2008 at 01:40:22 PM EST
    it's the same thing.  The main thrust of this bill is the bailout.  Gimme a break.

    Happy to give you a break (none / 0) (#148)
    by gyrfalcon on Fri Oct 03, 2008 at 04:10:12 PM EST
    when you aren't jumping up and down and screaming with outrage about stuff you just make up.

    If you want to argue against the bail-out, argue against the bail-out.  Don't spread falsehoods about peripheral stuff because you were too lazy to find out the facts.


    Awesome news for psychiatrists! (none / 0) (#166)
    by BrassTacks on Fri Oct 03, 2008 at 09:00:56 PM EST
    Their lobbyists did their job!  

    The Democrats today (5.00 / 1) (#42)
    by Manuel on Fri Oct 03, 2008 at 12:37:25 PM EST
    started to change charge of the economy.  In leading passage of a flawed but necessary bill, they demonstrated that they will be willing to make tough choices.  Decision making under Obama will bear watching.  In particular, the willingness to continue to invest in the country will be severely tested.

    I support the bill (5.00 / 5) (#49)
    by Steve M on Fri Oct 03, 2008 at 12:40:20 PM EST
    but I will not play the role of the "sensible liberal" lecturing my lefty friends on how they're just too goshdarned clueless to understand how necessary the bill is.  I've been on the other side of "sensible liberal" arguments too many times not to know how annoying it is.  None of us has infallible foreknowledge of how things will turn out either with or without this bill.

    Well, I'm always up for a fight! (5.00 / 2) (#55)
    by andgarden on Fri Oct 03, 2008 at 12:47:12 PM EST
    None of us have foreknowledge (5.00 / 1) (#105)
    by gyrfalcon on Fri Oct 03, 2008 at 01:40:13 PM EST
    but the vast majority of the blog opposition to the bill is really quite remarkably free of even the faintest concept of what it is and what problem it's trying to address and why it matters, never mind the niceties of how legislative politics operates in the real world.

    Folks who have done their homework and still think it's a bad idea I have some respect for.  The rest, not so much.


    Yeah, let's be hatin' on all those ignorant (none / 0) (#167)
    by BrassTacks on Fri Oct 03, 2008 at 09:03:02 PM EST
    bloggers because we're so much smarter than those dopes.

    Feel free to lecture me. (none / 0) (#71)
    by LarryInNYC on Fri Oct 03, 2008 at 12:57:28 PM EST
    I freely admit I'm too gosh darned (hat tip Sarah Palin) to understand how necessary the bill is.  Or unnecessary.  Or even WTF is going on.

    As my 4 year old would say (5.00 / 2) (#52)
    by Faust on Fri Oct 03, 2008 at 12:42:48 PM EST
    This bill is "the yuck."

    But then so is every other alternative. Could a bill be crafted that I would like? Yes. Is there time to pass it? Not in this climate, and not with this leadership (on both sides).

    Pure $hit, polished to a dull moist glow, and thrown at the fan.

    I don't support it because I think it's crap, and yet I do, because it seems necessary and I have no faith anything else would come along in the time frame required.

    And after all this it's pure short term stopgap measures that may not even do what is intended and may do things that aren't. Or are. If you know what I mean.

    The whole thing disgusts me and leaves me feeling like I just ate some very bad food. Blowout call on the big white phone to commence shortly.

    This Bill Alone Is At Best a Stopgap... (5.00 / 3) (#57)
    by santarita on Fri Oct 03, 2008 at 12:49:20 PM EST
    Fundamental reforms must follow in January.  I hope Pres. Obama doesn't take too much time off between his election and his inauguration because he and his economic team better have a plan to present to Congress.

    One powerful (and sobering) letter from Gov. Terminator was placed into the record.  California, the world's 8th largest economy, has asked the Fed for a $7billion short term loan to fund operating expenses (e.g. payrolls, etc.) because it is having trouble floating it's typical RAN bond.  The credit crunch is starting to affect Main Street.  That may have convinced people that urgent measures are needed.

    He said he will review this bill and results of (none / 0) (#61)
    by Teresa on Fri Oct 03, 2008 at 12:51:10 PM EST
    it on his first day in office, so we'll see.

    ::eye roll:: (5.00 / 5) (#64)
    by kredwyn on Fri Oct 03, 2008 at 12:54:13 PM EST
    How many different pieces of legislation has he said something similar?

    I think the FISA bill was one of them.


    To be fair (5.00 / 4) (#69)
    by CST on Fri Oct 03, 2008 at 12:56:50 PM EST
    He isn't president yet, so he may be telling the truth.  Then again, maybe not...

    It's not like presidential candidates have a good track record on the truth.

    He may also review it and say 'looks fine'


    IIRC from the West Wing (5.00 / 2) (#78)
    by kredwyn on Fri Oct 03, 2008 at 01:02:58 PM EST
    the first day is spent filling out a lot of paperwork and looking for the loo.

    I bet (5.00 / 4) (#86)
    by CST on Fri Oct 03, 2008 at 01:11:51 PM EST
    Someone will tell him where the bathroom is if he says please :)

    Also, he's not a "paper person" remember?  He'll probably hand it off to a secretary and just sign on the dotted line.

    Besides, I thought the first thing he was gonna do was review Bush's signing statements or something...

    Busy first day.  Unless he plans on starting on east coast time and ending on Alaska time.


    we'll add that to the list... (5.00 / 2) (#96)
    by kredwyn on Fri Oct 03, 2008 at 01:20:23 PM EST
    For First Day Review:
    FISA legislation
    Bush's Signing Statements (all 300+ of them)
    Financial Bail Out Bill (uh...how do you reject it retroactively w/o Wall Street freaking?)
    Iraq Stuff
    the Habeas Corpus situation...

    Anything else?


    Anything else? Yes... (5.00 / 1) (#151)
    by oldpro on Fri Oct 03, 2008 at 04:20:10 PM EST
    Photo ops
    Answer the phone.

    Why is Obama reminding me of Carter? (none / 0) (#168)
    by BrassTacks on Fri Oct 03, 2008 at 09:07:08 PM EST
    More and more, he's sounding like Carter.  He's going to fix everything.  Right.  That's the ticket.  Let's just pray that the economy doesn't get as bad as it did under Carter.  

    Yes, but first he promised to (5.00 / 3) (#72)
    by oculus on Fri Oct 03, 2008 at 12:57:57 PM EST
    read the entire federal budget.

    Sounds like a busy day (5.00 / 1) (#77)
    by Steve M on Fri Oct 03, 2008 at 01:01:18 PM EST
    Doesn't he know he's going to have to fill out all his insurance paperwork and stuff on the first day?  I wonder if he has to fill out that form where they make you certify that you're a U.S. citizen.

    yes, I think it's just a SS card and driver's (5.00 / 1) (#80)
    by Teresa on Fri Oct 03, 2008 at 01:05:24 PM EST
    license or other photo ID. No birth certificate. :)

    He'd Better Start Working On This As... (5.00 / 1) (#109)
    by santarita on Fri Oct 03, 2008 at 01:45:57 PM EST
    soon as he is elected.   He can't effectuate anything but he can certainly have legislation prepared as soon as he is inaugurated.  This bill is only a bandaid and at best it will stop the bleeding until the patient can get into surgery with a new and better surgeon.  I have a bad feeling that by January the patient will have lost a lot of blood.

    He can have legistlation prepared? (none / 0) (#169)
    by BrassTacks on Fri Oct 03, 2008 at 09:08:29 PM EST
    By whom?  The President doesn't do legislation.  That's Congress's job.  

    Put your fears aside. W has spoken. (5.00 / 4) (#84)
    by oculus on Fri Oct 03, 2008 at 01:11:23 PM EST

    Hee. (5.00 / 1) (#136)
    by liminal on Fri Oct 03, 2008 at 02:57:21 PM EST
    Now I feel safe. (none / 0) (#92)
    by Teresa on Fri Oct 03, 2008 at 01:14:31 PM EST
    If that is not scary enough.... (none / 0) (#97)
    by kdog on Fri Oct 03, 2008 at 01:21:01 PM EST
    when the big shots from Brand "D" agree with him, you know you're really in for it.

    The last time that happened was the Iraq war resolution if memory serves...we've all seen how that turned out.  At least this one only costs an obscene amount of money, not money and blood.


    Congrats to all (5.00 / 2) (#101)
    by eric on Fri Oct 03, 2008 at 01:35:47 PM EST
    you just gave Goldman Sachs, et al. $700 Billion.  That's roughly $2,000 for every man, woman, and child in the US.  That is a total of $6,000 from this poor family, who are living in a tent.

    Reverse-Robin Hood, indeed.  It's a crime.

    How bizarre (5.00 / 1) (#111)
    by Steve M on Fri Oct 03, 2008 at 01:50:27 PM EST
    are you actually under the impression that this will be paid for through some kind of one-time flat charge against every single American?

    I mean, here's the thing.  No one actually knows what this bill will cost, but I'm pretty confident that it will be paid for by people with money, not people with no money.  Because people with no money can't pay for things.


    No, I don't think so (5.00 / 1) (#117)
    by ks on Fri Oct 03, 2008 at 02:01:07 PM EST
    I think it's just hyperbole about the manure sandwich that's being served to taxpayers.  

    Well, it is obviously (5.00 / 1) (#120)
    by eric on Fri Oct 03, 2008 at 02:05:18 PM EST
    just an estimate, like those estimates of how much we all owe if we were to pay off the debt or how much the deficit is, per person.  I am not expecting some kind of bill in the mail or anything.

    Like Iraq ... (5.00 / 2) (#119)
    by Robot Porter on Fri Oct 03, 2008 at 02:02:34 PM EST
    another W sponsored bit of stupidity, which the MSM and too many Democrats say is a good idea.

    And, like Iraq, in two years everyone will be singing a different tune.

    There were no WMDs.  There is no Santa Claus.  And this won't work.

    In two years... (5.00 / 2) (#131)
    by desertswine on Fri Oct 03, 2008 at 02:30:27 PM EST
    they're going to want another $700bln.

    The Dow is way down since (5.00 / 2) (#138)
    by eric on Fri Oct 03, 2008 at 03:05:46 PM EST
    this historic, economy saving boondoggle was passed.  So much for that...  Maybe they need some more of your money - pay up or your 401K gets it!

    Yep... (5.00 / 2) (#146)
    by kdog on Fri Oct 03, 2008 at 03:53:48 PM EST
    all the 401k holders in my office are having a good laugh as I type...in the "better to laugh than to cry" sense.

    On the brightside, the office lefties and righties have never been more in agreement on anything since I've been workin' here...we all agree we been had, big time.  Maybe this massive con will unite us where all the previous cons have failed.


    Wall St. fears that the bailout won't work (none / 0) (#147)
    by joanneleon on Fri Oct 03, 2008 at 03:57:43 PM EST
    It's starting already.

    From Reuters:

    Wall Street ended its worst week in seven years with another tumble on Friday on fears that the $700 billion financial rescue package may not unblock credit markets and stave off a U.S. recession.

    the blackmailing to get the govt (none / 0) (#183)
    by of1000Kings on Sat Oct 04, 2008 at 12:43:01 AM EST
    to buy the assets for more than what they are worth is already starting...

    why, again, don't we have a nationalized banking system?

    oh, ya, that's right so that people can get paid a lot of money for doing nothing but playing magic tricks with our economy...


    This bailout is not going to work (5.00 / 2) (#142)
    by dutchfox on Fri Oct 03, 2008 at 03:14:38 PM EST
    Asked why this is happening, David Cay Johnston (5.00 / 1) (#157)
    by jawbone on Fri Oct 03, 2008 at 07:16:19 PM EST
    said on WNYC today that it's bcz of how our election campaigns are financed. It takes so very much money that those who give the most have the most influence and clout. Big Banker Boiz are huge contributors. It's why we had the lack of regulation which lead to the Big $h*t Pile and now the monumental Big Me$$.

    There is a podcast of the discussion at the link.

    Find out what the Savings & Loan crisis of the 1980s and 90s can teach us about our current financial problems. Investigative reporter David Cay Johnston is author of several books, including Free Lunch; Michael Santoli is Associate Editor of Barron's magazine.

    Obama's seed money came from hedge fund operators and Big Banker Boiz.

    He was not going to put homeowners first bcz he could not.

    Today's Bill Moyers' Journal is also searing-- (1.00 / 1) (#171)
    by jawbone on Fri Oct 03, 2008 at 09:15:52 PM EST
    Do not miss it.

    Second guest, Emma Coleman Jordan (sp?) and Moyers discussed the NYTimes article I posted about earlier today, and she used the fox/hen house analogy. She found the 55 minutes it took to dismantle safeguards against overleveraging "bone chilling."

    This is must see TV--or web watching. Should be rebroadcast, Sun here in NYC area.

    First segment was discussion of the VP debate, MCM coverage, and also Paulson Fix reporting and framing. Brooke Gladstone of On The Media seemed to think the pols were mislead by the alarmed voters. Check it out.

    Jolhn Boehner is crying again (none / 0) (#1)
    by andgarden on Fri Oct 03, 2008 at 11:55:42 AM EST
    but he'll vote for the bill, as are most Democrats, as would I.

    He's got a fall-back position ready. (5.00 / 1) (#3)
    by oculus on Fri Oct 03, 2008 at 11:58:44 AM EST
    It's all God's fault.

    That's pronounced (5.00 / 1) (#13)
    by coigue on Fri Oct 03, 2008 at 12:07:56 PM EST
    "It's God's mysterious PLAN"

    "It's all part of God's ineffable plan." (5.00 / 1) (#128)
    by Fabian on Fri Oct 03, 2008 at 02:26:57 PM EST
    will now be my perfect reply when I don't want to be drawn into a conversation.

    (Better than saying "Shoulda impeached him and all his little Bushies, too.".)


    No New Deficit Spending... (none / 0) (#17)
    by CoralGables on Fri Oct 03, 2008 at 12:09:30 PM EST
    If Pelosi can hold that line for eight years starting with the new President, we will begin to see a turnaround in the long term economy.

    Deficit spendng may be necessary (5.00 / 2) (#30)
    by Manuel on Fri Oct 03, 2008 at 12:29:48 PM EST
    To make the investments required to make progress on energy, healthcare, and infrastructure.

    Deficit spending is a Good Thing (5.00 / 1) (#100)
    by gyrfalcon on Fri Oct 03, 2008 at 01:35:30 PM EST
    in a recession.  We should stop obsessing about the damn deficit until we get a few years down the road.  A healthy economy and bringing the marginal rate on taxes back to a sane level will fill the coffers right up again.

    With all due respect (5.00 / 1) (#158)
    by CoralGables on Fri Oct 03, 2008 at 07:36:10 PM EST
    We are already 10 trillion down the road and what has it accomplished? Deficit spending whether due to more tax cuts or more spending keeps digging the hole deeper.

    More Revenue would help too (none / 0) (#23)
    by WS on Fri Oct 03, 2008 at 12:16:01 PM EST
    Obama's plan to roll back the Bush tax cuts on the top 5%, capital gains, and estate taxes will help bring back revenue.  Closing tax loopholes should be a priority too. There are a lot of business income taxes that can be recouped if we can close those.    

    I agree but in order to have revenue from ... (5.00 / 3) (#60)
    by santarita on Fri Oct 03, 2008 at 12:50:58 PM EST
    taxing business income, there has to be business income.

    How will that work? (none / 0) (#170)
    by BrassTacks on Fri Oct 03, 2008 at 09:11:43 PM EST
    Obama and the democrats have already promised so many new programs.  I don't see how there can be no deficit spending.  

    You Certainly don't believe (none / 0) (#197)
    by desertdude on Mon Oct 06, 2008 at 04:35:51 PM EST
    any of Obama's promises do you? He is fishing for votes. That's all. There is no money. Once in office he will say something like Bill did, "We really didn't know it was this bad until we got in and started looking. Some of our programs will just have to wait."

    mortgage sections (none / 0) (#63)
    by Katherine Graham Cracker on Fri Oct 03, 2008 at 12:53:58 PM EST
    ection 110 is the Democrat-backed "Assistance to homeowners" plan -- driven by one of the bill's key stated goals of "preserving homeownership."

    GENERAL.--To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets ecured by residential real estate, including multifamily housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage the servicers of the underlying mortgages, and considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.

    (2) MODIFICATIONS.--In the case of a residential mortgage loan, modifications made under paragraph (1) may include--
    (A) reduction in interest rates;
    (B) reduction of loan principal; and
    (C) other similar modifications.

    Yes, in the quest to "preserve homeownership" at all costs, it appears the government will be determining the value of homes directly in the marketplace -- not only reducing interest rates but also loan principal.

    Reader Robert calls attention to another micro-meddling section:

    SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is amended--
    (1) in subsection (e)--
    (A) in paragraph (1)(B), by inserting before ``a ratio'' the following: ``, or thereafter is likely to have, due to the terms of the mortgage being reset,'';
    (B) in paragraph (2)(B), by inserting before the period at the end ``(or such higher percentage as the Board determines, in the discretion of the Board)'';
    (C) in paragraph (4)(A)--
    (i) in the first sentence, by inserting after ``insured loan'' the following: ``and
    any payments made under this paragraph,''; and

    (ii) by adding at the end the following: ``Such actions may include making payments, which shall be accepted as payment in full of all indebtedness under the eligible mortgage, to any holder of an existing isting subordinate mortgage, in lieu of any future appreciation payments authorized under subparagraph (B).''

    it came from a rightwing site so it has some snarky comments in the middle there

    A Lot of Dems Think This is A (none / 0) (#127)
    by santarita on Fri Oct 03, 2008 at 02:25:03 PM EST
    good thing.

    Would you rather have the banks foreclose and then dump the house on the market at fire sale prices?


    It's not an either/or decision (5.00 / 1) (#156)
    by Newt on Fri Oct 03, 2008 at 07:07:50 PM EST
    They rushed it through before we could organize against it.  HOLC and HOME are both solutions that would fix the problem just as well as this bogus ripoff would.  This bill takes money from lower middle class and working class people and rescues investments belonging to the upper middle class and the super rich.

    I'd rather lose my entire retirement package than force people who can't afford their own house and who work two or three jobs apiece to pay for rent and food to pay taxes toward "saving" my investment.

    Democrats ought to be ashamed of our party for this disgusting trickery and theft.


    Reduction in Principal?! (none / 0) (#172)
    by BrassTacks on Fri Oct 03, 2008 at 09:16:24 PM EST
    Wow!  Why would anyone lend money for a house if the principal could later be reduced?   I see banks refusing to ever give mortgages to anyone, if the courts can reduce the amount that is owed to them.  Why would any company take that risk?  

    If we thought home mortgages were difficult to get now, there will be NO home mortgages under this plan.  

    This is truly awful.  Anyone who doesn't own a home now is totally screwed, unless they can afford to buy with all cash.  


    You know (none / 0) (#176)
    by Steve M on Fri Oct 03, 2008 at 11:28:28 PM EST
    we have these institutions called "bankruptcy courts" that are empowered to renegotiate or eliminate consumer debts, and yet lenders continue to lend money.  It's all factored into the risk of default.

    It won't help anyone get a loan (none / 0) (#177)
    by BrassTacks on Fri Oct 03, 2008 at 11:53:16 PM EST
    To have this written into the bill.  

    This is not bankruptcy court.  


    You know (none / 0) (#178)
    by BrassTacks on Sat Oct 04, 2008 at 12:01:55 AM EST
    I could get a loan for a house, stop making payments, and get my mortgage loan amount reduced.  The court could make my contract with the bank null and void.  How cool is that?  Courts deciding how much houses are worth?! AND voiding contracts!  This is so cool.  

    You know, my mortgage is a bit on the high side and my house probably isn't worth what I agreed to pay for it.  I think I'll try this.  I'll stop making payments, wait for the bank to try to kick me out, (heck that could be years anyway, free rent in the meantime!) and then get my contract voided and the price of my house lowered!  Awesome!  My payments will be lowered, I will have lived without paying anything for months, or years, AND then get a new, cheaper, loan.  What a deal.  I can't wait to tell hubby and neighbors about this.  Wait until everyone finds out about this new deal!  


    The bill was just approved by the house (none / 0) (#76)
    by Saul on Fri Oct 03, 2008 at 01:00:44 PM EST

    Democratic Programs (none / 0) (#79)
    by WS on Fri Oct 03, 2008 at 01:03:11 PM EST
    I think the bailout was necessary but one major problem now is how to pay for Obama's programs if he gets elected.  As far as I can tell, the three big ones are health care, energy, and infrastructure and with this bailout bill, will there be money for our programs in 2009?

    Of course there won't (5.00 / 3) (#88)
    by caseyOR on Fri Oct 03, 2008 at 01:13:12 PM EST
    There won't be money for any of the things that would help regular Americans. We have that pesky little war in Iraq and that skirmish in Afganistan to fund. Forget health care. Obama doesn't really care about UHC anyway. Maybe, maybe we'll get an expansion of SCHIP, but nothing else.

    On HOLC or HOME, or whatever you call it, Obama says he will have someone think about it. Sounds like "form a commission" to me. And no change to that odious bankruptcy bill.

    Also, don't expect any expansion of the tattered remains of the social safety net. People will freeze in their homes this winter, and many, many more will go hungry.

    Yeah, this is a great day for America.


    Yeah, Obama's comments .. (5.00 / 2) (#121)
    by Robot Porter on Fri Oct 03, 2008 at 02:11:53 PM EST
    on HOLC was the standard "form a commission" or "appoint a blue ribbon panel" dodge.

    On this, he had another chance to prove he's a progressive, and again he failed.

    It's clear what master he serves.

    My only HOPE is that when the economy falls further in the toilet he'll be forced to CHANGE his mind.


    Considering that it seems that he thinks (5.00 / 1) (#191)
    by Militarytracy on Sat Oct 04, 2008 at 10:29:17 AM EST
    the New Deal is an outdated solution to our "new world" that's probably what will happen.  The only thing that will remedy our situation is a really really brand new deal though.  I think he'll come around.  We probably won't be able to get all the Repubs on board with him either that he'll need until they see that things are going into the toilet.  He's likely to accept reality before they do.

    well (5.00 / 1) (#89)
    by connecticut yankee on Fri Oct 03, 2008 at 01:13:30 PM EST
    We were already in the red, this is just more free money from China. heh

    Should we address the deficit? Yeah, but this is a drop in the bucket and doesnt change the 2009 revenues beyond a bit more interest on the debt.

    I think Obama should just take fiscal responsibility away from the republicans.  They dont walk the talk.


    NO, there will be no money for anything (none / 0) (#173)
    by BrassTacks on Fri Oct 03, 2008 at 09:18:54 PM EST
    That we care about.  

    People who can't/won't make their mortgage payments will be bailed out.  No new mortgages will be granted, to risky for banks.  And there will be NO money for new programs like health care or the infrastructure that is desperately needed.  



    I know that going into this (none / 0) (#189)
    by Militarytracy on Sat Oct 04, 2008 at 10:12:47 AM EST
    this is what it looks like and you are right about people having no incentive and walking away from their mortgages.  There are things that can be done though to give people incentive.  We will spend the next two years getting into this rewriting mortgages with readjusted property values.  We probably won't begin to do that though until people begin to walk away.  We will likely address it in an emergency situation as well, but the groundwork for HOLC has been laid in this bill and that is where the power to do that will come from.

    Politics do indeed make for strange... (none / 0) (#122)
    by MileHi Hawkeye on Fri Oct 03, 2008 at 02:12:31 PM EST
    ...bedfellows.  From SquareState...

    "Colorado delegation holds with their strange alliances.
    DeGette (D), Perlmutter (D), Tancredo (R): Yea
    J. Salazar (D), Udall (D), Musgrave (R), Lamborn (R): Nay"   Party designations added for clarity.

    A view from abroad, from London Banker--who sees (none / 0) (#162)
    by jawbone on Fri Oct 03, 2008 at 08:45:51 PM EST
    Paulson's role for the Big Banker Boiz as simlilar to that of Cheney for Halliburton and Blackwater--ensuring increased profits and, now, survival.

    Posted at RGE Monitor, the home blog of Nouriel Roubini, one of the economists who has been calling it correctly about Big $h*t Pile and the following Monumentally Big Me$$.

    Having listened to all 42 minutes of the late night Treasury briefing of investment banks on Sunday, there is no doubt in my mind that this legislation represents the sort of federal largesse for Goldman Sachs, Morgan Stanley, Citibank and JPMorgan Chase that the Iraq war provided for Halliburton and Blackwater.

    The most cynical moment in the call is when the Treasury official confirms, "our preference would be to help the healthy banks become even healthier" rather than helping troubled banks or illiquid banks.

    America is now a centrally planned economy where the Treasury will determine which firms survive and prosper through allocation of scarce capital to an undercapitalised financial sector.

    Clearly what is going on here has nothing to do with kick starting the credit markets or stabilising the equity markets or restoring depositor confidence in banks.  (Treasury official:  "No provision in the legislation that mandates re-lending.")  What is going on here is a blatant attempt to provide government funds to a select cadre of firms (not all banks) which are chosen to be the survivors feasting off the carcasses of their less fortunate and less well-connected brethren as the downturn intensifies in the years to come.

    The crash in equities will still happen.  The debt deflation of the economy leading to mass commercial and consumer credit defaults will still happen.  The collapse of many national, regional and local financial institutions will still happen.  The bankruptcy of many municipalities and shortfalls in state budgets will still happen.

    This bill is about engineering survivor bias to friends of the Bush administration so that they profit disproportionately from the collapse of these markets using the funds provided by the taxpayer via the unreviewable and unconditional authority of the Secretary of the Treasury.

    The basic plan is to set up a federal money laundering operation.  Bad assets come in, get laundered by the Treasury and put in a new AAA "wrapper" (as it's termed on the call), and good assets go out, issued as Treasury guaranteed securities.  Whether the final value of the legislation this week is $700 billion or $150 billion is irrelevant as long as the laundering operation can accommodate the throughput, as that number is only a cap on total extensions at any one time.

    Read the whole thing; it's searing.

    More on Buffett (none / 0) (#184)
    by of1000Kings on Sat Oct 04, 2008 at 12:50:18 AM EST

    I love the last line:

    Another question, one that I've raised before: if these "illiquid assets" are such a great deal, why is Warren buying stock in anticipation of a bailout instead of buying the bad mortgages?

    I know the link is nothing more than a blog, so it's not substantial, but the point is still fair (and I also know that Buffett and other investors are buying this assets at fire-sale prices and expect to make a profit of at least 18% on the risk, but I believe more from the private industry could still be done considering the money that WILL be made off this bill, directly or indirectly)

    another funny/sad blog (none / 0) (#185)
    by of1000Kings on Sat Oct 04, 2008 at 12:58:41 AM EST

    just trying to drive home the point to those that think the fat won't become fatter with this bailout, and that the credit crunch is pretty much just blackmail considering it was created by the investment banks own doings...

    maybe the most interesting aspect of that blog is that it's dated October 2007...so Paulson has know that something needs to be done for at least a year now...


    no links I guess... (none / 0) (#186)
    by of1000Kings on Sat Oct 04, 2008 at 01:02:30 AM EST
    I cared a lot about how this would play (none / 0) (#187)
    by Militarytracy on Sat Oct 04, 2008 at 09:49:23 AM EST
    out but we were also having a celebration party for our son and his new feet last night, so this is the first rundown I'm getting and I'm pleased.  I'm very pleased with the needed strict oversight, with half of the sum being able to be blocked if this bailout does not end up freeing the interbank credit crisis and different solutions need to be sought, the recoupment of the cost of this, and the groundwork it lays for HOLC or whatever name they will choose to call it in the future.  Count me as extremely pleased!  I can't believe we ended up getting this out of petulant feet stamping pouting Bush and his cohorts.  This is a victory for Democrats, for little guy America, and for the economy we are all going to have to try and survive in in the next few years!  Compared to what Paulson was literally trying to extort out of the House and yet they denied him, this is a miserable defeat for BushCo.  For once, Nancy Pelosi did good.