Dem Option 4

Via Atrios, Dem option 4:

#4 -- Get More Democrats On Board: Finally, one other unlikely option talked about on Capitol Hill is to try to pass the bill almost entirely with the Democratic majority in the House. That would require adding a major stimulus package favored by Democrats, infrastructure spending, unemployment insurance spending, and heating and food stamp assistance for low-income Americans.

Um, why unlikely? Today changed everything. The Dems reached out and got their hands slapped. The Republicans do not want to be bipartisan. Nancy, Harry, Barney, you tried. Now you have to act for the American People. Time for Option 4.

By Big Tent Democrat, speaking for me only

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    They've gotta do Something (5.00 / 1) (#3)
    by andgarden on Mon Sep 29, 2008 at 07:02:52 PM EST
    to correct the damage that the ostrich caucus and the Republicans have caused.

    any bill w/o jobs investment payable (5.00 / 2) (#11)
    by Jlvngstn on Mon Sep 29, 2008 at 07:25:30 PM EST
    immediately should not be signed, period.  you cannot ignore unemployment and the 3 million unemployed and several million underemployed americans while helping wall st.  It goes against the grain of both party candidates' populist message.  Let John McCain say he doesn't want to spend 500 bn on jobs.

    Methinks most people have no clue what is coming from an unemployment perspective after the bailout takes place.  too much fat on wall st, too many out of work laborers and retail is about to spiral into record numbers of layoffs.

    Funny, i said this last month, last week, yesterday, about time you caught on.

    The unemployment figure is going to GROW (5.00 / 1) (#22)
    by Militarytracy on Mon Sep 29, 2008 at 07:55:17 PM EST
    It seems like most ordinary folks out there do not understand that we have turned an economic corner that we can't unturn.  They just can't fathom it but make no mistake, things have changed and it will be in our faces soon.....even if the bailout was passed today we were going to see a large sharp dramatic increase in unemployment.

    sharp increase (5.00 / 2) (#25)
    by Jlvngstn on Mon Sep 29, 2008 at 08:02:16 PM EST
    is mostly attributed to the recent hurricane. the sharp increase that is coming in Oct-Dec will be a direct result of decreased spending now that the stimulus has run out and people are losing their jobs.   70% of our econ is service based and we kept our heads above water with the stimulus.  Stimulus is a bandaid on lung cancer.

    Layoffs are going to increase in frequency even AFTER the bailout pushing us above 7 and perhaps even to 8 by the end of the year.  

    For businesses with stellar credit and great payment history there are still loans out there, and the bailout will help those with good credit not any business with not so good credit or lightly collateralized.  

    So the big biz will continue to be ok even while laying off and the smaller co's who employ 35% of the workforce will be challenged just to keep the lights on.

    I got a call Friday to up my BLOC, no interest in doing so because I cannot invest until big business grows.  Most small co's are dependent on big co's growth for our livelihood and the bailout stabilizes, it does not do a darned thing for small to medium businesses....


    Question is (none / 0) (#26)
    by litigatormom on Mon Sep 29, 2008 at 08:02:32 PM EST
    will Bush sign it?

    Of course, he'd have to admit that the economic crises wasn't as dire as he's been telling people.
    He'd have to have Paulson say that the stimulus package and other provisions would wreck the bailout.

    The other problem is that it may take a long time to draft such a bill. Pelosi and Hoyer would have to have the Dems vote on a straight party line vote, which may not be possible.


    Bush would sign (5.00 / 1) (#33)
    by Jlvngstn on Mon Sep 29, 2008 at 08:08:57 PM EST
    his legacy is baked and creating jobs upon his leaving saving us from catastrophic UE would be the only good ending he could have.

    They could authorize a 150 bn bailout immediately contingent upon second round of legislation passed in 10 days.  There is no reason any other piece of legislation would have to be addressed before the bill is completed.  150 bn could be authorized immediately for infrastructure as the lawmakers are well aware of the immediate "needs" in infrastructure and in fact i believe there is already a list of high priority projects at that cost.

    Congress needs to stop telling us what they can't do and start telling the american public what they will do.  How you spend the bailout money is far more complicated than how you spend infrastructure monies, I promise you.


    Wel (none / 0) (#29)
    by Ga6thDem on Mon Sep 29, 2008 at 08:04:16 PM EST
    let him own it then imo. He can veto or whatever. It'll be on his head and he'll have to explain it. Or maybe not. He never seems to be held accountable.

    And You Need 60 Votes in the Senate. (none / 0) (#37)
    by santarita on Mon Sep 29, 2008 at 08:12:29 PM EST
    in order to insulate it from a Bush veto.

    I think events will force a revote on a bill substantially similar to what we have now.  According to PBS the Chamber of Commerce and the Business Roundtable are now preparing to actively lobby Congress.  

    Another steep plunge in foreign markets and on Wall Street will add urgency to the passage.  And I suspect more banks, foreign and local, will start teetering.  

    As much as I would like to see Dem Option #4, I just don't think there is a lot of time.  


    I would support (5.00 / 2) (#14)
    by ruffian on Mon Sep 29, 2008 at 07:39:14 PM EST
    $150 - $250 billion in the bailout portion coupled with a larger investment in HOLC, infrastructure, renewable energy, green automobiles, and other projects, provided they keep the money and jobs here.  That would definitely help the economy and reassure me that my $700 billion was not going into an extremely high risk investment. I cannot support throwing $700 billion into this black hole, buying securities whose worth has yet to be determined.

    If the Dems put together something along those lines, I believe it would be supported by most Americans, and it would be the Republicans who pay the price if they would not go along.  

    250 bn (none / 0) (#20)
    by Jlvngstn on Mon Sep 29, 2008 at 07:54:01 PM EST
    into job creation with jobs staying here, who could argue against that other than deficit hawks who mostly are still supporting the 10bn a month in Iraq.  

    you have to address it from a liquidity perspective and a trickle up, if you do not commit to jobs and wait for that to fix itself you will be looking at a prolonged 7+ UE.

    This bill should have been killed for that reason alone.  

    I have no issue with 500 bn going towards the liquidity crisis as I believe we are 2 years out from a tech boom in the alternative energy industry.  It is equally prescient to consider or demand that a portion be allocated exclusively to that market to spur private industry along those lines so that it can happen in 2-3 years.


    The need for heating and food stamp... (5.00 / 1) (#47)
    by santarita on Mon Sep 29, 2008 at 08:38:18 PM EST
    assistance better be big enough to include all of those prudent baby boomers on the cusp of retirement who just saw almost an 8% drop in the value of their 401ks and IRA in one day.  And this doesn't include the losses over the last month.

    I'm thinking about Jim Webb's SOTU response (none / 0) (#1)
    by Pegasus on Mon Sep 29, 2008 at 06:58:36 PM EST
    that had most of us so excited way back when.  The Dems ought to be playing that thing on a loop right now.

    Robert Reich (none / 0) (#2)
    by WS on Mon Sep 29, 2008 at 06:59:35 PM EST
    thinks Congress will pass a scaled down $150 billion bailout bill for Wall Street.  Realistic?

    Prediction: A scaled-down bill will be enacted by the end of the week. It will provide the Treasury with a first installment of $150 billion. Treasury can use it to back Wall Street's bad debts with lend no-interest loans of up to two years, until the housing market rebounds. Or to invest in Wall Street houses directly, in exchange for stocks and stock warrants. There will be strict oversight. Congressional leaders will promise further installments, but with conditions calling for limits on salaries and relief to distressed homeowners.

    Oh yes I think it may be scaled down (none / 0) (#4)
    by CaptainAmerica08 on Mon Sep 29, 2008 at 07:02:53 PM EST
    but not as much as Reich said. Maybe 250-300 Bil?

    Isn't Rubin a current economic (none / 0) (#5)
    by oculus on Mon Sep 29, 2008 at 07:06:00 PM EST
    advisor to Obama?  Is this a trial balloon?

    Not Rubin (5.00 / 1) (#17)
    by WS on Mon Sep 29, 2008 at 07:44:37 PM EST
    The person who predicted that is Robert Reich, former Labor Secretary for President Clinton.  

    Who is an Obama ... (none / 0) (#18)
    by Robot Porter on Mon Sep 29, 2008 at 07:46:47 PM EST
    supporter and surrogate.

    Jesse Jackson Jr (none / 0) (#61)
    by BrassTacks on Tue Sep 30, 2008 at 12:34:44 AM EST
    voted against the bill and he's Obama's co-chair!  

    What the heck is going on?  I thought Obama had talked to his people in the House.  So many of his supporters voted no today.  

    Is Obama supporting the bailout?  I am beginning to think that he is not.  Does anyone know?


    If cutting the bailout by $550 billion ... (none / 0) (#16)
    by Robot Porter on Mon Sep 29, 2008 at 07:44:10 PM EST
    will work, why can't we cut it anymore?

    "until the housing market rebounds" (none / 0) (#58)
    by FreakyBeaky on Mon Sep 29, 2008 at 11:05:13 PM EST
    ... which will be when, exactly?

    The fact that the housing bubble has popped is the underlying causal factor that has made all the neat-o mortgage-based derivatives dreamed up by our best and brightest financial whiz-kids "illiquid" (that means "worthless" in the common tongue).  A few more hundred billion dollars thrown at Wall Street is not going to help.  

    Now an approach that keeps people who can make payments, however modest, in their homes ... maybe that would stabilize things a bit ...


    It is unlikely (none / 0) (#6)
    by Categorically Imperative on Mon Sep 29, 2008 at 07:08:34 PM EST
    Because congressional Democrats are largely gutless hacks who are too afraid of being labeled as "tax and spend liberals" or whatever the new iteration is to actually pass a real bill that won't have political cover in the form of GOoPer votes.

    There is no reason why it should be unlikely, but the Dems don't behave rationally.

    I'm (none / 0) (#12)
    by Ga6thDem on Mon Sep 29, 2008 at 07:37:20 PM EST
    afraid you might be right. We'll have to wait and see.

    A brilliant idea BTD. I would never have (none / 0) (#7)
    by WillBFair on Mon Sep 29, 2008 at 07:11:26 PM EST
    thought of that. But it would require actually spine, and if there's any in the party, I missed it.

    normally I'd agree with (5.00 / 1) (#8)
    by CaptainAmerica08 on Mon Sep 29, 2008 at 07:16:22 PM EST
    the "gutless" meme, but ironically the Dems may not have a choice but to alter the bill. I mean if the repubs are telling even a grain of the truth about their motives, then they are dead set against the very idea period. So if that's the case, the Dems have to scrap the plan and go with a Democratic bill.

    Gutless (none / 0) (#34)
    by DudeE on Mon Sep 29, 2008 at 08:09:58 PM EST
    "We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it -- not me.' "

    This would be political suicide, (none / 0) (#9)
    by 1jpb on Mon Sep 29, 2008 at 07:16:45 PM EST
    if done before the election.

    The Ds trying to shove something through on their own would be the greatest political gift in history.  And, the Rs would run, and run, and run with it.

    R's are going to run, run run with (5.00 / 2) (#23)
    by ruffian on Mon Sep 29, 2008 at 07:55:19 PM EST
    whatever they can make up, as we saw today. If Dems have a bill like this that they can defend as good policy, let the R's run against it all they want.  I'd rather get beat defending good policy than get beat for being a spineless Dem.

    Heh (none / 0) (#10)
    by Big Tent Democrat on Mon Sep 29, 2008 at 07:21:13 PM EST
    Sure. Whatever you say. Doing nothing will be better.

    Well, what would they do? (5.00 / 1) (#50)
    by 1jpb on Mon Sep 29, 2008 at 08:51:15 PM EST
    (1) No matter what the Ds do, they will be taking over as the folks to blame for a worsening economy.  The Ds would be going out of their way to take the Rs off the hook, and hang themselves in their place.  Does anyone doubt that the economy will continue to worsen?  As it worsens the Rs will suggest that the Ds wasted the money.  And, they'll say that the Ds made a bad situation worse.  And, they'll say that the Ds did this against what the public wanted (which may not be true now, but when things get worse the public will come to believe that they were always against the bailout.)

    (2) Think about all the things the Ds would put in a bill.  All of these specifics can be targeted by Rs.  These ideas would be called unworkable, or suffocating our ability to grow, or socialism, or doubling down on the redistribution to the irresponsible poor (which can be interpreted as a euphemism for minorities, and this type of language lets irresponsible non-minorities feel good as they scape goat even as they benefit from the Ds help--they get the help, then they vote against Ds) that caused the problem, and so on.

    (3) Beyond the politics, it is possible that the D ideas would not work.  Maybe the Ds are wrong.  Nobody can guarantee otherwise.  America has been using debt to fuel spending without corresponding increases in income.  I don't think we can handle a complete deflation because 1) we have too far to go in many asset classes, and 2) the big jump down would create a self-feeding spiral of job loss and value loss.  And, I'm not sure that the D plans regarding mortgages (especially the non-stimulus stuff) would be the best way to inflate incomes to a level to support our existing asset values.

    The reason the credit markets have dried up is more complicated than simply that folks are continuing to default on their mortgages.  I think we need to find ways to get money into people's paychecks, and there needs to be a multiplier, i.e. a dollar of investment needs to produce several dollars of increased income for Americans.  

    I'm worried that we're too focused on today's obvious problems.  The big money folks in the credit markets are always ahead of the game, they're worried about more than we're currently worried about.  (E.g. I was a VP in a bank where I worked with most of these companies that are now in trouble (though my bank is still doing very well) and I knew that the real estate market would fall apart so I cashed in and got out more than two years ago.)  I'm not yet convinced that the D suggestions are the best (although I am certain that the BS plans presented by the Rs are useless.)  I need a lot more information.


    So doing the wrong thing ... (none / 0) (#13)
    by Robot Porter on Mon Sep 29, 2008 at 07:38:58 PM EST
    is better than doing nothing?

    No one, not a single person can offer any guarantees that a bailout of this size will work.

    No one, not a single person can guarantee that the taxpayer will be reimbursed for this massive bailout.

    Who's to say a slower, more circumspect reaction might not work just as well?  


    So you thnk it is the wrong thing? (none / 0) (#19)
    by Big Tent Democrat on Mon Sep 29, 2008 at 07:48:36 PM EST
    Why for heaven's sake?

    BTW, politically, the answer to your question is yes.

    But I do not accept the premise of your question.


    Leadership (5.00 / 2) (#21)
    by Stellaaa on Mon Sep 29, 2008 at 07:54:17 PM EST
    Did everyone forget what that is?  

    I'm looking (5.00 / 2) (#24)
    by Ga6thDem on Mon Sep 29, 2008 at 08:01:59 PM EST
    and looking and not seeing it anywhere. Will you let me know when it shows up somewhere?

    Why am I skeptical of ... (5.00 / 1) (#30)
    by Robot Porter on Mon Sep 29, 2008 at 08:04:57 PM EST
    investing $700 billion in a plan that might not work?

    1. It's $700 billion; and ...

    2. It might not work.

    I also not convinced the MBSs are undervalued right now.  Nor that the housing market has come anywhere near reaching bottom.

    Personally, I think a bailout of this size is dead now.  You rarely can pull more votes to your side in a vote like this, you're more likely to lose votes.

    And the Dems will not follow the route you suggest.  Pelosi already said as much.


    Um (none / 0) (#38)
    by Big Tent Democrat on Mon Sep 29, 2008 at 08:13:39 PM EST
    That's not what we are discussing now.

    Well, your solution isn't ... (none / 0) (#45)
    by Robot Porter on Mon Sep 29, 2008 at 08:32:00 PM EST
    going to happen.  The House leadership isn't going to do it.  They've already said that.

    Today they said that? (none / 0) (#48)
    by Big Tent Democrat on Mon Sep 29, 2008 at 08:39:54 PM EST
    Got a link?

    In her statement after the vote failed ... (none / 0) (#52)
    by Robot Porter on Mon Sep 29, 2008 at 09:03:04 PM EST
    she said:

    We must work in a bipartisan way in order to have another bite at the apple.

    And she and others repeated similar statements throughout.

    The Dem leadership clearly has no stomach for passing any version of this bill alone.


    Pennies on the dollar... (none / 0) (#39)
    by DudeE on Mon Sep 29, 2008 at 08:14:02 PM EST
    ...when banks the size of WaMu are being bought for a couple of billion, it's tough to say that the underlying assets of mortgage obligations aren't undervalued.  JP Morgan/Chase stands to make out like a bandit simply because they have capital and are willing to take on the risk.  Real estate rarely plummets to zero.

    Yeah, and a lot of ... (none / 0) (#44)
    by Robot Porter on Mon Sep 29, 2008 at 08:30:02 PM EST
    "bright" people said the housing market wouldn't fall to where it is now.

    And remember a lot of the real estate is in residential developments where the land only reached significant value because there was a development there.

    Residential developments are always a speculative investment.

    Remember the commercial real estate boom in the eighties?  And all those office buildings which sat empty for years and years?


    Well (none / 0) (#15)
    by Ga6thDem on Mon Sep 29, 2008 at 07:39:48 PM EST
    if they don't do something like this then it makes the statement about this being the worst financial crisis since the depression into kind of a joke.

    If you go to Nouriel Roubini's site (5.00 / 1) (#35)
    by Militarytracy on Mon Sep 29, 2008 at 08:10:51 PM EST
    and get the free subscription he is offering during this crisis and download the Nouriel Roubini Conference Call Sep 24, 2008 you will understand that no matter what statements at this point anybody makes,  this is the worst financial crisis since the depression and it is no joke.  The only real question out there is what can be done to save what can be saved and help little people.

    Oh, (5.00 / 2) (#40)
    by Ga6thDem on Mon Sep 29, 2008 at 08:14:09 PM EST
    I have no doubt that it is serious. I was mostly talking from a political point. I mean Obama is going around stating how serious it is but can't get the house that his party controls to pass a bill? How does that look? It looks like he and Pelosi and all Dems are simply not serious when talking about the crisis.

    I think that particular bill was politically (5.00 / 3) (#42)
    by Militarytracy on Mon Sep 29, 2008 at 08:18:03 PM EST
    toxic because after doing the bailout things will continue to get worse and worse for the little guy, yet the bill addressed nothing for average people and average people will begin to be affected rather quickly as people lose their jobs.

    Yea (5.00 / 1) (#46)
    by Ga6thDem on Mon Sep 29, 2008 at 08:35:23 PM EST
    I think that they don't believe it will work either. They just want to be able to point fingers at the GOP and say "They voted for it too."

    I'm getting the same message: "There's really not anything that's going to solve this problem."

    The Fannie and Freddie bailout did exactly what? Save Fannie and Freddie is about all I can think of.


    I believe there are things we can do (5.00 / 1) (#49)
    by Militarytracy on Mon Sep 29, 2008 at 08:43:51 PM EST
    I like what LaRouche and Roubini have to say about what needs to be done.  Roubini predicts if we do this the right way we may end up with a severe 18 month recession (perhaps longer but he sees a possibility of beginning to pull out of it in as early as 18 mos) but a much brighter future ahead of all of us.  The alternative is an L shaped recession and who knows how long the stagnation could hang on, Japans hung on for 10 yrs.  He has a 10 step proposal that I hope gets some consideration.

    I trust Buffett (none / 0) (#28)
    by Jlvngstn on Mon Sep 29, 2008 at 08:03:55 PM EST
    he has no political ax to grind and is rich enough not to have to worry about a total melt down. And when he says something needs to be done, than something needs to be done.  I wonder how he feels up trickle up economics....

    I have (5.00 / 1) (#31)
    by Ga6thDem on Mon Sep 29, 2008 at 08:05:34 PM EST
    no doubts that this is serious. However, the Dems and Obama are going to look like fools if they don't do something after all the screeching about how bad it is.

    i know where your head it at (none / 0) (#36)
    by Jlvngstn on Mon Sep 29, 2008 at 08:12:21 PM EST
    we had a productive and civil discussion last week.  I think both parties have been short sighted and selfish in this affair and I have not seen one MSM outlet discussing the jobs situation.  If it were on their radar, it would be on the radar of the pols.  The american public need to scream about the impending unemployment crisis lest we allow the MSM and the POLS take us into a domestic Iraq (financially speaking)...

    Short sighted (5.00 / 1) (#41)
    by Ga6thDem on Mon Sep 29, 2008 at 08:17:18 PM EST
    and selfish is a statement that I would agree with. The MSM has become a total joke. Does anyone believe them anymore? I don't.

    Worth noting... (none / 0) (#27)
    by DudeE on Mon Sep 29, 2008 at 08:03:04 PM EST
    ...this is not technically a spending bill.  The $700B is designated as investment in CMOs which may or may not include bad mortgages.  There are assets there despite the value being dubious.  It's a whole new ballgame once you introduce spending.  Dems can pass it but Bush will just veto it.  It's pretty clear that Repubs are more than willing to tank the nation rather than compromise.

    I am all for it, but it will not happen. (none / 0) (#32)
    by Finis Terrae on Mon Sep 29, 2008 at 08:08:46 PM EST

    Roubini predicts a U shaped recession (none / 0) (#43)
    by Militarytracy on Mon Sep 29, 2008 at 08:29:58 PM EST
    if we do this the right way or an L shaped recession if we do this the Paulson way which will resemble Japan's financial crisis that was deflation followed by stagnation.

    Can you (none / 0) (#51)
    by Ga6thDem on Mon Sep 29, 2008 at 08:56:53 PM EST
    summarize what his suggestions are? If you don't mind and it doesn't take up too much of your time. Thanks in advance.

    Thank God Forbes did it for me (none / 0) (#53)
    by Militarytracy on Mon Sep 29, 2008 at 09:33:15 PM EST
    Thanks (none / 0) (#54)
    by Ga6thDem on Mon Sep 29, 2008 at 09:38:12 PM EST
    for the link. Those ideas are great. However, it seems none of them were included in the current bill were they?

    Other than buying (none / 0) (#56)
    by Militarytracy on Mon Sep 29, 2008 at 09:44:29 PM EST
    the toxic assets off of the books (at high prices) No.  There wasn't anything on there for homeowners which Roubini predicts based on other economies that have experienced this sort of situation.....will begin to walk away from their mortgages in heart stopping numbers when the going begins to get any tougher than it already is for the little guy.  There is no existing incentive for people to tough it out.

    Don't expect the Democrats we have (none / 0) (#55)
    by Jake Left on Mon Sep 29, 2008 at 09:39:18 PM EST
    to start acting like Democrats now. Harry and Nancy feed at the same trough as the republicans. I think they know the bail out is crap and don't want to have what it will bring only on their heads.

    Of course, I would love my Capra moment. I would love to have my role as skeptic broken by a solid phalanx of progressive Democrats turning the tables on the nasty Lionel Barrymore (playing the part of greedy corporatists everywhere) and actually do something to help the country rather than their country club. I really do pray for a reason to lose my cynicism.

    Phu leez!! (none / 0) (#57)
    by Andy08 on Mon Sep 29, 2008 at 10:37:57 PM EST
    C'on... Food stamps and unemployment insurance? What on earth has that to do with the financial crisis NOW?  This is not a budget or spending bill; this wa ssupposed to be an extraordinary bailout bill and the abaove have nothing to do with it.

    Besides, our side HAD its own version before the weekend why didn't they go ahead and voted all Dems for it back then ALREADY? Because Pelosi lied: they didn't have a majority of Dems onboard even back then. Do you think 40% of Dems voted today against this bill b/c it didn't have food stamps and
    unemployment insurance??? Do you think that this is the political "cover" that the 95 Democrats that voted against it were looking for?

    Completely absurd.

    How are we going to convince (none / 0) (#59)
    by rilkefan on Tue Sep 30, 2008 at 12:12:37 AM EST
    the Blue Dog Dems to vote for a good bill?

    Get GOP on board (none / 0) (#60)
    by abdiel on Tue Sep 30, 2008 at 12:20:03 AM EST
    The Democrats will never go for a plan unless they have a majority of Republicans with them.  The last thing anyone wants is an expensive and risky bailout bill that won't work.  Looking past November, you're going to ruin Obama's presidency and hand both Congress and the White House back to the GOP in 2012 if this becomes a partisan bill.  

    BTD, glad you're on board with... (none / 0) (#62)
    by alexei on Tue Sep 30, 2008 at 01:32:11 AM EST
    the Dems passing a Democratic plan and not trying to "put lipstick on pig", which is the Paulson/Bush proposal.  I kept saying that the Republicans would play politics and the Dems needed to do their own plan following Hillary's lead.