Why Should We Negotiate With Bush At All?

by: Chris Bowers

Sun Sep 21, 2008 at 17:30

I am going to ask what might be a stupid question, but why is it important to pass any bailout legislation at all before 12:30 p.m. eastern, January 20th, 2009? As I write this, that is less than 121 days away. Surely, if there is a bailout, it will take several weeks to pass it. In all likelihood, it will take more than a month.

My question is: why is there a big difference between passing the legislation in, say, 40 days, and passing it in 121 days? Will those eighty days somehow make all of the difference? Are the corporate executives involved living from paycheck to paycheck? Is there just no way that they can survive during the intervening 80 days?

It seems both smart and possible to just cut Bush out of the equation altogether. Members of Congress should just start directly negotiating with Obama and McCain, and work out a deal that can be signed into law a few minutes after the next President is inaugurated. Before that, the next six weeks can become a full-fledged debate about what sort of bill should be passed. During that time, Democrats can attempt to pass legislation of some sort that McCain will be forced to vote against.

Cut Bush out of the equation. Start negotiating with the candidates instead, thus forcing them to make this their first action as President. This will also have the positive result of making the election about the bailout and corporate malfeasance in general. Hell, it would also make every single congressional campaign about the same thing, since every candidate would be forced to work out the deal for two weeks before the next President is in office.

If there is any good bailout bill that Bush would actually sign, then I'll eat a lightbulb that has been soaked in the toilet. If Democrats would receive a political benefit from looking tough and forcing the election to turn on a discussion of corporate malfeasance, then I'll drink of a bottle of whisky and pee on a campfire. As such, there is no reason to deal with Bush whatsoever. Just start negotiating with the candidates, and force McCain to reveal just how much of a corporate suck up he really is. That feels not only like the way to solve the problem we face with the legislation, but also to solve the problem we face with the election. Or am I just stupid and missing something?

Chris Bowers :: Why Should We Negotiate With Bush At All?

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exactly! (4.00 / 4)
well said (or written as it were)

Avedon Carol hits the nail on the head....we don't need to rescue these people from their financial mismanagement, we need to jail them for their crimes....

I keep trying to envision what I would do if I were God and could just, y'know, fix things. I mean, without changing all physical law or anything. Just redistribute a lot of wealth and say, 'What part of 'Thou shalt not steal' didn't you understand?" (Maybe I'd add a few words to remind people that it wasn't the abortionists and queers and uppity women who got Jesus so pissed off that he turned over tables in the temple, it was usurers.) And I'm still at a loss.

But I'd certainly take away all that money from all those people who have been getting rich by bleeding the rest of us dry. There shouldn't be any billionaires, dammit. There shouldn't be people sitting pretty whose "work" consists mainly of going for drinks or golf with other people who wear watches worth more than the average full-time worker's annual salary.

I'd physically move some people around, of course. I'd remove a lot of pot dealers and hookers from jails, for one thing, and replace them with a number of political operatives and "businessmen" whose names you already know, along with quite a few you never heard of, who are the architects of what we have seen. (I think their former residences would also make nice homes for all those people they kidnapped from New Orleans and put in toxic trailers - don't you?) And then I'd move all their money back to the ordinary humans whose misfortunes they engineered to make themselves rich (that'd be pretty much everyone else). In that event, you'd be amazed at how many "too big to fail" institutions could fail without it bothering the rest of us.

You don't need to be God . . . (4.00 / 6)
to redistribute wealth.

All you need is the wealth tax:

80% tax on accumulated intangible assets above $50 million.

Let's call it the Jesus Tax, or Tables in the Temple Tax.

[ Parent ]
Leave in the insurance for money market funds (0.00 / 0)
This could be a real problem for ordinary people with some savings.  The rest maybe not so much.  I'm sold on this but not the rest of then bailout.

Do instruct Fannie & Freddie to help people stay in their homes and change the bankruptcy law to allow judges to modify mortgages for people in bankruptcy.  

But I'm not sold on the rest.

John McCain--He's not who you think he is.

[ Parent ]
He's still the President so we can't just cut him out (4.00 / 4)
But I like your idea.  A slight modification: we can start treating him like the lame duck he is.

Democrats can take control of the agenda and pass a good bill without regard for Bush's opinion.  Let the lame duck veto it.  Or the Republicans filibuster it,  LET THEM do that now that we're in an election season.

Will our Congressional Dems be so bold as to do that?  It's unlikely, but it makes sense to me.

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.

since when do lame ducks get to arrange $700 billion bail outs and demand no supervision? (4.00 / 3)
f#@k bush.

[ Parent ]
I think this is exactly the way it must go (4.00 / 4)
Dodd was a bit tepid this morning on MTP, but Obama and Pelosi are now clear about how any bailout must include substantive regulation and oversight over the spending.

Those are all points that will resonate well, and it's just as quick to pass a bill with rules as it is to pass one without. Boehner has defined the Republican line, which is that we need a "quick and simple" bailout bill, which is basically the biggest blank check in the history of civilization. All the Democrats have to say is "if you want a quick bailout, quickly vote for our bill!"

If anything deserves a national debate, it's this sort of move. Since the Democrats are on the side of the people in this debate, they have nothing to lose in sticking to their principles. Let's force people like McCain and Norm Coleman to take a side.

[ Parent ]
Yeah, ever notice (4.00 / 5)
how the worst, conservative bills--the AUMF, the MCA, now this--emerge right before elections, powered along by "the need" to act in a hurry, or else.

I like the Deep breath approach; short of that the Dems could just stick fast to their principles (if they have any) and pretend to negotiate with Bush, running out the clock, all the while bashing Bush for his blankcheck to Wall Street, and then pass a better bill in January, thanks to the the newer and more progressive Congress created by running against the Bush blankcheck. Got that?

Or course, the smart set will tell us we can't wait that long.

Makes perfect sense (4.00 / 1)
both economically and politically. There is no downside I can see to the Dems pushing a bill with everything they want -- which in this case happens to be what the vast Americans want now that some are actually awake. If the GOP/Bush want a bill, they either swallow the Dem medicine or they go on record as sabotaging the bailout that their own honchos claimed was absolutely essential to head off the crisis. Either we get a good, transformational bill now or we get a good transformational bill when the Dems win a landslide of historic proportions.

Resist their Shock Doctrine (4.00 / 6)
Paulson and his crony Schumer (and to a lesser extent Dodd) are all engaging in the classic shock doctrine tactic of creating an atmosphere of crisis.

This is overblown. Even if we are at the precipice, Obama should follow the lead of FDR and refuse to let his hands be tied by a conservative solution that precludes progressive action.

The key to resisting the shock doctrine is to not get shocked. Refuse to buy into the "omg crisis" attitude. Keep your heads about you and support only smart policies while resisting those you'd normally resist when people weren't shouting "crisis!" at every opportunity.

There is in fact no good reason whatsoever to negotiate with him at all. Bush is as unpopular as Hoover was, so we're not exactly losing anything by refusing.

Perfect response is - (4.00 / 3)
"Let's do this smart, not fast and dumb. We are talking about a lot of the people's money after all."

[ Parent ]
Maybe even better (4.00 / 1)
"Why should passing a smart bill take any longer than passing a dumb bill? This week we will have smart bill on the table. If the Republicans value bailout alacrity so much, they better not filibuster it!"

[ Parent ]
It IS a Crisis (4.00 / 3)

It has been a crisis for about years.  For 15 effin' years our cities have been devastated by foreclosures that stem directly from Wall Street's need for subprime products.  In fact, in many cities, while foreclosures are up, percentage wise they increased a lot more ten years ago than in the last year.

So now we have the crisis acknowledged, and the answer is... this?  What a total joke.  

it's seven hundred fucking BILLION dollars (4.00 / 3)
let me say that again - seven hundred fucking BILLION dollars.  If our representatives aren't careful in how they spend this much of OUR money and rush through a shit bill, they should all be shot.  It's time to slow down, take a deep breath, and get it right.

Postdate the check (0.00 / 0)
Sure, let's negotiate now.

But lets negotiate with the stipulation that any check shouldn't be issued until Jan. 21st, 2009... and will be disbursed according to the policies of the next administration.

Huh? (4.00 / 3)
My question is: why is there a big difference between passing the legislation in, say, 40 days, and passing it in 121 days? Will those eighty days somehow make all of the difference? Are the corporate executives involved living from paycheck to paycheck? Is there just no way that they can survive during the intervening 80 days?

What are you talking about?  This isn't about corporate executive making ends meet.  It's about the possibility of our financial institutions collapsing as a result of nobody being willing to loan anybody else money for fear that financial institutions are about to collapse.  We're not talking about inconveniencing some executives, who will quite likely be fine no matter what happens.  We're talking about the collapse of the entire global economic system.

Now, from what I can gather, Paulson's proposed plan looks like a terrible idea from many perspectives.  And, sure, it's possible things will hold on for the next few months even if Congress doesn't do anything.  It's quite possible that this is being exaggerated as other suggest, and that there's no need to hurry.  Certainly I don't want Congress giving Paulson unlimited authority to do whatever he wants with 700 billion dollars.

But presenting it as though the issue is helping executives make ends meet is either incredibly dishonest or incredibly stupid.  It's always easy to knock over a straw man

Do you know of any actual evidence (0.00 / 0)
that a bailout needs to start tomorrow or the next day? Considering the crisis has been going on for years? Are there any other claims by members of the Bush administration that you give credence to without supporting evidence?

[ Parent ]
At one point, the Dow was down 900 points last week (0.00 / 0)
So tell me what happens if we do nothing and the market craters?

[ Parent ]
...and now the Dow is back (4.00 / 2)
to just about where it was at the end of June. So why does some panicky thing have to be done right now, right this week? There's no reason to think any bailout of the kind the administration wants will do more good than harm in the medium term. You pay for your mistakes unless you're a Wall Street scammer -- then it's assumed that everybody will pay for your mistakes. And we will, one way or another, no matter what the government does. If you think burdening an already bankrupt treasury with another trillion or so in debt is not worth some serious deliberation, think some more.

[ Parent ]
The Dow is only back because new legislation... (0.00 / 0)
...is expected this week. Credit dried up. It will go right back to that if there is significant uncertainty about the passage of a bill.

[ Parent ]
I don't know any way (4.00 / 2)
to prevent the financial markets from reflecting the state of the economy at some point. Do you?

[ Parent ]
You haven't answered the question (0.00 / 0)
What happens if we do nothing, and people lose their money in money market accounts, in their bank accounts, in their 401Ks?

You keep assuming that the downside is just a poor economy. We don't know that. Various indicators last week showed far worse problems.

You sound like Herbert Hoover.

[ Parent ]
Seems like you haven't answered the question. (0.00 / 0)
What evidence do you have that buying the Bush plan whole hog will fix all the events you list? Yes, there appear to be far worse problems. What makes you assume that throwing another $700B at them will fix anything? Nobody's saying don't do anything. Some of are asking why it has to be tomorrow, and what evidence there is that that will fix something. Haven't heard any answers yet.

[ Parent ]
the more relevant question is (4.00 / 2)
what effect does a demand to do nothing have.  does it:

a) discredit you with democratic congresspeople
b) help give them the space and the pressure to craft a better proposal and have it appear credible
c) stymie actual efforts to address this problem to the point of economic collapse.

I would guess that it would be a or b or both- if the treasury secretary is meeting with chris dodd and dodd is saying it was the most serious meeting he's been to since he entered office - well, i'm suspecting that you dont' have to worry about a bill of some kind not being passed unless someone (coughcoughrepublicanscoughcough) sabotauge it for short term political gain.

[ Parent ]
There's More Than One Way To Stabilize A Market (4.00 / 4)
And rushing in quickly and sloppily is not necessarily the best way, even for short-term stability.

What's needed are stabilizing, reassuring measures, and some of those can take the form of limiting more volatile activities.  It doesn't all have to be hand-holding and handouts.

And if the Dow falls another 900 between now and next January, that won't be the end of the world either.  We don't want it doing that all in one week, but if the market's over-valued we don't want to waste resources trying to fight that, either.

The claim that we'll go back to utter chaos if legislation is postponed--that's pure speculation on your part.  Once people have calmed down, for whatever reason, they don't just snap back into panic mode like that! if they don't get what they're expecting right away.  The mere act of calming down for whatever reason has a positive, self-reinforcing effect.  It can't hold things together on its own, but it can help create some breathing space in which a more rational sequence of steps can be thought through.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
This is how they do it. (4.00 / 1)
They create a crisis and under threat of catastrophe ram through what ever they want. Keep in mind that "we" won't get to do anything about anything in this process. That's just the way it works. The time to prepare a political counter-offensive in anticipation of this engineered meltdown, is long gone. Congressional Dems are like so many corks drifting on a river of Republican/corporatist policy.

I like Chris' idea a lot. It just won't happen.

[ Parent ]
Watch Krugman on Bill Mahr (0.00 / 0)
We need to do something now:

"This is really bad, This Could be 1931 - The collapse of EVERYTHING, so you have to do something big.  There are no athiests in foxholes and no liberterians in a financial crisis."



[ Parent ]
Ask Krugman and others about the evidence (4.00 / 3)
The Dow is not the thing to watch. Its strictly a reflection of day-to-day nerves at this point. What's important here are the credit and banking markets, including money markets, which saw huge increases in withdrawals, with one big one shutting down and another falling into negative territory, which is virtually unprecedented and a signal that we're on the brink.

Yes, the "problem" has been building for years, even decades, but the crisis is a result of the house-of-cards that's our overleveraged, hopelessly complex, and largely insolvent financial system facing an abrupt collapse.  

Though there may be some overstatement of the urgency, the data and comments by folks like Krugman suggest the feds need to step in immediately or we'll at least hover right on the precipice, with high probability of falling off the edge at any moment.

If that happens, the result could be a total lack of credit in the economy and a sharp, possibly devastating contraction of retirement and other savings.

I think there's a very legitimate goal of acting quickly to avoid having a financial meltdown spread deeply into Main Street and individual savings.  Once that happens we'll need not only a bailout, but also face serious damage to businesses of all sizes and individual savings.  The economy's already weak, so that could be a spiraling disaster.  The point of fast action is avoid Wall Street's meltdown from spreading to Main Street, which is what happened in the 30s.

Think of our financial system as a close relative brought to near-death after being fed meth in their food supply for years.  We all want to punish those responsible for this violence against that person, but if we want to keep the person alive, we need to first attend to their health.

Unfortunately, all of us who have jobs, savings accounts, homes, businesses, or have family and friends that do, are heavily dependent on the health of our financial system.

This is a game of chicken that needs to be played smartly and carefully, not with blind bravado, which is some of what I'm hearing in this thread.  

[ Parent ]
Exactly (4.00 / 1)
Krugman and Nouriel Roubini, the NYU economist who predicted this a few years ago, think something needs to be done and quickly.  However, neither think the solution is a blank check to Wall Street.

Would someone please tell me who other than President Paulson is backing this plan?  

This does not seem to be the run up to Iraq.  There was a whole group of people echoing Bushes talking points about Sadaam.  No one seems to be onboard with this one.

Mark my word - the House Rs are going to walk in mass on this one which gives the Ds tremendous leverage to shape this bill and basically dare Bush to veto it.  Josh Marshall notes that Wall Street really has very little leverage b/c they are desparate for this bailout.  

Should be very interesting to watch this unfold over the next few weeks.

[ Parent ]
Seriously (4.00 / 2)
Bowers if you want to critique what is going on with this plan and what a reasonable plan would look like then you need to bone up on your market knowledge. You clearly did not see that yields on T-Bills dropped to .05% last week! POINT ZERO FIVE! That means the market was so freaking freaked out that T-Bills were basically driven down to no yield as people ran for cover. Meanwhile overnight lending rates between businesses skyrocketed to 3.5%!!! That basically crushes even legitimate businesses. Nobody was willing to lend to even AAA rated companies, there was a full on run on money market funds threatening to collapse those funds, further tighten business lending and crush pension funds. Money Market funds have until last week been considered the safest of the safe and pension funds have big deposits in them. Guess who's money that is - labor, that's right. Fed Reserve stepped in with $50B more in cash to prop them up.

The Paulson plan is utter crap, but not for the oversimplified class war terms you present.  

Michael Bloomberg, prince of corporate welfare

[ Parent ]
I can't hear you. (0.00 / 0)
Are you saying the Paulson demand is utter crap but we need to give him what he wants anyway instead of taking the time to get something more acceptable? If that's not what you're saying I don't see what part of Chris's post you're arguing against.

[ Parent ]
i agree with will's analysis (4.00 / 6)
but the question still remains as to what the best tactic is to make sure that unlike every other "crisis" legislation that they've passed the most possible gains go to those who have been getting slaughtered in a unilateral classwar.  Yes, this is more like FEMA-for-the-market than it is like the Iraq War and actually the mistake for those interested in proppping up the market is not that they're passing it in a rushed way but that they stalled so long.  

Basically, for those who aren't familiar with market jargon, the economy has thrived on trillions and trillions of dollars in easy credit at low rates, some of which were put into high risk investments.  However, once thsoe high risk investments start going bad, people start freaking out and pulling their investments from all kinds of places (sort of like how a bank run works) and if this process continues unchecked it ends up with a credit freeze and a collapse of the economy altogether.  No institutions will lend money because of the hit they think they're going to take and instead will invest in government bonds, gold, oil, etc. - i.e. "safe" investments that are more like shelters from the storm.

So that's the difference between doing it now and 120 days from now.  The difference between whether it's a write off of corporations bad debts or a way for people who are highly endebted and low income is the actual fight, not whether or not something should be done.

I wrote this in July when they weren't really doing anything (basically, they've been acting like Herbert Hoover up to this point):

Perhaps this minimal approach is because the American government is so far in debt that it simply can't afford to bail out its citizens (let alone those of other countries) - but if this were already the case, I think we would see bigger problems than we do at the moment.  As a wise friend remarked to me once - they always say they don't have the money - but really it's the priorities.

My suggestion is this: What needs to happen is a broad and rational discussion of exactly whose debts are going to be paid and how.  This kind of coordination, though it will immediately be labeled by crazy people as "socialist" in the United States, is probably the only way to prevent a massive global financial crisis.  The current method - waiting until a bank goes belly up and then bailing it out and group discusson restricted to the people who control the money (like the federal reserve) - doesn't address the systemic problem that's going to exist as long as American consumers are the consumers of last resort and they're in debt and their wages are not going up very quickly.

More importantly for progressives, without a broad international plan to address this issue - in all its dimensions-- it's going to happen de facto and largely silently as it is now - which means that the people who can raise their voices loudest (i.e. the wealthy, etc.) will be the ones who get bailed out, and the people who are most disempowered (e.g. residents of subSaharan african countries or low-income mortgage holders in the United States) are going to be screwed.  This is particularly important now, since the election is the best time to actually gain some leverage on the politicians and banks

[ Parent ]
That is what I wish I had said. (0.00 / 0)
I think it's probably too late to even get a clean political win let alone a solution that doesn't smash the middle class into the dirt.

[ Parent ]
Agreed (0.00 / 0)
We do ourselves no favors hyperbolizing about fictitious stuff.  This IS a serious crisis, requiring a serious response, and we need to do our best to understand it, in order to make appropriate demands of those who represent us.


Visit the Obama Project


[ Parent ]
i already understand it (4.00 / 1)
and i disagree with bower's anaylsis, but the strategy of disregarding a lame duck president and thinking about what actually makes sense is apt.

[ Parent ]
I was talking about the non-strategy (0.00 / 0)
of claiming this was about executives needing help, as stated by jlkenney here:

But presenting it as though the issue is helping executives make ends meet is either incredibly dishonest or incredibly stupid.  It's always easy to knock over a straw man

I was agreeing with him.


Visit the Obama Project


[ Parent ]
Why do we have to concede to them; why can't they concede to us? (0.00 / 0)
If it is really a crisis, then Bush and Paulson can go along with a good Democratic bill that will solve the crisis. We don't have to pass a bill that Paulson considers "clean." We can pass a bill that we consider clean. And if Bush and Paulson can't go along with a good bill and they veto it/sabotage it, then this crisis probably isn't really a crisis.

[ Parent ]
This Is What Is Likely To Happen (0.00 / 0)
I predict the House Rs will walk which means the Ds get to draft the bill.  It won't be perfect but it isn't going to be this piece of crap either.

[ Parent ]
Another thought (4.00 / 6)
The Dems are being far, far, far too easy on Bush and Paulson, not merely for helping to create the problem, but for not coming to them sooner.

Here is how the conversation should have gone:

Paulson:  We've been running the numbers and it looks like if we don't have a bailout package announced by tomorrow and passed by next week then the entire global financial system may meltdown.

Democratic leaders: You're fired.  Announce your resignation immediately or we begin impeachment hearings this afternoon.

Why Wait? (4.00 / 2)
Begin impeachment hearings now.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
I'm talking about impeaching Paulson (0.00 / 0)
If the guy resigns, no need to impeach him.

[ Parent ]
This Would Actually Be FUN! (4.00 / 4)
Instead of McCain and Obama debating each other, they'd actually be competing as real presidential candidates, as in job candidates.

Like The Apprentice.  Only without that obno Donald Trump.

And Bush could park the cars.  He always looked like a valet to me whenever he put on a tux.  Now he can show us what he really can do.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

Why indeed? I've been asking the same thing for weeks. (4.00 / 1)
I am going to ask what might be a stupid question, but why is it important to pass any bailout legislation at all before 12:30 p.m. eastern, January 20th, 2009?

Just say no!  No, I won't bring it to the floor. No, we won't vote it out of committe.  No.  No!  no. nope. no way.  NO-NO-NO!  It isn't that hard.  In January, they'll have more Democrats, fewer Republicans, fewer Blue Dogs (we hope), and a Democratic President.  Doing busines from power or weakness, hmm let me see.   Wait, here comes Melissa Bean.    

It's brilliant. (0.00 / 0)

Montani semper liberi

rushing after last crisis gave us the Department of Homeland Security (4.00 / 1)
... and we all know how well that has turned out.  Ridge took the helm at DHS on October 8th, 2001.

end the occupation of Iraq

er... that would be the OFFICE of Homeland Security formed oct 8, 2001 (0.00 / 0)
the DHS was formed November 25, 2002... my bad.

end the occupation of Iraq

[ Parent ]
the difference is that if the democrats ideologically opposed any response to the crisis (4.00 / 1)
they would lose the election, and probably rightfully so.  this is an actual economic issue - though the extent to which it connects to the "real" economy is a little unclear to me - but basically, if finance capital collapses, and the u.s. has been  outsourcing its manufacturing jobs, and its service jobs depend on other people having money (much of which has been provided through debt like credit cards and whatnot) - then the entire economy will collapse.

I would love for it to do so on principle because these bastards have been getting superrich on other people's backs for centuries, but this actually has effects on real people through job loss, etc - the rich might get screwed at a more rapid rate than the poor, but the poor have much less of a margin of survival.

[ Parent ]
Theres a better way to put it (4.00 / 5)
Hastily pumping in this money with no oversight could cause another commodity bubble and drive oil to 200 dollars a barrel.

IE not only is there no reason to rush there is every reason to not rush.

The liberal wiki
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Put the affected markets in "Safe Mode" (4.00 / 5)

If the government can just declare a temporary halt to short trading of banking/financial stocks why can't they also declare a temporary suspension of Mark to Market accounting requirements and associated margin calls, suspend all 'exotic' trading (short/long/hedge/derivative/leveraged etc.) of banking/financial stocks, etc. to simplify/stabilize the markets for a period of 30 (60/90/120?) days?

The idea is to put the banking/financial markets in a kind of "Safe Mode" to avoid A) a meltdown and B) a $700 billion shotgun rescue disaster. This would allow some time for a global, shared solution to be devised that would allow reopening of stable robust open market trading while protecting the bailout investments of taxpayers and enacting regulations to prevent a recurrence.

Self-refuting Christine O'Donnell is proof monkeys are still evolving into humans

The Fed has been pumping cash into the market (4.00 / 1)
by loaning money on very loose terms.  It's worked so far.  There is no reason to for the taxpayers to buy up Wall Street's shitty paper all at once before the next administration.

Note that the Fed still hasn't even dropped their rates to 0%.

One step at a time, folks.  Don't jump to a colossal theft of the public treasury because banks are paying almost 3% over some benchmark... I mean, so what?  Let's be rational here.  Keeping using monetary policy.  Then if banks fail, take them OVER.  Don't just give them money by overpaying for crappy securities.

But I do realize that the Congress will do whatever Paulson tells them to.  We really have already lost this battle.

Even if "Just say No" won't fly (4.00 / 2)
There is no reason not to bring a Democratic bill to the floor that may not pass, first.  If political and economic realities are such that something MUST be done soon, Dems could compromise for it after making clear where their druthers lie, and make the Republicans take the blame for its odious features.

They need to take control of the agenda now.

Make it clear that the Blue Dogs will have to pay for sabotaging Obama's chances here.

Of course, Obama needs to take the lead and stand firm for his strong proposals and not get rolled.  

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.

addendum (4.00 / 2)
even though the analysis off, the strategy is totally correct.  There is ZERO reason to listen to bush on this.  put HIM in the position of not signing off on a piece of legislation in the middle of a crisis.  THIS is the time to understand that bipartisan doesn't mean "work with bush."  It means have some ideas and get enough people on board to get them through.

And hey - if he wants to veto it - well that's his and mccain's problem ;)

You're on fire. (0.00 / 0)
Great stuff Dr. Anonymous.  Now I hope Congressperson Anonymous is reading and taking notes.  

[ Parent ]
Has anyone thought about this: (4.00 / 2)
1.  If the bailout passes with that "unfettered authority"

2.  And somehow McCain wins....

3.  In 4 months, it might be very likely that Treasury Secretary Phil Gramm will have $700 billion to spend on whatever the hell he wants.


if this passes, no one should pay taxes (4.00 / 2)
how much of my money are they going to suck away to kill people in iraq and afghanistan and other places and then have this kind of $hit before I actually mount some tiny act of rebellion against the government?

[ Parent ]
Seems like Obama is ahead of you (4.00 / 1)
He already convinced Nancy Pelosi to stand firm and not give Bush what he wants.

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Dow futures down 181 at the moment (0.00 / 0)
CNBC, Fox Business, etc. will spend all day tomorrow blaming any problems on Democrats. I think they are already doing it.

Good (0.00 / 0)
The stock market went up last week.  So what if it loses a few percent this week?
People need to chill out.

[ Parent ]
Yes that's a good idea (0.00 / 0)
tell the average person who is panicked over this crisis and listening to whatever the MSM tells him (which is the Democrats are trying to stall any help so they can win the election) to "chill out"

see how well that works.

[ Parent ]
And people are already PO'ed ... (0.00 / 0)
so they aren't gonna by CNBC's garbage ... people get this for what it is .. a bailout of Wall Street .. being down 200 isn't that bad .. it just presents buying opportunities for others .. hell .. it hasn't gone under 10,000 yet .. besides .. I knew the "plan" would goose the markets like it did .. maybe not 900 points of goosing ... but I thought at least 500 .. we'll see

[ Parent ]
CNBC? You're worried about CNBC? (0.00 / 0)
The lameass junk peddlers who've lost millions for any investors gullible enough to listen to anything they say? Remember how Lehman was absolutely sound, guaranteed?

People rightly call for retribution against the genius CEOs who brought the economy down. There's equally good reason to look at assessing damages against the stock touts at CNBC.

Anyway, OF COURSE they'll blame the Dems for everything. Con artists hate people who want to regulate them.

[ Parent ]
Liquidity crisis (4.00 / 1)
The bailout is not about rescuing Wall Street CEO's personal finances. It's about injecting liquidity and confidence into the broader credit markets to keep the money flowing to businesses at all levels. There needs to be some infusion of cash from the government into the financial system. The question is, How to do it in a fair and equitable way?

There is no liquidity crisis (0.00 / 0)
There's a solvency crisis.

There's $1T (that's $1,000,000,000,000) that only exists in the shitty books of Wall Street.

Now they want the US taxpayer to cover their fraudulent book-keeping.

[ Parent ]
I agree with waiting. (0.00 / 0)
George W. Bush rushing Congress got us The Patriot Act and The Iraq War.

Congress should work on a bill for the next president to sign.  

Not authorize $700 billion in a rush.

We need to preempt the spin (0.00 / 0)
with 43 days until the election and the eocnomy is crisis, people want to see SOMETHING done, they don't care what. If Demcorats are seen as trying to prevent a "fix" for the crisis before the election, it will backfire on them.

It's important that we pass a bill the President either signs or vetoes, so it looks like we're doing SOMETHING.

People want SOMETHING done, they don't care what.  

[ Parent ]
It's an Election Year (0.00 / 0)
Maybe the best way for the netroots (seconded by MoveOn possibly) to influence what the Democrats do in this crisis is to threaten their reelection. Sounds drastic, but this is one instance in which it needs to be done. Come up with a minimum platform that Democratic members of Congress must support or you will vote against them. Make it an online (Facebook or Obama website?) petition and create as broad a coalition as possible around it. Open Left could take the lead on this.

One of the principal points is that this saddles us and our children with a huge debt that we are not responsible for. Second, that it makes things like univeral health care or universal preschool or combatting climate change that much harder. The third is that Democrats who vote for the Paulson plan are threatening their reelection already.

This is a drastic step, but we need to speak the only language that will wake up wavering Democrats. This includes withdrawal of financial support for those who do not support a minimum program that's fair to the American people. And not only members of Congress--the same goes for Obama. At the very least, pledge not to support him financially unless he takes a strong stand.


Yeah (0.00 / 0)
so long as we're not some minority of voters and the Democrats in Congress are backed into a corner, realizing Option 1 means they won't get the votes of their base and Option 2 means they won't get the votes of anyone else.

When stuck betweem the base and everyone else, the party always sells out it's base. McCain is selling out his base right now calling for more regulation.  

[ Parent ]
The bailout is irrelevant (4.00 / 3)
I believe that what Paulson already knows (but we don't) is this:

The financial sector is already toast. Virtually all of the actors who have been dealing in this toxic debt are already insolvent (if the securities were priced at fair value). This $700 billion won't save them -- or more precisely, enough of them to prevent a collapse -- and the result will be a calamity, regardless.

The only way to save any of them is to overpay for the debt. Not only is that unconscionable, the Treasury can't print enough money fast enough to save most of them. Therefore, all this plan would accomplish is to put $700 billion at the discretion of Paulson and the administration to save some of them -- their friends and the ones with the most influence.

Once we realize that the financial sector will collapse in any case, our thinking changes drastically. Instead of pretending to try to stop the unstoppable, we need to figure out how to mitigate the effects of this disaster on the people and taxpayers of the United States, especially the homeowners going into foreclosure.

Meanwhile, I think we should let the free market forces do their will. Let the unregulated financial firms just go belly up -- and straight into the arms of Federal receivership, just as if they had been regulated S&Ls and banks. We can set up a real RTC just as we did in the 1980s.

One way to do this (4.00 / 2)
Freeze the advanced derivatives market: no new securitization, no claims.

Provide loans to the financial institutions with the securities as collateral, instead of buying them.  Any company that stays solvent has to repay the loan.  Those that go belly up will create taxpayer losses (if they get loans first), but there is no moral hazard, especially if no loans are extended to firms that clearly cannot survive.  This is a variant on the bailout that will pump in liquidity without rewarding bad judgment.

Take a few months to unwind the maze of obligations and liquidate the assets.  Complement all this with assistance for people whose homes are being foreclosed (same principles).

One possible limitation is the sheer volume: the real value of the assets is $70T, whereas bailout/loans would only be $700b or so.  But that shouldn't make a difference if the loans are provided to the same players as the buyout, on the same basis.

Are there some financial experts here who know if this will work?

[ Parent ]
Because the corporate handlers (0.00 / 0)
on the other end of the leash say the congress critters must do so.

"It sounds wrong...
     ...but its right."


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