Bailout and Speech Thread

by: Chris Bowers

Wed Sep 24, 2008 at 21:02


Oh crap, it appears that Senate Dems have caved to the shock doctrine, agreed to the $700 billion figure, and plan to have the bill passed into law by Monday morning:

Senate Democrats emerged from a meeting Wednesday with Treasury Secretary Henry Paulson to report a general, conceptual - but fragile - agreement on a $700 billion plan to rescue the U.S. financial markets.

Senators said Paulson and the Democrats struck very tentative deals on Democratic demands on oversight and transparency, executive pay limits, and equity interest on taxpayers' behalf as part of the massive plan. A hard-fought Democratic provision to allow bankruptcy judges to revise mortgage terms was not likely to survive the horse-trading, however, as Paulson would not agree to the provision that is already in the House and Senate versions.

Majority Whip Dick Durbin (D-Ill.) said a bill could be produced as early as Thursday, with debate and a vote likely over the weekend. Ideally, Durbin said the Senate would finish the bill before Wall Street opens on Monday.

Why did it have to be $700 billion? That figure was pulled out of nowhere, and based on nothing. Why did it have to be done while Bush was still in office? Because, if we didn't turn it into the perception of immediate armegedden, then they probably wouldn't have gotten the money at all.

When this gets passed, it will suddenly matter a lot less if Obama becomes President, because we just gave all of the money for Obama's social programs to Henry Paulson. That was a good idea. I'm sure it will be for the betterment of our nation.

This is an open thread on today's developments and Bush's speech.

Update: PBS is reporting that House leaders will meet tomorrow to hammer out the final details. Also, Barney Frank claims he has the votes to pass a deal tomorrow. This one appears to be over.

Yes, we are getting equity, but it is equity on the crappiest shit. Yes the administration caved on some demands, but we appear to have caved on the biggest demand of all: the $700 billion amount that they pulled out of thin air. And yes, of course it still matters that Obama wins. But I stand by my assertion that with so much money spent beforehand, it matters a lot less. Most of what the federal government does is spend money, and the money for the next President is shrinking, fast.

If the amount gets knocked way down to $150 billion or less, then maybe we will have something. However, with the $700 billion figure, we just seriously kneecapped President Obama in favor of the biggest corporate bailout in history.

Chris Bowers :: Bailout and Speech Thread

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Bailout and Speech Thread | 108 comments
I hope McCain loses (0.00 / 0)
and it looks like he will, but I have no confidence in the Democratic leadership because of this - after everything else that's happening, with all the phone calls they're getting, with all the other potential options that WE can find so THEY must be able to, they agree to this piece of $hit legislation?

I should have woken up earlier.  Welcome to the desert of the real.

I just saw Chris Dodd on Rachel Maddow (4.00 / 2)
and he didn't sound like anything was set in stone. He says $700 billion is too much money considering we will have a new administration in 40 days, so there has to be some checks on how much money is spent and whether the plan is working.

There also seems to be a difference between the Dodd plan and the Barney Frank plan. And of course Republicans haven't weighed in yet.

I don't think anything has been nailed down yet. I wouldn't be surprised if Republican pressure knocks the number from $700 billion to $150 billion, as Chuck Schumer proposed.

[ Parent ]
$150 million (4.00 / 5)
that's my counteroffer. Take it or leave it...
[ Parent ]
Leave It (0.00 / 0)
Not one penny for these crooks.

Lets spend the money on health care.

"Keep the Faith"

[ Parent ]
Post Partisan... (0.00 / 0)
THIS should be where we get a post partisan coalition together.  A group of Smart Dems with balls and fiscally conservative republicans to block this shit.
[ Parent ]
what's a fiscally conservative republican? (4.00 / 1)
is that like a unicorn?
[ Parent ]
That's unfair... (0.00 / 0)
Admittedly, there are not a LOT of them anymore, but there are some... I'm not hearing of lockstep Republican voting ont his bill.
[ Parent ]
sorry just reacting to the fact that they vote with their president (0.00 / 0)
who has inflated the federal debt from like 1 or 2 trillion to what - 8 trillion? 10 trillion?  now 11 trillion?

there were fiscally conservative republicans, the same way there were tax-and-spend Democrats, but that, as they say, is an old story.  It's the Democrats who are more pro-market now and the Republicans who are engaged in class warfare.

And I like neither.

[ Parent ]
but you are right :) i have republicans in my family (0.00 / 0)
and pro-business peope in general.  i just can't stand this $hit anymore where we have to pretend that the ideas from 1984 (both the book and the year) are applicable in the real world.  but your tone was quite civil and kind and i should have reacted the same way to you.
[ Parent ]
what's a Dem with balls? (4.00 / 1)
There are less of them than fiscally conservative Republicans.  There has to be a way we can make bet and money on DC.  They are a predictable lot.  We could clean up or apply for a bailout.
[ Parent ]
"checks on it" is not enough (0.00 / 0)
people are getting kicked out of their houses and the government is going to have a trillion in debt already and is wasting money and people's lives in iraq and afghanistan!  they get to the point where they're passing legislation, and terms, the times, and the extent are dictated by the outgoing president who no one likes and who has no credibility on economics?  whether you agree there is a crisis or not (i happen to believe there is), there clearly is a manufactured POLITICAL crisis right now that's intended to ram a lot of stuff through without fully thinking it through.   That sounds familiar.

Where did these Democrats learn about power?  Oh, right, they didn't, despite being stepped on for 8 years (and increasingly so for 25).  It's  not just that they have no backbone to make difficult decisions - they don't even recognize when it's in their interests to have a backbone for EASY political decisions.  Every politician could benefit from a few years (or decades) as a community organizer...or maybe we could just get rid of the politicians and have community organizers instead.

[ Parent ]
Barney Frank says they do have a deal (0.00 / 0)
http://www.reuters.com/article...

Democratic Rep. Barney Frank said on Wednesday Democrats had reached an agreement to stem one of the worst U.S. financial disasters in decades, and that there would be enough votes to pass the measure and send it to President George W. Bush to sign into law.

"We now have between House and Senate Democrats an agreement on what we think should be in the bill, and we have a meeting scheduled at 10 a.m. tomorrow to meet with the Republicans," said Frank, chairman of the House of Representatives Financial Services Committee.



[ Parent ]
What are the chances... (4.00 / 1)
of House Dems or Senate Republicans saving us from this mess? Can we get a filibuster going or put some populist/progressive poison pills into the house version? This is just garbage.  
Don't like the amount (4.00 / 4)
But the difference between equity and not makes a huge difference.  We aren't flushing money down the toilet, we are restructuring where it is located.  If the companies survive and regain profitability, the equity can be resold at cost.

While I'll admit I have a poor handle on this, I'm not nearly as panicked as I was earlier in the day.  In fact, this may even be a good thing.

I waiting to hear from Krugman, DeLong and others with real understanding, but so far I don't share your fear.

Will Paulson really do this? (4.00 / 1)
We would be relying on Henry Paulson to do a heckofa job for us. What are the chances that he will? His stonewalling and fear-mongering the past two days makes me extremely wary that anything will be done properly. This bailout should have explicit funding from a tax on the rich. If it really is a crisis, then Bernanke and Paulson should be willing to go along with that.
[ Parent ]
They are. (0.00 / 0)
If you've watched the testimony the last few days they've given in to pretty much everything as far as oversight and equity stakes go.

And BTW. Paulson and Bernanke should never be compared to Brownie. They are smart as hell. Just cause Bush picked them doesn't mean they're bad. Though I understand the blanket assessment.

[ Parent ]
Why should we trust any of these concessions? (4.00 / 2)
Paulson blatantly lied about what was in his original proposal. He said he always favored oversight, but the plan he sent explicitly barred oversight.

As Krugman says:

I'm not playing gotcha here. This is telling: if Paulson can't be honest about what he himself sent to Congress - if he not only made an incredible power grab, but is now engaged in black-is-white claims that he didn't - there is no reason to trust him on anything related to his bailout plan.

If Paulson will lie like this to a Congressional committee on national TV, why should we expect him to act in good faith later behind closed doors?

[ Parent ]
Because Paulson just proposes a plan (0.00 / 0)
Congress writes it and signs it.
[ Parent ]
And Paulson implements it (0.00 / 0)
as he sees fit
[ Parent ]
Not if there's oversight. (0.00 / 0)

[ Parent ]
Just because one is smart... (4.00 / 1)
Doesn't mean they aren't selfish lying pieces of shit.
[ Parent ]
Meh. Mah. Bah. (4.00 / 9)
This, I'm quite sure, will be a disaster, a major transfer of wealth upward--from the non-rich (social programs that would've been passed) to Wall Street, equity sharing notwithstanding, plus there'll be, I'm quite sure, corporate-written small print that will make it vastly worse than it even appears. How do I know? Because I live and breathe, because I live and breathe (and study Democrats.)

Nothing this massive--with this much $$$ at stake--should be done this quickly, without hearings or a chance for public debate to evolve.

Do we really believe that a bill signed by Bush could be even close to decent?

One more thing: Obama has said he'd forego doing away with Bush's tax cuts for the wealthy if the country is in a recession. (a high probability)

Meanwhile, he says the bailout will force him to do away with social programs, like health care.

So, to review: the rich keep their tax breaks and the rest of us don't get health care? What the...?


[ Parent ]
Tax Cuts... (0.00 / 0)
Do you have a link for that?  I saw the suspension of social plans comments, but not the other claim... What I saw was adding Middle Class tax breaks and doing away with the upper class ones.
[ Parent ]
It was in the Forbes interview (0.00 / 0)
Should be able to google it.
[ Parent ]
Can't find it... (0.00 / 0)
I again request a link...    
[ Parent ]
here ya go (0.00 / 0)
LINK
[ Parent ]
Kind of equity matters (0.00 / 0)
"Equity or not" doesn't say anything by itself, it also matters what kind of "equity" you're getting. What are we getting? "Warrants"? What does that mean? Is it enough?
[ Parent ]
so if there is no deal until next week (0.00 / 0)
that means mccain won't be debating on friday
Heh. (0.00 / 0)
That's right. No bill till Monday with debate over the weekend.

Ha!

[ Parent ]
What a ridiculous stunt (0.00 / 0)
McCain's campaign has become one big freak show.

Obama has come out of this crisis looking like a leader while McCain panics, flips his positions, pulls stunts and simply fails the test.

Voters are noticing, too as the polls indicate. This crisis has got to have put a big dent in the trust factor for McCain.  

[ Parent ]
and the wheels on the bus... (0.00 / 0)
have fallen off
fallen off
fall-een off.

sing it with me :)

it's the only good piece of news to come out of American politics in the last week.

[ Parent ]
He will be there (0.00 / 0)
Otherwise, Obama gets a free infomercial on Friday.
[ Parent ]
I wish this were smaller (0.00 / 0)
Like $100 bil. that could be renewed later.

But seriously, things are moving around so much that who knows it this deal will hold.

Let's wait and see what happens in a day or two. Everything is very much up in the air. And so far House and Senate Dems have been adamant that they're not passing anything without substantial Republican support AND McCain's support.  

It is going to be smaller. (4.00 / 1)
They are talking between 150bil in multiple tranches. Or 350bil in 2 tranches.
[ Parent ]
Not quite (4.00 / 3)
Paulson will only have the money until Jan 20th. He'll likely only be able to spend 150 million or so by then.

And big stuff like EFCA will still be important. Still not very happy about this whole deal.

John McCain: Beacuse lobbyists should have more power

Don't count on that. (0.00 / 0)
A Republican with a shit load of money could spend it all in one day.  
[ Parent ]
Dude, buck up (4.00 / 3)
Some smart guy recently told me
It needs to be emphasized that this is a deal among the negotiators, and there is no guarantee that Congress at large will go for it. Such negotiated deals were previously--and recently--defeated.

They have won round 1 (OK, maybe 2 as well if we count the whole Shock Tactic/Need to do something NOW!!! line), so do what you do best!!!!

AGITATE FOR ITS DEFEAT!!!!!!!!!

Oh, Bush is on TV now... I think there might be a crisis or something.

What (0.00 / 0)
Was with the sound during his speech?  Like someone was gripping the microphone or something.
Dodd on Maddow now n/t (0.00 / 0)


New Jersey politics at Blue Jersey.
He just said something like "there's currently enough regulation in place" (0.00 / 0)
but, "it had to do with a failure in enforcement" or some-such.

Huh?

Isn't much of this "crisis" (I'm coming down on Chris's side on this) a by-product of deregulation?  At least some of it?

[ Parent ]
yes (4.00 / 1)
but what he meant was that the Bush administration was out to lunch when it came to studying these no-doc, risky ARMS and the mortgage securities market.

Deregulation was a big part of the problem. But the Bush team didn't do anything to slow/stop the real estate bubble.

The Republican guy on Rachel Maddow sounds like a Democrat -- calling for oversight, thinks $700 billion is too much, doesn't trust the Bush administration or Paulson to spend this money.

[ Parent ]
Yeah, I got his point on the Bushies (4.00 / 1)
but my concern is his acceptance/promotion of the "enough" regulation.

I'm no expert, but I believe there is a correlation to the activities and deregulation, is there not?

(And yes, "correlation is not causation" and all that, but I see smoke and am thinking fire.)

IS there enough regulation?  Is it only an enforcement issue?

[ Parent ]
And Dodd sounded like the Republican. (0.00 / 0)
Says a lot, don't you think.  
[ Parent ]
Also "If the crisis is as bad as we are led to believe" (4.00 / 3)
WTF?

Don't you think you might want to verify there is a"crisis" before throwing $700 billion at Wall Street in a seat-of-the-pants operation?

From Krugman: http://krugman.blogs.nytimes.c...

But there's another possible explanation, which I find terrifyingly plausible: the plan came first, and all this stuff about price discovery is an after-the-fact rationalization, invented when people started asking questions.

It has seemed very strange to me that such a supposedly crucial economic program would be based on such an exotic argument. My sneaking suspicion is that they started with a determination to throw money at the financial industry, and everything else is just an excuse.


[ Parent ]
he's right (0.00 / 0)
And I don't like this whole idea of buying mortgages, thinking they will rise in value any time soon. We saw a historic bubble in real estate prices, and those values won't go back to 2006 levels until 2016 at the soonest.
[ Parent ]
Krugman has a sneaking suspicion (0.00 / 0)
and the rest of America is like Well Duh! Why are economists so stupid?
[ Parent ]
Because Economists are taught to think logically and analytically (4.00 / 1)
and this administration operates without much of either.
[ Parent ]
Of course this is what happened!!! (0.00 / 0)
   Hasn't anyone paid attention?!  How did the Iraq War start?  

John McCain lets lobbyists shape his economic policy
[ Parent ]
It wont matter a lot less if Obama is President (0.00 / 0)
What about ending the war in Iraq? Restoring our diplomatic relations around the globe? Appointing SCOTUS Justices?

Tax cuts for the middle class, that Obama is standing firm on?

Certainly, social programs are important but there are many other important issues that Obama will deal with in a far more effective way than McCain would.

gutless (0.00 / 0)
this is another example of the gop light that we on the left have to accept as a party since we have no other options in america. i guess keeping their upscale jobs is more important then protecting their constituents. its obvious that the dems and the gop are in bed together and the voters are the opposition, enjoy your victory congress you certainly didn't earn it.  
I agree that $700 bil is BS (0.00 / 0)
But this is a win for Democrats.  Are we so used to losing that we can't even take a win?

Look, the Administration CAVED on everything but one issue.  And if Obama wins this election, then he can scale back the bailout in January.

Did you ever see Brewster's Millions?  That's the situation Hank Paulson is in.  It is physically impossible to spend $700 billion before he leaves office in January.  

Think about it.  There are roughly 120 days until Jan. 20.  24 hours per day, 3600 seconds per hour for a grand total of 10,368,000 seconds until January 20.  Paulson would have to spend $67,515.42 per SECOND in order to get rid of all that money before Obama takes office.  But the thing is that if the equity shares work as they're supposed to, we'll make that money back.  

Don't get too freaked out.  We still need Obama to be President, but we'll survive this.  

addendum (0.00 / 1)
The more important thing here is to ensure that this passes over the weekend.  McCain has said he won't go to the debate unless there's a deal by Friday.  I say call him on that.  He either capitulates and goes to the debate, or Obama gets 2 free hours on TV by himself.  We win either way.
[ Parent ]
well (0.00 / 0)
I think Paulson spent $285 billion last week on Freddie Mac, Fannie Mae and AIG.

He could burn through $700 billion in three or four months if he wanted to.

[ Parent ]
burn baby burn (0.00 / 0)
it takes only 1 minute to write a check and Paulson can put as many zeros on it as he wants to.  
[ Parent ]
but (0.00 / 1)
Not if the things he can purchase are limited.  Remember, Brewster couldn't end up with any assets after 30 days.  From wikipedia:  

There are some conditions attached: at the end of the 30 days, he may not own any assets that are not already his, and he must get value for the services of anyone he hires. Furthermore, he may donate only 5% to charity and lose another 5% by gambling, and he may not waste the money by buying expensive goods and then destroying them or giving them away.

Yes, I'm sticking with my Brewster's Millions analogy.  Primarily because I love that movie. But it's relevant since Paulson will be able to buy only mortgaged related securities and with the oversight of a bipartisan board.  It's not like we're giving him money to just start buying whatever the hell he wants.  

Moreover, at the end of it, we will end up with assets--equity in the companies who participate.  

[ Parent ]
Dude... (0.00 / 0)
That's the worst analogy ever.  It has NOTHING TO DO WITH THE FUCKING REALITY OF THE SITUATION.  This isn't a book/movie.   Continued insistance on using it shows you really don't understand what's going on here.  Please quit using it as you will only just piss people off.
[ Parent ]
You have no sense of humor. n/t (0.00 / 0)

[ Parent ]
It's muddying an already muddy discussion on this board. (0.00 / 0)

[ Parent ]
No, it's not. I had one of the first posts up here. (0.00 / 1)
The discussion got messy after I put this up.  
[ Parent ]
With this kind of stupid bullshit... (0.00 / 0)
Where the country I love is getting destroyed while no one with the power to do so will fight to keep it from happening... YEAH YOU ARE GOD DAMN RIGHT I HAVE NO SENSE OF HUMOR ON THE SUBJECT.  AND NO PATIENCE FOR FLIPPANT IDIOTS WITH NO GRASP OF THE IMPORTANCE OF THE SITUATION!
[ Parent ]
And I have not tolerance (0.00 / 1)
For people who don't have the ability to remain calm when they don't have the ability to do anything.

You've heard the joke about arguing on the internet, right?  Look man, you can type in caps all you want, and god knows I've done my fair share, but you'll be a lot happier if you take a deep breath and calm down.

[ Parent ]
He's not buying securities. (0.00 / 0)
He's buying equity stakes in the companies to keep them afloat and liquid.

Assets are not the same thing as equity.

[ Parent ]
You sure are pissing me off... (0.00 / 0)
I can't believe this discussion. Obama advisor Warren Buffett buys 5 Billion worth of Goldman Sachs, Hanks old firm, which he already started propping up by stopping short selling.

Congress is working out a new plan that Obama is behind like he was behind FISA. They are using vague terms in the actual documents. Hank works for Bush and Cheney.

These asset tranches you fools believe will have some value were insured by firms worth 20 million, and the tranches were worth 20 Billion, they are toxic crap, and will never yield anything close to their "magic" value, if anything at all. And they knew this going in, both the buyer and seller, so instead of bailing them out, I think my congress critters ought to be talking about giving them 10 to 20, years behind bars, but instead, we are going to trust Bush appointees with hundreds of billions of dollars to keep making the rich richer. Oh My GOD, this discussion sucks as much as our congressional Dems. God help us all!

And Hank will be able to spend it in 2 hours, much less four months. Bend over and get ready to be screwed again, Repubs in charge, forget the lube, shut up, bend over,  and do as you are told. FOOLS!!!

And again, our congressional Dems are CAVING into a bush/cheney timeframe, and coughing up 700 BILLION effing dollars, and you Obamamaniacs think everything is going peachy keen, he will fix it later. This is more than has been spent in Iraq, what will a dem prez be able to do starting that far back. Then they blame us for the mess, and get back in office in 4 years. Heckuva job dems.

Bullshit, BS and more BS. Corparitist Obama turns out worse than Hillary would have been. 1 term do nothing president. Democratic party = money party, We the People" lose out again. Boy this game is fun. Can I move to Canada now?

[ Parent ]
which members of Congress are willing to resign (0.00 / 0)
if he plan doesn't work?
That's It (0.00 / 0)
What's the point of being a Democrat anymore. Really?

I think I'm gonna quit the party. Nader was right.

Nader is often right (4.00 / 1)
he just can't win.
[ Parent ]
was he right (4.00 / 1)
when he said Obama is trying to "sound white"?
[ Parent ]
Winning (0.00 / 0)
At this point, I don't know if Obama winning would really be a win.
[ Parent ]
This situation (4.00 / 3)
does not change the fact that McCain is a trigger happy hothead and Sarah Palin is a poorly informed religious freak.

Get real.

Obama is no McCain and Biden is no Palin, by a long shot.

[ Parent ]
the choice is between a warmongering lunatic in thrall to the corporations (4.00 / 1)
or a weak-willed but sane fellow in thrall to the corporations.

The choice couldn't be clearer to me: McCain's still a thousand times worse.  

[ Parent ]
Nader hasn't been right about anything (4.00 / 3)
since his public safety days.  An ego in fleshy form.
[ Parent ]
We Worked Hard (0.00 / 0)
We fought to get a Democratic majority, and look at where it got us. War: Still going. PATRIOT Act: Still got it. Bailout: Don't mind if I do!

Fuck the Democrats. It's over.

[ Parent ]
Democratic Leadership... (0.00 / 0)
There is a difference....

Primary Challenge to Pelosi and Reid and all who vote for this.   And lets take out Reid and Pelosi from leadership.

[ Parent ]
I guess you haven't been reading (0.00 / 0)
his position on the mortgage market over the past few years.  He is one of the most stalwart progressives out there.
[ Parent ]
he says many of the right things (0.00 / 0)
unfortunately, he does many of the wrong things. Like deliberately running in order to help throw elections to the Republicans.
[ Parent ]
Tougher to pass in the house (0.00 / 0)
The Senate deal won't mean squat if the house balks. Word is that there aren't many conservatives signing on, and there is at least some opposition from the left too.

Conduct your own interview of Sarah Palin!
Actually I think this is a bonus for democrats (4.00 / 3)
It stresses a lack of commitment from democrats and the fact that Republicans are giving in.  

Now democrats just have to make sure they get every single Republican supporting the bill before they vote for it and cut down the amount to 50 billion with an option to vote for more later if needed and I'd be ok with it.

Republican support is crucial as the Republican rank and file hate this bill.  It would be the very best way to drive down turnout on their side.

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May not be $700 billion (0.00 / 0)
I think the reporter who wrote that just lazily used "$700 billion" as an adjective because that's what has been discussed all week. That may not be in the bill.
Time to make a few angry nighttime calls, people.... (4.00 / 2)

Daytime too.
Made Three Here In Oregon (4.00 / 1)
Both Senators and my rep.  Gotta admit, my voice was shaking a bit.  I'm fucking pissed, and I let them know.  Hopefully it helps a bit.
[ Parent ]
This is a big win Chris... (4.00 / 1)
Limiting the amount to only $100-$150 billion would have been far, far better.  But assuming the equity interest thing holds (which is, far and away, the key to this thing), it is not a massive giveaway to the financial industry - it's far more similar to the purchase of AIG by the government, albeit under better circumstances for the companies involved.  

This also could quite easily mean that Paulson can't find enough financial companies to spend all the money allotted.  By providing equity to the government, the financial companies will be diluting the holdings of the existing shareholders considerably (which could forment a shareholder revolt).  The government could potentially become the majority shareholder, and thus gain control of the company outright and have the right to tinker with management as it currently does with AIG.  Losing control like this is not something that a CEO wants.  It will probably be used by the teetering banks like 5/3 and Washington Mutual, but not everyone and their mother, if the equity rule holds.  

"This one appears to be over." (4.00 / 1)
Well then, thank god McCain suspended his campaign so he could go to Washington to save us all.
We don't have $4600 to contribute to each one (4.00 / 1)
And rely on others...who look at their investments.  I look at mine, but they think wiping out my small one is "too bad, so sad."

Damn it, we needed JRE.  We needed him and he is mired in personal problems.

what's sad is Gregory and Matthews seem more (0.00 / 0)
skeptical than Congress.


New Jersey politics at Blue Jersey.
Let's hope (0.00 / 0)
That this really is, after 8 years of being Bush's coalition partner, the straw that breaks the Democrats' back. It is long past time for us to get rid of the entire Congressional Democratic leadership. Dodd, Frank, Pelosi, Hoyer, Reid - they all deserve to be put into retirement, forced retirement via primary if necessary.

Can there be any more doubt as to the stunningly incompetent political "skills" of this group? Any more doubt to their active complicity with the entirety of the Bush agenda?

The public isn't going to forget this. Come 2010 all we need to do is say "Congressperson X voted for the Bush Bailout."

Why Dodd? (0.00 / 0)
What did Dodd do?
[ Parent ]
Personally I have confidence the 700 billon dollar number (0.00 / 0)
will be knocked down

..."The secretary and the administration need to know that what they have sent to us is not acceptable," says Committee Chairman Chris Dodd, D-Conn. The committee's top Republican, Alabama Sen. Richard Shelby, says he's concerned about its cost and whether it will even work.

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

If they do keep the number that would be stupid.

The liberal wiki
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Equity (4.00 / 4)
Dos quoth Chris:

Yes, we are getting equity, but it is equity on the crappiest shit.

I don't think that is correct.  In the original plan we bought the shit.  This plan means we get equity in the company itself.

Again, I'm waiting for experts I trust to weigh in, but so far I like what I see.  

Near as I can tell, Chris, your only real argument is you don't trust these guys.  Ok, I'll admit that is a strong argument, but it will only take you so far.

I'm still hoping for a lower dollar amount, though.

I agree. (0.00 / 1)
I understand Chris's frustration, but I think it is a little arbitrary to say that the $700 billion figure is the single most important issue in this whole debate.
[ Parent ]
It is... (4.00 / 1)
If that figure will hinder us from passing some of the proposals we want... ESPECIALLY HEALTH CARE REFORM...  

And lest we forget... The BILL for the Bush Prescription Drug plan that benefits only the old people is set to come do... jack ass made it so the real economic sting was AFTER he left office.   We are fucked right now.

[ Parent ]
Yes. We are fucked. (0.00 / 0)
But not because of this bail out. We're fucked because of lax to no regulation of our financial system.

It's really not even a bail out technically. We may break even or make money on this like we did with Chrysler in the 70's.

If this doesn't go through we're even more fucked. So we have a bad choice and a worse choice.

[ Parent ]
Prove it... (0.00 / 0)
Because the burden of proof has not been met that lack of a $700 billion bailout will mean the sinking of the economy.  If its imminent PROVE IT!  Because there are many economists much smarter than us that have suggested much better ideas.
[ Parent ]
Thank you. (0.00 / 0)
All this discussion by people who don't know what the fuck they're talking about.

Pearl clutching and breathless rants. It's not very heartening to know that these people are on my team.

[ Parent ]
Please educate us... (0.00 / 0)
Oh master of the economy that you are.
[ Parent ]
Insanity (4.00 / 1)
This should have zero impact on our ability to do other things we want, like health care.  This money isn't being spent, it is being invested.  We may lose money on the investment as part of the recovery, but that loss will be nothing like the total value of the plan.

One would think from reading this list that it is against Democratic, liberal principles for the government to take a direct role in resolving national problems.

I understand the trust factor, I really do.  And I reserve the right to change my mind completely as new facts come out and experts weigh in.  But this list has gone totally bonkers.

[ Parent ]
Agree (2.00 / 2)
There is a TON of chicken little crap going on here.  

Remain calm, people.

[ Parent ]
This bill is good (4.00 / 1)
The 700 billion, if it really amounts to that, we be doled out in parceled chunks. There is nothing in the excerpted piece that precludes portioning it out.

The compromise bill, as evidenced by TPM, is a pretty good bill.

This site is run by worry warts and perfectionists but frequented by rationalists. It's an odd combo to watch/participate in sometimes.

And for a bailout and speech thread (4.00 / 1)
this thread is awfully short on speech talk.

That speech was frightening. If I were a Master of the Universe I would be stampeding to the entrance to the NY stock exchange to camp out overnight to be in line to sell, sell, sell.

To steal a phrase... (0.00 / 0)
Evil will always triumph because Democrats are dumb.
Congressional Budget Office on Bail out (4.00 / 1)
It ain't pretty frankly.  He implies it might actually backfire and goes through the details...including the Democrats demands on equity stakes.

Overview on the hearing, details on The Economic Populist.

NoSlaves.com  


The Economic Populist

700 billion for a reason (0.00 / 0)
to avoid the word "trillion."  they wanted to throw as much money as they possibly could at the financial markets, but the $700 billion figure was chosen because it would have been referred to as the "trillion dollar bailout" if they asked for anything more.
why didn't they go for $999, 999, 999, 999.99? (0.00 / 0)
it would've passed just as easy.
[ Parent ]
Ugh (0.00 / 0)

 I just spent the evening (a) taping a local-affairs cable show (I'm a rotating Dem panelist), and (b) attending my three-hour local Dem central committee meeting, in which we coordinated with the Obama campaign, among other things.

 Did I just waste all that time and effort?

 Why did the Democrats just destroy Obama's administration?  

"We judge ourselves by our ideals; others by their actions. It is a great convenience." -- Howard Zinn

Another possibility (4.00 / 1)
Obama is on board because this gives him a ready excuse for not following through on most his campaign promises.

In other words, a rerun of Clinton who had to change "putting people first" to "putting corporations first" because, in his words, "a bunch of fucking bond traders" made him.

[ Parent ]
To paraphrase ... (0.00 / 0)
... radio commentator Raymond Gram Swing, "This stinks.  It will always stink.  ...  And anyone who identifies himself with it will stink."

Swing was referring to meeting Munich in 1938 between Hitler and British Prime Minister Neville Chamberlin.  When Chamberlin returned to England he said he got "peace in our time".  

Matt Stoller was right in 2006.  We need leaders who will stand with us in a bar fight.  

a fascist coup (0.00 / 0)
I think it is a fascist coup.
The rich are stealing from the poor big time.
The desperation is to do it fast before the election.
For what its worth at this late date... (0.00 / 0)
the following plan makes a lot more sense than the Paulson plan, even with the proposed Congressional add-ons.  It's proposed by Nouriel Roubini, a professor at NYU's business school who saw this coming much earlier and more clearly than most anyone.
http://www.rgemonitor.com/roub...

If there was more time, I'd love to see the netroots push this one hard, in conjunction with the elements of the "financial expert" community that are coming around to Roubini's way of thinking.  Here are the highlights:

Roubini proposes a program he calls HOME (Home Owners' Mortgage Enterprise), which is basically an updated verion of the Great Depression's Home Owners' Loan Corporation (HOLC).  He argues that this is more important and would be more effective than the attempt by Paulson (and now Congress) to do an RTC-like bailout of financial institutions:

According to Roubini, the HOLC "was created to buy mortgages from banks at a discount price...and refinance distressed homeowners into new mortgages with lower face value and lower fixed rate mortgage rates."

[O]f the five possible uses of fiscal policy - income relief to households (the 2008 tax rebate), rescue/bailout of financial institutions (Bears Stearns, Fannie and Freddie, AIG), purchase of assets of failed institutions (an RTC-like institution), recapitalization of undercapitalized financial institutions (an RFC-like institution), government purchase of distressed mortgages to provide debt relief to households (an HOLC-like institution) - the last option is the most important and effective to resolve this severe financial and economic crisis...

Creating a new HOLC mechanism is likely to be more effective than creating a new RTC (whose purpose was to buy and dispose over a number of years of the assets of already failed S&Ls;)...

An RFC mechanism may be necessary once an HOLC is created: purchasing mortgages at a discount implies banks taking an additional capital hit (if they have not already written down the value of such assets or have not provisioned for the loss with loan loss reserves); therefore the purchase of such assets will further undercapitalize such institutions that do need more capital. So the government injection of capital with preferred shares will allow distressed but solvent banks to increase their capital and thus not to be forced to contract further credit as it would be the case if they remain undercapitalized.

So, Roubini who has seen this coming earlier and more clearly than most anyone, proposes we:

1. Focus first on funding a HOME program to directly help mortgage holders;
2. Once this is done, it'll be clearer which financial institutions are ailing but solvent (vs. insolvent) and therefore worthy of government support.
3.  When that support is extended, taxpayers should be granted preferred shares that are "senior to common shares and other preferred shares (and carry a high enough dividend)."  
These taxpayer shares, Roubini says, "should also be senior relative to all of the other creditors of the bank (with the exception of insured deposits)."

[T]hus, no more of the bailout of unsecured and sub-debt creditors that occurred in the case of Fannie and Freddie. Sub-debt holders of banks (and creditors other than insured deposits) should be appropriately whacked if needed to ensure market discipline and avoid future moral hazard [bolding mine].

Roubini also proposes ten steps that need to be taken to reform our financial system, including direct regulation of what he and others describing as our "shadow banking system."
http://www.rgemonitor.com/roub...

Roubini closes his article with the following:

[L]et us not delude ourselves that even a HOME program of debt reduction will prevent a recession: the recession train has already left the station and the economic downturn is already becoming global. What we can avoid now is only the risk that a severe US and now advanced economy recession will turn into a Japanese style decade long stagnation. Thus, the time of dithering and using band-aid to deal with the financial storm of the century is over and the time to act boldly is now! Lets create the HOME (Home Owners' Mortgage Enterprise) now!

I think this approach is not only the most effective way to deal with the problem, it has the potential to be extremely attractive to voters...a focus on helping Americans keep their HOMES instead of bailing out Paulson's pals on Wall Street, who need a very different kind of help--more like Gamblers Anonymous.

It is a fundamentally progressive solution in that it focuses on the many citizens who are suffering due to the recklessness of Republican lawmakers and the non-regulators they've appointed (and failed to oversee), and the wealthy elites that abused the license to make obscene profits.  Then, when the drunken (Bush's term, not mine) party ended, these same irresponsible politicians and financial elites are scaring the American taxpayers and their representatives into paying to clean up the mess, even though they were never invited to the party.  

And while focusing on providing help where it's really needed, it seems reasonably likely that Roubini's plan could cost significantly less than the proposed bailout, since it approaches it in a more bottoms up way that gets to its fundamental causes.  At the least it would generate a lot more bang for the buck in terms of relieving real suffering.

$700 billion in installments (0.00 / 0)
Not quite sure what this means, but NYT says...


Democrats also are leaning toward authorizing the entire $700 billion that Mr. Paulson is seeking but disbursing a smaller amount, perhaps only $150 billion, to start the program, with future funds dependent on how well it is working.

Link: http://www.nytimes.com/2008/09...

Bailout and Speech Thread | 108 comments
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