Elizabeth Warren likes to tell the story about how when she first met with Barney Frank about the financial reform issue, he told her, in no uncertain terms, that the banks would win on the issue of establishing a Consumer Financial Protection Bureau and that she had no hope of getting the CFPB as part of the law. She tells the story not to embarrass Barney -- who was very supportive of Elizabeth in her fight to get the CFPB in place -- but to rally people who feel like there is no hope of beating the banks on anything. However, the story does, in fact, carry a lesson about Barney: he is intimately familiar with what the big banks want and don't want, and is not inclined to take on the bankers unless people as strong as Elizabeth refuse to take no for an answer.
The latest example is that Barney has jumped on board with the big banks and their credit card company subsidiaries on the debit card "swipe fee" issue. He has been saying he would be happy to work with Republicans in Congress to roll back the related new Federal Reserve regulations.
Now, I love Barney Frank, and he is a good guy on most issues, but this is pure craziness. The basic question is: Politically or policywise, why would you want to help the big banks in opposition to Main Street businesses? On one side, you have six big banks that already own assets equal to 64 percent of our country's GDP. They own 80 percent of the debit card market, and the swipe fees they charge, by their own admission, are almost pure profit. On the other side you have retail stores, restaurants, hairdressers, cabbies - representatives of Main Street businesses who have lacked the ability to bargain with these behemoth credit card companies. Is there any question policywise as to who it would be better to help? What about politically -- which side do you think is more popular with the American public?
Here's the other thing that is nuts about what Frank is doing: Why would you want to give the Republicans the political cover and opportunity to re-open the financial reform bill just passed? Does Barney really think Republicans would stop with debit cards if Congress were to start debating financial reform again? Thinking about all the changes banking lobbyists would make in John Boehner's conference room if the financial reform legislation passed last year were re-opened is enough to make my head spin. (A little "tweaking" of derivatives regulations here, a little amendment or two to the CFPB there... Oh, and don't forget the legal bailout we need so that we can foreclose on people faster.) I can see the whole bloody scenario pass in front of my eyes, with Republicans just telling the media, "Well, even Barney Frank said we should fix a few of these things."
I think that Democratic members of Congress who have been in Washington a long time sometimes forget what is really at stake in issues like this. They have old friends -- former staffers in many cases -- who have gone on to work for the banks talking to them at fundraisers about little tweaks they want to make on this issue or that issue, and they forget what matters to the American public. Members of Congress -- even the good ones sometimes -- get to think it is just a battle between lobbyists, and they forget what really matters. I got involved in this swipe fee issue, helping retailers and consumer groups that care about the issue, because it is a $15 billion battle in which the money either will go straight into the pockets of the big banks or back into the Main Street economy. It is easy for me to pick sides, and it should be easy for Barney Frank as well.
I see that GOProud, an organization that was billed to be a new kind of Log Cabin Republicans but has turned into a hybrid Uncle Tom apologist for kind-of-pro-gay-but-only-when-people-ask-about-it, not-anti-equality-but-not-gay-bashing-either Republicans, is now working to take down Barney Frank. Today, they've endorsed his challenger, Sean Bielat, and are actively working on his behalf.
This isn't anything new for GOProud. I wrote here about how they're the same organization that endorsed Mary Bono Mack, a woman who voted against DADT repeal, refuses to support an inclusive ENDA, voted to ban same-sex adoption in DC, and refuses to take a position on Prop 8, over the man who would be the first openly gay married parent elected to Congress, Mayor Steve Pougnet. A clear contrast here, but they didn't care. I wrote here how they tripped over each other to defend Rep. Charles Djou (R-HI), who said he voted for DADT repeal because of that serious problem we all know exists in the military:
DJOU: On that particular issue, it comes from personal experience. I have served for nearly 10 years now in the United States Army Reserve. What concerned me about the Don't Ask, Don't Tell policy is that it just simply doesn't work. And I have seen too many instances as an army reservist, soldiers would sign up for a re-enlistment bonus. Get this gigantic sum from the American taxpayer. And then as soon as the unit gets called up to mobilize to Iraq and Afghanistan, they suddenly claim they are gay, with no prior indication of that whatsoever. Get the discharge and keep the bonus. That's wrong, that's unfair and that's why this policy should be changed.
Ohhkay. When LGBT activists rolled their eyes, GOProud ED Jimmy LaSalvia snapped:
"The fact that any on the gay left would analyze why Charles Djou voted for DADT repeal, rather than the fact that he did, shows that they are more interested in affirmation and the group hug than actually delivering results for our community," he said.
Awesome!
So let's look at their press release announcing how exactly kicking Barney Frank out of Congress will advance LGBT equality.
"If we really want to protect gay jobs we don't need to pass the Employment Non-Discrimination Act [ENDA], we need to fire Barney Frank," said Jimmy LaSalvia, Executive Director of GOProud. "From his perch atop the Financial Services committee, Barney Frank was one of the architects of the financial meltdown that cost millions of Americans - including gay and lesbian workers - their jobs.
This is the biggest crock of bullshit. ENDA doesn't really matter, and Barney Frank created the financial meltdown. I'm guessing this is why they closed comments on the website post announcing this- they don't want people saying they're full of it.
They continue:
Sean Bielat is a common-sense conservative who supports policies that will grow our economy, create jobs, and improve the lives of all Americans, but especially gay and lesbian Americans."
"After almost 30 years in Washington, Barney Frank is everything that is wrong with politics today," continued LaSalvia. "Instead of supporting pragmatic approaches to healthcare, social security and tax reform that would help gay and lesbian families, Barney Frank has preferred to play partisan politics and serve as the all-too-willing attack dog for the most radical elements of the Democrat Party."
[...]
"Unlike Barney Frank, Sean Bielat supports free-market healthcare reforms that will make domestic partner benefits more available to gays and lesbians and will give individuals - not the government - more control over their healthcare," said LaSalvia. "Sean also supports reforms to Social Security, creating personal savings accounts allowing gays and lesbians couples to leave their Social Security to their partners or whoever else they choose - reform opposed by Barney Frank."
Sean Bielat believes that marriage is a state issue and opposes a federal constitutional amendment banning same-sex marriage. Bielat strongly backs 2nd Amendment rights, supports efforts to aggressively fight terrorism and the spread of tyrannical anti-gay radical Islamic regimes, and favors school choice.
Basically, GOProud's recipe for finding "pro-LGBT" Republicans to support is :
1. Taking FreedomWorks' altar-of-the-free-market solutions for America- school choice, privatizing Social Security with personal accounts, give every newborn a Social Security card and a gun because it's his/her Constitutional right, etc.- and then throwing in the a random mention of "which will of course benefit gays and lesbians" or some variation thereof to describe the policy
2. Making sure the potential Republican doesn't support lynching gays or anything crazy
3. Finding some random issue they can claim to be a measure of LGBT support, like opposing the Federal Marriage Amendment or "my neighbor down the street is gay" or whatever works
and Voilà! You have a pro-LGBT Republican! Basically, under this model, nearly any policy can be worded to be a pro-LGBT policy, and any Republican can be a pro-LGBT Republican.
I had the privilege of speaking to New Organizing Institute's LGBT Bootcamp a few days ago, and tonight they're holding a party at NGP Software which the GOProud Chairman, Chris Barron, has been invited to attend. Since the Bootcampers learned about the concept of "theory of change" a few days ago, if Barron accepts, I'd love to hear a report on Barron's theory of change regarding how defeating Barney Frank and Steve Pougnet, along with being apologists for Republican homophobes, dismissing the importance of ENDA, and generally sucker-punching our movement out of our best advocates and votes, will advance LGBT equality.
Bringing Republicans on board is one thing. Being another FreedomWorks with gay staffers in charge who justify their work to bring down our best LGBT advocates by throwing around "gays and lesbians" in a press release here and there is another.
A few days ago, activists interrupted a hearing led by Chairman George Miller in the House Education and Labor committee, insisting that he bring ENDA up for a vote immediately. Jeremy Hooper has full coverage.
I was interested by Rep. Barney Frank's reaction (summarized below):
''What a stupid thing to do.''
...
Frank called the action ''immature, tacky'' behavior on Wednesday afternoon and said that ''George Miller and others are working hard'' to see the bill passed in the House.
...
''no help whatsoever''
...
Frank said, ''I understand people are frustrated and angry,'' but he ''genuinely'' didn't understand the purpose of the Get Equal protest.
''How does this help us get the bill passed?'' he asked. ''Who's mind are they going to change?''
On the one hand, as Rep. Jared Polis explained to the activists afterwards, Miller and our allies are taking care to not get into a situation like 2007, where we were in danger of a motion to recommit succeeding, which was aimed at stripping gender identity protections out of the bill. One thing I noticed when watching Rep. Polis' interaction with the activists is that they wanted it both ways: to have a committee vote immediately, but also to not lose the vote.
[Youtube video placed in the extended entry]
You can do things fast, or you can do them right. Leadership tends to not bring bills to a vote until they have the votes, although occasionally for making a broader point towards a goal even when it is known the votes are not in hand, in the case of the New Jersey State Senate on marriage equality. If you don't, in the case of New York State Senate on marriage equality, where we suffered an embarrassing 24-38 defeat, your cause can look very bad.
On the other hand, since Frank said this past Sunday a committee vote would occur "within the next two weeks" on this, and there is still no vote scheduled, and by my count such a vote has been now postponed twice since last fall, there is an understandable impatience and frustration out there at the pace of things. And there are two pressure points here: one is pressuring the Miller and the leadership (and rank and file) to not cave to what Joe Sudbay calls "political homophobia" in an election year, and bring up the bill when it has the votes. The other is pressuring members of Congress to actually support the bill, as Frank is right to say last month:
Frank pivoted from the protests to the work that he said remains ahead, saying, ''The only thing that's left for the community to do is the hard thing: Help us get the votes.''
I think the middle ground between what Frank is saying and what the activists are saying is that Frank believes we'll get a House vote on ENDA, while folks are skeptical that it'll actually happen, even if our side has the votes for passage. Both points are important, but with a cautious eye towards making sure to get the vote right. That means getting in touch with your member of Congress- even already supportive members of Congress who need to know this is a priority for their constituents. It is still legal to be discriminated in employment in 29 states on the basis of sexual orientation, and 38 states on the basis of gender identity. That's over half the Union. The switchboard is 202-224-3121. Here's the latest update on where members stand from The Bilerico Project. There are also five Northeastern Reps who are prime targets if you know someone from the district:
New Jersey (NJ)
Rodney Frelinghuysen (R-11) 202-225-5034 973-984-0711
New York (NY)
Bill Owens (D-23) 202-225-4611 518-563-1406
Chris beat me to the Friday tab dump, but that's OK, because mine's an LGBT one anyway. Here's what I'm reading around the tubes:
Courage Campaign and GetEqual has a petition from Cleve Jones, a longtime friend of Speaker Pelosi, asking her to move ENDA after recess. You can read and sign here. They're going to deliver it to her offices during recess.
Meanwhile, Barney Frank says "it's our turn" and Tammy Baldwin says she's counted and the votes are there in the House. OpenLeft will also be partnering in an action on ENDA in the coming weeks. Stay tuned.
Up in Maine, the Catholic Diocese- one of the most vicious opponents of marriage equality last fall- announced it was withdrawing funding from Preble Street, a non-profit serving disadvantaged women, teens, and other people with food, shelter and support, because Preble Street joined a coalition in favor of a No vote on question 1. In response, the Diocese demanded its $15K back and rescinded a 2nd $15K award, while Catholic Charities Maine demanded its $2,400 back. There has been an outpouring of outrage and support for charity for charity's sake. I know a lot of Maine Catholics who have given this week, including the awesome mom of Joe Sudbay over at AMERICABlog. Check out Bill Nemitz's column here, and Catholics for Marriage Equality, a new group run by Anne Underwood (a very smart organizer I interviewed in Maine) has a donate page here.
HRC President Joe Solmonese has a very measured response to Dan Choi's criticism here. My earlier piece is here if you'd like some background.
Asked about the new DADT regulations and the White House commitment on the issue, Barney Frank says, "They're ducking. Basically, yeah, they're not being supportive, and they're letting Gates be the spokesman, which is a great mistake."
HRC is launching a new nationwide tour of veterans discharged under DADT and their allies. Those featured are here. I have an unconfirmed list of dates and tour stops, and I'll get a full list up as soon as it's finalized. Target states are WV, NE, VA, IN, FL.
Would sure be nice to see our Commander in Chief, or Admiral Mullen, step up and smack this guy down.
These new numbers on HIV rate of infection in DC are really, really scary- and according to the piece, may even be off-target because they may have not sampled enough in establishments frequented by African-American men. A friend of mine has generated a lot of good activism on this through FUK!T, a DC non-profit which sets up tables I see at nightclubs and bars so guys can take a free package with condoms, lube and safe-sex information cards when they go home for the night. It's a very smart, prevention-oriented campaign whose budget was just cut. A $10/month (tax-deductible!) donation pays for 2400 kits, and I just signed up to contribute exactly that. You can donate here. If that's not enough to entice you, check out these hot videos and pics featuring world-famous porn stars (sorry, I couldn't resist).
Freedom to Marry, a smart pro-marriage equality organization, is expanding their staff in NYC. Several jobs here.
The really interesting thing I noticed about all the press around The Mount Vernon Statement is that nowhere was a mention of Contract With America and how this documents echoes that bold manifesto, yadda yadda yadda. Apparently that's because Newt himself is helping to push yet another document- the Contract From America- on behalf of the Tea Party Patriots today at CPAC. This Contract has 22 "solutions" which will be narrowed to ten today by voting. The ten winning solutions will then be unveiled to the world on April 15.
Among the more interesting ones:
PROTECT THE CONSTITUTION: Require each bill to identify the specific provision of the Constitution that gives Congress the power to do what the bill does.
No doubt, an outgrowth of catcalls during last fall's town hall meetings that the Constitution does not allow for comprehensive health care reform.
ENACT FUNDAMENTAL TAX REFORM: Adopt a simple and fair single-rate tax system by scrapping the Internal Revenue code and replacing it with one that is no longer than 4,543 words -- the length of the original Constitution.
On this one, I turn to the wisdom of Barney Frank, who once wondered aloud on the House floor why Republicans think the usefulness of a bill is inversely proportional to its length.
LET US SAVE: Allow all Americans to opt out of Social Security and Medicare and instead put those same payroll taxes in a personal account they own, control, and can leave to whomever they choose.
Partying like it's 2005!
AUDIT THE FED: Begin an audit of the Federal Reserve System.
Ron Paulite fingerprints, perhaps, and something we can agree on.
I also do find it interesting that while the Mount Vernon Statement is signed by Christian fundie types and espouses the usual language on "family values", etc., but this document doesn't have anything on "values" "traditional marriage" "unborn fetuses" or the like. Of course, the Tea Party types have always been more about economic and constitutional issues, but that has drummed up some attention among the fundie types at the National Tea Party Convention:
One convention development that might have slipped past the mainstream media's coverage was a new effort by some longtime Religious Right leaders to hoist them-selves aboard the Tea Party bandwagon.
[...]
Rick Scarborough, the founder and head of a small, but disproportionately influential, Texas-based outfit called Vision America, has come up with a plan to try and fuse the Religious Right's "traditional family values" agenda to the economic concerns that have thus far mostly dominated the Tea Party movement.
At a workshop at the National Tea Party Convention given by Scarborough, the senior pastor of Harvest Point Church in Nacogdoches, Texas, unveiled what he's calling the "Mandate to Save America," a plan that might, as Devin Burghart of the Institute for Research & Education on Human Rights who attended the convention recently reported, signal "a shift taking place ... transforming the focus from bailouts and deficits to the culture war."
Scarborough is a former Southern Baptist pastor from Pearland, Texas, who in addition to Vision America, also heads up Vision America Action and the Judeo-Christian Council for Constitutional Restoration. According to Burghart, Scarborough told a crowd of 200+supporters at the Tea Party Nation convention that it was time that differences between "fiscal and social conservatives ... cease[d]."
The 21st Century Democrats' Youth Leadership Speaker Series is off to a great start teaching and inspiring tomorrow's progressive leaders of the Democratic Party with speakers like Congressman Barney Frank, Congressman Dennis Kucinich, and--soon--Interior Secretary Ken Salazar.
Last week, President Barack Obama released key legislation designed to fight the banking industry's too-big-to-fail problem. But Obama's plan doesn't actually address too-big-to-fail at all. It reinforces a broken system in which economically dangerous companies are bailed out whenever they drive themselves to the brink of failure.
If we want the economy to support all people, we have to break up the big banks and start treating the creation of good jobs as an economic priority on par with Wall Street rescues.
The editors of The Nation break the political debate over banking into three camps:
The first camp is composed of bank lobbyists, Republicans and conservative Democrats and wants to do nothing.
Camp two, endorsed by the White House and influential Rep. Barney Frank (D-MA), would impose tougher regulations on too-big-to-fail banks to keep them from getting out of control.
The third camp wants to go even further: If a bank is too-big-to-fail, it is also too-big-to-regulate. Companies that pose a danger to the economy have to be split up into smaller firms that cannot induce economic ruin.
The Nation editors rightly see the third strategy as the most sensible. While the "break-up-the-banks" policy is being portrayed as a left-wing pipe dream by cable news networks, the policy actually relies on an age-old observation of conservative economists. Regulators make mistakes, and they often get co-opted by the very industries they are supposed to be supervising.
The practical policy is to impose structural limits on what activities banks can participate in and how big they can get. Just look at the list of high-profile supporters: former Federal Reserve Chairman Paul Volcker, former Citigroup Chairman John Reed, Bank of England Governor Mervyn King. I don't remember seeing any of those guys at the Iraq War protests.
Many of the regulatory blind spots that brought down the economy were obvious to some policymakers for years. Back in 1994, Sen. Byron Dorgan (D-ND) wrote an article for The Washington Monthly warning that derivatives trading was putting the economy in grave danger. Commodities Futures Trading Commission Chair Brooksley Born tried to take action on these derivatives, but was overruled by other regulators, including then-Fed Chair Alan Greenspan, and then-Treasury Secretary Lawrence Summers, now the top economic adviser to President Obama. Summers and Greenspan even convinced Congress to pass a law banning the regulation of key derivatives, including credit default swaps, which ultimately brought down insurance giant AIG.
Fifteen years after Dorgan's article first ran, The Washington Monthly is featuring it again, along with a recent speech by Dorgan that details massive failures in Wall Street and Washington.
"We had regulators come to town in recent years and willfully boasted that they wanted to be blind as regulators," Dorgan says.
There are good elements of Obama's plan to deal with too-big-to-fail. It gives policymakers the option of putting a too-big-to-fail institution through a special bankruptcy process administered by the executive branch, thus avoiding the problems created in bankruptcy court when Lehman Brothers failed. But the bad part is really bad: Officials would also have the option to provide unlimited bailouts to Big Finance via loans, guarantees and even asset purchases.
As Mike Lillis notes for The Washington Independent, some responsible Democrats like Rep. Brad Sherman (D-CA) have been objecting to this aspect of the legislation for months. Sherman, in fact, calls it "TARP on steroids," noting that the bank bailout at least came with some meager oversight and a limit on the program's actual size.
The bank lobby is spending money like mad to maintain their stranglehold on the economy. Neither Congress or the administration will change course without intense public pressure. So it was very reassuring last week to see thousands of people protesting the annual meeting of top bank lobby group, the American Bankers Association. David Moberg chronicles the protest in a blog post for Working In These Times that covers speeches by both key union leaders and ordinary people facing foreclosure after watching their tax dollars go to the very bankers who wrecked the economy.
"There was broad agreement on anger at the banks for providing so little, if any, public benefit for the massive bail-out, and for so quickly returning to the greed and abuse that precipitated the crisis," Moberg writes.
Laura Flanders covers the protests for GRITtv, including video of protesters chanting "Bust up big banks!" In a roundtable discussion with Christina Clausen of the United Food & Commercial Workers Union, George Goehl of National People's Action and Rob Robertson of the Right To The City Alliance, Rolling Stone journalist Matt Taibbi explains the overriding impotence of the regulations Congress is about to approve. Regulators will not be able to crack down on abusive derivatives, a full 8,000 of 8,200 banks will be exempt from Consumer Financial Protection Agency oversight, while the same agencies that screwed up heading into this crisis will be charged with preventing the next one.
"They've had sweeping powers to do whatever they wanted," Taibbi says. "They've had this regulatory power all along."
What we need are good jobs, and lots of them. Obama's economic stimulus package has made tangible economic progress. It's saved hundreds of thousands of jobs, and is clearly responsible for the turnaround in gross domestic product (GDP) we saw in the third quarter. But a full 17% of the workforce remains unable to find full-time work, as Julianne Malveux explains for The Progressive.
When Wall Street crashed in 1929 and unleashed the Great Depression, the government eventually stepped in as an employer-of-last-resort. The Works Progress Administration (WPA) and Civilian Conservation Corps (CCC). built schools, parks, roads and bridges which still serve our communities today. Both the WPA and the CCC employed literally millions of people-in the 1930s. It's a model that could work very well today.
As the current recession makes clear, ending too-big-to-fail and guaranteeing a good job for everyone in our society who wants one are the two most critical structural reforms our economy needs. Don't let lawmakers forget it.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
When I offered in a blog thread to go lobby on TARP oversight and reform while I was in DC, little did I know that I was going to be asked to write about it on Open Left. It's a challenge to rise to the standards set by all the wonderful writers and activists on the front page of this blog. And did I mention that I am sure they are all much better typists than I am....(.Any misspellings really is my typing, I won spelling bees as a kid.)
In the past I have employed 2 methods. The first, more official one is call ahead, get an appointment with hopefully the legislator, but often it is the Chief of Staff, Legislative aide or the Press person. This works when they are friendly, agree with you and want very much for the legislation to pass. My other is the walk in and see what happens....and that's what I did Wednesday, not because Dorgan wouldn't welcome help on this bill because there had been no time to make an appointment.
As the House engaged in a bit of theatrics designed to show the Obama administration it was serious about TARP reform, the Senate now seems to be reconsidering its carte blanche release of the second $350 billion. But the Frank TARP reform bill addresses substantially more issues of concern to TARP critics than does the Dorgan legislation (still in committee with no cosponsors).
Perhaps most importantly, the Frank bill (H.R.384) prevents any funds from being made available unless between $40 billion and $100 billion are committed to a foreclosure prevention plan. The legislation calls for creation of FDIC's popular and oft-cited loss-sharing foreclosure mitigation program that would prevent an estimated 1.5 million foreclosures. Problems exist with the effort, as noted below, but the truth remains that 0$ of the first $350 billion were spent on foreclosure mitigation. The Dorgan bill (S.195) omits all foreclosure provisions. Is this any way to ensure that a foreclosure mitigation plan will actually be administered?
Though the conditions included in each bill for receiving TARP funds - agreements laying out how the funds will be used - are similar, Frank's provisions are stronger. Frank's bill prevents the use of TARP funds for M&As; without certification that the action will reduce taxpayer risk or could have occurred without taxpayer money. Frank's legislation requires reports on lending increases attributable to TARP where the Dorgan bill requires only "a detailed monthly report about how emergency economic assistance...is being used..." This Dorgan provision leaves "the intended objectives and goals of [emergency economic] assistance" undefined, while the Frank legislation requires Treasury to establish "benchmarks" in its agreements with firms receiving TARP assistance.
As such, the funds will be released without any further conditions attached to them. Given that incoming Treasury Secretary Timothy Geithner has been closely involved with the disbursement TARP funds so far, virtually nothing will change about the program whatsoever. We still won't know which firms are receiving the money. We still won't know how that money is being spent.
All that was necessary to secure a seamless transition from the Bush bailout to the Obama bailout were two letters sent from Larry Summers to members of Congress. This is the same Larry Summers who, just last week, drafted a massive business tax cut for the stimulus package, which even moderate Democratic Senators found abhorrent. That tax cut was removed from the stimulus because, unlike anything that happens with TARP, one chamber of Congress can shoot it down with a simple majority vote. By comparison, for TARP to be stopped, a two-thirds majority was required from both branches of Congress.
Dodd's willingness to just trust the administration is, as Elena Schor noted earlier in the week, similar to the trust many Senate Democrats placed in the Bush administration when granting them authority to use military force in Iraq. Keep in mind that Dodd was one of the Democratic Senators who gave that authority to the Bush administration. While it can be safely said that there are good reasons to trust the Obama administration more than the Bush administration, HOPE and trust were abandoned as systems of government a long time ago. A far greater level of assurance than a letter to Congress would have been President Obama signing a Senate-approved version of HR 384 into law. It is a willingness to sign such laws, beyond HOPE, that was the reason so many Americans voted for Obama back in November. Letters of assurance are no substitute for actual laws.
TARP money will be released, without any new conditions, oversight or transparency attached to it. At this point HOPE has moved from a campaign slogan to a system of governance.
The market is off 300 points, and Barry Ritholz is saying that $700 billion is just a start. Dean Baker says you shouldn't make a decision when the banks are pointing a gun to your head.
According to the NYT, Lloyd C. Blankfein, Goldman Sachs CEO, was in the room with Henry Paulson (former CEO of Goldman) when the decision to save AIG was made. Why does this matter? According to the NYT, AIG owed Goldman $20 billion. If AIG had been allowed to go bankrupt, Goldman would be in line with all the other creditors, hoping for a few dimes back on each dollar of debt. Because Henry Paulson decided to rescue AIG, Goldman gets paid in full.
The bailout details aren't clear, but I see no reason to think that the addition of House Republicans to the negotiating process has improved anything. For what they've tried to do here, Barney Frank and Nancy Pelosi should be moved into the 'moderate Republican' column. I've long thought that Pelosi got a bad rap, that she was just managing a Blue Dog dominant caucus. But this, plus Barney Frank's utter contempt for the voters, for common sense, and for a completely corrupt Wall Street bailout, changes my mind.
I can't believe these two would do this. It's not just the $700 billion give-away. Pelosi and Frank are jamming this down the throat of the Democratic caucus for no good reason. This probably won't unfreeze the credit markets, it's not going to solve the crisis, all it's going to do is give money to Wall Street executives. And it is wildly unbelievably unpopular; no member is getting positive calls about it and every member is getting huge numbers of angry calls.
It's a horrible, craven, corrupt deal, it's politically idiotic, and it is a testament to the utter and intentional failure of Speaker Pelosi, Majority Leader Hoyer, Caucus Chair Emanuel, and Finance Chair Frank.
The Democratic rank and file haven't seen this bill, and I'm pretty sure that the Republicans aren't going to want to vote for it. No one likes it. Hell no on this deal.
Update: How many times do we have to go through this? There IS NO PONY PLAN. It's either the plan on the table or the election. There is no alternative. You can't vote for your own particular bailout, it's a yes/no on this one.
In 2002, you couldn't vote for a specific type of war, you had to vote to let George Bush run his own war. That's the choice on the table, my friends.
I've been in the 'hell no' camp with regards to the bailout proposal put forward by Hank Paulson. Most progressives, though, have accepted the notion that - even if it's not the Paulson proposal - something must be done. The split is really between the 'do it right now' camp and 'do it after the election camp'. Progressive economist Dean Baker was in the urgency camp, but he recently began arguing that Democrats should walk away. I asked him to clarify - what specifically made him think the meltdown threat was overblown, and here's what he emailed me.
Well, there is a risk of a meltdown that would be really awful, but I am less concerned about that today than I was a week ago largely because of the way the Bush administration is acting. If you really fear a meltdown, you don't go to the wall to stop an idiot special interest bankruptcy provision for the benefit of the bankers.
And that's what this urgency is really about, getting something done before the election so Democrats can't design a real bailout package. I don't understand why Democrats want to move this forward; Barney Frank seems to be afflicted with 'dealitis', as are most Democratic leaders. And we're not hearing any pitchforks from progressives, though there are slow rumblings.
But this $700B 'bailout' is a huge mistake. As Jerome A Paris makes clear, our financial system is extraordinarily broken. There's also plenty of cash to take over these banks, but these bankers want government money because it comes on better terms than Warren Buffett's sweetheart deal.
It should be obvious at this point that there's no urgent need for a deal. We're going to muddle along with a broken financial system for awhile, and the Bush administration is simply not acting like a meltdown is a realistic possibility. So why should we? Let the voters decide this one.
Update: I'm sympathetic to the people who want to do the bailout the right way, but as we saw with the war in Iraq, there is no pony plan. There is only this bailout or no bailout. No alternatives are part of the decision matrix, my friends. However, if you wait until the election, then a bunch of new alternatives do open up.
Which is why 'hell no' makes the most sense. And yes, credit is tightening up but that's not going to change for some time regardless.
Sorry Democratic leaders, but this is a partisan crisis.
According to one GOP lawmaker, some House Republicans are saying privately that they'd rather "let the markets crash" than sign on to a massive bailout.
"For the sake of the altar of the free market system, do you accept a Great Depression?" the member asked.
Meanwhile, the National Review is blaming the Washington Mutual failure on minorities. We have an election in 40 days. This should be up to the voters, which means that, ick, it's not actually 'above politics'.
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