House Bailout Vote: The Uprising Comes to Wall Street and Washington

I'm scheduled to appear on CNN at 3:30pm EST to discuss the House's extraordinary vote to reject the $700 billion Wall Street bailout. What I'm going to say is pretty simple: it's clear that Congress is facing a full on revolt from both the Right and Left - the very revolt that I predicted in my book, The Uprising. No longer is this a populist revolt merely scaring Wall Street and Washington - this is a populist revolt that has, to quote Markos, crashed the gate, and it represents a real victory for the progressive movement and voices who said Hell No.

Those who are surprised by this turn of events just haven't been paying attention to what's going on out in the country - they haven't been paying attention to, for instance, the social survey research showing rising rage against both our corrupt government and Corporate America. During my 3 month book tour, I faced a wave of skepticism from the Establishment media about my thesis. This earthquake on the floor of the U.S. House should end that skepticism once and for all.

Just as I said in the book that it's not clear what is going to come out of the Left-Right grassroots uprising throughout the country, it's not clear what is going to come out of this uprising in Congress. Will Democratic leaders tack to the hard right, load the bill up with corporate tax cuts and pass this bill with only Republican votes? Or will they actually be leaders of the Democratic Party, make this bill a vehicle for the kind of New Deal-style investments and regulations that are necessary to start rebuilding this country, and pass this bill with full Democratic Party support?

This is the question moving forward. I've laid out the top 5 reasons to vote against this bill and go back to the drawing board. That article outlines what should be the basic conditions for any bailout, including a speculators tax, re-regulation, economic stimulus, bankruptcy law reform and aid to homeowners. No amount of tinkering with Paulson's atrocity is going do the trick. They have to go back and start from scratch.

Make no mistake about it - this is not a moment of celebration, it is a moment for increasing pressure. The Uprising is waiting for a serious response - will Congress step up to the plate? Contact your member of Congress right now and demand he/she goes back to the drawing board.

Comments

[smartgrowthdeveloper]

Say what you may about who benefits from this "bailout", but the harsh reality is that there is an absolute credit freeze in the marketplace due to this Congressional impasse and the uncertainty that it creates. Businesses are grinding to a halt and layoffs will follow shortly. Despite an otherwise healthy development project and never missing an interest payment, ... unless things in the credit world change immediately, within the next two weeks I will be forced to terminate 10 hardworking employees and dozens of subcontractors (and not a "Wall Street Fat Cat" in the bunch) all because both of our lenders have shut down all lending activity for our construction and our qualified customers. Have some folks.

[galilei]

Don't fall for the old, "We've got to take action, even if it's the wrong thing, it's better than nothing."
Oldest. trick. in. the. book.
As well as one of Umberto Eco's fourteen points of fascism:
"Irrationalism also depends on the cult of action for action's sake." (from http://www.themodernword.com/eco/eco_blackshirt.html)
We're being manipulated.
Google "dark pools of liquidity". These are secret, private stock markets being run by the same people lining up for this bailout. They're using these markets to manipulate our public markets and hold our economy hostage. We shouldn't give these people anything but prison sentences.

[alpaig]

I'm disgusted with both the Dems and Repubs who supported this bailout. I recognize they need to do something but it doesn't have to be this specific bailout. These two parties are so in bed with
Wall Street I have no hope for change with either Obama or McCain. Where's McCain's
maverick stance in all this? Obama is doing the same thing he did with FISA and everything else he has his hands on. "It's not a perfect bill but it's the best we can do right now and I promise this will just be the beginning and when I get in we'll get things straight". Yeah, right. Obama and his belief in incremental changes , putting it together small piece by small piece over the course of years.
That's not what I expect from the "change" candidate. Check out Marcy Kaptur on You Tube.
She's a Democrat from Ohio who's in the House and who opposed this bailout. She has two clips
one being "Let's Play Wall Street" and "They Want Mama". Whether one agrees with her or not she's got my vote because there is no one on these two tickets who is willing to put the people first
nor who has the political courage to stick up for the people and against all their cronies who are contributing to their campaigns who reside on Wall Street. McCain or Obama- who cares?- what's the difference?

[texanna]

You are totally correct, Mr. Sirota. The premise of the Paulson ransom note, uh, I mean proposal, was invalid to begin with, i.e., if the Congress doesn't abdicate what's left of their part of the government the whole country will go up in smoke. The Democratic "Leadership" should never have accepted it. By doing so, they started from a position of weakness and had no chance of coming up with any intelligent response to this crisis. They are now at the position that they should've been at over a week ago -- the problems with our economy are multi-faceted and cannot be fixed by throwing billions at the gamblers that got us there. We have a void of leadership at the highest levels and now is the time for Obama to show us what he's got. I don't think he's got much, but I'm willing to have my expectations exceeded.

[takeBackUS]

After the bail out failed, the dollar went up and interest rates went down. Both of these seem to be a good thing. Maybe the market is trhying to tell us something - letting the market work through the excesses of Wall St. by itself may be better than this stupid bail out which will cause inflation, raise interest rates, and hurt the average person.
By the way, I received an email from my bank yesterday saying my credit card credit line has been increased. What credit crunch?

[Jer1957]

The right-wing Hedge Fund Money (NY/London) funded Obama to beat Clinton.

Why am I not surprised that Barack-- just like Bush & Paulson--wants the taxpayers to bail-out the Hedge Funds' multi-trillion $ losses--no questions asked?

It is a really a shame there is not a Dem presidential candidate on the ballot this November--at least not one than FDR would support.

No Bail out& No Bail for the swindlers!

[RoloTomassi]

Bah...Clintonite sour grapes.

[Jer1957]

The author is right on almost all points.

The one point he omitted is crucial.

I am a life-long Dem activist who never dreamed of voting for Sen. McCain this November. I voted for Hillary Clinton in my state's Dem primary and was elected as a state convention delegate on her behalf.

Barack Obama was always the candidate of the Clinton-hating investment bankers--and overseas hedge fund mgrs.--who gain the the most from the bailout.--if FEC contribution records are to be believed.

How else does well-marketed 'poor peoples candidate' Obama get the largest campaign war-chest in the history of the world. And Obama has now pledged to 'ram thru the bailout!')

I will vote, only, for candidates who call this proposed bailout a swindle.

I hope that those candidates are Democrats. But to earn my vote Sen Obama will have to show some courage--and bite the hedge fund hand that has fed his meteoric rise.

[David2]

I'm with AmericanHeathen on this, we need to DEMAND accountability, not just on Wall Street but also up Pennsylvania Ave. For far too long we have been subjected to not only a president but also a whole political PARTY telling us that everything is just hunky-dory when they knew the signs were there of trouble and they intentionally ignored them.

And now, all of a sudden, these same people who have been pulling a Pollyanna act are storming in like Dudley Do-Right and acting like they know how to save us? I DON'T THINK SO!

Plus, let's not forget that these are the same people who are telling US that it's all OUR fault because WE made "bad decisions", but now they want US to bail them out for THEIR OWN bad decisions!

Sorry Gordon Gekko, but you had your turn with greed and it cost you. It's time you got a taste of your own medicine.

I am glad this whole thing blew up in their faces! It's high time that that Wall Street and Washington realize that the world doesn't revolve around them! They need to know that we're not going to jump just because they're screaming "BOO!"

Both these groups need some to do serious explaining, and preferably with the people who carry badges and handcuffs and like to frog-march people in front of the cameras. And this should come before we are forced to give out ONE RED PENNY!

[AmericanHeathen]

Hey! I've never been more happy to lose money! The message is clear from the American public...Not on our dime! Now, the question is, who is going to be held accountable? I smell a Rome size version of the SNL scandal. Too many folks walked away from that mess. Ladies and Gentleman, it's time for us to DEMAND an investigation, prosecution and sentencing of ANYONE responsible for this mess.
I say that the SEC, Congress, ANYONE involved be brought into focus and given the third degree.

Deregulation, complacency, hidden political agendas... it's time to change the playing field and the players. Do you really want to let them get away with shoving this under the rug of a bailout? Business as usual?

I implore all of you to take a good hard look at this potential bailout and see it for what it is. A free ride for Wall Street. Because that's exactly what it will be. Regardless of whether or not you are a Rep,a Dem, or an Ind. It's time for us to take back our country from those whose only goal is to suck the life out of America.

It's payback time for Americans...with interest!

[Konnie]

I can't believe that i am the only one who received an email touting the Birk Economic Plan.

google it. basically its saving the economy from the other direction. Birk (and I have not idea who

that is) wants to divide $85 billion between every one of the 200,000,000 citizens - man, woman

and child over 18. the means every one of us woud get $425,000. ($594,000 per couple) how's that for a stimulus

package. Per Birk it would be taxable - estimated at 30% - that would be an instant return

to the treasury of $25 b.

now think about what would happen: mortgages would be paid up to date or off. that would be
a huge shot in the arm to the mortgage bankers. Car loans would be paid saving the big 3
financing arms, credit cards would be paid down or off - saving master card and visa banks.

think of the jobs that could be created. #1 all the folks working 2 and 3 jobs could quit them.
the 62-85 year olds could finally retire

people could finally open savings accounts.
kids could pay for their own college educations or pay off those school loans.

housing values would stablize and property taxes could be collected. think of the sales
tax that would be generated.

i spose this is just all too simple. too easy. makes to much sense.

but there would still be $615 billion to save the credit markets...­..........

david, you are the populist, what

[EuGeneTherapy]

Math is off by a factor of 1,000. We need more reality, less fantasy. There will be no easy way out of this mess. George Bush fiscally bankrupted every entity he ever touched, and now apparently the federal gov't in just eight years as well. And some naysayers said it couldn't be done.......

[Konnie]

sorry my bad.....wanted it to be true............

[David2]

Sorry, but I pulled out my handy-dandy Windows calculator and did some quick math...

$85 billion divided by 200 million only leaves you with $425.

Nice idea, just not enough decimal places to make it worth something.

[rwe2late]

WHY CYA WORRY MADE THE BAILOUT STINK

The Dem leaders MAIN interest in getting Repug votes for the bailout was CYA.
They did not want the "responsibility" for the bailout plan laid at the Dem doorstep.

So they "compromised" aspects of the plan to weasel Repug votes. If they really thought the proposed plan was in the "best interests of the USA", they would have insisted on the provisions they thought would make the BAILOUT PLAN WORK, NOT WEASEL REPUG VOTES WHICH THEY ONLY NEEDED FOR CYA. They would NOT have conceded points such as credit card and mortgage default protections.

EVERYBODY admitted it was NOT the best of plans, but representatives were told to vote for it anyway, in the spirit of "bipartisanship". Bipartisanship, indeed, since when is bipartisanship more important than doing what is best for the country?

The Dems have the votes IF they really believe their plan is best. Put the Repugs in the same position the Dems claimed to be when they voted for unliked military appropriations to "support the troops".
Let the Repugs vote for provisions they don"t like, to "rescue" (or is it now "buy into") the economy.

The Dems should stop being a cowardly majority that won"t insist on what it allegedly believes in.

And since they obviuosly don't truly believe in this bailout package, hold hearings and develop a better package.

[rwe2late]

WHY CYA WORRIES MADE THE BAILOUT STINK

The Dem leaders MAIN interest in getting Repug votes for the bailout was CYA.
They did not want the ‘responsibility’ for the bailout plan laid at the Dem doorstep.
So they ‘compromised’ aspects of the plan to weasel Repug votes.
If Dem leaders really believed the proposed plan was in the ‘best interests of the USA’, they would have insisted on the provisions they thought would aim to make the BAILOUT PLAN WORK, NOT WEASEL REPUG VOTES WHICH THEY ONLY NEEDED FOR CYA. They would NOT have conceded such points as credit card and mortgage default protections.

EVERYBODY admitted it was NOT the best of plans, but representatives were told to vote for it anyway, in the spirit of ‘bipartisanship’. Bipartisanship, indeed, since when is bipartisanship more important than doing what is best for the country?

The Dems have the votes IF they really believe their plan is best. Put the Repugs in the same position the Dems claimed to be when they voted for unliked military appropriations to ’support the troops’.
Let the Repugs vote for provisions they don’t like, to ’rescue’ (or is it now ‘buy into‘) the economy.

The Dems should stop being a chickenshit majority that won’t insist on what it allegedly believes in.

[Romeover]

There comes a time when you have to stop bailing out the boat, and just fix the leaks.

Without first admitting the problem and then fixing the corrupt and broken financial ripoff industry, handing them money will do nothing but feed their egos and their addictions. Without addressing the systems of regulation, taxation, and concentration of economic power, any bailout will just be prelude to a bigger and more disastrous foundering of the economy.

We have a financial sector that has been mainlining speculation instead of wholesome investments. An investor buys an asset at fair market price, in the expectation of reaping dividends over time. A speculator buys an asset at what he hopes is below fair market price, in the expectation of selling it to a fool at what he hopes is above fair market price.

Speculation is, at best, gambling. At worst, and we have been seeing the worst for decades now, speculation is fraud and theft. The S&L fiasco, the Tech bubble, the energy fiasco, the housing bubble, were all speculative rip-offs.

Institute a securities sales tax. Break up the big players. Impose a heavily graduated corporate income tax. Nationalize health care. Invest in alternative energy. Invest in education. Invest in America and her people.

Bail out the ship, throw the supercargo overboard, plug the leaks, and set sail.

[Doofus]

I don't know about you people, those of you who are running-dog
capitalist roaders, but I'm personally not in any hurry at all to be
investing in some Baaad Mortgages. All of a sudden, I have my
own financial worries. It would have been ok if the government
would have taken that on. Not great, but ok. Just not me.

If they can figure out a way to MAYBE make some kind of a profit
on 'bad paper', more power to them (US!). The point, however, is
to 'avoid total financial meltdown'. The 'finger in the dike' approach
sometimes works, and actually is something worth trying. To hold
out for some (bizarre?) equity scheme is double-plus unwise.

[RadCenter]

So everyone who has an IRA or 401(k) just took a huge hit today, and this is a victory for the working person? Pardon me if I don't feel victorious.

[DixieMelody]

Take the hit today or take it after Congress slaps a $700 billion bandaid on the problem with no real safeguards that the greedy won't dump all their toxic loans (not just mortgages) on us and then start lining their pockets again.

[RoloTomassi]

Tell it to the GOP.

[RTIII]

Wrong viewpoint: the bailout would have ALSO killed your 401K - by making every dollar, not just the ones in your 401K, worth a LOT less. That kind of change is _permanent,_ while your retirement account is flexible and can rebound as it's moved more by confidence than anything else.
.

[Romeover]

Wrong viewpoint: the speculative bubble depreciated any holdings, including 401K's, that dabbled naively in the speculation, sucking money out of the system and into the hands of the speculative "wizards" ("magicians" might be a more apt description, as they seem to have supernatural powers to make value disappear).

The value of REAL investments is not moved "more by confidence than anything else"; it is the value of speculative investments which follows the fears and "irrational exuberance" (isn't that Greenspan a linguistic hoot?) of the market.