How Do You Make a DC Intellectual Look Less Articulate Than Sarah Palin Being Interviewed by Katie Couric?

That's easy. You ask them how failure to pass the bailout will give us a Great Depression.

The odds are that your favorite DC intellectual type has uttered some dire warning like that. After all, they all heard some authority like President Bush or a highly respected news reporter make such a claim. All right-thinking people know that we just have to give $700 billion to the Wall Street crew or the economy will collapse.

While all right-thinking people might know we need the bailout, just about all right-thinking people don't have a clue as to what they are talking about.

The Great Depression story is of course the most extreme case. No one has yet sketched out the sequence of events that will give us ten years of double-digit unemployment. But hey, if the scare story helps get the bailout passed -- and gets those uneducated skeptics in the hinterlands to buy it -- why not talk about the Great Depression?

I was on a talk show today in which one of the other guests (a representative of the security industry trade group) told listeners that you can't get a mortgage unless you put 30-40 percent down. This is of course total garbage (the interest rate on 30-year fixed rate mortgages is a very low 6.0 percent) and the vast majority of loans are being made with 10-20 percent down, but lying for Wall Street is no sin.

The host of the show was appalled to find that neither I, nor the other in-studio guest, supported the bailout. At one point he became exasperated and told me that because companies can't get access to credit they might have to lay off workers. He told me that United and GM may have to begin laying off workers next month if the credit squeeze doesn't ease.

Of course if United and GM actually do lay off workers, the credit squeeze will be a very small part of the story. The airline and auto industry face really big problems for reasons that have nothing to do with the credit squeeze, although paying higher interest rates on borrowing clearly does not help.

It is remarkable how the contemptuous comments that the elites have directed at the masses for opposing the bailout can be so much more accurately directed back at themselves. In fear and anger they have embraced a bailout that makes little sense in the context of the economic crisis facing the country. Rather than listening people who actually understand the economy (I doubt a single economist in the country believes that the bailout is the best way to help the economy) they have shouted down and shut out critics of the bailout and have been willing to spread all manner of outlandish scare stories to advance their case.

It was impressive to see the mass outrage over the bailout at least temporarily stop the bill. But, the full court press by Wall Street, the media and the entire political establishment is hard to counter. If the bill is not stopped, those who vote for it should at least be held accountable for the economic mess they create. Remember, these are the folks that couldn't see the housing bubble.

Comments

[kiwijohn]

The Country is heading for a prolonged period of economic difficulties, not just economic, and all the $700billion does is ease the pain for the fat cats who caused the problem in the first place.

The proposed rescue package is the result of a global conspiracy of bankers and politicians whose self-interest is masquerading as sophisticated economic/financial policy. The added tax policies in the new Bill just make it look more complex.

If there is an inherent weakness in current world economic infrastructure it is the existence of a largely fake, intangible economy hidden to most of us by occult vocabulary. Nothing in this revised bill changes the fact that the liquidity crunch is a symptom and not the root cause of our systemic problem, a failing market philosophy.

If this bill goes through, there are a few on Wall Street who will gain in the short term and perhaps retire, while the majority of tax payers foot the bill for the next ten years and beyond. This is an expression of legitimized sociopolitical corruption at its worst!

[halfchihuahua]

"I doubt a single economist in the country believes that the bailout is the best way to help the economy."

Well, Obama's chief economic adviser, a leading economics prof. from Cal, supports passage of the bailout. Like John McCain, I don't know much about economics, but most economists I've heard say we must, unfortunately, pass some sort of bailout to stop the credit freeze and the ramifications of such a freeze.

[slaxx]

i think that we simply don;t know enough and other people say that there are better plans to solve the problem.

and aren't only the banks that are holding bad mortagaes and securities backed by bad mortgages and lost out due to forclosures the ones that will have credit problems? what about the good banks that were responsible? i think that part of the problem may be that even "good" banks unknowingly bought bad securities.

[berrycooda]

From what I hear, Obama is saying that it will be better to raise the FDIC to cover $250,000 bank account.
The Repubs. are agreeing.
How many people have that amount of money in the bank, let alone be able to make enough in wages to save that amount.

Again, this will benefit the richer percent...­not the peons...mo­st of whom depend on gov't assistance anyway.

They should give each state a couple of billion dollars and see what can be done with that much money.
It could put a lot of people to work just fixing roads etc. that are falling apart.
Then maybe we wouldn't have to lease our toll roads and airports like Chgo. did to other countries for
75 years to get money for the state. Other states are doing the same thing.

America is for sale to the highest bidder....­.

[slaxx]

that increase to 250,000 is a farce, simply designed to make people feel more confident and avoid a bank run. same with the tax cuts - it's simply to get public goodwill and support for the bill - it has no other purpose.

i honestly think that this bailout is about investor and consumer confidence. we're undergoing a self-fufilling panic. the truth is that we will get a recession with or without this bailout.

[antirepublocrat]

Increasing to $250,000 increases the unfunded liabilities of FDIC and will hasten the moment it becomes insolvent.

[gypsy508]

Telling that this was his best idea. Not that it is a bad one but just telling about who exactly benefits.

[cccrider]

NO bail out untill we see what it is and agree.

[genet43]

The NY Times spelled it out correctly. The only "candidate" to oppose the bailout was the Libertarian Bob Barr.

This is an issue that both the Progressive and the Libertarian movement can join. The sky isn't falling and even Michael Moore has a 10 point plan that's light years better than the current bill.

I was going to vote for Obama but if he votes in favor of this bailout bill, I'm voting for Bob Barr.

[gypsy508]

Nader firmly opposes it too. But he does have a list of things that should be included if it does have to go forward.

[Brother Stephen]

I have no loans, I usually wite my monthly payments the day I receive them. I pay all of my bills in full each month. I shouln't be required to be a part of the solution.
In my opinion the people who started this mess are the first who should be investigated, and punished by forfeiting all assets and imprisonment. If they have a spouse and children, the penalty should be the same. Let those who benfit at the expense of others pay first and unfortunately that includes the whole family on assets lost. I will gladly let you use my money, if needed, then to help alleviate the problem.. Is it possile to have justice done today? . There is an article you can link to from this page by Marty Kaplan which should be read to help some of you to enlighten yourselves.
It will answer my last question.

[tolate2pray4me]

Right on Brother_Stephen! Let them forfeit the billions they have stolen, then ask us to pick up the tab for what is left.

[7NoTrumpXX]

I agree with you.

The FIRST question everyone should ask is "who is going to pay back the 700 Billion Dollars the government will have to borrow to give to Wall Street?" That's 700,000 million dollars, as ADDITIONAL debt of $2,333 per citizen.

Our government is already borrowing 2 Billion Dollars a DAY just to keep afloat. That's about 700 Billion Dollars a year we are already borrowing and that does not take into account what we OWE, which is now close to 10 TRILLION Dollars. Every citizen would have to send over $30,000 to the Secretary of the Treasury to pay off the National Debt.

Ten Trillion One Dollar Bills, taped end to end (1 foot for $2), would stretch into outer space a distance of 880 Million MILES, enoughtto make 12 round trips to MARS. Imagine that.

If we keep borrowing money we can NOT pay back and the NATION goes bankrupt, THAT will lead to a world depression. Not saving Wall Street will be a small ripple and it would a very valuable lesson to investors and those who "play" the market. Maybe those people should get a real job.

[deepfreezevideo]

Time to start thinking of ways to achieve economic revenge on the folks who have rammed this
bailout down our collective throats. I propose a nationwide buying freeze, work slowdown and tax protest.

[slaxx]

then we only hurt ourselves. i agree though, we too often sit by and take it from our goernment and do little other then complain and blog, which often falls on deaf ears. we need a president and a government who will listen to us, not dictate us.

[deepfreezevideo]

We're handing our trust over to the very people who created the mess.
It's like trusting Enron to clean up Enron.

[deminmo]

Two candidates now run on the "Change" platform, but take a
look at how things stay the same! We who do not trust the current
administration, feel that Bush has one more trick up his sleeve, an
October surprise. It's happened before, and especially when a candidate
has been in doubt of winning. The past bailout bills: One gave $700B
without oversight and in the hands of someone who was part of the
group that made the problem and benefited from it. The second had some
oversight but language in the bill made it more at the discretion of Paulson.
Now rumor has it we have oversight, less outlay at first, and a whole lot
of extras that will not get it passed, and do not really benefit us. Nothing
really changes.

[Tennessee-Rooster]

The Republican Party has made a career out of FEAR over the past eight years, maybe I am wrong, but I will NOT SUPPORT ANYTHING or BELIEVE ANYTHING until they go out of office. If President Obama or Vice President Biden tell me we need to fear then I will believe it but not until that happens. Like I said, I may be wrong but this goverment has CRIED WOLF till I just don't trust anything anymore out of them. This is their fault not mine, like my father use to say, "Trust is earned".

[slaxx]

i think that 99.99% of people agree with you.

[tolate2pray4me]

We are supposed to believe the same guys who brought us weapons of mass destruction in Iraq, the same party who in the 80's bailed out the failed savings and loan industry. Has anyone seen a return on that? What about the airlines we bailed out? What about the 25 billion to Detroit last week? I could go on and on, Americans are told to be responsible, manage your money, don't spend more than you make. This is the same administration that made it all but impossible for individuals to declare bankruptcy, even when the debt is due to astronomical medical bills or other unforseen hardship that many Americans face. This is a false crisis to save face for Wall Street after they have not only raped America but the world as well. Let them burn! Hell most of America is already suffering and about 40 percent know poverty, so lets see how bad it gets. I bet the average American will fare better than the bankers gone bust. Oh, while we are adding don't forget the billions we have shipped to Iraq that is borrowed against our childrens future as well as all the other money that leaves this nation via foreign aid, how about some American Taxpayer Aid for a change.

[slaxx]

i think that a part of the reason why the congress wants this bailout is to keep foreign investors happy so they continue to invest in america. if they feel that their $$$ isn't safe here, they will go elsewhere, which will hurt our economy. i think the congress is more concerned with what the rest of the world thinks and not the american taxpayer.

[makesmecrazy]

I don't think anyone on wall street deserves a dime until we quit funneling billions of $$$$$ a month into Iraq. It is finally time for the people who have an ounce of sense to hold the winning hand and WE need to insist that this ridiculous never necessary invasion of a country end IMMEDIATELY so we can recoup some of those $$$$$$$$. Additionally, we can reclaim some moral position that is 180 degrees opposite of that idiot Bu$h.

Again, with emphasis, this is one chance... and we don't get many.... to reclaim something of what we've lost over this horrible last 7+ years of the bush regime.

[EleanorAnn]

Obama just spoke before the House and what he said was without passage we could be headed for a big recession not depression. He also said the purpose of passage is to help the American people who could be hurt badly if we don't go forward with this bailout. He also said we will all feel the impact of this bailout, yes it's a sacrifice but to save our economy from the worst case scenario the bailout as written now must be passed.
Earlier in his speeches he said if he is elected President, the bailout is planned in stages and can be changed along the way if the President chooses to step in. He would step in if the planned stages are not working.

[Donald Wolberg]

Mr. Obama has seemingly taken the elitist road (he is certainly not an intellectual), likely from fear of straying from the congressional line. Mr. McCain is much the same without looking at the issue with a critical eye. Of course loans are being made, and of course some made loans cannot be repaid, but that is a choice made by people at their own risk. In actuality, 30 year mortages at 5.79% are being made, some with 0% down and some with 10%. The market place is the best arbiter of the market place. Mr. Buffett today purchased $3 billion in GE stock!

[deminmo]

One economist on CNBC suggested that GE, Citigroup and then
Hedge Funds and Leveraged Buyout Transactions would be the
most likely to have problems.

[hosshoss777]

Shoot, it's just as likely that this bailout is in response to falling oil prices as anything else. Since it's OPEC-CHINA and a few more nefarious sources of cash that actually support the Federal Deficit and the high flying, not related to reality, Wall Street. Americans just don't understand how the dollar is used and Americans are abused by having the Dollar serve as the Petro Dollar and the World's reserve currency.

[Sound-Bitten]

People who are against the bailout have been sadly misinformed.
Like a previous post, credit has stopped flowing much like oil has stopped circulating in the cars we drive.

Those with any kind of retirement nest egg would see it shrink to a fraction of what it was.
1. The stocks and mutual funds portion of their port folio will fall precipitously because everyone will be selling with no buyers.
2. The supposedly-safe bond portion of their portfolio will not be sellable because the bonds hold so much of the $62 trillion in credit swap default derivatives. These are not regulated thanks to Gramm and McCain's December 2000 Commodity Futures Modernization Act. This bill freed financial institutions from regulation of their CDS transactions. AIG is a prime example of how credit derivatives have been abused, but the practice is widespread (again, $62 trillion).

Those anywhere near retirement age will be in serious financial trouble if the rescue plan is not passed. The ripple effect will carry into job losses and small business failures.

[deminmo]

Don't the markets affect the retirement funds anyway? If
a portfolio is not diverse enough that can cause more loss
in one area than another. I have a neighbor who has a big
portfolio, she is in her 80's and her finance manager came to
her house to reassure her. She was so worried, she got on
a plane 2 days later for a vacation trip. It's being sold as a
do or die program. But, since I have no 401K, I guess I can
afford to question this.