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

[thebeerdoctor]

Perhaps it is time for the true Democrats and the true Republicans to form a coalition and finally challenge the craven leadership of both parties. The so-called accepted policies are destroying this country.

[jstowe100]

I agree; I believe we are headed for party-splintering, in the not so distant future.

There is tremendous polartization in America today, not just across the board, but within each of the two major parties as well. There is definitely room for more.

[deepmine]

This Wall Street "panic-rape" of the U.S. taxpayer is likely to pass Congress on the second try since all our "so-called" leaders are now in support, including candidates McCain and Obama, as well as the leadership of both the Republican and Democratic parties.
Americans cannot stop this rush to save these bums and they are unlikely to vote thier individual reps out .
Why not, instead, punish both political parties?
Not one penny of contributi­ons...and register independen­t...leave them high and dry....sen­d them the way of the 19th century Whigs.

[jackwaddington]

If indeed we need a revolution, in both mind set and manner then let the stock market fail and see where that leads us. Yeah yeah yeah everyone is scared but I say we are anticipating a scary scenario, which I predict, will not happen. A new mind set will settle in and a new manner of dealing with life will then transpire and then we will all wonder why the hell we never thought of this before.

[j0hnwi11iams]

The problem with the market isn't the correction, it is the SHOCK. The SHOCK will cause a massive sell-off that will cause prices to plummet (deflation). It will be impossible for people in debt to pay off that debt. There will be a wave of bankruptcies as the currency (which is created from debt) contracts.

The rescue is necessary to absorb that shock and stem a massive sell-off.

[123zeke]

California says it is broke and cannot pay its teachers folks. I guess Alaska is in pretty good shape. How does that sound?

[tea in the harbor]

Why should we bail out people who have already proven themselves incompetent?

If they knew what they were doing, we wouldn't be in this mess. A precondition of any "Bailout." or "Rescue" should be that the entire management team for any company wanting help be replaced. Handing over $700 billion to the same clowns that screwed this up would be the epitomy of stupidity! And that includes the current Treasury Secretary, he was in charge of Goldan Sachs as this crisis developed and either didn't see it coming (incompetence) or went along with it (malfeasance).


Wall Street has bled us dry, and now they are tapping the veins of our grandchildren! The problem is that financial services are are overvalued and those of us who actally produce things are grossly undervalued, untl they are ready to change that equation nothing is gong to get better, so screw em!

[zrants]

FAILURE TO COMMUNICATE - I am amazed at how inarticulate many Congressmen and women are. Here are some of the better ideas I've gathered from various sources for protecting both Main Street and Wall Street, where most of our retirement funds are invested.

TAKE THE TIME - The Emergency Economic Stabilization Act of 2008 is an improvement over the original Paulson plan. We have time to perfect the plan further.

LOAN THE MONEY - Buying questionable properties requires setting values on unknown properties, and means taking on unknown debt as well. Given the choice between loaning cash or bailing out, loaning seems the best, least risky choice. Congress can determine what to do with the profits when they materialize.

HOUSING VALUES - As a California resident who watched housing prices spiral out of reach for years, I have mixed feelings of relief that real estate prices are falling, and sympathy for owners of the over-priced property stuck with bad loans. We need control on both prices and interest rates. Surely someone in Congress can figure out how to protect the interests of both Main Street and Wall Street.

REGULATE - We need to re-install the regulatory systems that have been dismantled. Laying off large numbers of regulators to make government smaller and cheaper has resulted in unsafe products and a financial system out of control. We need a regulatory system that protects the rights of US citizens, not corporations.

[MarylandLibertarian]

I agree totally that Congress (from both parties), as well as high (no pun intended) officials from Republican and Democratic parties are driving home some hogwash about another "Great Depression" looming if we do not approve yet another bailout. Republicans know that unless the economy improves significantly by Election Day, McCain is toast...th­at is why they are willing to sell out their tax-payers in the long run to make a short-term impression that the economy is strengthening. Obama, however, is no saint either. He is also rushing to get this latest bailout passed because he fears it would make him look bad if he does not support it. The average American voter does not understand economics anywhere near enough to make an informed decision as to whether this latest bailout plan is advisable (it is NOT advisable).

Thus far, I have seen only ONE PRESIDENTIAL CANDIDATE willing to put politics aside and stand up and advise against the bailout: Bob Barr!

[Hansharriet]

We don't need a bailout. This is the biggest heist since the large train robberies in the 19th century.
Nothing is going to happen. There was one good result of this bail out fantasy: We found out how stupid and brainless our Members of Congress, Congressmen and Senators, are. They are all of the Sarah Palin caliber. Disgusting, isn't it?
This collection of our Representatives is just repeating what they did when they voted on Bush's big Iraq lie, because they were then afraid that he may be right against all the facts. Now they are afraid again to stand up. They are guilty of selling out the people and we will hold them accountable. "We didn't know!" or "We were lied to" or "We were mislead" like Hillary and others said afterwards will not be accepted as excuses this time..
The people don't want a bailout and they know better than you. Listen to them. This is called a Democracy and you must represent them properly.
Rep. Van Hollen, Hoyer and Pelosi: You are responsible of going against the will of the people!

[WritusMaximus]

Moderator Ms. Ifill has big incentive to go soft on Palin, but if she is intent on getting real answers from Palin, the bias card McBush/Palin will play. Looks like it is going to be up to Biden to somehow hold Palin's feet to the fire by demanding she answer the questions, a very delicate/tricky proposition.

[Voellf]

The general public is either for or against the bailout based entirely on emotion. Do any of us understand the full ramifications of the bailout? Do we understand where the money is supposed to go and what it will do when it gets there? Why 700 billion? Where does that particular figure come from? Do you know? I don't, and I count myself as being smarter than the average bear - or president, whichever has the higher IQ.

[CJWausau]

Emotion Hell ! ! !
Please take the time to go out to the website and start reading. That bailout has more holes than 'Swiss cheese'. One that really bothers me is on page 31, line 8 [ "subsection (2) paragraph (A) Limits on compensation that shall exclude incentives for executive officers of financial institutions . . . ." ]

With a loophole like that, before the ink of the presidents signiture would be dry, You and I know damned well that it would be abused to write incentives in to replace the golden parachutes they would have to forgo if in the bailout program.

God must surely have one enormous sense of humor judging from the 'idiots' he has put in Washington DC.

If You or I go to the bank and ask for a loan, we have to live by the bank's rules. I You have not written, called, or emailed your rep, senators, McCain, Obama, Biden, Palin, Pelosi, and any others that need to know how you feel, I'd suggest that you get with it now ! Thank You.

[deminmo]

Paulson admitted the $700B number was just taken out of the air,
a big enough amount to make some difference. Everything hinges on
sale of these bundles when the "market corrects", and that this amount,
possibly up to $1trillion will be enough. But did you know on Sept. 27
$612B was injected into international banking to help stabalize it? And
that Defense spending is about the same, $700B? If this money can be
found, why hang taxpayers with worthless papaer?

[valleygent]

You know...its not about experience­...truly. Its about INTELLECT. SARAH PALIN IS VOID OF HAVING ONE. SEND HER BACK TO ALASKA TO HUNT AND STUFF...

[Voellf]

The truth of the matter is, that the general population is either for or against the bailout based entirely on emotion. If asked, very few people can say what the bailout entails, how it is supposed to work, or what will be the cause and effect from it. Do you know? I certainly don't, and I count myself as being smarter than the average bear or president - whichever has the higher IQ.

[walk0nwalls]

It's depressing, to say the least, to see everyone going for this indelibly stupid plan.

[anelder]

try listening to someone you respect. Or at least your should. Warren Buffett.

He and the larger percentage of economists, despite the 200 congressmen state otherwise, unequivicably insist the this package, not a giveaway or bouyout but a purchase of investments, must go through. Many say the plan could be a better one but all say what's improtant is to have it done sooner and not later. If you further listen to Buffett and others of his ilk our Sec. of Treasury Mr. Paulson is the absolute best man to handle this. To tar Mr. Paulson with the brush of having been appointed by Bush means he can't be any good is nonsense enough not to argue with.

My point is that to have such a distaste for this adminsitration and congress, which I fully understand, that it makes you into someone who refuses to make a decision is the height of stupidity.

[Jazzbeau]

"To tar Mr. Paulson with the brush of having been appointed by Bush means he can't be any good is nonsense enough not to argue with."

Perhaps, but based on the track record of his appointees it would likely be a decent bet.

[newsweek1945]

The bailout is a sly capitalistic ploy to get the American people to spend more of their money to save the butts of the gang that bled them. Wow!, Talk about arrogance. Does'nt it have all the earmarks, excuse me, of bushism, like fear-mongering, doom, and gloom, and the newly coined, "country first" ?
Boy, these bloodsuckers never give up. They may don other clothing, but their alarmist signature is still the same. What are we going to do; strengthen the shylocks so they can squeeze the purses of the real working public tighter and pretend that they really don't need help, because they are "fundamentally strong"?

[anelder]

Sir, just listening to your analysis of what's happening is to know you are completely ignorant of what's going on.
You see this as a bailout and fail to see that the rescue is to our whole economical structure. We are buying assets from companies at a tremendously reduced rate and holding them till they recover.
You know the concept, get into the market when it's down and hold till it goes up. This action, more than enything else, will allow confidence in our system so that monies can be freed up for us, not the big cats, us to continue earning a living and getting credit. Businesses to make their payrolls, purchase goods to be manufacture, and so on. I see no purpose in continuing since all this is out there to see but obviously it matters not to you.

[carvermon]

Man, for an elder you sure are naive.

[chelliza]

Does anyone but me think that maybe it is a problem that businesses and individuals are so addicted to credit? I keep hearing that businesses "need" to be able to borrow. My husband started a business 16 years ago and he has always worked within the actual income of the business. He paid off the initial start up loan right away and has never borrowed a penny more. Businesses and individuals can and should live within their means. When this doesn't work, how will they get their next fix of the needed credit? Are we always going to make sure that they don't run out?