Defeating the Bailout Looks Like Another Republican Ploy
The Hill reported today: "Unlike the three-hour vote on the 2003 Medicare drug bill, House Republican leaders did not put much pressure on their rank-and-file members to back the rescue package." John Boehner, Roy Blunt and other "leaders" of the House Republicans thought they could strike a public pose as if they really cared about the credit seizure that looms over the country while secretly hoping to pin the bill's passage on Nancy Pelosi, Steny Hoyer, (and by association, Barack Obama). Republican House members would then be free to return to their home districts and run against the "Democrat" bailout. They wanted Speaker Pelosi to pass the bill without much Republican cover so they could tell their constituents that the Democrats were just "picking the taxpayers' pockets again." In 2003, when the House Republicans were in the majority and wanted to pass a sweetheart deal for their corporate benefactors in the pharmaceutical industry they had no problem "whipping" up enough votes. Just ask Billy Tauzin and Tom DeLay. But when the economy is teetering on the verge of a severe credit crisis they refuse to put in the extra effort. They wanted the bailout to pass without many Republican votes so they could blame the majority and milk it in the remaining weeks until the election.
The No Child Left Behind and the Patriot Acts were "bi-partisan"; the Medicare prescription drug bill that forbids the federal government from volume buying pharmaceuticals was "bi-partisan"; the Authorization to Use Force in Iraq was "bi-partisan." The deregulatory fervor that included the repeal of the Glass-Steagall Act in 1999, which knocked out a pillar of the New Deal regulatory banking reforms, was also "bi-partisan."
And now we're being told that the $700 billion Wall Street bailout bill is a really great thing, in part, because it is "bi-partisan."
Whenever you hear the word "bi-partisan," even during the waning hours of the Bush years, it usually means something very bad is about to happen.
In principle, I do not support this bailout bill. I agree with the critical flaws in the bill that Dennis Kucinich articulated this morning on Amy Goodman's show, Democracy Now! I don't believe in a government welfare program for Wall Street swindlers who had the audacity to pump up the paper value of one of their hidden, unregulated derivatives, "credit default swaps," from $631 billion in 2001 to $62 trillion in 2008! I think some people should be indicted; some people should go to jail.
These crooks have the economy in a vise so we must give them what they want because if we don't it's going to bring "this sucker down" (to paraphrase President George W. Bush). If the government does not ease jittery stock markets by pumping fresh cash into the system and taking on Wall Street's toxic derivative sludge the ensuing credit seizure could slam the economy into a years-long depression. It would then take billions and billions of dollars to try to prime the pump. The bailout bill was a desperate attempt to keep a recession from becoming a depression.
The gap between the super rich and everybody else has grown for decades, and the ruling elites are geniuses at passing the costs of their reckless speculation onto the backs of working people. All of a sudden I hear Bush Administration mouthpieces such as the billionaire Henry Paulson, who in the past have told us that we are all on our own and we shouldn't rely on government for anything, speak about "our" financial markets as if working people have been the ones swapping "collateralized debt obligations" and "hybrid debt instruments." We now hear from the dead duck Bush regime: "All for One and One for All!" The whole damn mess would be nothing but a bad joke if the situation were not so dire. There is going to be real suffering soon among our society's most vulnerable people. Whatever Congress decides to do or not do the economy is already tanking and hurting working people across the country. I would rather see the leaders of this nation stabilize the markets at least until the Obama Administration can take over and begin the long arduous process of cleaning up after the worst president in American history. It is my hope we can seize the opportunity this crisis presents, hold President Obama's feet to the fire, and construct a new social compact in this country, a New New Deal.
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Yea, absolutely right. Will Obama step on the land mine? Im watching his senate speech right now.
Im not sure how to decode it. I think he's talking too much.
Why is no one mentioning the $300B mortgage assistance bill passed this summer, and effective today, Oct. 1, to help homeowners on the verge of default/foreclosure? Has everyone--media to Congresspersons to commentators--forgotten this legislation? With all the debate on Wall Street bail-out vs. homeowner bail-out, it seems more than odd that no one is factoring in *existing* legislation. In a word, Why?
We hear ad naseum legislation must be passed immediately. [like the Patriot Act] .... Waiting until November, more than a month from now lessens the urgency meme. Do republicans know something we don't ?
In a debt driven economy businesses and individuals need loans; banks need liquidity. But when banking institutions are unable or unwilling to provide loans it creates a credit contraction. Main Street, i.e. small businesses, students, home buyers, farmers, etc. are hit hardest.
Millions of foreclosures cost banks billions upon billions of dollars. With that many and more foreclosures just over the horizon throwing a trillion dollars at the financial sector would be an endeavour in futility. Presumably that money would be absorbed as lost revenue rather than provide liquidity.
To keep loss at a minimum stemming the tide of foreclosures makes more sense. Affordable mortgage payments allows homeowners to keep their homes. Money flowing back into the banking system builds the liquidity financial institutions need to lend money for small businesses and farmers to continue operating; students continue learning; etc. in this context everyone wins.
But a lot more must be done before the economy is robust and strong. Borrowing a trillion dollars to jump start the economy is a short-term fix with long-term consequences. Long-term solutions starts with Main Street all the way to Wall Street.
Credit score over 700 and 20% down payment for all homes MUST.
Move from there!!
We need to stop the banks from lending money to deadbeats period !!
I don't have a credit score over 700. I didn't have 20 percent down. I'm not a deadbeat borrower. I have made EVERY payment, and I will continue to do so. The ONLY thing that will make me not pay my mortgage would be if I lost my job.
I believe both sides of the aisle are using this too get re elected.....
i think its true that the demo's could hav gotten it passed by themselves....
but also the republicans could have let county come first instead of blaming nancy....
both sides should get kicked out....as much as possible...but the people will re elect those bums
an i believe that both demo's an republicans are in some way very freindly too the wall street guys who made this big mess...probably know the bankers by their first names an their children....go to their birthday parties an weddings...an would like too bail them out after the election....when their job as a senator or house rep...is safe....
both would be presidents showed no leadership with their own party.....
i support obama but would hav rather had hillary ....how does that kenndy speech go
some people see things as they are an ask why...i dream of things that never were an say..why not
i ramble...but .....
both sides need too grow up....the meany nancy an the cry babies republicans
I agree. In public both sides are using this politically and it sucks big time. Being an Ind., I give a lot of credit to the Rep.'s and Dem.'s that voted against this bail-out. And I am sick to death of that spineless, gutless Senator Reid and the fearfull Nancy Pelosi!! We need someone that can stand up to the privately owned corporation called the Federal Reserve. They are as much Federal or as much a government agency as is Federal Express. Educate yourselves or become sheep.
"Make yourselves sheep and the wolves will eat you." Ben Franklin
And right now they are eating us!!
The Dow was up today by 585 points.
Any bets on whether Pelosi will favor calling for another vote on the bail-out bill before the Dow can go much higher?
uhhh.... yauhhhh(?) you think?
A bill has to be passed in order to save us from the credit fallout. I think that a bill that is moreso geared toward helping the taxpayers than these corporations is a better bill and a bill that can get passed (unanimously by the Dems so that we can take full credit for it and forget the repugs). Yeah, a bill geared more toward helping Main Street get out of the mess that the corporations helped to create, and also stop the credit crisis that is going to bring this country to a grinding halt.
See Joseph A. Palermo's Profile
Great comments -- I agree with those who are against this bailout, I just don't want to see people losing their small businesses and the like because of a credit crunch -- thank you for your praise and criticisms. I would like to see a new Home Ownership Loan Corporation (HOLC) that saved 4 or 5 million homes in the 1930s -- but we'll have to wait for a new administration. I still think the political ploy of the Republicans was to trick the Democrats into passing it so they could stamp a big "D" on this terrible bill and run against it in perpetuity. They already are trying to blame Democrats for not regulating Freddie and Fannie and therefore "causing" the meltdown. Now that's rich!
When you say the GOP is trying to blame Dems for not regulating Freddie and Fannie and thats rich you should view this http://www.youtube.com/watch?v=_MGT_cSi7Rs
I totally agree on the ploy, there is not 1 House Republican that will say Pelosi's speech changed their vote. I believe that the House Republican leaders were expecting the bill to pass on Democratic votes so they could try to save seats. Now the money that was referred to in the Republican proposal that was waiting on the sideline is getting pumped into the market to keep the defeat backlash from hurting. Plus it helped that the Treasury pumped $630 billion dollars into the world market yesterday.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahwz_k5JvuB8&refer=worldwide
Technically, that $630 Billion came from the Fed, NOT the Treasury Department.
Big difference. Big.
The outline of a good plan is pretty simple: Provide money to help people pay their mortgages. (Maybe not everyone; I'd exclude, for example, those who bought up a bunch of condos in California, Las Vegas, or Florida hoping to flip them quickly and got stuck when the musical chairs game stopped.) Not a dime for all the derivatives, credit default swaps, derivatives of derivatives, and the rest of the Ponzi scheme.
To fund it, increase the marginal tax rate for 2008 on people over $500,000, which should hit the fat cats who benefited. Consider the proposals to put a small tax on purchases and sales of securities.
Also consider Obama's suggestion of increasing FDIC protection, although I doubt very many people have over $100,000 in any one bank. Maybe provide some FDIC protection for money market mutual funds, although their higher returns was supposed to be a risk premium for the lack of insurance.
Banks who need more capital should get it the old-fashioned way: pay higher rates on deposits. That will immediately reward savers and help the little old ladies living on CDs. It also gives local & regional banks a chance to compete with the mega-holding companies.
This is really a good thing for the country and the democrats. Now they can come back with a better bill for th country and the taxpayers. The republicans will be up against a wall, and treading water as fast as they can. Obama needs to get his economic "team" together and put something out there that is different, but he will need the big Dems to go along with it. Now is the time for him to do a 180 and get in front of this thing. Show a bold move that MAKES SENSE TO JOE SIXPACK AND SALLY LUNCH PAIL! Even if it is thrown out he will at least be showing everyone that he is in it for them.
Joseph,
I agree. The govt needs to do something. Sending $700 billion to the financial industry, however, AIN'T IT!!! What they need to do is take over the bad mortgages! This will mean that people will be able to afford their homes, the businesses will no longer have "toxic debt" on their books, and it will actually pay back the costs AT A PROFIT for the govt! If this were to occur, it would be a win-win!!! I don't think that it will happen, certainly not under bushco, but I have hopes that perhaps this will fail until after the election!
Have you read the bill??? It is available for everyone to read. You will see that buying the toxic debt is part of the bill. Read the bill, it can get better with bankruptcy protections for homeowners and a few more items.
No, buying the toxic SECURITIES made from toxic debt is part of the bill. The DEBT will still be out there, and will still be causing a Great Depression 2.0 in a few months....
"Defeating the Bailout Looks Like Another Republican Party Ploy"
I take a back seat to no one in criticizing Republicans, but Nancy Pelosi personally screwed this one up:
(1) She called a vote NOT KNOWING IN ADVANCE, name by name, who was going to vote for, and who against, the bill. Knowing that is the Speaker's job.
(2) She delivered a PARTISAN DIATRIBE BEFORE THE VOTE. Doing that (as fun as it may have been for us) abandoned the high ground of bipartisanship, providing political cover at the most critical moment to at least a dozen Republicans who disliked the bill and, probably, all progressive women.
(3) Having lost the high ground, she ALLOWED FIVE DEMOCRATIC COMMITTEE CHAIRMEN TO VOTE "NO", along with several Subcommittee heads, when she should have threatened to strip them all of their chairmanships, instead. She should have threatened Dennis Kucinich (not an easy Representative to influence) with expulsion from the Party. She didn't, and they all voted "No".
When even as doctrinaire a group of right wingers as Paul Ryan, Boehner and Blunt pressed for the national interest over partisan advantage, Pelosi's failure as Speaker was all the more appalling.
We need to forgive--but remember. She gets one more shot at getting this right. I hope and expect she will. If not, the Speaker's job should go at once to someone tough enough and smart enough to get the job done: Rahm Emanuel or Barney Frank. Failing again isn't an option.
The next bill (and you know there will be a next bill) should be a big D Democratic bill. If we're (that's we not they) are going to buy up mortgages en mass the bill should have provisions for resident owners to refinance at realistic terms as FDR did in the thirties. Baloon mortgages and other exotic contracts should be trashed and refinanced as fixed rate mortgages with an eye to facilitate stable housing situations.
Any cost or instability for tax payers must be taken out of the hides of the people who caused this mess and have profited from these usery and insane lending practices. And I think it is important for Democrats to use language like, "taking it out of their hides" to renforce the understanding that this mess was no accident or mistake. This is a scandal perpitrated by people who knew quite well what the results would be and just thought that they could duck out before the kaka hit the air conditioner.
This bailout is and always was unnecessary. What is needed is a Federal Reserve guarantee of cash so that the flow of money is not impeded. The rest (CDOs and HDIs etc) can all wait until the new Administration takes over, or the fat cats begin to tighten their belts and stop buying caviar and Moet. Congress only needs to authorise Fed Reserve to guarnatee a set amount of cash for banks that are individually in difficulty. A bank should have to apply for the money and the loan from the Reserve made on the basis of a repayment. If it means that the executive take pay cuts or the shareholders do not get a dividend this quarter, so what. I have a pitiful amount of shares and I fully expect that any dividend I get paid is on the basis of the company's performance. If the company (the banks in this case) has not performed I don't expect to get a dividend; why should these people automatically get one?
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