Gut Check Time: Will Congress Stand up to Wall Street?
It's gut check time.
The attempt by Treasury Secretary Paulson to put a gun to the head of Congress and terrify them into forking over a $700 billion blank check to the Bush administration in 48 hours has failed. Now what?
Most Americans would just as soon the Masters of the Universe were allowed to sink in their own folly. They had the party; let them clean up the mess. But, looking at sinking housing values and shaken retirement accounts, most Americans know something has to get done.
Banks and investment houses carry weapons of financial mass destruction. Last week, they looked into the abyss. If nothing is done, the chances for a deep and long depression are very great. So stocks skied around the world when Paulson announced his support for a massive bailout of Wall Street. And stocks and the dollar plummeted, and oil and gold soared when it became clear on Monday that the Congress wouldn't simply salute and go along. Doing nothing is not an option.
Leaders from unions, consumer and citizen groups have weighed in, demanding strict conditions on any bailout. On Monday, Sen. Chris Dodd put forth a draft bill that called for an independent board to run the bailout, required that taxpayers get partial ownership in any firm bailed out, and mandated steps to forestall foreclosures and work out mortgages, helping to keep people in their homes. House Speaker Nancy Pelosi demands a kickstart for the real economy - extension of unemployment benefits, aid to states and localities, investment in green jobs and basic infrastructure. (But at only $50 billion, a relative pittance for the real economy compared to the sums demanded to rescue Wall Street). Rep. Barney Frank insists on limits on the compensation of executives of any firm that gets bailed out. Together, these conditions begin to make some sense out of a bad fix.
Initially, Bush and Paulson, backed by the slavish Republican leadership in Congress, resisted, calling for the bill to remain "simple and clear." Republican leaders denounced help for homeowners and Main Street as "political" and "partisan" as opposed to bailing out the Master's of the Universe which somehow is an emergency above politics.
But Paulson is a deal maker. As his testimony indicated today, he'll trade nominal oversight and a few bridges for the $700 billion. As someone who made half a billion on Wall Street, however, he's been unbending on limits on pay for his friends, on providing taxpayers with an equity stake in the firms that are helped, and on measures to force work outs of mortgages and a freeze on foreclosures. And he'll resist any detailed measures to regulate Wall Street to insure this doesn't happen again. For all the talk of bipartisan accord, this will be a face off. Democrats will have to stare him down.
With the financial markets reeling, who will blink first? Will the Democratic leadership insist on common sense? Will Paulson be able to panic Congress into folding? Will the financial firm lobbyists now swarming the Capitol like a plague of locusts be able to rent the votes they need?
The decisions will be made over the next few days. If you want to make your voice heard, go here to contact your legislator, or to get more information.
But this staggering bailout - as perilous and costly as it will be -is only a stop gap. Broader lessons need to be drawn; larger and more permanent reforms are needed. One thing should be clear: the conservative era is over. The theology of market fundamentalism has proven to be a false idol once more. As Joseph Stiglitz has argued, the collapse of Wall Street is to the market fundamentalists what the fall of the Berlin Wall was to communism. It's over. The right has proved once more that it cannot be trusted to run the government it scorns. A trillion dollar debacle in Iraq. A trillion dollar bust on Wall Street. Hundreds of billions pocketed by Big Pharma and Big Oil. It is time for a reckoning.
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JUST SAY NO TO THE OLIGARCHS!!!!
This is the last straw. If the American people cannot let their voice be heard about $700,000,000,000 of their tax dollars, then all is lost.
Remember, the $700B is NEW dollars ----
The Treasury has already pledged $200,000,000,000 to Fannie Mae & Freddie Mac, $85,000,000,000 to AIG, $30,000,000,000 to Bear Sterns.
Total Bail-out to-date: over 1 Trillion and counting ($1,000,00
Joshman add to that the trillions of dollars Bush borrowed from China and Japan for these wars ! We are in for some lean years ahead and if this bailout does go through that could come to another trillion before their through bilking us !
NO BAIL OUT! Let it fall I don't care. I have a BA in Economics and a BS in Finance and I am currently on Food Stamps and a Calif. State Pension of $528 which doesn't even cover my rent. The only jobs I can find are commission sales (car has been repossed) or tax accountant during tax season. I got audited by the IRS for my part-time Real Estate business which I had modest earnings. You see the IRS considers small business people to be tax cheats but not large corporations. I cannot work for state government because of blowing the whistle on Medi-Cal provider fraud when Pee Wee Wilson was governor. I was originally a Ron Paul Libertarian but I am an Obama supporter and a Democrat. The religious right have brainwashed dumb ass blue collar people into supporting Republican Fascism. The free market is dead! We have a choice between Fascism and a mixed economy Social Democratic sociey with civil liberties. I choose the later.
"At 8:30 this morning, Senator Obama called Senator McCain to ask him if he would join in issuing a joint statement outlining their shared principles and conditions for the Treasury proposal and urging Congress and the White House to act in a bipartisan manner to pass such a proposal. At 2:30 this afternoon, Senator McCain returned Senator Obama's call and agreed to join him in issuing such a statement. The two campaigns are currently working together on the details."
This is not happening!!!! NO, NO, NO, Hell no to Obama for bailing out Wall Street with Paulson.
That's right, its' not.
Wrong information ! Obama rejected to delay the debates as McCain wanted .McCain still wants the photo op in Washington I think he's afraid to debate Obama ! The Dems in Washington told them both they didn't want the politic's of this election interfering with the discussions along with the media McCain plans to bring along so they can take pictures of him looking presidential !
Obama said he will go on with the debate . Obama won't agree to Paulson's terms he has that up on his site .I personally don't agree with any terms of a bail out !
Do Republicans support free market capitalism or not? When big
contributors come knocking about their losses, do we the taxpayer
suddenly become responsible? If Congress decides on Friday that
this bail out has to happen as is, where exactly does this benefit the
average American? The car makers and credit card companies are
the next ones in line. Behind them are Hedge Funds and then LBO's.
This isn't $700 billion, this is several TRILLION dollars! In six months
when it becomes apparent this bail out wasn't a fix, and we have no
recourse (Section 8 of plan), what do we do?
Mr. Bush, Mr. Paulson, Mr. Bernanke please don't try to play us for fools!
Thanks for mentioning credit card companies, why this is not included in the conversation is beyond me.
For two decades the prosperity of the US has been fueled by consumer debt. A debt that is supported by wwhat? As it turns out it is supported by absolutely NOTHING, NADA, thin air ! How is this going to play out. This is not over.
I've decided to outsource my next political leaders. There is a guy in Venezuela who is actually standing up to these very same banker oligarchs without making excuses and he is bringing his people OUT of Capitalist poverty, slavery.
If jobs can be outsourced on Main Street, they can be outsourced in Washington.
Viva Bolivar!
No Bail Out!
Besides, where is the Treasury going to get the money? Are the going to fire up the presses and print it or borrow it from . . . Fannie Mae?
Just for the record, a bailout means to spend all the money for nothing. This is not that and Wall Street is not a monolithic business. Have oversight, compensation limits and companies that put assets into the fund will be penalized. This will rightly happen, no doubt.
However, this is not like a typical appropriation or bailout where the money is simply spent. The money is to be used to buy mortgages and other debt and then resold when the economy strengthens, likely for a profit, but for some value. Your argument has a basic flaw since the proposal is to do exactly what Buffet is doing, except for the taxpayer. It is not a bailout program, but allocation of working capital. Conservatively the return will be 7% for the American people AFTER the payment of interest for the debt.
Example:
Purchase Assets: 50% of face value max. includes uncollectable debt.
Return on notes already in place: 10-11%
Goveerment Cost to Borrow Money: 3%
Return on investment 7-8%. If the economy turns around in the next couple of years, their will be a capital return as well on the underlying value of the assets. The reason the government has a better deal (Buffet like) is the cost of money. Private investors cost is close to what the notes pay to begin with.
What you suggest is not what they are requesting for us, the taxpayers! They want it no string attached. So far, congress is listening to their constituents and not caving.
The more you hear the more this stinks.Let them fend for themselves as they tell the rest of America do.What happened to the fundamentals of the economy are strong and now we should believe that 700 billion will fix everything
Give up folks.
None of us stands a chance. Period.
With Henry Paulson (The correct action would be to fire him! But they won’t.) as a former head of the TNC - Al Gore the head of global warming myth, Bruce Babbitt the head of the World Wildlife Fund, Bill and Hillary Clinton as co-heads of the global world - their focus on shutting down domestic resource production is succeeding.
Their chosen one - Barack Obama - is nothing more than their front man for their concerted movement.
They chose wisely: Black, smart, charismatic, handsome.
They've been ahead of us dummies for about 50 years.
Like Nikita Kruschev said (and I paraphrase) - "I won't drop a bomb on you. I'll just take over the minds of your young." He must be so proud of his comrades, carrying on his mission.
Hung up on "reproduction freedoms" has usurped "Production Freedoms" of our food providers.
Just think: A single issue of 1/100 % of women is more damn important than an entire U.S. populace loosing all of its freedoms and the ability to feed itself.
Heads up Hollywood, your actions contribute towards shutting down farmers markets like the fantastic Santa Monica Farmers Market.
You have allowed your wants to preg away and kill the results in-uteri, over the freedoms to maintain American food supplies.
Biden will bow out Oct 10th - Barack will announce Hillary's nomination Oct 13th. These master thespians will have performed their script beautifully.
Kruschev wins.
Jack Cafferty is asking what do we want to hear Bush say tonight in his speech?
Loads are already saying that they want to hear that he and his administration are resigning.
Link to comment:
http://caf
Doubt it wall street own them already!
Will Congress "Stand Up" to Wall Street in what is fast becoming a naked POWER GRAB? The answer should be obvious to the most casual observer. Anybody want to place any bets?
As for "gut" checks I would ask if you've seen any "guts" from Congress lately because I sure as hell haven't.
Draft Perot/Ventura-08
Deep depression? Nobody knows what will happen either way! Stop trying to sew panic like the Bush Wall Street drum beaters. I don't know, you don't know nor does anybody know what will happen in this uncharted territory. The best question is does the taxpayer want to risk 700 billion and not know the outcome or ride it out and in the worst case scenario you are warning about the tax payer will have a 700 billion dollar cushion to wait it out!
NO CASH FOR TRASH.
JUST SAY NO!
I am convinced that any Congressional leader from either party that allows this bill or ANY amended bill to pass is doing so because they are hiding felony criminal involvement.
Everyone came out of that initial meeting with Paulson and stated that after he spoke no one said a word.
It’s hard to speak when a PRISON CELL is flashing before your eyes.
This whole thing is insane and must not be allowed to continue without a full criminal investigation into the Wall Street companies AND the Washington bureaucrats that profited from illegal practices.
That's exactly it - bail them out before their misdeeds, greed and incompetence sink everyone else in the country. Then put all those criminals in the dock - no let outs in return for party funding or personal friendship. When they're found guilty fine them ALL their ill gotten gains - than make them work for their living in the gaols. There is absolutely no reason why these people who caused the problem should be allowed to retire stinking and obscenely rich, while the taxpayers hard earned is used for the bail out - as much as possible should come from the funds these greedy b-----ds have salted away at our expense.
Then some serious and proper regulation so that they as well as us lesser mortals run our affairs in a reasonable and ethical manner. No moire BS from the right wing - their bluff has now been called.
Will Congress stand up to Wall St.? We'll see...
The second question is: Will Congress stand up to itself, or will they circle the wagons to protect themselves? They have plenty of culpability in the mortgage mess... Where is the call for hearings?? Big Oil makes too much money and they immediately drag the CEOs into the chamber. We're on the hook for a minimum of $700B and no call from Congress for hearings on how it happened?
By the way, have you guys ran the numbers?? I mean Holy Crap it's a lot of money:
$700 Billion MINIMUM divide by 139 Million taxpayers (2007 number of returns):
700,000,000,000 / 139,000,000 = 5025.00 per taxpayer
That's on top of the current US deficit liability of $32,000 for each PERSON in the United States. http://www
If you take the current deficit and divide it by the number of taxpayers, not persons, it's even more ugly:
9,700,000,000,000 / 139,000,000 = $69,784 per taxpayer..
You have just enumerated several reasons why I am a founding member of the MN Independence Party. Thank you for the common sense Howsaboutsomesense.
Draft Perot/Ventura-08
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