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US Senate Backs $700 billion Bail-Out Plan
Emergency rescue plan passed after six-hour debate by 74 to 25 and will now go back to House of Representatives
The US Senate voted comfortably in favour of the Bush administration's contentious $700bn bail-out of the banking industry early this morning, bringing the package back to life after a bitter week of political wrangling and wild gyrations in financial markets.
U.S. Senate Majority Leader Harry Reid speaks at a news conference in Washington, DC on October 1. The US Senate has passed a new 700-billion-dollar bailout of the debt-stricken financial system but European leaders agonised over a proposed emergency fund for ailing banks and money markets. (AFP/Getty Images/Alex Wong) After
a six-hour debate, the emergency rescue plan was passed by 74 to 25.
The Senate majority leader, Harry Reid, said: "I'm very, very happy.
This is a good vote."
The bill is expected to go back to the
House of Representatives tomorrow, where Republican and Democratic
leaders hope to reverse Monday's shock vote against its progress.
The upper chamber's approval will come as a relief to George Bush
whose authority has been severely tested by Congress's rebellion. Global financial markets have been volatile throughout the week and financial institutions have been struggling to stay afloat on both sides of the Atlantic.
The two candidates vying for the US presidency, Barack Obama and John McCain, both broke off the campaign trail to cast their first votes in the chamber for months.
"This plan is not perfect. Democrats and Republicans in Congress have legitimate concerns about it," Obama told his fellow senators. "But it's clear from my perspective that this is what we have to do right now to prevent the possibility of a crisis turning into a catastrophe."
Since it was rejected by the House earlier in the week, the plan has been sweetened with measures to appease doubters. The core proposal still authorises the treasury to spend billions of dollars cleaning up the balance sheets of struggling banks by buying up moribund mortgage-related securities. But it has grown from its original three pages to 451 pages.
In its new form, the plan will increase protection for US bank customers by raising the limit of a federal guarantee on deposit accounts from $100,000 to $250,000.
Another amendment extends energy-related tax breaks for businesses - a measure intended to win over Republican free-market critics but which has rankled some on the left who see it as a nod to commerce rather than to struggling homeowners.
There are still staunch hold-outs in both parties. Bill Nelson, a Democratic senator from Florida, argued that it hardly does anything to help those facing foreclosure on predatory sub-prime mortgages.
"This bill sends a message to Wall Street that if you play fast and loose in the name of short-term profits, the government will make up your losses," said Nelson.
But Lindsay Graham, a Republican, argued that the alternative was to allow credit to become so expensive that "Americans are not going to be able to borrow a dime". He said: "If you think this costs a lot now, just do nothing and then see what it costs."
Many Congressional figures say they have detected a change in the mood of constituents towards grudging acceptance of the bailout, partly prompted by this week's plunge in Wall Street stock prices. A long-time critic of the plan, Republican senator Joe Barton of Texas, said the balance of calls to his office from voters had shifted from 60-40 opposed to the package to 70-30 in favour of it.
A glut of dismal economic statistics has given fresh impetus for action. New data yesterday showed a slump in manufacturing activity, a dive in car sales and soaring job losses.
The world's richest man, Warren Buffett, has likened the situation to an "economic Pearl Harbour". Some 14 high-street banks in the US have already gone bust this year and investment houses Lehman Brothers and Bear Stearns have fallen victim to the crisis.
But on the streets outside Congress, noisy protesters demonstrated against the bailout. Jobs With Justice, a workers' rights group, held rallies outside Washington branches of Bank of America and Citibank. Sarcastically dubbing themselves "billionaires for the bailout", they chanted: "We broke it, you fix it."
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45 Comments so far
Show AllFor those that don't know about Joe Barton, he is in business's pocket, he'd sell out in a minute. So don't be fooled by his 70% for and 30% against. I used to live in his dist. and the people I know there haven't changed their mind.
Call your Representative. Stop this rip off.
Is that a wealthy suburb? If so, Barton's "safe", yes/no?
Pretty much middle class/working class, but there have been a lot of retirees moving into his dist. And he's slick. I'd say he is on the safe side of 50% for the moment. This could change it.
Thanks for the info. Plenty of retirees these days are conned into voting for Wall $treet from what I hear on the radio. As for working/middle class, how long before they're further whittled out?
P.S.: I'll also ask Lou Dobbs what he thinks of Barton as I'm sure he'll give an interesting response.
These folks are whittling pretty good.
Someone told me Dobbs is railing against this bail out. Calling them what they are. I may need to check out the old Populist anyway.
One question is: how will this affect the Community Reinvestment Act. Republicans are bashing CRA as a way to attack Democrats (ie. Carter, 1977 CRA; Clinton, 1990s CRA revision) and especially Obama, who is connected with ACORN, an Alinsky-style organization that has long organized around CRA in Washington and in winning CRA agreements with banks in major cities around the country. One blatant falsehood is that CRA requires banks to make bad loans to poor people and minorities. So this is a way to blame the poor and racial minorities for the financial crisis. If they can blame CRA, then maybe it's not about failures of conservative financial policies and programs after all, and maybe McCain can still win.
On the other hand, CRA is said to involve only 20% of the bad mortgages, and a recent study finds, for example, that CRA loans are among the better loans. The January 2008 study (of 2006 HMDA data) is "The Community Reinvestment Act: A Welcome Anomaly in the Foreclosure Crisis," and is available online through a search of its subtitle. It has also been featured in a number of business publications, which are linked by the study's authors at traigerlaw dot com.
Among the findings: CRA banks had far fewer high cost loans; the loans cost "68 basis points less" on average; and where there were more banks (covered by CRA, while other, more predatory, lenders are not covered) there were fewer foreclosures. See the report for the specifics, in proper context.
I doubt that CRA loans will be affected much. They are made locally so most are good but there are abuses of course as in almost any program of this sort.
Acorn is another matter, started as a good idea, but its now nothing more than a front organization much like LaRaza. More interested in funding itself than working.
I boycott corporate media. Must admit my curiousity got the best of me and I watched a bit on Monday and Tuesday. The corporate media have become cheerleaders for the establishment and corporate power. They no longer even pretend to be unbiased, and they will not allow dissent. We have a centrist-conservative alliance that is ruining our country.
75-24 in a Democratically controlled Senate. Only 8 Democrats voted NO: Maria Cantwell, Byron Dorgan, Russell Feingold, Tim Johnson, Mary Landrieu, Nelson of Nebraska, Debbie Stabenow, Sen. Tester of Montana, and Ron Wyden joined Bernie Sanders in voting NO. 15 Republican Senators voted NO. It's time for us to come to grips with the fact that the Democratic party is not our friend and we must abandon them completely. Barack Obama voted YES, enough said about him.
Of course the Democratic Party is not our friend. But how in the world does that lead to the conclusion that progressives should not support Democrats? Have you ever heard that "politics makes for strange bedfellows?" Politics is not about only supporting your friends as that is often hopeless and it is especially hopeless for progressives in the US. The corporate media and the rest of the oligarchs make certain that only oligarchy-friendly politicians have a chance to win the presidency in the US, and so it is a certainty that no one who is a "friend" of progressives can be elected, but does that mean progressives must throw away their votes and not try to make the best of a bad situation? We could very well have riots, mass jailings, and troops in the streets in the next few years. Under what leadership could such a situation provide an opportunity for growth of a progressive movement? Under what leadership could it deteriorate into a totalitarian police state? Under what leadership could it lead to total revolution and is that what we want? The problems are of unbounded complexity and there are no clear and simple answers. The discussion should never be completely closed.
Oh brother, here we go again! The Democratic apologists and their lesser evilist arguments! A "bad situation" which has been caused by the centrist-conservative alliance of Democrats and Republicans. If we don't vote for the lesser evil, our comfortable world will end! Can I say one word to you? BLACKMAIL! If you don't vote for this crap you'll get worse things happening! I will continue to advocate for a dismantling of the Democratic and Republican parties, esp. to try to build a progressive majority in the U.S.
I totally agree with the dismantling of the Democratic and Republican Parties. I despise the Democrats. And I would love to see a progressive majority. This argument is about strategy, not about values or ideals. Why can't you dreamers see this? I was a dreamer too when I was younger, and have voted for Nader twice and several other hopeless candidates over the years. And I do believe such votes can be justified as part of a long-term strategy. But something is hitting the fan soon, and long-term strategies do not make as much sense in such a fluid and dynamic political situation. Also, until the power of the corporate media is broken, hopefully through the development of alternative media, no third party has a chance in hell.
WHY? do you guys think that this type of argument , makes people change their minds about Obama?
It doesnt work, makes people resentful, and limits free speech.
If the Dems had listened to their party members concerns, for once, (ie the working class, poor), they would not have this problem.
The Dems do not have a free hand in picking their nominees. The corporate media and the rest of the corporate oligarchy dictate what the acceptable nominees are. Kucinich never had a chance as the corporate media would have kept on knee-capping him if he ever rose in the polls.
So? We all know or should know that the corporate media only respects $$$. That's the whole point: Democrats are settling for small crumbs thrown there way in exchange for: billions of tax dollars on occupations, military spending, never ending and false "war on terror", Wall Street over Main Street, no campaign/electoral reform, shutting out progressive voices at every turn... I hear you say it's strategy but I say it's not worth the cost to all of us. We don't get a progressive majority by voting for and supporting Democrats.
Democrats know they cannot win if they offend the corporate media and they would be out of their jobs and completely powerless. The long-term answer is the development of alternative media, especially that on the Internet. Under what political environments will that alternative media and the political function of the Internet be allowed to grow to the point that those to the left can become relevant again? Throughout history savvy political operators have tolerated unsavory bedfellows to improve their political positions. Purity does not help in politics as the political arena is dirtier and uglier than a pig sty (no offense to pigs).
The internet has been around a long time now.
I see no change in the political system.
It is just not possible to have an effective 'revolution" online. I am amazed that people think that it is.
You must admit that the Internet has been evolving rapidly over the past few years. But I will admit that this is all guesswork, and I have stated on more than one occasion that intelligent, knowledgeable, and completely reasonable progressives can disagree on strategy because there are far too many unknowns, including Rumsfeldian unknown unknowns.
My best guess is that progressive democrats, Greens, and other progressives of various stripes should come together to form a new unified progressive party that does not plan to put any candidates in the field for the time being. Such a party could put forth policy papers and other position papers and require Democratic primary candidates to come before it, genuflecting, pleading for support, and could put conditions on supporting Democratic nominees, particularly with regard to gaining endorsements and political contributions.
Probably the most important work of such a party would be in building and supporting alternative media so that the corporate media loses its control over US elections. Only when an alternative media is established that has as many customers as the corporate media will it make sense for the progressive party to field candidates. Until then such candidates will be little more than the object of unceasing ridicule and a distraction in elections.
I used to think that maybe progressives could change the Democratic Party from the inside, but I have been convinced, partly by examining the party's history through other outside reading and partly by the effect of reading all the wonderful articles and comments at CD, that it is probably too late to save that party. However, that conclusion by itself is not sufficient to determine the best way forward.
Thanks for that RichM. I would say something similar about you.
I'm going to have to say old RichM is right here. kivals has plainly stated he's a socialist more than once. Cretainly no Democratic or Republican party booster. We've disagreed more than once, but he never deviates from his viewpoint. Always honest in his opinions. I can say the same about RichM, though I don't know where he is exactly in the political spectrum, around kivals I expect.
We don't share the same view of our possible future, certainly not about socialism since I'm a liberal, but I always value what they say as its usually reasoned and honest. I have learned some things from both.
Yes! Vote for Obama. or else!
Also, the bailout. Also, bankruptcy. Also FISA.
Or Else!
Neo-liberals shock politics.
Americans love a good panic, and they'll get what they deserve out of this one just like they did with the rush to war in Iraq.
Somewhere along the line you'd think that they'd wake up and notice that it's the same people lying to them over and over again.
"The world's richest man, Warren Buffett, has likened the situation to an "economic Pearl Harbour."
WOW! Bush and Cheney must be thrilled to have another "Pearl Harbour"!
As if 911 wasn't enough to have Americans all cowering and thanking them for the Patriot Act and the Department of Homeland Security.
What do you bet they saw this one coming too and did nothing to stop it - er,... I mean, deliberately created it.
I suppose now the government will only have enough funds for the bailout and the war. Healthcare?...No Way! Maybe next time.
Joe Barton is not a Texas Senator--he must be a rep. I agree the 70:30 is bs--pure and simple.
Oops! I missed that......Thanks! He is in the House, almost 30 years I think.
Don't Make Working People Bail Out Wall Street:
http://www.huffingtonpost.com/rep-bernie-sanders/dont-make-working-people_b_131070.html
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?
_r=http://www.votesocialist2008.org/1&em=&adxnnl=1&oref=slogin&adxnnlx=1222963547-PKhVW8jcGzfuFuDD5GmSnQ
http://www.kucinich.us/
We COULD have done any of these. http://www.thenation.com/doc/20081013/stiglitzhttp://www.michaelmoore.com/words/message/index.php?id=237
We could have done ANY of these. They couldve allowed Sanders amendment a vote!
They couldve listened to Kaptur, DeFazio,. Kucinich.
They have chosen sides. It is time for you to do the same.
"Battle lines being drawn. Nobvody's right, if everybody's wrong." "People carrying signs. Mostly say 'Hooray for our side".
"Aint it time we stopped, hey, whats that sound. Everybody look what's goin down"
DIRTY HARRY !
By this morning it should be clear to everybody that America's problem is beyond repair. Although it is fun to vent on our blogs and pretend that we are the vanguard of a groundswell of indignation that is going to transform our society and rekindle the spirit of liberty etc etc, it obviously is not catching on in middle America. We are a milk cow and the DemReps are, well, a milking machine. Unlike the Matrix, we don't know enough karate to beat them. Some of you still intend to vote for them, which is your right, though I find it pathetic that you would support someone who has just raped you.
The only thing I can think to do is vote for Nader. Who knows, maybe they count the votes. I can send a message that I stand with that tiny sliver of the population which no longer recognizes the right of the two-party corporate oligarchy to rule us and steal our livelihood. This will not bring down the system, but it will allow me to retain my self respect. The system, fortunately, appears to be coming unraveled without any help from us, and if trends continue all the arguments about 100 year wars and Supreme Court appointments will soon become moot.
Anybody else rummaging around for those old Laurie Anderson tapes?
"Ladies and gentlemen, this is your captain speaking. Please place your treat trays in the upright, pocket position. We are about to attempt a crash landing....: "
kivals - I'm no dreamer. I'm an old man like you, and this week my bottom is kind of sore. I've been violated and ripped off for - what did it come to apiece? - $2700, and now these arrogant poltroons and their soulless puppeteers are saying, as Dreedle and Cathcart said to Yossarian, please like us. I'm sorry. It isn't in me.
I'd love to hear your long term strategy. Mine is to die soon with with the word "no" on my lips.
Your post is so spot on! I would add that besides self-respect the higher the percentage for Nader the more people will be emboldened to think outside of the two-party (sic) system we have foisted upon us. My arguments are never that we can "win"; only that we must start BUILDING towards a progessive majority in every way that we can.
I agree, excellent post by voxclamantis. I was slightly thrown after reading kivals and RichM. I'm still thinking about kivals post. Most of the people I know, friends and relatives, are voting for Obama, (some inlaw right wing exceptions). I'm one of the very few who will vote for Nader. Most of them love Nader over Obama but they all make the same argument that kivals makes, the repubs are very bad, can't let McCain win.
If I were to imagine sitting down at a table with Nader and Obama, just the three of us, and I had to choose, there is no way that I could look Nader in the eyes and say, well I agree with nearly everything you say, but sorry I'm going to have to go with this guy Obama, even though I don't trust him, even though he will pander to the wealthy elite, even though he will continue to fund the bloodthirsty war machine, even though he will continue to whittle away at constitutional freedoms, because dear Ralph, I'm more afraid of McCain.
I will not betray someone I trust, nor will I betray my (naive?) conscience.
"I will not betray someone I trust, nor will I betray my (naive?) conscience."
Thats not naive, thats honorable.
But I'm afraid they are right and I'm edging over to Obama for the very reasons you cite. So you might think it over some more.
Well stated, voxclamantis!
"Politics make strange bedfellows" is ambiguous enough to apply to a range of phenomena-- but personally, I think it applies more to circumstances like the de facto alliance between Old School fiscal conservative Republicans and the few progressive Democrats opposing this abominable "bailout"-- not cuddling up with bedbugs.
I find that classic "realpolitik" masquerading as "realism" has a self-confirming or self-justifying quality that its proponents don't acknowledge. Moreover, I find it ironic at best that those of us who simply refuse to countenance the duopoly any longer are scorned as "dreamers", fools, or simply idiots by would-be pragmatists whose sensible strategies are predicated on wishful thinking.
For almost a half-century, the Democratic Party has treated progressives like Lucy treats Charlie Brown with that football. By all means seek to partner and pressure and cozy up to it in the belief that it can be either transformed or eviscerated from within. Time and again, Democrats flatter, cajole, or beguile progressives into supporting them just one more time, only to blow them off faster than a fart once they've acquired or retained political power.
This "bailout" crisis is as clear a demonstration of this as it gets. I gather that after an uncharacteristic refusal to capitulate the first time around, the Dems are being "wooed" by tossing a few bones and tacking on a few gimmicks to the same basic concept.
If the bill passes, as seems likely at this point, all of the Democratic opponents will trudge back to We the People and spout, perhaps with a sigh, "Well, we gave it our best shot! And we almost DID it, THIS time! The glass is half-full! See, if we elect Our Guy, and plenty of Us to back him, we'll be able to turn it all around!"
I'd rather remain lost in dreams than delusions.
PS: Is it coincidence that CD dropped this article to the bottom of the headline listings, and replaced the headlines with relatively trivial stories? Mining, for God's sake?
Obama quote:"the plan is nor perfect".Yes it is; it is perfect for the fidiciary, malfeasance of the Wall Street criminals that got us into this mess where they need a bailout. Folks, do not buy the red herring that this is about you and me, because if you believe that I have a bridge that has not been built yet in Alaska that I would like to sell you! All the Whore, MSM talks about is the little guy cannot get a car loan ect. blah,blah,blah. The wealthy,elite are in a frenzied,punic, panic for one reason and one reason only: their nefarious,financial schemes are close to being exposed, i.e. the bailout of foreign banks and all the rest of their criminal actions.It is like a bank embezzler that steals depositors $ from a bank, and then has those same depositors cover up for him by having the government steal it back to re deposit it for him! The definition of political insanity: voting the Repugs and Dems in time after time and year after year and expecting a different result. Vote third party
As Sen., Dorgan said, "never buy anything from a guy who is out of breath".
They have revealed themselves. NOW, Is the first time in History we can make a stand. Republicans and Democrats alike, VOTE OUT of office all incumbents!
Coffeelover,,,,,,,,
how true, but this is not a recent reveal. vote them out...maybe except the brave ones that continued to vote against this and did not bow to pressure and temptation of pork.
"The financial rescue package the U.S. Senate is about to vote Wednesday night has been expanded to 850 billion dollars, up 150 billion dollars from the original one, according to CNN."
Ten percent inflation per day? Egad, it's better to hold Zimbabwe dollars! heckuvajob...
here is some details of the pork added to the bailout:
http://www.cnn.com/2008/POLITICS/10/02/bailout.pork/index.html
*Creation of a seven-year cost recovery period for construction of a motorsports racetrack $100 million
*A refund of excise taxes to Puerto Rico and the Virgin Islands for rum $192 million
*Income averaging for amounts received in connection with the Exxon Valdez litigation $49 million
etc.etc.
Thanks for the link.
Just unbelievable.
That cannot be true about the Rum!!!! Must be a typo! Maybe they meant an 192 million $ refund to RUMMY!
For those with the time and inclination, please visit Deepcapture and click on any of the four links at page top to learn the hows, whys, and wherefores related to our current situation.
Most people ignore the machinations on Wall Street thinking they don't have any effect of them. I trust everyone now understands such thinking is very erroneous. Big War, Big Oil, Big Auto, Big Pharma, Big Government, etc., are all controlled by Big Money--Wall Street. It is at the root of our society's dysfunction. Since the beginnings of the USA, people have understood the basic contradiction between the aims of themselves and Big Money. The fiercest, longest lasting revolt against Big Money was the 1870-1900 Populist Movement, which died through the strategic error made by joining with the Democrat Party. Today, while there are a handful of good, decent people in the Dem and Rep parties, most are Faustian characters who are beholden to the Big Money Devil. Knowing how the Devil works is fundamental to its destruction. The above link provides some of that knowledge. Perhaps most of all, Deepcapture provides one with the reasons why DeFazio's No Bailouts Act is the best way to procede.
They ADDED $150 billion!!!! WOW!!! We've got to stop supporting these thugs! We've all been mugged!
Remember playing Monopoly as a kid? What happened when you landed on someones BoardWalk and did not have the money to pay the rent?
You had to give all your property to the holder of the BoardWalk and leave the game.
You went bankrupt. That is the rules. You could not mark to value or fantacy your mortgaged assets and get a loan from the bank. You could not borrow money from other players cause they trusted you. You left the game, broke.
They players on Wall Street know this, but the Congress has not the guts to tell the loosers who took the risks to pay up or go bankrupt, give their assets to the winners, and leave the game.
We should not be "bailing out" the loosers on Wall Street because that is cheating, pure and simple.
Can anybody explain the "sweeteners"?
First the actual amendments: Most stories I've read about this bill use the word "sweeteners" without any descriptions. Do we know what they are besides increasing FDIC coverage limits and more tax breaks for big corporations?
Second, the audience: These were intended to win over opponents? According to what I heard from House negotiations, the previous bill failed because congressional offices had been bombarded by "regular folk" (the laity?) saying "No way!" How do tax cuts for corporations and raising FDIC limits benefit "regular folk"?