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Political Turmoil as House Rejects Bailout
All of the political leaders blessed the deal, but the House of Representatives spit it out anyway. The Wall Street bailout is so odious to public opinion, the "people's house" rejected it today, 228-205. The fever chart in Wall Street--better known as the stock market--swooned instantly, with the Dow falling 700 points. The political bedlam in Washington is as real as it gets.
The party leaders will probably try again. I doubt they have the energy or courage to renegotiate the terms in any serious way. A majority of Democrats voted for the measure, but most Republicans took a walk. They will be scolded--and pounded by captains of industry and finance--for being "irresponsible." But I doubt the public will agree.
In all of elected Washington, representatives are closest to the people and they know a vote for this outrageous measure is going to end the careers of some colleagues--maybe many of them. This time, the dissenters can claim principle and say they are voting with the folks, while also voting to save their own hides.
It adds another deep shock to the system, both in politics and economics, but what an invigorating moment for democracy.
The financial bloodbath will continue, but unless the deal on the table changes significantly, Henry Paulson gets to decide who lives and who dies. The former investment banker from Goldman Sachs would be empowered as treasury secretary to play savior or grim reaper, the liquidator who essentially pulls the plug on some banks and financial firms or the man who rescues them from ruin. Of course, Paulson would consult with other government officials. But you can be sure that, behind closed doors, he will ask former brethren in Wall Street to help decide which club members are worthy of saving. This power to pick winners and losers would remain in Paulson's hands until a new president arrives in January.
This the essence of "the deal" Congress worked out over the weekend and was stymied today. Some bells and whistles were added to make the transaction less obnoxious to public opinion, voters and taxpayers. They are not meaningless, but both parties lacked the nerve to tamper with Paulson's basic proposal. This is still a massive bailout of imploding Wall Street, financed with the public's money. And it is still a massive crap shoot for the American people.
If the billions from Washington somehow restore temporary calm and balance to global financial institutions and markets, then the usual cheerleaders will proclaim the "system" has worked. Most Americans, I predict, will not join the cheering. Too much destruction lies ahead, both in the financial system and in the real economy where people live and work. Too much bitterness and rage will be attached to the White Knight at Treasury when he dooms one pension fund or bank, but rescues others. Too much deceptive sleight-of-hand is already embedded in Paulson's approach for ordinary mortals to even recognize what Paulson intends to accomplish.
The essential political failure, in my view, is that Congress did not step up and assert the full emergency powers of government in this epic crisis, that is, take temporary control of the entire financial and banking system so regulators and policy makers can steer the US economy to safer ground, compelling the private institutions to follow their lead. This rescue plan remains essentially voluntary. Yes, the Treasury Secretary would be awarded gargantuan personal powers, but there is not much in writing to compel the banking behavior of private interests he chooses to rescue them. One assumes Paulson will demand some private deals and use his enormous leverage to squeeze anyone who resists. But there is nothing to guarantee this path is taken. The bailout will belong to the club and the club will manage it.
Democrats are the majority party and insisted on some qualifying terms in behalf of the populace--better than nothing, but weak half-steps. The government can claim warrants or equity ownership from firms in exchange for the public aid. It can put a lid on bloated executive salaries at the rescued banks or brokerages. It can demand more up-close oversight of how the Treasury Secretary performs. The language for all of these measures suggests to me--I need to read the text again more carefully--that these are essentially discretionary suggestions.
Paulson can do them if he chooses. Or, if he likes, he can wiggle around them in the fine print. The Dems do not want to assert real control over Paulson's decisions for fear they will then be blamed if and when everything fails.
Republicans, as usual, are playing their own political game--trying to evade the blame, now and later. Their proposal for an insurance program that financial firms must pay for is ludicrous. It's like trying to buy hurricane insurance on your house after the storm has already blown it away. But the GOP already is in ruin, so its members are thinking long-term survival and creating a predicate for revival. Blame the government, blame Wall Street, blame the go-along Democrats--maybe people will start liking Republicans again.
Democrats are still in recovery from twenty-five years of deferring impotently to the wise men of Wall Street and retreating tactically from conservative initiatives. I see this crisis as the Democrats' hesitant first step toward rediscovering their nerve and abandoned convictions. They are not there yet. But this crisis is not over. I predict they will get another opportunity to stand up for something and rather soon.
In the nature of this crisis, the next president will be compelled to clean up Paulson's irregular mess. He will be forced to act, not only because of the rising popular anger and enveloping recession but because the Paulson approach is founded on private deal-making and his deceptive statements of purpose.
By January, whoever wins the White House, it will be clear that Washington cannot cure the disease by relying on one smart guy from Wall Street. A new federal agency will be needed to supervise the bailout and restore defined public purposes and enforce them on the system. The government will have to assert its powers forcefully, because by then it will be obvious the "voluntary" approach helped some losers to become winners, but it neglected to save the country.
- Posted in
73 Comments so far
Show AllI;m glad my Representative voted against it. Unfortunately, she was the only Democrat in Florida to do so.
If this event had not occurred so close to the election, the bailout would have passed by a healthy margin. The only congresspersons who voted against it were those facing tight elections. Congress knows that they are owned by Wall Street, not Main Street.
"I see this crisis as the Democrats' hesitant first step toward rediscovering their nerve and abandoned convictions."
I wish. We all wish. All the Germ-o-crats are really doing is withdrawing their money from the bank and hiding the cash in safe deposit boxes, tomato juice cans buried in their backyards, in plans up their backsides, the way French prisoners on their way to Devil's Island used to do, waiting to see if it all crashes. Like the Repimplicans, they will take care of themselves first and foremost. Aside from that, they don't really have a clue what to do because this crisis is unprecedented. They've spent so many years bending over and grabbing their ankles, they no longer know how to straighten up.
Nothing in this bill does anything to correct or discourage the blatantly irresponsible behavior by our increasingly perverse interpretation of "Free Market".
Here our representatives have a golden opportunity, indeed a "mandate" to really address a system who's incentives are totally bass-ackwards, and they are totally avoiding any responsibility.
If the crisis is businesses needing short term loans to keep operating, let's address that DIRECTLY. This bailout is like addressing a shortage of doctors by making their golf carts drive faster.
i agree...but expecting a bill to correct the root cause of the problems would require them to identify and accept the true root causes:
Root Cause 1) Fannie Mae and Freddy Mac pressured by clinton and radical groups to provide loans to people with poor credit ratings and no money for down payments
(radical groups: ACORN, e.g.)
Root Cause 2) A pushover congress that ignored all regulators and individuals who tried to warn them of this impending disaster and the need for regulation
(key ignorers: Barney Frank, Chris Dodd, republican-led but not conservative congress, e.g.) (key individuals who warned [like it or not]: George Bush, John McCain, regulators)
isn't it crazy that the people at the heart of the problem are now flying in to be the saviors and bail us out of their problem with our money?
You forgot to mention the Republican Congress that repealed the Glass-Stegall act that made this mess possible. Along with a lot of de-regulaion by both parties aided by no oversight or regulation from the present administration.
McCain was one of the key pushers of deregulation, still is. As far as Bush and McCain warning about this problem.....thanks for the humor.
it might be funny if it weren't true:
Timeline shows Bush and McCain warning Democrats of financial mess
youtube.com/watch?v=cMnSp4qEXNM
John McCain warned us about Fannie and Freddie
youtube.com/watch?v=_ROOriYvJM4
.You seem to live on an interesting planet, but you should check less biased news sources for the truth of events on THIS particular reality....so typical of you neocons, no conscience, no respect for truth, so easily led by the testicles with shoddy and stupid lies.
I could mention the republicans like Phil Gramm, who , when the GOP was in power, made sure that the mortgage derivatives were deregulated, isnt he McCain's economic advisor now?
Those of us not sheep like you understand that the blame here is truly bipartisan, but these words will be wasted on one who resists thinking....
.
We see things, not as they are, but as we are.
Anais Nin
um...did the link not work for you?
ptok,
May I suggest you research your vacuous claims of 'root cause?' Fact, the complicit lenders were non-CRA regulated. Those subprimes came from lenders who were not required to lend to low and middle income. ACORN is not a radical group, it is a Federally funded agency empowered to aid the poor. Mortgages under ACORN have lower defaults and foreclosures than any other agency. Only fixed rates are allowed. Fannie and freddie are private, fed insured, corporations which may issue mortgages. Most are bought from banks and individual mortgage companies. Loans reflecting poor credit and no money down are middle and upper middle class loans based on verifiable income and job stability, small business income strength. This is the source of subprime stupidity, also. Talk to the developers, their real estate agencies and funding sources, champ.
Your secondary invective is also a non-proven propaganda fairy tale. Deregulation was carried out by Ultra conservative Republican Congresses, Republican and right wing Democrat presidencies and Congressional members, including Bush and McCain.
The Repugs that voted against it because the Dims wouldn't allow corporate/business enhancements and an insurance policy for business to boot, with no taxpayer safeguards. The majority of the 94 Dims voted against out of respect for the electorate. The rest were Repug lites, like those who voted for it. Those who voted for will be voted out of office this year or two years from now. This uprising is not over, it is gaining strength and numbers every day. This success is the icon of the process unfolding.
http://www.commondreams.org/view/2008/09/25-1
by Ralph Nader
Congress needs to show some backbone before the federal government pours more money on the financial bonfire started by the arsonists on Wall Street.
1. Congress should hold a series of hearings and invite broad public comment on any proposed bailout. Congress is supposed to be a co-equal branch of our federal government. It needs to stop the stampede to give Bush a $700 billion check. Public hearings should be held to determine what alternatives might exist to the four-page proposal advanced by Treasury Secretary Henry M. Paulson.
2. Whatever is ultimately done, the bailout plan should not be insulated from judicial review. Remember there is a third co-equal branch of government - the judiciary. The judiciary does not need to review each buy-and-sell decision by the Treasury Department, but there should be some boundaries established to the Treasury Department's discretion, and judicial review is needed to ensure that unbridled discretion is not abused.
3. Sunlight is a good disinfectant. The bailout that is ultimately approved must provide for full and timely disclosure of all bailout details. This will discourage conflicts of interest and limit the potential of sweetheart deals.
4. Firms that accept government bailout monies must agree to disclose their transactions and be more honest in their accounting. They should agree to end off-the-books accounting maneuvers, for example.
5. Taxpayers must be protected by having a stake in any recovery. The bailout plan should provide opportunities for taxpayers to recoup funds that are made available to problem financial institutions or to benefit from the financial institutions' rising stock price and increased profitability after being bailed out.
6. The current so-called "regulators" cannot be trusted. The U.S. Government Accountability Office (GAO), "the investigative arm of Congress" and "the congressional watchdog," must regularly review the bailout. We cannot trust the financial "regulators," who allowed the slide into financial disaster, to manage the bailout without outside monitoring.
7. It is time to put the federal cop back on the financial services beat. Strong financial regulations and independent regulators are necessary to rebuild trust in our financial institutions and to prevent further squandering of our tax dollars. The Justice Department and the SEC also need to scrutinize the expanding mess with an eye to uncovering corporate crime and misdeeds. Major news outlets are reporting that the FBI is investigating American International Group, Fannie Mae, Freddie Mac, and Lehman Brothers.
8. Cap executive compensation and stop giving the Wall Street gamblers golden parachutes. The CEOs who have created the financial disaster should not be allowed to leave with millions in hand when so many pensioners and small shareholders are seeing their investments evaporate. The taxpayers are bailing out Wall Street so that the financial system continues to function, not to further enrich the CEOs and executives who created this mess.
9. Congress should pass the Financial Consumers' Information and Representation Act, to permit citizens to form a federally-chartered nonprofit membership organization to strengthen consumer representation in government proceedings that concern the financial services industry. As the savings and loan disasters of the 1980s and the Wall Street debacles of the last few years have demonstrated, there is an overriding need for consumers and taxpayers to have the organized means to enhance their influence on financial issues.
10. The repeal of the Glass-Steagall Act, separating traditional banks from investment banks, helped pave the way for the current disaster. It is time to re-regulate the financial sector. The current crisis is also leading to even further conglomeration and concentration in the financial sector. We must revive and apply antitrust principles, so that banking consumers can benefit from competition and taxpayers are less vulnerable to too-big-to-fail institutions, merging with each other to further concentration.
11. Congress should impose a securities and derivatives speculation tax. A tax on financial trading would slow down the churning of stocks and financial instruments, and could raise substantial monies to pay for the bailout.
12. Regulators should impose greater margin requirements, making speculators use more of their own money and diminishing reckless casino capitalism.
.
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.
"This bailout is like addressing a shortage of doctors by making their golf carts drive faster."
Don't underestimate the importance of the Political Economy of Golf in all of this.
These "negotiations" by our fearless leaders (behind closed doors) should be recorded so they can be played back so the citizens can be informed as to who, why, and what is going on. I imagine that most of the reps have Hundreds of Thousands, if not Millions, tied up in Wall street that will become wiping paper. We deserve to know what is exactly being said behind those doors. One thing I haven't heard is what our leaders will do IF any bank denies a loan to a working/retired citizen. I for one would like to have one of them say that the "taxpayer credit union" will loan them the money if any bank denies a citizen, that has a job or is retired, a needed loan.
The Democratic leadership has the strategic aptitude of Elmer Fudd.
The Dems could have called for a vote on the original Paulson plan, then voted overwhelmingly against it. This would have torn the Republicans apart as they scamper to put space between themselves and Bush/Cheney before elections. The Repubs would have had to follow the Dem lead in protecting Main Street from Wall Street.
This could have been a Dem-led bipartisanship victory against Bush (and split the Repub House).
Instead the Dems got their hands dirty by trying to 'fix' the bailout before voting.
They now share in the debacle. Repubs who voted against it can now claim the 'saving Main Street' mantle (including my own Representative, Darrell Issa (R-CA 49th)). This might just save his job. Way to go, Dems.
Oh, and what leadership! 40% of House Dems voted against it. What does that say about Pelosi?
Just our bad luck. Along with the worst ever President we have a worser Congress.
"The Democratic leadership has the strategic aptitude of Elmer Fudd."
Wonderful analogy!
Wylie Coyote is more like it.
locust,
Aided and abetted by his cohort here David Drier (R-26th Dist.), whose last four color large postcard from the edge of reality ranted on about Veterans Benefits, with agency phone numbers. Whoops! Not one word from him in almost 8 years of any substance on any major issue. But then, Halliburton pays him as do the rest of his corporate 'stable of studs.'
Feinstein was the only respondent to my emails for a negative vote.
W. Greider,
Thanks for this. More will read and comment, I'm sure. Any change will be those the House Republicans wanted, IMHO. The insurance scam you mentioned, then lower taxes on corporates and small business, and more taxpayer money for more failings to come.
The Democrats cowardice to be a more creative solution is becoming less and less a viable excuse, you gave them 'lack of energy,' and now the long whine will commence.
The media focus on NYSE 'plummeting' the magic number of 770+ or- rang $700billion like cathedral chimes, yet there was scant mention of its close numbers. The more I watch, the more likely, I see failure of Congress to produce anything meaningful. I weep at their lack of reflection on acts that have been illegal, the lack of fortitude by either party on vicious expediency. This vote is a vote of accountability. If it changes, my worry will increase with inflationary proportion. It is true this was democracy ignited, but only a weak flame in a very, very dark corner of reality. Too much of any fuel will snuff it, that common mistake of interpretation, of intent and judgment.
If this crisis is left to it's 'owner' devices, it will eat itself. If fueled with cheap money, an inferno will eat most of us, with each addition.
There is no Democratic leadership, just as there is no Republican leadership. The leadership of America is in the hands of corporate America. They use our treasonable elected officials as their board of directors, and our Constitution to eliminate domestic dissent and control foreign business competition. And then they use their god to justify the whole business.
Hoa binh
"The so-called "oversight" provisions the Dems are trying to attach to the plan -- in their attempt to get the public to swallow it -- are all fake."
This should remind careful observers of the machinations to get NAFTA passed in Congress. Sander Levin (D-MI) authored some language about protection for labor and the environment, language that was completely toothless, and that provided the Dems with the fig leaf they needed to swallow the deal.
The UAW was so angry with Levin that they failed to endorse him ... for one election cycle. Then it was back to business as usual.
I predict something similar will be done for the financial sector's ransom demands.
This is hilarious!
The republicans sprang this gimmick on the Congress so close to the elections figuring that the representatives and senators would approve it on the way out the door.
And what contributed to the defeat of this obscenity? The fact that it was presented so close to the elections made the public revolt against this action even more powerful.
q
But it didn't pass. Keep fighting for a good bill.
Yes.
"I see this crisis as the Democrats' hesitant first step toward rediscovering their nerve and abandoned convictions."
______________________________________________
http://ap.google.com/article/ALeqM5isOFwdbq0tsqatW6vJpkDRTI1gMgD93H628O0
______________________________________________
As I noted elsewhere, one refusal to swallow does not a summer make.
Someone I know has seized on the "Jackie Robinson" parallel to defend Obama's performance on a variety of fronts-- from admirably refusing to lose his cool during the recent (pseudo)"debate" to prudently avoiding taking bold and risky positions that would invite undue jeers, catcalls, smears, and criticism.
I don't know if that's true, of course-- i.e., that Obama has hearkened to his inner Branch Rickey and vowed that above all, he would not lose his cool, make waves, or otherwise rock the boat to achieve his historic goal. One problem I have with that parallel is that in Robinson's case, there was a flip side-- letting his bat and glove and arm and legs do the talking.
With politicians, their public personality or character is all they've got. And as the candidate for the highest office of government, for better or worse Obama IS singled out for special distinction and scrutiny.
Personally, as regular visitors should know, I've come to reject the political duopoly too firmly to hold out much hope that the Democrats could transcend their systemic and structural complicity and corruption and become an "honest" political party. But for the sake of argument, I don't see how it will if the man of the hour sticks to conventional, tepid positions in the face of one crisis after another.
Yeah, I know that the great Abraham Lincoln snuck into the Oval Office by talking out of both sides of his mouth. But I don't see history repeating itself.
Nice to see some good baseball talk. I am a former Bklyn Dodger fan, who came back to baseball in 1985 and the Mets. I was a little kid when Jackie Robinson started at Ebbets Field. I do not think he was a Democrat. I put his US postage stamp in art from time to time. It's gonna be a long winter until the Mets play again.....Hopefully, we'll do better with an economic plan. The public has been doing well so far to hold back the stampede.
To give credit where it's due, "one refusal to swallow does not a summer make" is a really good line.
Thanks, I appreciate that.
"There are obviously a lot of very powerful and privileged people sweating more bullets tonight than they have sweated in many and many a year."
I hope they are sweating rail road gun shells (the biggest I could think of)
I'm still not convinced we have a "crisis" But if we restore regulations and economic trade policies we will once again have free markets. In any case we need to let the market work itself out. No bail out. Let em'eat cake.
More,
The giant mortars of the Civil War that were carried on railroad 'flat cars?'
Not to be homicidal, neutron shells?
Nope, I was thinking of the railroad guns from WW1. Those were just the biggest I ever saw.
Although I agreed considerably with most of your analysis, you completely lost me with the Democratic Party optimism. I don't know how you get to that rosy future from the general description of the problem you present. In fact, most of us will not be able to afford a glass to measure our level of optimism for decades when this thing is finally crammed down our throats.
They have not only sold "We the People" out to corporate greed, but they have nearly tripped over each other to do so.
I am so enraged at my Rep. for voting FOR this travesty... and he has been incommunicado since the vote... no phone... no email... no voicemail. I would write him and post it, but I know that since the anthrax scare, it takes forever to process postal mail... if at all. And of course, time is of the essence.
Nice tactic.
True... and they would probably remove the anthrax anyway, so why bother? ;)
Milton Friedman had the plans ready to go after his "shock therapy" opened a temporary window in which to implement dictatorial reforms that would cause much suffering and death in order to fatten the fat cats. But being Chicago School, he had the ear of governments, we don't.
If we are to let unscientific, utterly undependable and fraudulent economists run our government and our lives, why not listen to the few dependable and honest ones like Naomi Klein?
If we don't have a plan, we can count on the plutocrats to implement Friedman's Shock Doctrine.
Hey! London School of Economics(Miliband Fellow), and an honorary Doctor of Civil Laws, at such a young age! With two world best sellers outing all the s.o.b.s' responsible and their strategies.
Economics is a social science. It is politically corruptible by money. And that is why honesty, dependability and good looks:) are ignored or marginalized. Corps can't cash it out.
Naomi Klein is speaking at the University of Chicago tomorrow Oct. 1, at 7:00PM. the topic, "Disaster Capitalism: Milton Friedman and the Chicago Boys." Hopefully it will be available as a podcast at some point.
So who stands up NOW? Ball one, They will push at it again, with a smaller power margin, if that fails they will try again some other way.... Untill everybody knows where the knife cuts and which way.
Hey it happened in Albania, as it happened in Texas. ALL pyramid scams end up like this.
But this time we have NAMES and FACES, and we know who WON the game.
Let's play FOLLOW THE MONEY!!!! Our celebrity accountants will go first to the CAYMAN Islands!
Yachts, Estates, Racehorses! All for the good of AMERIKKKA!!! Honey! There is a camera crew at the door, they say they've come for the WARHOL COLLECTION!
The boshevik's they INVENTED MEDIA! Every film editor knows the truth...
So who stands up NOW? Ball one, They will push at it again, with a smaller power margin, if that fails they will try again some other way.... Untill everybody knows where the knife cuts and which way.
Hey it happened in Albania, as it happened in Texas. ALL pyramid scams end up like this.
But this time we have NAMES and FACES, and we know who WON the game.
Let's play FOLLOW THE MONEY!!!! Our celebrity accountants will go first to the CAYMAN Islands!
Yachts, Estates, Racehorses! All for the good of AMERIKKKA!!! Honey! There is a camera crew at the door, they say they've come for the WARHOL COLLECTION!
The boshevik's they INVENTED MEDIA! Every film editor knows the truth...
Dear Sunlighter,
Today, the Sunlight Foundation is calling on Congress to
exercise restraint and increase legislative transparency by
posting the next version of the financial bailout legislation
online for at least 72 hours before bringing the bill to a vote.
We believe all legislation should be posted online for at 72 hours
before a vote to give lawmakers and citizens sufficient time to
review and debate it, and this bill is no exception.
That's why we just created a petition --
http://readthebillfirst.org -- that urges Congress to wait at
least until 72 hours after the publication of the next version
of this bill, before moving to a vote.
The failure of the Emergency Economic Stabilization Act of 2008
on Monday, September 29, 2008, is a case in point. The bill was
posted online late Sunday afternoon, and voted on less than 24
hours later.
This isn't a bill to rename a few courthouses; this bill is
Congress's biggest intervention in the economy in decades. This
important legislation deserved more time for public scrutiny.
Please join us in our call for legislative transparency by
signing the petition at http://readthebillfirst.org
You can review and comment on the Emergency Economic Stabilization
Act on PublicMarkup.org -- http://tinyurl.com/4q3zvn -- too.
Our Party Time site -- http://PoliticalPartyTime.org -- is also
doing its part to shine a light on how the financial sector is
wining and dining the very lawmakers in Congress who are making
the decisions about the most massive proposed bailout of
industry in history. Based on the anonymously submitted
invitations we've received, we now count 357 parties this year
planned for or featuring members of the two crucial committees
that are the first stops for considering the administration's
$700 billion bailout request for the financial sector. See the
full list of parties here: http://tinyurl.com/3htbev.
And be sure to check out our blog post here --
http://tinyurl.com/3lq3d7 -- about the finance industry's
investment over the past 18 years attempting to influence
Congress. The post includes a very cool interactive graph
showing their spending, and a YouTube tutorial video explaining
the graph.
Thanks for all that you do,
Gabriela Schneider & the Sunlight team
Thomas More September 30th, 2008 1:50 pm, and YOU forgot to mention that Bill Clinton signed the repeal of the Glass Stiegel Act into law. This mess is bipartisan, enough blame to go around including the banks, mortgage brokers and house buyers being stupid.
Without anarchy there will be no change
True. I should have included that fact. But as you correctly point out, this mess has so many culprits, Republican, Democrat, progressive, liberal, conservative, corporate, criminal, etc.....we'd need a new website for the list.
Let's hear it for the 95 (mostly) progressive Democrats who helped derail this odious bailout!! Let's also hope that the leadership listens to their concerns and not the conservative free marketeers as they craft the new bill. Yes, I'd prefer no bailout but since we do not have real representation but a bought and paid for congress sometimes we have to make the best of a terrible situation.
Rep. Edwards of Maryland was on C-Span talking about reading the entire bill on Sunday night and voting against it; I wonder if the Democrats who voted for it bothered to read the bill??
.
No bail-out until both Bush and Cheney are IMPEACHED !!!!!!!!!!!!!
.
Questions I haven't seen raised yet about the bailout.
The Federal Government is going to buy up all these empty houses that have been foreclosed on under the bailout plan.
Who is going to pay the property taxes while they just sit or are the local and state governments going to be expected to just eat it resulting in either higher taxes for the rest of us or reduced services?
Who is going to keep the electricity and heat on in these empty homes? Think frozen water pipes this winter, the subsequent damages, and repair costs or further reduced value of the property.
Looks to me like this bailout will be another gift that keeps on giving with the subsequent appropriations needed to take care of the above.
The 700 billion is only the start.
Lobo Gris
Correction: it's the McCain-Obama-Bush (MOB) bail out. All three stand against the average American taxpayer and for the corporate welfare.
Barack Obama was for single payer before he came out against it.
If--IF--there is any bailout, then Henry Paulson must go. He MUST go.
This quote from his legislation is enough to send his ass packing. Below is Section 8 from Paulson’s proposal:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Yeah, right a-hole. The people don't THINK SO.
Keeping this criminal and contemptuous jerk (off) on as Treasury Secretary is not a choice at this point.
Goldman Sachs interestingly enough was one of the few companies who bet against Mortgages and profited from the housing bubble being burst under Paulsons watch. Paulson was given a 19 million good by bonus to remember Goldman Sachs when it came time to make tough decisions.
The Commodity Futures Modernization Act of 2000 allowed Goldman Sachs, Paulsons former company to make a killing manipulating oil futures prices up to $147 a barrel this summer. It made OTC derivatives permanently exempt from regulation and also gave us the Enron scandal.
Paulson was chairman of Goldman Sachs from the time of the 1999 Glass-Steagall repeal to his appointment in 2006 as Treasury head and earned over 700 million in this period.
Paulson is the chairman of the President's Working Group on Financial Markets. It is also known as the Plunge Protection team. He can legally manipulate the markets so they plunge almost 800 points one day, and go up over 400 points the next. There is no accountability outside the Executive Branch for their actions.
Paulson was the guy who announced the Government would make an $85 billion nationalization (subject to shareholder approval) rescue (bail out) of AIG. AIG’s former Chairman, Hank Greenberg was for more than forty years Chairman of AIG. His AIG career ended in 2005 over a prosecution brought by Eliot Spitzer. Spitzer was Spitzerized earlier this year as Governor of NY, since they knew he would be all over what is going on today.
The announcement on AIG came a day after Paulson announced the Government would let Lehman Brothers fail. Why AIG and not Lehman?
Goldman Sachs was AIG’s largest trading partner and stood to lose $20 billion in a bankruptcy of AIG. Were Goldman Sachs to go down with AIG, Paulson would have lost $700 billion in Goldman Sachs stock options he has.
Goldman Sachs is now one of only two Big 5 Investment banks left (75% of Goldmans Sachs main competitors swallowed up by others), and has been made a Bank Holding Company by the Fed. This means it is now allowed to create money like any bank and is under the fed umbrella, and will profit immensely once the bail out begins.
Paulson will receive a heros welcome when he returns to Wall Street next year. Just name your price Hank, a job well done. Two years of hell for America, and counting, but joy and bliss on Wall Street.
For those who think the Big Shots on Wall Street will suffer. Consider that for every insured derivatives loser, there is a winner. The Big Shots placed the winning bets, the losers can not pay. The bail outs are to ensure that the winners of these bets get paid.
Ben Stein on Larry King Live: "The people who bought the credit default swaps are making trillions. The people who bought the credit default swaps are going to be the richest people in the world."
The gatekeeper Krugman who was on with him almost had a heart attack that Ben let the cat out of the bag and immediately went to work changingthe subject.
STEIN: The people that bought the credit default swaps are making literally trillions, literally trillions.
KRUGMAN: I don't think that's right. We can have that discussion another time.
STEIN: The insurers couldn't be losing trillions if the people who bought the insurance weren't making trillions.
KRUGMAN: That's not really true. But, OK. But no, look, it is pretty grim. This is an across the board economy in big trouble and the stock market is reflecting that.
Yeah, isn't the market for this shit worth, what was it...$62 trillion?
Earlier this year Ben Stein also went on the Craig Ferguson Show and smugly assured all the kiddies in the audience that America "would never go into another Depression" like the Great Depression because of all the wonderful safeguards now built into the markets.
My question is: Are the economical advisers who were involved in setting up the policies that caused the meltdown now providing advise on how to solve it?