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The President Who Provoked A Panic: Statement on Congressional Approval of Bailout
This is the first time in the history of the United States that the president has sought to provoke a financial panic to get legislation through Congress. While this has proven to be a successful political strategy, it marks yet another low point in American politics.
It was incredibly irresponsible for President Bush to tell the American people on national television that the country could be facing another Great Depression. By contrast, when we actually were in the Great Depression, President Roosevelt said that, "we have nothing to fear, but fear itself."
It was even more irresponsible for him to seize on the decline in the stock market five days later as evidence that his bailout was needed for the economy. President Bush must surely understand, as all economists know, that the daily swings in the stock market are driven by mass psychology and have almost nothing to do with the underlying strength in the economy.
The scare tactics of President Bush, Secretary Paulson and Federal Reserve Board Chairman Bernanke created sufficient panic, so that by the time of the vote, much of the public believed that the defeat of the bailout may actually have had serious consequences for the economy. Millions of people have changed their behavior because of this fear, with many pulling money out of bank and money market accounts, and in other ways adjusting their financial plans.
This effort to promote panic is especially striking since the country's dire economic situation is almost entirely the result of the Bush Administration's policy failures. First and foremost, the decision of Secretary Paulson and Chairman Bernanke (and previously Alan Greenspan) to ignore the housing bubble, allowed for the growth of an $8 trillion bubble, which is now collapsing.
It is the collapse of this bubble, which has already destroyed more than $4 trillion in housing wealth, and is likely to destroy another $4 trillion over the next year, that is at the root of the economy's problems. While competent economists were warning of the bubble and the dire consequences of its collapse, the top officials in the Bush administration were celebrating the rise in homeownership rates.
The Bush administration made the crisis even worse by deregulating Wall Street. This led to the huge over-leveraging of financial institutions, which has vastly complicated the country's economic policies. It is especially disturbing that Secretary Paulson personally profited from these policies, earning hundreds of millions in compensation from Goldman Sachs during his years there as its CEO.
The collapse of the housing bubble, while falling short of the magnitude of the Great Depression, is likely to lead to the worst recession since World War II. Repairing the damage caused by this bubble will be a long and difficult process. Cleaning up the damage to the political system from President Bush's unprecedented fear campaign may prove to be even more difficult.
57 Comments so far
Show All"The Shock Doctrine"
-Yes it is.
And,people, please hold onto your principles. We are going to need them. I know everyone is angry. I am FURIOUS!
But, if we abandon what we care about and be-lie-ve, they just win again, and, we become them.
Anyone here knows tha I am certainly not an optimist.
Maybe it is because I've gotten used to not having money.
I know that you are just screwing around. but, before you just go off about this, consider all the other things this basterd-ass Congress has helped Bush do, and you couldnt expect anything else.
They have done worse things ---like the war. Of course, alot of people will die from this bailout, if we dont force a change (and I dont mean Obama)
Seriously, that's it. Crime pays, period.
If we can't beat em - and we clearly can't - they it's time to join em. From now on, it's nothing but lying and stealing. Gimme gimme gimme. Their game, their rules. I'm tired of being "us" - I wanna be one of "them."
So, screw you America - if you got a nickel left, I'm coming for it!
that is all you ever get from american politics,... fearmongring and scare tactics.
for the supposedly greatest nation on earth, chock full of rugged individualists, an awful lot seem to shake at the knees and shit their collective pants, whenever some one says there is a boogy man out to get you, be it a financial (bailout or "else"), social(gays) or foreign (they hate us for our freedom), boogeyman.
so much for "home of the brave..."
Bullshit. You aren't talking about Americans. You are talking about our Congressmen, Senators and President.
Still, like it or not, the greatest nation on earth. But we better get busy or that address will change and soon.
Wrongo, More.
I will change my address,
Fuck America.
"The greatest nation on earth"?? What planet are you on?
That kind of smug, arrogant attitude is why this country has gone down the toilet.
Militarily, the greatest nation on the earth.
By other measures, measures that also count - health, education, democracy,
you are nowhere near it.
Then which nation is the greatest right now ?
Who the hell cares? Why is that even important? This isn't a competition! This is life! Something those in politics don't seem to understand, as they have always been more than willing to send the poverty stricken to die in one form or another.
I actually don't care. >;-) I was just finding it rather humorous that so many people criticized Thomas More for saying that the US was the greatest nation.
I happen to be an Anglophile myself.
"the greatest nation on earth"
Once you get your head out of your A--, you may see the light.
"the greatest nation on earth"
in need of major reform. I'll stay here and keep helping people in my community spread the words and wisdom to reform this nation even if I lost my two legs and an arm in the Vietnam war ! Until, the US actually becomes the greatest nation on this planet, there's no point in deluding yourself.
I anm really sorry about that brother. And I can see your viewpoint. But you should be in another country in your position and I feel you'd not be so down on America.
Try and help sonme of these kids coming back from Iraq if you can. I hear they need a lot of help.
God Bless you.
.I would question your measuring stick, Mr. More....On what basis do you make that claim for greatness? We can no longer claim the highest standard of living in the world, and that standard looks to be lowering even faster. We no longer care for our sick, our elderly, our children to the same measure as do other nations, we spurn the needs of our returning military until caught then shamefacedly make some amends. We torture, murder, break international law by invading a sovereign nation.
Are these the measures you use to determine greatness? Now Sweden, thats a great nation, Switzerland, pretty darn great too....We have a basically good citizenry here, potentially a great one in fact. But , because we have become fat, lazy and complacent we have allowed whatever claim to greatness we might have be lost in the insane greed and incompetence of our government and those who control her.
By the by, this article seems an apology for th eDemocrats, throwing allthe blame on the Bush administration when anyone paying attention understands that this has been a long time in the making and took the cooperation of both parties in full.
.
We see things, not as they are, but as we are.
Anais Nin
Surprisingly I agree with you. We need to get busy. But I tire of all these folks holding our country to a higher standard than others. And I've had enough of the America haters.
Our record overall is vastly better than any other that has led the world and we, unlike most other nations have the ability to turn this around quicker than anyone would believe. If we can get some leadership.
Sioux Rose
I'm glad that Dean Baker defines this as a tough recession as opposed to another Great Depression. Only time will tell. Reading links left by other conscientious CD contributors one realizes the degree to which international elites (and corporations) are entrenched in the mess that's been made of the U.S. stock market. We also know that the tax cuts, insane military budget, and unjust salaries to CEOS could all be altered so that this bailout was covered by those who more directly profited. It's still a good idea to slim down expenses, seek greater self-sufficiency, and hold on for the rough ride to come. Even if we ourselves do not directly suffer, we all have friends and loved ones who have probably bought the Reagan-version of The American Dream and as a result hustled for "more, bigger, faster, better" to the point they are in debt up to their eyeballs and living on a psychic treadmill resonant with the laboratory rat fed cocaine to test his responses.
At least the rat got some 'coke' for his efforts.
Had this been anywhere in the third world, it would be laughably embarassing how obvious this is corruption. This is essentially an opportunity for the existing investment firms/banks to acquire "Troubled Assets" and resell them to the Treasury for profit.
The bill has an Orwellian provision for preventing "unjust enrichment" by placing a limit on the purchase price for Troubled Assets EXCEPT where those assets were acquired in an acquisition, recievership, bankruptcy etc.
It further gives the secretary the power to guarantee all troubled assets going back to March 14th.
What happened on March 14th? The collapse of Bear Sterns, later acquired by JP Morgan Chase
Par for the course. George H.W. Bush committed treason in 1980 by paying Iranian hostage holders millions of CREEP (Committe to Re Elect the President) dollars from the Nixon campaign to hold American hostages to get Ronny Raygun elected. It's been revealed that Prescott Bush was part of a coup plot to oust FDR and impose a dictator.
Now our "decider" has invoked a panic to facilitate a huge heist of taxpayer money to his buddies on Wall Street.
Now we need Jeb...but it will depend if there's anything left to steal or betray.
hahahha, greatest nation on earth... that's why the USA is going to hell, Americans live in a fantasy world. Keep telling yourselves that
Collapse? The jury is still out whether the housing bubble will collapse or not. I don't have solid metrics, but let's tease this apart once. Real estate shot up in the 90's and 00's far, far faster than real earnings. In order for the bubble to collapse, it must decline FASTER than earnings are declining. Since a lot of people are out of work, and the government is now in charge of real estate price-fixing, looks like we may be headed toward a repeat of the Great Depression. No particular shortage of land, but the prices are fixed/shielded from the market's inability to pay, so there's a rise of a new serf class.
Time to dust off the concepts of adverse possession and squatter's rights.
Don't worry folks we can get Obama to fix it all when he gets elected. Bye bye America.
You are joking of course since he voted for the GD bill.
Is this the first time in the history of the United States that the president has sought to provoke a panic to get legislation through Congress? No, I remember the anthrax bio-terror attacks that were used to gain passage of the USAPATRIOT Act. I believe that Hitler called his legislation the 'Enabling Act' and so it goes.
This isn't the first time presidents provoked financial panic. Raygun did it in 1981 with his tax cuts for the wealthy shit and Bush II again in 2001 with the same. But don't forget that they knew that they had plenty of allies in Congress of both parties to peel off of from.
"Still, like it or not, the greatest nation on earth. But we better get busy or that address will change and soon."
Thomas, exactly what makes you so great? So exceptional? Take away your big guns and what do have left? Thomas I believe that you have confused the mythology of your nation with the actual reality of your history. I lived in your country for over ten years (you recruited me) and I really did not see any of the greatness you so proclaim to the word. (I almost feel embarressed for you when I here your politicians proclaim yout country to be the greatest. It is like you don't realize that the rest of the world is listening.)
BTW I like your country and I have made many dear friends in many states. You know Thomas none of my American friends seem to think that that they are so great or exceptional. I tell you this Thomas because you will never be respected in the world if you continue to use slogans that suggest others (non-US citizens) are somehow less than you. Actually, to us other citizens of this planet, when you proclaim yourself to be the greatest you sound childish.
If the US isn't the greatest nation, then which nation is ?
A Voice Apart
Because any nation is only as great as the least of its citizens, no nation is great. Nations are the reflections of those who people it. The US is no greater, nor lesser than any other nation on the face of this earth.
"Because any nation is only as great as the least of its citizens,"
Why is this true? Why would you not instead look at the average instead of seeking out the very lowest example? It sounds like the weakest link theory for a chain, which is a simple one dimensional construction. Is that what society is? Or is it maybe a very complex multidimensional mesh structure of some kind?
"The US is no greater, nor lesser "
This supposes that the "least" of each country are equally least to each other, if we apply your stated theory. Is this likely to be true?
"If the US isn't the greatest nation, then which nation is"
What do you mean by greatest... please explain. We are all waiting.
Scare tactics have been the Bush modus operandi since 911 when The Decider enlisted the Congress in the bipartisan assault on the Constitution in the name of the war on terror.
By this time, it should be clear that "the devil made me do it" is no excuse for the disgraceful capitulation of Congress. There are a few elected reps who still possess common sense, but the majority have cravenly betrayed their Constitutional roll.
And this is the fault of the moron-in-chief, Bush?
Dean Baker's criticism of Bush's fear tactics underscores the impotence of Congress. It's not his fault that the reps of the people are so utterly spineless and gullible.
Bush is a terrible president, you can smell the sulfurous stench long after he leaves the podium, but what does this say about the members of Congress that they cannot muster a coherent opposition to this fascist?
Common Dreams needs to post every essay that Naomi Wolf writes. This is not a non sequitor. Fascism is the ugly reality Congress, and progressive commentators like Dean Baker, refuse to acknowledge.
Hey, what ever happened to that color-coded terror alert thing ? Is FOX still showing it at the bottom of the screen on all of their broadcasts ? Or have even they given up on it ?
Fear is a tool to keep the people under control.
First there was the fear of terrorists and them striking at any given moment and the Bush Regime pass the "Patriot" Act with the help of the mainstream media devoting 24 hour a day coverage that groups of terrorists armed with box cutters where about to launch attacks anywhere at any time, those who believed the government could not do them any harm believed this fable and fell for this first act of treason.
Second there was the fear of Iraq which could launch an attack against the USA at any time and strike any place - this was again aided and abetted by the complient mainstream media who broadcast this bull 24 hours a day and the result was an illegal war against a country who had destroyed all their weapons a decade earlier, still there was enough to believe that the government was honest and wouldn't tell lies and fell for this second act of treason.
Third due to to the above two acts of treason the government illegally detained and tortured unknown numbers of maybe innocent men and then justified themselves that they where the good guys...ever stop and think that good guys would actually torture? Against all international laws the Bush Regime stuck their middle finger up to the world and continues to torture and illegally detain innocent men.
Fourth, the complete and utter lack of concern shown by the Bush Regime when it comes to global warming - even to the point of flat out denying that it even exists.
And now, after millions of people have suffered due to the greed of the ruling elite and lost everything they have had through big business taking their jobs overseas or for the crime of becoming ill and being hit by obscenely large medical bills those who created this mess have a bad day due to their greed and the manufacturing of money which was never there in the first place the Bush Regime moves faster than a speeding bullet to bail them out (or rob us of our money to give to the ultra rich who have lost nothing). A con job which in the light of day will be seen as the biggest in the whole of human history. Fear again was used to justify this crime of taking our money and giving to these greedy and insidious "people".
Don't think that Obama will be your friend if you vote for him, he won't he was right behind this bill and he is under complete control of the ruling elite.
It's time to realise that we are not free, and if we continue to play by the ruling elites game we will never be free as the only way we can be free is by taking control of our own lives and and our own destiny and realise that if we work together for the good of all we can create an equal society where no man or woman is better or worse than any other.
Time to stop working for the ruling elite, let them really have a bad day.
We have the power it's time to use it. We are all One.
peace and love
all is illusion...there is no government
Bush actually used the word "panic" in his speech seeking congressional approval of the Paulson Plan, in a blatant attempt to scare people, and it worked. Congress was coerced and the taxpers were blackmailed. If you see a congressthing walking along the road, kill it. And Cruxpuppy is right: this IS fascism, almost by definition. It took 70 years for the United States to lose the war. Remember October 3, 2008 as the day that President Bush gladly signed the Treaty of Capitulation.
-30-
I don't think Congress was scared. I suspect many of them were simply rewarding their campaign donors.
"If the US isn't the greatest nation, then which nation is ?"
There is no greatest. All have their failures. Some have greater failures some lesser. My question was; What makes you so great? Or for that matter, what makes any of us so great?
"Militarily, the greatest nation on the earth."
I knew some neo-con would be proud of his military history. You probably believe that you have been a force of good in the world. Protecting the world from evil.
"By other measures, measures that also count - health, education, democracy,
you are nowhere near it."
You got to be kidding (LOL)
You assume too much.
"I happen to be an Anglophile myself."
Me too. Love London and the lake dist.
Glad to provide humor by the way. I never understand why its so important for some to prove their country is trash, no matter how twisted the logic or warped the measure.
" Or for that matter, what makes any of us so great?"
Maybe the masses of people wishing to move into the US could tell us why the US is great.
Eh, crummy VISAs and "cheap" labor?
I was disappointed to hear Barny Frank push this bill through the House, promising the good faith of Hank Paulson. I was disappointed that Obama intervened on behalf of the bill swaying the "nay' votes to "yea" votes. Just proves that Pigs, with a little lipstick, can fly.
.
I’ll say it again…
We needed Ralph Nader as President in 2000.
We needed Ralph Nader as President in 2004.
We NEED Ralph Nader as President in 2008.
Never before as we do now
http://www.votenader.org/index.html
.
"Maybe the masses of people wishing to move into the US could tell us why the US is great."
I am sure it will come as a suprise to you but most people are happy living in the countries they were born in. But of course that depends on where they are from. Exactly how could the "masses wishing to move" to your country answer my question as to what makes you so great? After all they have never lived in the United States. The are only, for one reason or another, wishing to move there. Like you they only know what they have been told. At least I lived in your country (also UK and Canada) and speak from personal experience when I state that no country is the greatest. All have certain advantages and disadvantages. I guess my circle of international friends and acquaintances forgot to mention that their primary goal in life was to live in the United States. At the time I lived among them they seemed perfectly content practicing their respective professions and raising their families in the country of their birth.
BTW you no longer want the poor and destitute.
BTW Good article. LOL three posts and I didn't mention the article.
"Exactly how could the "masses wishing to move" to your country answer my question as to what makes you so great? After all they have never lived in the United States."
Did I really need to point out the people who have actually succeeded in moving into the US? Check with them. You might then check with the masses who aren't fleeing the US. The movement of people across the US border for temporary or permenant residence is overwhelmingly in one direction. In.
They are only, for one reason or another....... (correction)
A Voice Apart
"Because any nation is only as great as the least of its citizens, no nation is great. Nations are the reflections of those who people it. The US is no greater, nor lesser than any other nation on the face of this earth."
Beautifully stated.
and this nation which is hemmoraghing will soon cease to exist as a free nation
In Christian terms we are walking through the valley of the shadow of death. As American's we are in that shadow now. Simply put, it's time to choose life or death.
Jake,
I was no in no way suggesting that the United States has not been perceived as a mecca for immigrants but merely challenging the assertion that you are somehow the "greatest" nation in the world. I am not anti-American but actually tend to be more pro-American in my observations of your nation. I have learned from my experience that you are not nearly as bad as some of you claim while at the same time not as great as your knee jerk mythological narrative suggests.If you consider yourself to be the greatest then we (others) are somehow lesser than you. This is simply not true.
ardee October 4th, 2008 9:51 am
"I would question your measuring stick, Mr. More...."
There is really no measuring stick. Thomas was simply repeating a phrase used by many withhout any thought to the existence of other successful democratic nation states. It is one of many negative nationalistic slogans employed in the American mythological narrative such as, we the greatest, were the best, we are not perfect but there is none better ..... etc. etc.. He really can't help it.(Indoctrination since birth)