Putting increasing pressure on the House “no” voters to fall in line, the Senate voted (74-25) overwhelmingly in favor of a $700 bil government purchase of bad debt from Wall Street … with lots of extra caveats.
I’m not going to to into the caveats now. Let’s just say that the 3 page draft has morphed into over 100 400 pages, with new government department for oversight of the Sec’y of Treasury’s decisions (but only via “consultation and recommendations…), and sundry other details (increasing FDIC insurance limits).
The basics remain the same. The government will buy bad assets at whatever the Sec’y of Treasury deems appropriate, hold them until whenever he deems appropriate, then sell them at what he deems appropriate. Who that is? Today, it’s Henry Paulson. After January or thereafter? Serves at will of the POTUS with Congressional approval.
Gee… I feel so much better. NOT! But at least I do know what new job I want….
And it was ironic that, while the Senate vote was going on, the stock market results were on the ticker tape news across the bottom. Goldman Sachs up over 40% from last month’s dive. Gee… that’s the Warren Buffett buyout/rescue. The one where he used a model of preferred stocks that might serve as a better foundation model than we have to choose from today. Certainly it would be at less cost and risk to the taxpayers.
But these options were tossed aside by the elected ones… never to be entertained. Forget the oversight and little extra perks added “to protect Main Street”. The US government has only one fix in mind – and that’s going into the business of buying real estate for the taxpayer…
…and considering they are suspending the “mark to market” authority, and doing one of their famous “studies”, we can safely assume they aren’t even buying in at a wise price.
Why Congress has been so bull headed and refused to entertain other avenues… i.e. preferred stocks, and formations of HOLCs to deal with consumer mortgages, RTCs and RFCs… just drives me crazy. I can only assume that the majority of our elected officials in both chambers is comfortable with a Marxist rule in our future.
This is beyond Obama’s nuanced “socialism”… the kind you have to really look at his history and his words to recognize. This is bold, outright, flat out Marxism, IMHO. And according to both our media, and our elected representatives, we the people are too stupid to know what’s good for us.
Today, talking head after talking head kept saying the public was against this plan because we “don’t understand”. If their condescending ‘tudes weren’t enough, I pretty much went ballastic when I heard Obama make a subtle statement that tells us, the taxpayer, just how “dumb” we are…. but nicely, of course.
He did so in a way meant to go over our heads so we won’t notice he’s insulted us to the max. Using the quote from the blogs at ABC news that Congress should do “what’s best”.. here’s the possible POTUS – the same one so many believe is leading in the polls – barely masking his disdain for “Main Street” in his usual flowery style.
“To the Democrats and Republicans who have opposed this plan, I say this– step up to the plate do what’s right for the country even if it’s not popular, because the time to act is now.”
Does the impact of this statement hit anyone like it does me? We of “Main Street”, as they like to call us collectively, do *not* like this gambling of our tax dollar. And instead of exploring other feasible routes, they tell us it’s their way… or the highway of doom.
And to boot, we have some pompous Senator telling his peers that even tho the idea is unpopular… with *us*, the citizens… we’re too stupid to know that this is what’s “right” for the country. Therefore Congress should step up to the plate, and ignore us, the voters.
I don’t know about you all… but both candidates for POTUS have shown me their irreponsibility tonight with their votes. And quite frankly, I think all of us… both sides of the aisle… had better keep our eyes peeled on our futures. Personal opinion? If the House GOP and DNC caves, this is the beginning of the end of the US as we have known it.
Open for discussion from here… I could use all the “optimism” you can muster…
UPDATE: To show you how “bipartisan” this NO NO NO and did you hear me when I said NOOOOOO! attitude is? Even George Soros says dumb move….
All I can say is it’s a weird day in life that I find myself in agreement with Soros….
Investor George Soros said on Wednesday the the U.S. Treasury’s original $700 billion bailout plan would have done little to address the credit crisis, suggesting instead the government take a direct stake in financial firms.
Global credit markets are in their worst slump in generations as bank lending grinds to a halt on persistent fears about the extent of financial institutions’ exposure to the downtrodden mortgage sector.
Soros said the U.S. Treasury, rather than using federal dollars to buy up toxic mortgage bonds, would be better off making a direct equity investment in the banks. This in turn would spur reluctant private investors to step in again.
“The fact that the plan was rejected in Congress provides an opportunity to amend it to make it more effective,” Soros told Reuters in an interview. “The way to do it is to focus on recapitalizing the banks by injecting equity and actually encouraging existing shareholders to provide that equity.”
Soros said under such conditions, he himself would take an interest in buying up financial shares. This approach worked during Scandinavia’s own banking crisis in the early 1990s, Soros noted, and could work again in the American case.
A government role in the equity of banks is part of the Democrats’ counterproposal to Treasury Secretary Henry Paulson’s original draft legislation, which was shot down in the House of Representatives earlier this week. The Senate would vote on a new bill later on Wednesday. Like most other observers, Soros said the urgency of doing something could not be overstated.
continue reading at link above
Vietnam era Navy wife, indy/conservative, and an official California escapee now residing as a red speck in the sea of Oregon blue.
I should have posted my last comment here, so here it is again:
“When the government fails to pass a socialism bill and the market goes south, let it go south. For every person you hear saying this bailout is going to strengthen the market, it’s the exact opposite. The market’s not being allowed to work here because the losers haven’t been flushed out.” (Rush Limbaugh)
Read the rest here:
http://www.rushlimbaugh.com/home/daily/site_092908/content/01125100.guest.html
P.S.: Sorry Mata, I am not optimistic at all.
Yeah, Craig… I heard Rush say that yesterday. I also heard Cavuto say something similar yesterday afternoon to a guest. That part of capitalism and success is also failure. They are both part and parcel of the same freedom. And sometimes failure is also market correction.
i am so disappointed, why am i not shocked? this is a gross act of negligence. we should ahve had actual money men on it. not politicians who only wnat to line their own pockets working on it? this is tragic. yeah, i lost over 20 grand in the last few days, but i don’t want to fix this, i want this to fix itself. if we had economists working on this it would be a much better thing, far less money and it would freakin work. god i am so freakin pissed.
That 100+ pages House Bill has now morphed into a 451 page Senate monster.
http://money.cnn.com/2008/10/01/news/pdf/index.htm
Wait til it gets back to the House and see if they don’t tack on another 100 pages or more.
The basics remain the same. The government will buy bad assets at whatever the Sec’y of Treasury deems appropriate, hold them until whenever he deems appropriate, then sell them at what he deems appropriate. Who that is? Today, it’s Henry Paulson. After January or thereafter? Serves at will of the POTUS with Congressional approval.
—
Look for NJ Gov Jon Crozine (D) an Obama econ advisor to get the Sec Tres. Guess what? he was Goldman Sachs CEO before Paulson was! “Change” indeed…..
sometimes i think it would be great if we started from scratch, put a whole bunch of nonpoliticians in there and had them be the law makers. they couldn’t do any worse now could they, hell they would do better. wait i think we are trying that, a hockey mom who wanted her kids schools to be better, maybe she should go in there and clean house. i would be more afraid of her than i wold be of pelosi, frank, or dodd. she might ground me.
Did McCain vote FOR this bailout????
In a word, Timothy… yes
Truly, truly disappointed. Seems our great leaders have now forsaken “We the people” and morphed it into “You the morons”. I listened to numerous Sens talked about how unpopular this was; phones, e-mails, faxes were going 1000 to 1 against this, but I guess we should be soooo happy that these crooks are looking out for us.
I’m listening through all the speeches and all I can hear is a great flushing sound, as our Republic goes right down the toilet.
Question: Since the “bail-out” was an amendment to the mental health bill, could the house nix the amendment, pass the mental health bill and send it back to the senate, without the bail-out/pork package?
And maybe I just need another Jack and coke, but had a crazy thought that if this turns into a dem sweep in all 3 branches, do you think that there would be a 2012 election?
Man I hate thinking sober! 🙂 But do think that I’ll be stocking up on my ammo.
Sarge
…
Have fun with Obama-Hitler, Timothy. Cause if you don’t vote for McCain, that’s who you get. Any other vote is a vote for Obama.
Your new chant will be “Seig Heil”.
“Goldman Sachs up over 400 some odd points. ”
GS was up just over 7 points today.
…
Ooops… forgot to put in the decimal point there, Bagua. Must have been at 4.40 when I saw it roll by earlier in the eve. Thanks for the stats. It closed up 6.5%, last trade at $134.50. Considering that Sept 18, they were at $86.31, that’s up by about 45%
Timothy,
I can understand your anger, I am also very angry. But I don’t get to vote, I do not live in the US. If I could, I would still vote McCain. Remember that Palin is there and I am sure she can make miracles and shake up these Republicans. If you do not vote McCain, for sure Obama is going to win.
Is this what you want? Think about it. Yes we are all mad at McCain but we are madder at the Dems. So let’s not have them win this election. If Obama wins, your country will go down the drain… and so will your neigbour, Canada… and capitalism and probably democraty. Get over your anger and vote McCain/Palin. It is not the time to let emotions take over logic.
Anyways, the Dems where blaming the Republicans all week for the refusal of the bailout plan and meanwhile, Obama was gaining points in the polls. Maybe it was only a strategy from the Reps to vote for the bailout, so they would not lose this election. Let’s give them a break, this country can not afford an Obama President.
Craig,
Okay, I’ll take my posts down, have a few shots of whiskey and hit the sack. At least curling season starts next week!!!!
Great Timothy! Wise decision. Nothing like a good old shot of wiskey and a good night sleep.
Here in Canada, we are just about to give ourselves a majority government in the federal election on the 14 of october. This majority will be for the Right Wing, the Conservator Stephen Harper… the best Prime Minister we ever had. It would be such a shame if he has to deal with a stupid marxist-socialist POTUS down south. Please give us a break. For the first time, Canada is turning RIGHT… we are finally winning over our idiots leftists.
No matter what happens, we’re well and truly f*cked.
Rocky_B,
Your post is stunning! Very good information you give to people here. But, why did you put it in a thread posted on February 26? Nobody will see it when you will no longer be in the recent post column.
I would suggest you could copy/paste it here so everybody can see it and read it.
K Craig, NP. For those who don’t know here’s the link Craig is refering to in context:
Okay I can’t just let all these Obama campaign talking points continue unchecked. How about the actual facts instead of rhetoric?
Yes we’ve heard the Obama promises during the debate, a 95% tax cut for all Americans. According to the non-partisan Tax Policy Center. Obama’s rant is false.
(See: http://www.factcheck.org/elections-2008/factchecking_obama.html)
By the way, the elderly, who are in worst financial shape than any other group, would get no tax break and in fact most would be taxed even harder under the Obama plan because he wants to tax medicare. Most elderly don’t get child deductions/credits or earned income credit. Hell if they live alone they can’t claim head of household either. But hey that’s all right with Obama huh? After all, they’ve lived long enough and need to die and make way for the young, right?
If the Bush tax plans didn’t work, why don’t you explain why tax revenues increased with his tax cuts? If what Robert is telling us were true they should have plummeted? The reason is that extra money was being circulated. More goods were bought, which meant more people being paid wages, that money gets taxed, but those employees get more money too so they buy more, which results in more wages being accrued and taxed. That’s a net economical boost. If you cut taxes on the rich, they also spend more. There are more taxes than just income taxes Robert. I’ve examined Obama’s tax plan. The ONLY place where he cuts taxes is with income taxes. Instead he increases other taxes, none of which we can take exemptions or deductions on, and establishes new taxes, including a lot of hidden taxes. It’s the old bait and switch. Those who think they are getting a tax break under Obama will loose every dime of it through other taxes and FICA increases for new incentive and spending plans. Saying that 5% go back to what they had to put out before Bush is also a lie with these new taxes.
But when you increase taxes, growth stagnates and declines. Tax the hell out the rich and they start hoarding their money to await better times. The economy goes into a recession. That increases unemployment. I lived through the Carter years of double digit unemployment. Our family was in the lower tax brackets. Believe me, it wasn’t fun. Yes we are in a recession now, and part of that is due to America having to send our money away to the Middle-East, because Dems have blocked domestic oil drilling, new refinery and nuclear power plant construction. Partly because of the 2 decades worth of failed Fanny Mae, Freddie Mae, and Sally Mae loans which was vastly instrumented by Democrat setting us up for today’s organized crisis, for which they blame the Republicans, Bush, and saying McCain will make even worst. I gaurantee you that Obama’s tax plan would change the recession into a deep unrecoverable depression. That’s the socialist plan. They have to totally destroy our economy so they can reorganize us under a new form of government.
BTW the total tax rate before the 1929 crash to all Americans was only 10%. FDR’s New Deal increased the taxes to all Americans by 10%, and to the rich by 20%. When you add in Social Security, that increased it by another 10% That was before FICA taxes, and our current welfare/medicare systems which increased it by another 10%. And it wasn’t taxing the rich that brought us out of the Great Depression, it was the jobs created by the Work Project Administration of 1939 and the military industrial build-up prior to World War II. Unfortunately war is usually an economy booster. And before you say it, yes I know the WPA was also part of FDR’s New Deal.
As for the Palin isn’t ready or doesn’t have the experience claim, she is just as ready and experienced as JFK, Jimmy Carter, & Bubba Clinton were when they first sat down in the oval office. So Robert? Why not try another Daily Kos/Obama/Acorn talking point. Leiberman doesn’t think Obama is fit to sit in that chair. Pray tell us what specifically HIS executive experiences include? You’re throwing bricks in a glass house?
Now something I feel needs to be added to this story. If Soros is suggesting something to Congress, run, do not walk to the nearest phone and advise your Congresspersons not to listen to him. His agenda is to suggest things that would only make things worst in the long run. What good is the Government pouring $700 billion directly into corrupt and failing businesses going to do but dig us in even deeper when they do more of the same, fall even harder and we are left holding the bag with no secured assets to potentially back the money up. For the American dollar, it would be like going from the gold standard to a copper standard. Hell yes he would invest in those companies heavily the moment the bill passed, but once the stock lept up he would sell like a big dog. Because he knows they are set up for an even bigger fall.
Yes many of us are upset that McCain signed off on it. But it was difficult for him not to with the punishment he received for not supporting the previous bill. Even with it’s flaws as I posted elsewhere, this one is a little better than the previous one and he was begrudgingly willing to sign off on the other one until house Republicans firmly told him they wouldn’t. McCain was in a Catch-22 on this one. Damned if he did & damned if he didn’t. If he didn’t sign, the media was ready to tell the public he was doing everything in his power to make the economy worst and he had to regain some ground with the public on that if he expects to win in November. I’m sure he waited to vote until he knew how his fellow Republicans in the Senate were leaning. Had he not shown support and a willingness to show solidarity with other Republicans taking a risk on it he would have alienated a lot more people on both sides of the aisle. The same constituents who were against the previous bill became frantic when the media started telling them the last 2 days that if the bill was not passed, it would be a death-toll for any hopes they might have of getting credit in the near future. This was not a vote to be a maverick on and he knew it. I don’t know about the rest of you, but today I just paid my credit charges for this month on line and even the credit card companies are obviously scared because they have reduced their interest rates.
Rush is right.
Much like human beings, if the free market is sheltered from “illness” it won’t develop immunity to disease. Saving the markets now may protect it from a protracted down period, but next time it gets sick, it will only be worse.
What doesn’t kill you, makes your stronger. Unless Congress is your doctor.
I keep hoping that the bill passed because there’s something they know that we don’t. Other than that, I just don’t see any excuse.