Allahpundit hits the nail on the head better than I ever could hope:
Why not? She tried a bipartisan bill and got nothing for it. What’s stopping her from turning it into a Christmas tree for the left and passing it on a strict party-line vote? Bush will sign it regardless and Senate Republicans will be under tremendous pressure to decline a filibuster with the Dow down 600 points today and god knows where tomorrow. This is the flaw in the “if the majority thinks it’s so important, let them pass it” approach: They will pass it, on their terms…
…House Republicans weren’t willing to swallow a bitter pill today so they’ll swallow a more bitter pill later this week. And guess what? They’ll still get killed at the polls in November…
I know there is a wide divide here on the site about this bailout, varied opinions and open debate. But I hoped the bailout would have passed today. I think it was a bit of “foot meet gun” for our the citizenry and I think all the House GOP’ers accomplished today was give Pelosi & Co. and excuse to pass something much more liberal and full of trimmings, fully ignoring the GOP. Kind of the point of an opposition party to the majority is to ensure we use our voice effectively enough to sway the process- we have no chance of that right now. So all or nothing was the clarion call and we go the nothing.
Even Ramesh Ponnuru at the Corner thinks a more liberal version is Pelosi’s best and most likely option:
I would figure out if there were a bill to the left of the one the House just voted on that could pass on a party-line vote and reassure the markets.
September 29th, 2008 at 3:48 pm
Jason is 100% correct. If there is another bill, The house GOP just stuck us with a verion that will be poisoned with pork!
September 29th, 2008 at 3:49 pm
EXACTLY. A collapse of the markets is even more socialism for 20/30 years. Hello, FDR New Deal on steriods. We should have went with the most conservative possible plan.
September 29th, 2008 at 3:54 pm
I’m with you, Jason. This is a political and economic disaster… unless something is pulled out of the hat in the next 72 hours the GOP will pay the price for this for a long, long, time.
Truly, jaw-droppingly unbelievable. Darrell freakin’ Issa opposing it on the grounds that “it lays a coffin on the coffin” of Reaganism. Ronald Reagan would’ve been the first to embrace this bill. He knew when ideology ended and the national interest began.
September 29th, 2008 at 3:56 pm
Now I know you guys are joking. This is really funny.
September 29th, 2008 at 3:57 pm
Baloney!
The fact that Pelosi held the bill open for 20 minutes was to pull in the support she needed to get it passed.
America is PISSED!
If you think that passing a bill full of Christmas tree ornaments is going to pass then so be it. It will allow Republicans to retake the Congress. If 40% of DEMOCRATS voted against the bill, then this wasn’t an attempt to get everything they want and more.
In my opinion, some on this site are rabid with conspiracy theories. Despite what some on this site may believe, some Democrats actually believe in fiscal discipline. A bailout of any kind is just as unpalatable as it is to scores of Republicans.
If I’m wrong, then I’m wrong. Pelosi generally doesn’t know what the heck she’s doing…ala the Treasonous trip to Lebanon shortly after her election to the Speaker of the House. She’s a bitter, bitter politician, and the liberals…Democrats and Republicans…will have to take their medicine when it comes to solving this crisis. Americans are angry and won’t put up with the bailout of irresponsible Wall Street companies.
Just my two cents. Thank you for the forum.
September 29th, 2008 at 3:58 pm
To a certain degree it is too late. If there is another bill, from Pelosi, she will not only include pork, but fill it with anti-corporate regulation, a profits ceiling, CEO income caps, etc…..
Way to go House GOP!
September 29th, 2008 at 3:58 pm
#4 – you don’t know bupkis about Reagan, quite apparently.
September 29th, 2008 at 3:59 pm
Jason is 100% correct. Now we will get the bill with ACORN funding and Lord knows what else in it on a straight party line vote within the next 48-72 hours. The Republicans in the Senate will be forced to go along with it, and President Bush will sign it.
The House Republican are not heroes in this. They were played like a fiddle by Pelosi, who will now get the bailout bill of her dreams within the next 2-3 days.
September 29th, 2008 at 4:01 pm
OK., so, be off with you. Go organize your own party.
September 29th, 2008 at 4:05 pm
#9, how about giving me my pragmatic party back?
September 29th, 2008 at 4:05 pm
We may get lucky and kill it off a second time. If not, at least our fingerprints won’t be on this debacle of a bill.
September 29th, 2008 at 4:06 pm
These banks need to go bankrupt. This market correction (recession) MUST happen. The bad debt and malinvestment MUST be cleared out. The seeds of this recession were planted because the Fed’s manipulative easy-credit policies distorted the market signals like interest rates that investors need to look at to know how to plan for the future, causing businessmen to invest in the wrong lines of things (malinvest). Pumping more money into the system will only keep these market signals distorted, causing MORE malinvestment to pile up, which means the market correction will have to take even longer and be even more severe.
And, it’s so sad that this has become a scarce-mentioned sidepoint, but… WHAT ABOUT THE CONSTITUTION???
September 29th, 2008 at 4:07 pm
Jason, Kavon are 100% incorrect
She did not try bipartisanship. She turned the matter over to the Messiah in the big meeting and then held a news conference to call republicans un-patriotic.
Then 95 democrats fled.
What is stopping the ACORN bill?
Those 95 to being with. The millions they represent to end with.
September 29th, 2008 at 4:07 pm
#11, think about it. The markets are crashing, Dc looks like a complete failure, and now Obama, Pelosi and the rest of the Democratic nut-jobs can move in and save the day, and get what they want at the same time.
Remember, they have a majority. If Obama tells them to vote yes, they will vote yes. That is what Obama should have done in the first place.
September 29th, 2008 at 4:07 pm
You mean a party that would liquidate the US taxpayer to insulate bank CEOs from the consequences of their decisions? I’m not certain what party would support that.
September 29th, 2008 at 4:08 pm
Kristofer – send me an email when you get a chance – i tried leaving a comment for you on your “Humble” post but with all of the bailout news I imagine that post is long gone now.
rbrun79 at gmail dot com
thanks
September 29th, 2008 at 4:09 pm
#15, no I mean to party of action and legislation, the party of reagan and Gingrich. The party that won eith ideas and compromise. The party that got Clinton to sign the welfare reform bill, and the party that cut spending.
September 29th, 2008 at 4:10 pm
Jason may be right, but I am skeptical. Up to this point, the Dems have shown absolutely no courage on this issue. They were more concerned with holding hands with McCain and the Republicans as they all jumped off the bridge together than they were about “solving” anything.
100 or so Democrats did not vote against this bill because it was not liberal enough. Making it MORE liberal and larding it up with pork and slush funds is not going to make it more likely to pass. The reason so many Dems voted against it is because the majority of Americans are against it, and the Dems don’t want to hand the Republicans an issue 4 weeks before the election.
September 29th, 2008 at 4:11 pm
Kris,
You’re asking what happened to the party that cut spending while disowning the party that rejected the $700 billion recession-aggravater (i.e. bailout) that would have crushed the Dollar and hugely inflated our national debt????
See post #12.
September 29th, 2008 at 4:11 pm
Market also correct themselves. The question is whether the credit market stay solvent. You know, markets can correct themselve out for a generation. A market can say, there is no money to be made in giving loans and then viola, no loans will be made for twenty years.
Yes, there is a role for government to ensure that certain markets do not collapse like the credit market. Sorry, guys it is like the FDA role to ensure the safety of food. Basic and clear regulation and not burdensome regulation in this manner IS essential.
I can’t believe I just lost my country to these idiots!
September 29th, 2008 at 4:11 pm
I’m not 100% sure she has the votes to pass a bill to the left of this one.
September 29th, 2008 at 4:13 pm
Hey, do you want to buy a car on credit? How about a home? How about education for schooling? This is what we are talking about saving not CEO’s. This isn’t the collapse of some remote market. This is your purchasing power reduce by 80% over your lifetime.
September 29th, 2008 at 4:14 pm
#19, if Gingrich had not been pushed out by Delay and Dole has not retired, we would have never been in this mess in the first place. But they would have also been smart enough to get a bill through last week that would have prevented the disaster that has started.
Gingrich and Reagan were great conservative reformers, but they also had a track record of getting the top dogs in the other parties to support conservative legislation. The greatest acomplishments for Tip O’Neil and Bill Clinton, were conservative legislation.
September 29th, 2008 at 4:14 pm
I don’t think I have ever posted a post met with so many “Jason could be right”. It must have been the bran flakes I had for breakfast.
September 29th, 2008 at 4:15 pm
Kris,
This mess started in 1913.
Central planning of the money supply DOES NOT WORK, for the same reason that central planning of other goods causes economies to collapse.
September 29th, 2008 at 4:17 pm
I love Reagan, and I love Gingrich. But they were never able to develop the political will or the popular demand necessary to resolve our spending deficits and massive national debt. They benefited from the same system. And it was Reagan’s monetary and credit policies–that I supported at the time because it’s really hard to imagine how a policy will play out in terms of decades–that brought us to this precipice, though it was the Community Redevelopment Act and other mortgage loan abuses that have pushed us over the side sooner than anyone would have liked.
Dude. History may well have returned its verdict on the American ponzi-scheme economy, an economy based on loose credit and the liquidating of our own productive capacities. If so, then we need to adapt to the new terrain. Life may get more complicated. But it may also get more sustainable. And we may return to our earlier status of a net producer of the world’s stock of wealth.
September 29th, 2008 at 4:18 pm
#21 one thing we know for sure after this afternoon is that there sure arent enough votes to pass a bill to the right of this.
and for the record for those of you who may be too young to remember, Reagan always put the interests of the US and the party ahead of his own (for reference see 1976 GOP Convention)
I still contest something has to be done and soon. I said earlier 72 hours it may be down to 48 with what happened on with the credit and stock markets today
September 29th, 2008 at 4:19 pm
The Dems are going to wait til near the end of the week, when the DOW has dropped near 3000 points, and until the public is foresquare behind ANYTHING, and then they’ll load it up with whatever they want, pass it, and ride in as heroes on a white horse. No one wanted to take ownership of this bill in last week’s environment; where the DOW was still somewhat afloat and where a significant portion of the public had yet to feel the pinch, and doubted the dire warnings. Anyone will gladly take ownership of the bill when average Americans are finding that they can’t get loans, and as CNN, NBC, and CBS spread mass hysteria unparalleled in the modern era. So yes, Jason is right, though I suspect they’ll wait to move until the public is welly and truly in a panic. If they passed it on a party line vote tomorrow, some Republicans would still be able to use it as an election issue.
September 29th, 2008 at 4:20 pm
Jason it wasnt the bran flakes you just slept at a Holiday Inn Express last night didnt you?
September 29th, 2008 at 4:20 pm
This analysis only makes sense if the Democrats who voted against the bill are the most liberal Democrats. However, more Republicans will vote against a Christmas tree bill as will conservative Dems. I think that the House has to now pass a bill that is satisfactory to even the most conservative Republicans.
September 29th, 2008 at 4:20 pm
Kristofer,
” If Obama tells them to vote yes, they will vote yes. That is what Obama should have done in the first place.”
1. There is a reason Obama has yet to take a strong, specific stand. He is a coward and only cares about winning the Presidency. His pollsters know most Americans are against this, and he has never been a man to go down on principle.
2. Congressmen are not going to jump on this just because Obama says “jump.” (which he won’t- see #1). 97% of Congressmen look out for #1 first, second, and third.
September 29th, 2008 at 4:23 pm
Yeah. This is precisely what we need to change. This mentality. This notion that we should borrow in stead of save and accumulate capital whether as consumers or as a nation. We have a tax system that rewards debt and punishes capital formation. Cheap credit combined with high taxes and low interests rates on savings income makes it far more attractive to borrow instead of save. Here’s the problem: we may never be able to pay off our national debt. And doubling it so that we can reward the reckless behaviors of Wall Street CEOs will not help us.
September 29th, 2008 at 4:24 pm
30. Right on. That’s the problem. She’ll pick up people like Neil Abercrombie, but she’ll lose the 60 House Republicans she had.
September 29th, 2008 at 4:24 pm
All I know is that we are fucked now. It is what it is. We’re going to lose again. This is really getting old.
September 29th, 2008 at 4:24 pm
John McCain just lost the election and I suspect we’re heading into an era of unchecked liberalism.
September 29th, 2008 at 4:25 pm
House to reconvene on Thursday to reconsider a “rescue.”
The screaming should get really loud over the next 48 hours or so. I anticipate some severe stock market ripples. Bond markets (not Treasuries) will continue to erode.
Bam’s getting great coverage for arguing this whole thing was a result of McCain/Republican belief in free markets.
This isn’t intuitively the best time to have to be out arguing the virtues of free markets.
September 29th, 2008 at 4:26 pm
The selloff in the market today had LITTLE to do with the credit crisis and everything to do with FEAR of what MIGHT happen.
This may have been the largest one day point loss, but it’s not a crash.
Get your heads on straight! Thank you Gamecock. At least one contributor to this blog hasn’t gone insane.
Taxpayer RAGE and Nancy Pelosi hubris kept this bill from passing. Mostly the former and some of the latter.
YIKES! People are going nuts!
September 29th, 2008 at 4:28 pm
I’ll say.
September 29th, 2008 at 4:29 pm
Great Depression wasn’t a one day selloff. It happened over a period of months. We are seeing the exact same conditions.
September 29th, 2008 at 4:30 pm
Go get your mule, your canteen, and your satchel full of hardtack and head for the hills old timer. We’ll send word for you when civilization restores itself.
September 29th, 2008 at 4:31 pm
Personally, this all probably doesn’t effect me too seriously. I have only small student loans to pay back (though, I’m on the brink of asking for a larger one that I don’t really need, but which would be comforting to have). I’ve never bought anything on credit; I’m too young for that I guess. I work for the government in a job that is essentially guaranteed to exist for at least two years. Both my parents work for the Government, in pretty secure jobs. But, it’s still a terrible situation and I’m not going to feel too happy that I won’t personally be hammered to significantly, when millions will suffer.
September 29th, 2008 at 4:32 pm
#24 No Jason, its because so many that post here are defeatist weenie yutes.
September 29th, 2008 at 4:32 pm
AuH20, too bad your hero Ron Paul was not around in 1913, he could have saved us and we have been buying cars by trading in our farm product and gold pellets to GM.
dotan, the problem is that we allowed the GOP to be taken over by liberal ecomomic Dixeicrats who destroyed our . Finally, we have non-Dixiecrats in power over the GOP, but they will get pushed out of power.
September 29th, 2008 at 4:33 pm
No, it has to do with the credit crisis, because it is happening. Credit is NOW frozen to a companies except for the top fortune 200. Look for mid size business go under in about 4 to 6 months after this. Large corporations will pare staff to a bare minimum. Unemployment, will reach 20% in about 2 years.
These things happen when the credit market disappears for a few years.
September 29th, 2008 at 4:36 pm
I work in the private sector, in the ‘real’ economy. Everyone is scrambling to protect their balance sheets. Peopla are
September 29th, 2008 at 4:36 pm
Welcome to the perverse world of an economic crash. Those who took out huge loans are the ones who will benefit; those maxed out on credit are the ones who enjoyed to the full the possibilities of the good times. And they will never be made to pay unless we bring back debtors prisons. Either (a) our currency will crash in value and they will be able to pay off their debts in cheaper dollars; or (b) they will simply default with the rest of the defaulting horde and never suffer for it because credit will be generally unavailable anyway; or (c) Congress will vote to bail them out just as they would like to bail out share holders and Wall Street CEOs.
You who were frugal, like myself, will have little to show for it except that adapting to the new economy will be infinitely easier.
September 29th, 2008 at 4:37 pm
well….
Romney ‘12!
(and I was never a Rombot)
September 29th, 2008 at 4:37 pm
cont’ from #45….people are going to be out of work and companies will begin to sell-off assets and inventory.
September 29th, 2008 at 4:41 pm
Kris,
Indeed, Ron Paul (who IS a hero and has proven himself as such in his efforts to stop this ridiculous and unconstitutional legislation this past week), was not around, but many wise economists such as Ludwig von Mises and Philip Wicksteed were around, and warned repeatedly that socialization of the money supply under a central planning bank system would lead to this chaos. And after them, equally wise economists like Henry Hazlitt, Murray Rothbard, and, yes, Ron Paul, have warned and predicted constantly, up until the day this disaster struck, of these kinds of consequences of our socialist monetary policy.
September 29th, 2008 at 4:41 pm
dotan, “frugal”????
Many of us, who paid down debt and/or who converted investments to cash are safe from the financial crisis, but what about the millions who will probably be unemployed next year?
And….our currency will probably not “crash”. It might have with a $700 billion bailout. In fact our currency value will improve over time. This is a bad combination, because our exports will drop at the same time our economic out-put drops.
September 29th, 2008 at 4:46 pm
The only argument I’ve heard against this bailout is on principle. Surely house republicans understand that a more conservative plan will not be proposed. They are the minority party. The democrats could certainly push a far more liberal plan through on their own.
So, their “conservative principles” will result in a net loss. And many of the sheep of the GOP happily cheer them on. Because they did the “conservative” thing. Some of you would rather not have a rational decision-maker in office, and instead be happy to elect a robot who only does the “conservative” thing.
If we stop being the party of common sense, we run the risk of the democrats filling that vacuum.
September 29th, 2008 at 4:46 pm
#49,
#1, Ron Paul is not an economist.
#2, the only thing Dr. Paul can contribute to this crisis is that he lived during the depression and knows what it is like to share a room with several brothers and sisters. He can help organize a soup kitchen in Morristown, NJ.
#3, This is not time for anarchism disguised as libertarianism. He must prevent the descruction of our economy, and we should vote out every member of congress who has stood in the way of progress.
September 29th, 2008 at 4:47 pm
Really? Do you anticipate deflation even with the fed pumping billions into the system daily? That would be great! I’ve never been a cheap money partisan. If you want to promote savings and capital formation you need a strong dollar.
September 29th, 2008 at 4:49 pm
Do you guys seriously think Obama wouldn’t have just put all the goodies back into this bill when he gets sworn in next year? Especially with a Democratic Congress behind him?
That’s why the Democrats didn’t care if this bill got passed. The foundational framework of throwing a trillion dollars or more at the problem remained exactly in tact. If they would have gotten that foundation laid now, they would have claimed the economy is still not good in February ‘09 and added all these other goodies in anyways.
Sheesh. This plan was a disaster no matter how you look at it.
September 29th, 2008 at 4:49 pm
If you think 95 Dems voted against it because it didn’t have enough cash giveaways in it, you’re kidding yourself.
They voted against it because their constituents gave them hell for spending so much money. A bigger spending bill is not going to get more votes.
The bailout itself is the poision pill, not a lack of extra stuff.
September 29th, 2008 at 4:51 pm
Anyone tried logging on to the house.gov? The server is waxed… why do you suppose?
September 29th, 2008 at 4:52 pm
dotan,
“Yeah. This is precisely what we need to change. This mentality. This notion that we should borrow in stead of save and accumulate capital whether as consumers or as a nation. We have a tax system that rewards debt and punishes capital formation. Cheap credit combined with high taxes and low interests rates on savings income makes it far more attractive to borrow instead of save. Here’s the problem: we may never be able to pay off our national debt.”
Words of wisdom there. I have long that a day of reckoning is coming. A civilization cann’t infinitely sustain a trillion dollar current accounts deficit and negative private savings. It looks like the day of reckoning of our artificially propped up economy may have arrived. I think that a bailout may only put off that day, and make it worse.
September 29th, 2008 at 4:52 pm
McCain needs to offer his own version, maybe even a bipartisan bill with Joe Lieberman.
If the Dems kill it, McCain can pound Obama for blocking a bipartisan, non bailout solution in the debates. Doesn’t matter if the bill succeeds or not.
If McCain is able to differentiate himself from Bush on the matter, even better.
September 29th, 2008 at 4:53 pm
#53, well, it looks as if we agree on something. I was just hoping to achieve our common goal without seeing poverty rates hit 20%.
September 29th, 2008 at 4:53 pm
Where is everyone complaining about the $25Bil the US Government just gave to Ford, GM, and Chrysler in the spending bill just passed? What’s another $700Bil on top of the Auto industry money and the airlines money from early 2000’s. Corporations can make whatever decisions they want because they know in the end the Government will bail them out.
September 29th, 2008 at 4:53 pm
dotan, exactly. The new trillion dollars added to the national debt would just have made our money worth even less.
So we would have looked at bad debt being used to prop up an economy failing because of bed debt. Sounds great to me.
eric (#51), I oppose this bill partially on philosophical grounds, but mostly on pragmatic grounds. This bill wouldn’t have done what Bush/Bernanke/Paulson said it would have. Using debt equal to 1/3 of our total annual budget to prop up an economy that’s stinking with rotten debt already just begs for the problem to be prolonged, drawn out, and ultimately more painful in the end.
There are plenty of ways to solve this crisis. This bill was about one of the worst of them.
There’s no way to assess the value on these liabilities, for one. For another, it was never decided what to do with any (if there indeed is any) profit made off of this “investment”. Democrats wanted to use it to subsidize more housing programs. Republicans wanted it added to the national debt. Guess which side wins in that equation?
September 29th, 2008 at 4:54 pm
Kris,
Why is it so difficult for you socialists to understand? EASY CREDIT POLICIES BY OUR CENTRAL PLANNING BANK DISTORTED THE MARKET SIGNALS WHICH CAUSED THIS MALINVESTMENT TO PILE UP IN THE FIRST PLACE. MORE FREE MONEY WILL ONLY KEEP INTEREST RATES DISTORTED AND CAUSE MORE MALINVESTMENT TO PILE UP, MEANING A MORE SEVERE MARKET CORRECTION WILL BE NECESSARY.
God, you people are going to destroy this economy, and the Dollar.
And what about the friggin’ Constitution? Hello???
September 29th, 2008 at 4:55 pm
#49
This is not an issue of Federal control over the money supply. Jeez. The issue here is that too many
and individuals were playing with money that didn’t exist. The same thing could have happened if we’d stuck with Ron Paul’s beloved gold standard and everybody borrowed more than they could pay back based on the assumption that they’d find a load of gold in their back yards over the course of the next decade or so. As is painfully clear today, that was not to be.
September 29th, 2008 at 4:56 pm
#57, the landing would have been less painful, but most importantly, we could have legislated conservative reform in the mean-time to resolve this issue.
Why would you want to hit rock bottom to resolve an issue, when we could have lived with a mild recession?
September 29th, 2008 at 4:56 pm
“America is PISSED!”
Do you actually believe that most Americans know what’s going on? Week 2 of “Dancing With The Stars” is on tonight. That’s all that most Americans care about.
September 29th, 2008 at 4:56 pm
#60 — exactly. This bill would have created the most massive moral hazard crisis ever seen and driven the market wacko for the foreseeable future. How much debt does this corporation have? Who cares? The government will bail them out eventually.
#62 — you and I don’t agree on much here, but I agree completely with this post.
September 29th, 2008 at 4:58 pm
AuH20 you are wrong. This was not about floating futures loans but it was about stabilizing current assets. Now we have neither. Central planning worked for 70 years. We only screwed up in the last 18 years by relaxing the restrictions on getting a new home and not have oversight over the terms of these loans.
September 29th, 2008 at 4:59 pm
re my #56: do you think that millions of American’s just figured out this rescue plan was about them, not wall street?
September 29th, 2008 at 5:01 pm
We had two options restructure debt or default. Which option is worse for markets. Defaulting is by far, but that is what some are advocating with not doing anything. Don’t come to me when you can’t pay for your daughter’s wedding.
September 29th, 2008 at 5:01 pm
Kristofer,
I don’t see those “conservative reforms” you are hoping for passing anytime soon. Who will suceed where decades of Republicans presidents and years of Republican Congresses failed? I think long term, more debt will make it worse.
If you subsidize bad behavior, you get more bad behavior. It’s not that I WANT the econmny to hit rock bottom. But it’ll have to, sooner or later. Some day we will have to pay for our profligacy. I fear a bailout will make that “rock bottom” even rockier, and “bottomier.”
September 29th, 2008 at 5:02 pm
#Auh20 with respect, Ron Paul’s anarchist believes are closer to socialism that our conservative beliefs. If Dr. Paul really cared about the constituion he would not have wanted to strip rights away from women across this country.
It is easy to use the constitution as a weapon, when you interpret laws to beat half the population, I am not sold.
And I cannot believe I am saying this, but Big S is correct, “if we’d stuck with Ron Paul’s beloved gold standard”, we’d still be in this mess.
We can all agree that this country (Gov’t and individuals) went in to heavy debt that we could not repay. Lending practices must change. But why destroy our economy and standard of living? Why not save those who deserve saving?
If we do nothing, who will pay for the baby boomers who are about to retire? We will anyway!
September 29th, 2008 at 5:03 pm
Matt C, we are not trying to “save” corporate America, just the entire middle class.
September 29th, 2008 at 5:07 pm
Here’s a question for all you die hard capitalists: If the treasury is going to buy these instruments at 30 cents on the dollar, what happened to the other 70 cents? Why is it that you believe that people are making money selling at a 70% loss?
September 29th, 2008 at 5:07 pm
Rock bottom is defaulting on markets. Which means 20 years before the credit market recovers. The best scenario was for conservatives to gain power to implement fiscal policies which now will be impossible for 30+ years. My course of action would be prevent the markets from defaulting, then gain more political power and then implement conservative fiscal measures.
Now, the path is default, the absence of 20 years of a credit market, 30 years of liberal government, a destroyed free market, and then if things go ideally for conservatives maybe just maybe 40 years from now a government in the form of the current makeup of France. That’s the best option. I am going to be sick.
September 29th, 2008 at 5:10 pm
Oklahoma,
“If the treasury is going to buy these instruments at 30 cents on the dollar, what happened to the other 70 cents? Why is it that you believe that people are making money selling at a 70% loss?”
It’s not a question of these companies MAKING money off their original investment, but losing less money. So here is my question. If taxpayers can make an easy trillion in this once in a lifetime arbitrage opportunity, why isn’t the private money flowing in from around the world to snatch up this debt for 30 cents on the dollar? If this was such a great “investment,” there wouldn’t need to be a taxpayer bailout, now would there?
September 29th, 2008 at 5:11 pm
Dotan is right. I feel the need to disagree with Jason a little bit here. People have been talking about the housing bubble for years. That was simply a symptom of a much deeper obsession our country has to consume without building production capacity; to get easy money. People don’t want to produce, work, go to school to learn meaningful and marketable skills. We were spoiled by easy credit and a tolerance of dishonesty (not paying obligations). Compound that with the fact that our families have disintegrated leaving many without a natural safety net; parents abandoning kids and kids abandoning their parents; we are going to be in for a long ride and a weekend bill that creates nearly a trillion dollars of free money out of thin air isn’t going to solve our problems. This is a societal problem of a bunch of babies who grew up during the liberation generation who don’t understand real risk, and their kids who have compounded their parents reckless disregard for basic principles of economics and social life.
September 29th, 2008 at 5:11 pm
Heh.
September 29th, 2008 at 5:14 pm
Joseph,
Hard to believe we were clawing each others’ eyes out 8 months ago….
I whoeheartedly agree.
This is as much a cultural and “family values” problem as anything.
September 29th, 2008 at 5:14 pm
September 29th, 2008 at 5:19 pm
Uhm! MEXICO RECEIVED A HUGE BAILOUT FROM CLINTON! THAT SAVED THEIR ECONOMY. WE FORCED THE REFORMS ON THEM, AFTER THE BAILOUT.
September 29th, 2008 at 5:23 pm
McCain just lost the election (again).
September 29th, 2008 at 5:45 pm
It’s time to impeach Bush!!!!
September 29th, 2008 at 6:03 pm
nowandlater,
Sorry man, but you’re out to lunch. Impeach Bush with 4 months to go? If the House even took up such an inane idea in the midst of the greatest financial crisis in generations, I’d vote for kicking every last politician in America out of office in November. They’re already a bunch of cowardly, useless, packrats fiddling while Rome burns, we don’t need them blundering off into useless crusades. Not now. Not ever frankly.
September 29th, 2008 at 6:07 pm
I am so pissed! He had two years to address this.
September 29th, 2008 at 6:11 pm
#83 I only wish that somehow our politicians started suffering as much as the rest of us will. After all, they’re substantially more responsible for this disaster than we are.
September 29th, 2008 at 6:15 pm
Really? We voted for the bastards, did we not?
September 29th, 2008 at 6:18 pm
#86 I haven’t personally. I’ve voted against all three of my congresspeople…
September 29th, 2008 at 7:09 pm
[...] what we’re about to enter according to R4’08’s own Matthew E. Miller. I found this comment interesting as it’s something that I’ve been sensing in the wake [...]
September 29th, 2008 at 7:09 pm
[...] what we’re about to enter according to R4’08’s own Matthew E. Miller. I found this comment interesting as it’s something that I’ve been sensing in the wake [...]
September 29th, 2008 at 7:29 pm
#75: I know of no one who is claiming that taxpayers are going to net 1 trillion. Most people estimate that there is a chance that the taxpayers might recoup all of the $700 billion, maybe a little more. It is not a great investment from a risk-return point of view. But, the real issue is freeing up the capital markets.
P.S. The stock market lost $ 1 trillion today… and that’s you, me, and everyone else who has a 401(k), 403(b), or even a defined benefit program that invests its treasure in the market.
September 29th, 2008 at 7:35 pm
#79 — Come on dotan I thought you were anti-socialism. Take over the entire financial sector, rape it, then sell it. Nice plan.
The point is that these are mortgages. When these financial instruments are bought, the deals can be unraveled, and the underlying mortgages can be dealt directly. The bill, defeated today, would have directed Treasury to do just that. Many of these mortgages are performing, some need to be re-financed to eliminate ARMs, others may need to be foreclosed on. These aren’t bankers… these are real people like you and me. Some of them are not even behind in their payments. The bankers are taking their losses, okay so maybe we could inflict a little more pain on them… but at what price to the rest of us?
What did you get turned down for a loan or something?
September 30th, 2008 at 8:50 am
why is no one talking about hte fact that Poulson pulled the $700 BILLION figure out of his @$$?
http://latimesblogs.latimes.com/washington/2008/09/bailout-plan.html