John Paulson, president and portfolio manager of New York-based investment management firm Paulson & Co. Inc., thinks “The Public Deserves a Better Deal”:
The Treasury plan to buy illiquid financial assets has been widely criticized as being unfair to taxpayers, who will have to bear losses ahead of shareholders of the institutions that will be bailed out.
There is a better alternative to stabilize the markets: Invest the $700 billion of taxpayer money in senior preferred stock of the troubled financial institutions that pose systemic risks. Let’s call this the “Preferred plan.” In fact, it is the Fannie Mae and Freddie Mac model — which the Treasury Department has already endorsed and used in practice. It is also the approach Warren Buffett used for his investment in Goldman Sachs.
There are major problems with the Treasury plan. First, by buying banks’ worst assets at above-market prices, taxpayers take an immediate economic loss — while transferring wealth to shareholders and executives of the very institutions that brought on the financial crisis.
Second, this plan puts too much discretionary power in the hands of Treasury officials. Who determines what financial assets are purchased and at what prices? Who determines which bank gets to benefit from these taxpayer subsidies? Will bank shareholders continue to receive dividends, and executives continue to get paid huge bonuses?
When financial institutions borrow massive amounts of money to invest in assets that are now found to be illiquid and poorly performing, it is not the responsibility of taxpayers to bear the resulting losses. These losses should be borne by the shareholders.
If taxpayers have to step in and provide capital to keep operating enterprises that the government decides are key to the functioning of the economy as a whole, taxpayers must receive protection.
Treasury Secretary Henry Paulson said at the Senate Banking Committee hearing this week, “[the] Fannie Mae and Freddie Mac [interventions] worked the way they were supposed to.” These enterprises continued to function, maintaining homeowner access to and lowering the cost of mortgage financing. However, managements of these companies had to leave and forfeit the compensation packages they had negotiated.
Shareholders had their dividends blocked and remain first in line to bear losses, as they should have been. Taxpayers came both first and last — first to get paid back, as the new preferred stock is senior to all shareholders; and last in realizing losses, as common and other preferred equity would be extinguished before the taxpayers would be at risk.
This mechanism — purchases of senior preferred stock with warrants in troubled institutions — addresses the problems with the Treasury plan. The financial market is stabilized, companies get recapitalized, failures are avoided, debt securities are supported, and time is gained for illiquid assets to mature.
The institutions continue to function, their cost of funding will decline as equity capital increases, and innocent third parties like bank depositors, broker/dealer clients and insurance-policy holders are all protected. The only difference is that potential losses are kept with the shareholders where they belong.
The Treasury plan would also entail larger outlays than the Preferred plan. By allowing all banks to sell their worst assets to Treasury at inflated prices, taxpayers would be subsidizing healthy banks which have access to private capital (Goldman Sachs, J.P. Morgan, Wells Fargo, and Bank of America, for example) as well as banks that don’t have a private alternative. But under a Preferred plan, only banks that don’t have a private alternative will be given federal assistance. This would reduce the outlay otherwise required to solve the crisis.
Few people familiar with the issues deny that Treasury action is needed to stabilize the financial markets. However, the question is who should bear the cost?
Under the Treasury plan the taxpayer pays the price. Under a Preferred plan, the shareholders of the firms who created the problems bear the first loss. Who do you think should pay?
Before committing $700 billion of our money, we should encourage Congress to take a few extra days to get this legislation right.
If a deal like this, which seems to be of the type being floated by Congression Republicans on the conservative end (with a tentative endorsement by John McCain, and with the sympathy of George Bush) is what ends up passing, the GOP will have done its due dilligence. If it does not pass — and we get instead the Democrat/ Paulson-backed plan (which taxpayers are increasingly worried about — even as Obama, by essentially again voting “present” is picking up polling gains), a crisis might certainly be averted in the short term, but at what cost? Already the Democrats are larding up the bailout proposal with boondoggles used to fund things like La Raza and ACORN — leading many conservatives to take a step back and refuse to go along with the Paulson/Dodd compromise.
These are, indeed, anxious times — and clearly something must be done. Bright lights on all sides are making their arguments; but in the end, one thing remains true here: the House GOP doesn’t have the numbers to block the Paulson/Dodd bailout bill:
If Pelosi has her entire caucus in line to support the Paulson plan, then she has the vote to pass it. Some estimates have as many as 50 Republicans ready to support the plan in defiance of Boehner. If that’s true, Pelosi could lose all of her Blue-Dog Democrats and still pass the bill.
So why not just call a vote?
The quick answer is that the current Democratic leadership, when called upon to make a serious leadership decision, are most interested in either punting or covering their own asses. Going out on a limb this way — that is, taking ownership of the Paulson/Dodd bill against the objections of many conservative Republicans who think improvements can be made that would shift the burden away from the taxpayer — is something only those confident in their convictions would do.
Those interested in how to politicize all this — in how to gain political cover, should their bill prove to be a disaster in the longer term, and protect their power — are quite predictably using scare tactics to force the hand of Republicans, to pass this bill as a “bi-partisan measure,” else lay the blame for its having stalled on the GOP, and in particular, Senator John McCain.
The media is of course more than happy to run with this narrative (being pushed hardest by Barney Frank, whose ex-boyfriend had an executive position at either Frannie or Freddie, who knows which is which anymore) — even as nobody asks where exactly Barack Obama is in all this leadershippy stuff — but in truth, if Congressional Dems believe in the Paulson/Dodd deal, which is, too, being pushed by the President, they can get it through the Congress.
What they can’t do at this point is push it through Congress and cover their political flanks at the same time.
This is a high stakes gambit for both parties, particularly with an election approaching. And as it stands, McCain could be the short term loser here for failing to bring Pelosi the cover she wants. And with the media as her ally, she can certainly ride this out until the the Republicans blink.
Or it could be that, having frightened the electorate so, a failure to pass this bailout bill despite having the votes necessary could (if the conservatives don’t blink, should they not be permitted to push alternate proposals), prove disastrous for Democrats, who will be (rightly) seen as having had the votes to do something, but having nevertheless failed to act — not out of impotence, but rather out of political cowardice.
If I had to guess, I’d say the Republicans blink first — but only because Pelosi is incapable of blinking at all.
Hopefully, McCain, et al, don’t confuse what is a physiological / cosmetic shortcoming on Pelosi’s part to her having a pair of brass Faberge huevos…
“but only because Pelosi is incapable of blinking at all.”
Blinky Pelosi
“Already the Democrats are larding up the bailout proposal with boondoggles used to fund things like La Raza and ACORN”
Cash advance for their, ahem, efforts, cough, um, uh, vote fraud, so um, uh, the uh right party, uh prevents, um anoth uh er, 4 uh years of the eh uh Bush administration.
something must be done.
the bailout is something.
therefore, it must be done.
If you haven’t seen this video yet, its worth 10 minutes of your time:
http://patriotroom.com/?p=2479
From dre’s link it would appear the only things on Pelosi’s face still mobile are her eyelids and — tragically — her mouth.
I fundamentally disagree with the notion of buying preferred stock in any of the banks in question. As odious as the whole mess is, it may be better to buy some of the toxic paper directly and hold it until it matures.
Having said that, a few common sense points should be kept in mind:
1) Paper should not be bought for face value. While not worthless, the MBS paper should be valued at some fraction of it’s initial value-period. I’m sure a formula can be arrived at based on geographic location and maturity date, etc.
2) Not one penny of any potential profits from the appreciation of purchased MBS should go to ACORN, La Raza, or the Housing Trust Fund. ALL profits realized must go to paying down the national debt. And, the entire community re-investment act must be repealed and the GSRs dismantled; so that government mandate losses are not imposed upon the financial system any longer.
3) No crazy regulation allowing bankruptcy judges to arbitrarily revise existing mortgages; this would undermine existing contract law and effectively discourage mortgage lending all together. I saw that nit-wit Maxine Waters yesterday suggesting to Neil Cavuto that this was a component that was required for justice. When pressed over how that was fair to people who acted responsibly, or that were spartanly frugal in order to live up to their contractualo obligation, Waters responded that everyone should have their mortgage renegotiated if either their house value had declined or they simply felt the terms were unfair…
Unbelievable…
This is a tough nut to crack indeed; but I would rather see the government actively engage the private sector, through favorable tax breaks and incentives, with as little subsidization and socialization as possible, than economically becoming the next France…
Perhaps we ought to limit the subsidies to small thrifts and local banks, stressing the need to keep consumer credit lines and legitimate student loans flowing, as well as the stable, well financed corporate banks on wall street…
I don’t know, I’m no financial wizard, only a humble rocket scientist…
Just give me the money.
I’ll figure something out.
My plan might be to sell lottery tickets to the Wall Streeters.
“hey, ya never know”
This part jumped out at me.
“First, by buying banks’ worst assets at above-market prices, “
The whole crisis is because there is NO market price for those assets. Nobody knows what they are worth and that has frozen the market. By buying them the Fed creates a market price. Then if/when the economy picks up they then sell those assets.
Maybe we/they make money maybe we lose but getting a market going is what is needed from what I’ve read. All the Democrat add-ons are doing is CYA, rewards for friends and possibly getting the Federal Government into owning a large chunk of the formally private sector financial industry.
And, the Democrats are already Demagoging and politicizing this whole affair, trying to score points for O! instead of acting in good faith.
It is their wish to protect the socialistic element of CRA and Fannie/Freddie policy that led them to block two major reform and regulatory attempts over the last 8 years. But of course, thay want to hide this fact and insist! that it is the eeeeeeeevil, Wall street lovin’, main street hatin’, anti-regulation, anti little guy, RethugliKKKans….
When it is they who have benefitted most from the GSE’s largesse; and in Barney Frank’s case, well, who knows!
They have the votes to pass this if they wish, without the RethugliKKKans. They don’t have the stones to do it alone though, and want the cover in case the whole deal blows up…
Well, they can’t have the cover and the plums they’re loading the bill up with. O!, Dingy Harry and San-Fran-Nan have to decide what they want. Maybe someone shoud remind them of the old cliche; No Guts…No Glory…
And isn’t that what they really want!?!
Underlying urgency in all this is Banks need to get this stuff of their books to resume “business as usual” so the economy doesn’t seize up.
Business as usual means writing more crappy paper. Its what Banks do. After some critical mass of bad paper accumulates, the system convulses and we repeat this process. In my adult lifetime, I’ve seen this happen 4 times. 2 localized, 2 systemic. Continental Illinois, SnLs, LTCM and now MBS’s. The 2 systemic as a result of congressional meddling in the form of social engineering.
Bankers are by far the textbook definition of stupidity.
And the definition of insanity is …. doing the same expecting different results.
And lying, as the link in Dash’s comment (#4) makes clear.
If the O! gets polling traction from this, and I suspect he is and will continue to, then we all as a nation as fucked for 4 years minimum. I have hope that sense will prevail, but hope is not a recognized survival strategy.
Remember, the lowest common denominator, at the margin, will yield the final result. Sucks for the rest of us.
i suppose we could all pack up and move to Czech Republic or Mexico. Or start the slow painstaking process of rectifying the situation by taking back the children.
Best.
Everything is local y’all.
Get involved in your PTAs and school boards. Give to your alumni organizations, organize, petition and make yourselves heard.
So is this “IQ bait”? I never can tell…
– All this whole pile of sausage making represents is Paulson and his insider buddies, working the Fed for yet more freebies.
– Jamming trainloads of taxpayer money into the gaping maw of bas paper only serves to continue lining the pockets of the fuck heads that caused all this crap in the first place, the “compassionate Socialists”, who thing we need to sell 500,000 dollar house to people that can’t manage a monthly renal on an apartment in a government housing project.
– Its total bullshit.
– Since the Fed is the ones with our money, and in charge at this point, they should sell off any assets of losers like WAMU, and all the other bad faith orgs, and then let the dust settle.
– Failure financially is natures way of saying you shouldn’t be running a business. Thats how the free matket operates. Going against that is like poking a hole in a Damn because you noticed a leak. Its not going to do a damn thing except bail out a bunch of greed driven losers, and it won’t really help the bamkrupt home owners.
– No one benefits except the original culprits.
– Pure madness.
>>that can’t manage a monthly renal on an apartment in a government housing project.
They’re charging kidneys now?
I could name a couple sweet bars in Prague. A dollar still takes you pretty far and the locals are rather taken in by Americans.
Normally, I’d be saying ‘let them fail’ with the rest of you, but this is really too fkn big.
We can punish them later. Jail time, whatever. Cool with that.
Doesn’t mean push this garbage barge through, only think punitively after the main work gets done.
“They’re charging kidneys now?”
– Sorry for all the typos – eyes are really bad this morning.
– Damn mess just makes my blood boil. But the good news is, it looks like cooler heads will prevail. At least some more sensible people are asking the right questions.
#13. I have hope that sense will prevail, but hope is not a recognized survival strategy.
No but it makes a great campaign strategy!
O!
Why am I certain that I’m about to buy part of a house I’ll never live in? Why do I have little confidence that the folks who created this mess can fix it?
Yes, I’m talking about our esteemed political class. I’m amazed that there are 1000 people in this country that think that Congress is doing a good job, and a hair over 500 of them are in the Congress. How can they have a measurable approval rating?
Didn’t they just tell us that Sarbanes-Oxley fixed the private sector? Meanwhile, quasi-Federal Fannie Mae and Freddie Mac were imploding.
A rational country would have them all burned in effigy, without the effigy.
Maybe a brief vignette to lower the collective blood pressure:
So me and my posse of freshly minted college grads are sitting around drinking the other night, commiserating the financial mess in a rather apolitical way, hoping we won’t be laid off, etc. So I bring up the 1977 CRA and its expanded requirements under Clinton, and the monies Baracky got from FM, and my young, innocent eyed accountant friend goes, “Wait, I thought Obama didn’t take money from lobbyists,” but before I can correct him, a couple of the guys were like “Yea fat chance.” These are the same people who were enamored of Baracky 2 months ago, but now not so much. The information damn is starting to break, bit by bit.
“by buying banks’ worst assets at above-market prices, taxpayers take an immediate economic loss”
The problem is that the market price for these assets is effectively zero, if you want to help the credit market you have to create value. Since there is a physical asset behind these, there is an absolute value, and when the market rebounds, people will buy these back, for more than the government paid. It might take a while, but the only entity that can deal with these sums and the length of time it will take to get any return out of these securities is the government.
Buying stock in a private entity that is going to crash and burn without access to credit isn’t super smart. Plus, Buffett wasn’t shoring up Goldman, he was investing in a brand new company, a bank holding company that can (and will) snap up any number of smaller banks. A bank with a brand name. He’s not stupid and he wasn’t “protecting” anything. He’s not in the “protecting” business.
Vote on the damn bill already.
Should be a couple of “buts” in there, a period or two and maybe a semicolon. I’m doing three things at once here. Sorry
Mav’s opening statement at the Debate…
My friends,
Tonight we are hear to talk about foreign policy, but I feel that there is an issue that all of you want to hear our positions about – this country’s financial crisis. My opponent has, in his 2 years in the Senate has collected over $100,000.00 in financial contributions from current and former employees of Fannie Mae and Freddie Mac. He has at least two former executives of Fannie Mae that are currently advisers to his campaign. He has not presented a bill or voted for any sort of oversight on the financial markets during his time in the Senate, but had encouraged funding of programs that have engaged in fraudulent practices, such as ACORN, which have engaged in deceptive voter registration practices and financial mismanagement of funds to the disadvantage in our inner cities.
This campaign is about restoring your faith in the President of the United States and the Congress, not in allowing Washington to “do business as usual”. Your vote for me, and my running mate, is a vote for true change, change that I will fight for. I am the real candidate for change.
Thank you.
(Looking at Barry O the Media Ho)… Your turn, BITCH…
Barry O glooking glazed eyed into the cameras…
– I’m not buying all the “Omg, we can’t let them fail”.
– Any banks that are burned out, close. Insure the customers up to 100K so they don’t lose everything, and shut the fuckers down.
– Within a month there will be new banks, under the aegis of the savings and loan laws, to take their place. Sacks already did that voluntarily. They know the truth of the situation. Most financial people don’t think there should have ever been such a thing as “bank holding operations”. The savings and loan laws were tightened up because of the last round of bank failures, so the bastards just came up with a new angle to work around it. Limit bank charters. Period.
– Of course the wall street sharks hate that. They want action. Fuck them.
– Customers will get screwed to varying degre4es, but no one will take a total loss except the bad boys that were the perps in the first place. Screw them.
– That will stabilize the system automatically, and save a hell of a lot of money, and if credit is too tight the Fed can do some things to loosen it up.
– That’s what needs to be done, make the system truly healthy, not throw good money after bad, and worse, reward greed.
– The entire industry will stabilize if the Fed does things right, other wise you’ll see the same thing repeated a few months from now.
I am confused as to why I can’t find anything about shutting down Fannie and Freddie altogether as part of any deal. As long as they are allowed to operate any “fix” is only addressing the symptoms.
“The entire industry will stabilize if the Fed does things right”
I’m becoming more convinced of Democrats’ cynical motives by the day. Money for La Raza and ACORN? Really? Trying to sneak in further extensions on Oil Shale drilling when 70% of the electorate wants otherwise? These people just aren’t serious. Its moot that Dems will try to squeeze in socialistic policies whenever they can, but this is beyond the pale. They legitimately think an economic crisis will reverse the trend of electing Republican presidents (28 out of the last 40 years). They need their vitriol and hamstringing against Bush to be justified. With an assist from the media they managed to marginalize Iraq to the fringes of public consciousness; they’ve convinced themselves that Islamic extremism is a figment of the wingnut imagination; they think they have the freedom to maneuver in this crisis vis-a-vis Barney Frank’s refusal to support mortgage reform. This may be their little big horn. Let’s hope.
The fact that Baracky is not even looked to as a leader amongst his own party makes me smile. He is not even a significant player amongst the Left. Time to lead, Baracky, Harry, and Nancy. Where are ya’ ?
[cough]
– The Dems have aligned themselves to the core in a way where anything good for America is bad for them, and the reverse.
– The whole Dem machine is based on an idiotarian stacj of cards. If any one of the cards come loose, the entire glass managerie will crumble in a day. They’re hanging by their finger nails, far out on the slimmest of limbs.
– Obama said with a straight face that the surge is “wildly successful beyond anyones imagination”, after years of insisting it would be an abject failure. Fecklessness raised to an art form.
– Anything that they perceive as a help to the Reps, such as drilling or real gains in the WOT, they will block, and fuck the consequences and the country. They want power back.
– No, they are not serious.
– The only thing they’re serious about is party and power above all else.
The part about how this is what it looks like when the Democrats and their media work in lockstep is sort of the takeaway here I think. Put Baracky in the mix and for real, it’s gonna be something truly new and not like America before ever.
– Feets, Obama is a total product of the Chicago/Daily political machine. If he makes it to the WH, you can bet your bippy that every single one of those tabs will be called in, in one way or another.
– So things being normal, what you’ll see is a return to the precinct power blocks of old, not a thing new.
– The thing that’s changed is this financial mess. He actually appears to be a bit confused, because this isn’t the way it was supposed to be.
– He looks a little lost right now, because he has zero record in the Senate to point to, and a whole lot of Fannie/Freddie involvement he’d like to forget.
– The whole meme of his imaginary strength against McCain in the economic issues is being undermined with this Wall street chaos.
The first priority of any move by gum’mint has to be to restore…
confidence.
Well. I guess we are well and truly fucked dry, aren’t we?
Some big-ass bailout will be passed, I’m sure of it, as soon as Nancy and Harry get done wiping their fingerprints off the smoking gun of this cluster-fuck.
Money for La Raza and ACORN? Really?
Heh.
My money says the Dems will fecklessly dither and hand wring versus actually blinking – until they don’t cave, but are instead crushed by public opinion about their incompetence.
I still think their playing a rigged game (which there’s virtually no way for them to win, or even come out of without serious bruises), and haven’t at least publicly figured that out yet. And even if they do, who, other than the DU, is going to buy it? Heck, when I first drafted my post on it, I sat back and marveled at the whole tinfoil hattery aspect of the whole concept.
The basics are this – Bush, McCain, and many other astute conservatives have seen this nightmare coming for some time. Taking advantage of opportune timing, the Bush administration basically provides a megaphone for the squealing coming from Wall Street, then scares the beejezus out of everyone with with the most socialistic proposal to come out of a Republican administration since Nixon’s wage and price freezes in the 70’s, with an absolutely terrifying 700 billion dollar price tag hanging on it, for maximum sticker shock value, which focuses national attention like a laser on the issue. After a couple of days yanking the Dems into as much of a panicky lather as possible, and after they’ve had plenty of opportunity to make complete buffoons of themselves – to the point of publicly admitting “we don’t know what to do” – McCain is able to make the bold move of suspending his campaign and riding to the rescue. Which catches The One (who basically ‘got nothin’ in the ideas dept) completely flat footed, and forces him into being totally reactive. McCain shows up, Barry shows up, and the stage is set for the Sting.
McCain is sitting in the position of being able to reject the Paulson nightmare – thus effectively cutting loose Bush, and forging his own path (so much for ‘more of the same – he’s Bush-lite!’) – gaining the ‘break’ he needs from the incumbent. When Barney Frank tells you to stop revolting against W, you know you’ve sunk a three pointer. Likewise, it’s a textbook ‘third way’ opening that Bush has created for McCain, and for the Congressional Repubs that will be facing voters in a few weeks.
So anything they come up with that a) appears to address the problem while b) not costing the taxpayers 700 billion, and without c) creating a frighteningly powerful socialist style government takeover of the markets – will be seen as bordering on smashingly brilliant. Except of course, to the Dems that will either have to go along or risk political suicide for being obstructionists trying to plunge the nation into another depression over petty politics.
I still think W hit the sac fly on this one – and now McCain is rounding the bases.
Oh, and btw, my prediction that the debate would be a go (although there wasn’t as much last minute drama as I anticipated) was correct. Wonder how close the rest of it is.
I present the solution to our woes:
“Here’s one example of finding and/or getting more than originally thought: Over twice as much oil has come out of Prudhoe Bay than was initially predicted. It would not be at all surprising if that result is repeated with offshore reserves, especially because Congress has prohibited even exploring the areas involved for years. At the current price of oil, we’re talking at least another $1.3 trillion in royalties.
And how about North Dakota’s Bakken Reserve? There’s plainly lots of oil and gas in the Plains:
‘The amount of recoverable oil depends on the estimate; however, [the] United States Geological Survey (USGS) … estimated it contains a significant oil deposit. The study found an undiscovered volume of 3.65 billion barrels of oil, 1.85 trillion cubic feet of associated/dissolved natural gas, and 148 million barrels of natural gas liquids in Bakken.’
The royalties on the oil alone at current prices, if only 10% is recoverable, would be over $5.4 trillion (365 billion barrels x $100 per barrel x a rounded 15%).
Then there’s shale oil. This Wikipedia entry shows over two trillion barrels in estimated U.S. reserves. Again assuming that only 10% is recoverable, that’s another $3 trillion in potential royalties.
If you’re keeping score, we’re at $11.5 trillion. That’s more than the current national debt of $9.8 trillion  and I ignored any potential additional royalties from natural gas. I also haven’t considered potential oil from sands, oil, and gas from the Great Lakes, or oil and gas from other inevitable future discoveries.
Oh, and I forgot to tell you that, according to a spokesman for Congressman Peterson, the royalty rate for land-based extraction is typically much higher than 15% and that states also collect substantial royalties on top of what Uncle Sam gets. (I never expected this or I would have called on Tuesday.)
Read whole thing:
http://pajamasmedia.com/blog/uncle-sams-multi-trillion-dollar-oil-lockup/
The Democrat/Paulson bill? If it makes your stupid ass feel better to imagine that it was the dirty eeevil-librulls fault when you are standing in that bread-line, then go for it, you nutjob.
We are sooooo fucked.
There is a lot I could say about all this, but I’ll keep it short.
– When you really boil all this down; Treasury is suggesting that more credit is the answer to bad credit. They want an extension not a solution.
– The 700 (b) bailout will most likely fail to accomplish long-term stability of the financial sector. Think of it more as a “buyout” than a “bailout”.
– If you ever wanted to put an end to these specific social-engineering programs- now is the time, and I think we all understand the price.
– Keynes Failure is now total and complete, the ultimate failure at controlling the market, and we get to witness it.
Money for La Raza and ACORN? Really?
Oh I know why the Dems want to keep it, what I don’t understand is why at least some of the Republicans aren’t raising hell about it.
Even w/o all the pork the Democrats have added to this bailout bill, any ‘bailout’ from now on is like putting a band-aid on a sucking chest wound. Add the pork and you’ve just given the patient blood thinners, to boot.
Stock up on the beans, bullets and band-aids, people.
…and get to know your local survivalist.
I have a rationale for rejecting the bailout that I haven’t seen anyone else suggest.
If we’re facing multi-generational consequences to all of this, either now or later,
then let’s say “bring it on”, so that *this* generation takes the hit, for the sake
of our children and grandchildren.
Wind, I hope you’re right. I wish the GOP was running ads showing how in bed Obama is with Freddie/Fanny AND these banks that are collapsing. He’s taken alot of money from them (though of course Obama does not take money from lobbyist) but there’s no enough press. So its gotta come from adverts and blogs. I said a week ago I thought this entire crisis was potentially the nail in the Messiah’s cross (so to speak). McCain was on the right side of this two years ago and as you point out, is the perfect person to come out at the head of this. Hell, the campaign ads would be perfect- “JOhn McCain warned us of this impending crisis 2 years ago. Obama didn’t have a clue”
So in conclusion, I’m hoping you’re right. I agree with other posters that the MSM is doing a fine job spinning this so no democrat gets mud on their shoe, while dropping an entire bucket of manure on Bush, McCain and the republicans.
Lisa wants to feel better about this whole thing than the facts will allow.
Carter @ 44,
That’s the real test here and I see the problem as two fold. 1) Do the Republicans really have the stones for that? 2) Republicans are almost worthless when it comes to making their arguments and fighting the rhetorical fights- too much golf I think.
On the other hand…
Democrats are really making a bad political move here.
The market has already changed the way they do business, and 700 (b) won’t turn the clock back- it only allows Bush to ride off into a setting sun. If this plan passes, Obama will own the depression.
Yeah, how dare we look askance at the pols who blocked reform!
Matt,
I’m pretty sure we’ll be seeing plenty of ads featuring the Barry, Barney and Chris clown show. But probably not until after McCain puts forward his own vision of a plan, which I fully expect to see this evening during the debate.
I also think the reason he left DC at this point was specifically to make his case at the debate, again, talking past the MSM filter, as he’s done in the past. I’m pretty sure he’s got in mind what he wants to endorse/push, and it probably wasn’t announced prior to his departure to deny the Dems and Barry’s Brownshirts the chance to nitpick and spin it to death before McCain had a chance to deliver it, unblemished, to John and Jane Q Public.
Victor @ 47,
It is a one-party government.
The owner of the depression will be whoever the Republican/Democrat/Media/Fed/Hollywood/etc. axis tells us it is.
Oh whatever with your it is a one-party government and your axis with all the slash mark thingers. It is not.
If conservatives really wanted to promote meritocracy and restructure entitlements across the board, here is the chance.
They have to know that they will never get the votes to privatizes Social Security and scrap Welfare. This is the moment in time they have told us was coming- they should be prepared for it. Someone should.
McCain is a loser and much less, fuck him! Now is the time for conservatives to make their case, turn maverickism on it’s head and talk pass the fumbling party nominee.
Philosophically speaking, of course.
There won’t be a solution put forward that identifies the cause of failure in the system.
The Dems have the majority in congress. So, their line is “Failure of regulation/throw money/enact more regulation”.
The public record is not all that complicated. This didn’t just happen. There are real people behind what began as a short sighted populist political hack attack during an election cycle but never went away. Real people… and Barney Frank, who I’ve decided has been on loan from Marvel Comics his entire tenure in the House.
Stand fast, Republicans. You LOST in 2006 because you didn’t govern conservatively. The only contribution to this non – solution you will be allowed to make by this pack of Democrat ne’er do wells is to provide ass covering, and at the same time prove the base correct that they have no people left in Washington.
Let the chips fall. Let Nacy and Harry reap what their party has sown.
Happyfeet,
It’s hard to deny that the argument isn’t Socialism or No-Socialism, it’s more an argument about the lengths of a socialism embrace.
A loyal opposition means you go down with the ship when the time calls for it, so where are those guys?
I would argue that those types (wherever/whoever they are) are the ones that need our attention.
Let me say something about the few good Republicans. They are heroes without a doubt, as it must be risky to say the least to oppose the machine. But, the fact that they will oppose it shows, simply, that they aren’t insiders to the real system. They will be plowed under just as we slobs are.
Most of you are addicted to the R vs. D mantra. Break free of that, people! I know it is hard.
Lately, cracks have appeared in the pyramid scheme run by the people who own our elected government. Chances are, they’ll get what they want to patch the cracks, or they’ll use the collapse as a pretext for the pursuit of their other cherished goals, such as North American union, etc. Look into Marxist theory on how to create and exploit this kind of real or invented crisis. I believe that they want a collapse when they’re ready, but maybe they aren’t through milking us yet. It is a one-party government, and it owns us.
There will be more crises, unimaginably worse that this one.
Don’t be divided by R vs D! We need a patriotic anti-government majority. That will require that we give up less important political goals, for the sake of survival. Don’t wait until we’re starving!
I deny it!!!1!
/wasn’t so hard
Your loyalty to one party puts you in the position of supporting one-half of Big Brother. The millions on the other side, who you think are your opponents, prop up the other side. You have made yourselves allies in support of your Master.
We dreamed of a Republican president and a Republican majority, and invested some of our youth to that end. What did it get us, besides stabbed in the back? Fellow patriots, stop being used!
Most of you are addicted to the R vs. D mantra.
Not really.
B Moe,
O.K. I’m speaking to those who are.
Jeff,
If the stock market crashed today than, I agree, it would have been the Republicans that blinked first. But seeing that it closed up 120 points or so I’m not so sure.
Ralph, the use of “you” in addressing such people on this site, is not a good idea. Just FYI. ;-)
LOL Ralph, you have no idea how anybody here thinks about that stuff.
Sure there’s some who see it that way, brand x vs y, but plenty more who don’t. Me, I see it as more State vs. Pentagon, a money and power thing fought through proxy wars across the globe, than R vs. D. See? My tinfoil is thickerer than yours.
And we probly aren’t buying what you’re selling, either.
These political parties are not the government, or the country. Both can be opposed with no compromise to patriotism at all, on the contrary. The Founders were anti-government, and put in place a minimalist one. The way back in that direction evidently will require a radical rethink. Campaigning for “small government”, via the electoral processes available to us, did not work. Almost everyone here agrees with that by now, right?
I am convinced that a majority is ready to rethink. I learned this by wandering around the blogosphere and noticing how many, who position or label themselves, or who think of themselves, as political opponents, are actually in agreement with regard to this specific topic, which I argue should be considered overarching. Many great thinkers on all sides are one small step away from knowing that they are allies against a greater enemy.
I am sure that this realization could happen…
Gosh really? Great Thinkers, hunh?
Do tell. Name some names
You don’t need to take money from any lobbyist if you get it directly the CEO.
Ralph doesn’t like to waste a sermon.
I like Jeff’s sermons better. They involve long words, and hallucinogens.
happyfeet @ 51,
I struggled with paradox, when the party I rightly expected to do one thing did the opposite. I was forced to rethink, exactly who’s interests they were serving. Now, the Democrats have the majority, and what I see is that *they* have betrayed their base, too. (This is what I gained perspective on when I visited the “left”-side.) We were told that a Democratic majority in congress would be the end of the world. In fact, they’ve done nothing. Back some decades ago, we were told that the Democratic congress would bring us excessively big government. So, we campaigned for Republicans, and won. And I repeat, what did it get us? Radically, revolutionarily bigger government was our reward.
To resolve paradox requires reexamining premises, in this case my naive belief that one party was “good” and one was “bad”. I concluded: They are the same, and they are both “bad”. Thus, “one party”.
Democrats have so done something.
They got rich.
Reason they didn’t do more was b/c they were too busy publicly flouting BushitlerCheneyburton to listen on the rare occasion he made sense.
And the Republicans weren’t much better at backing him up, since they wanted to keep their jobs and all.
So we’re in the fucked up position of a bunch of guys lost in the woods who elected one of us to lead us out, but then nobody listens and the guy we elected to lead is yelling guys guys the way out is this way you fkrs.
#68 Ralph:
Maybe you should change your metric to ‘one party is more likely correct than the other’.
Well even if, there are still two kinds of voters. The ones what watch tv news and the ones what don’t. I wish the ones what watch tv news would be more quieter cause I don’t respect their opinions, not even in some strained social anthropology way. They just sound stupid.
boss person blah blah blah Sarah Palin interview blah blah blah well, to be fair to her blah blah blah but then she said something I don’t remember what it was but it was like blah blah blah
happyfeet Did you see the whole interview?
boss person Oh, no… I saw clips on I think Anderson Cooper or I don’t know … something on CNN.
happyfeet oh.
As in oh tell me more of these clips. I am very interested in hearing of these clips and of your impression of these clips. Let me make some tea and we will speak of these clips at length.
happyfeet: Tell him you’d like to subscribe to his newsletter.
But not until you have a new job lined up.
Hope this hasn’t already been posted. However, any investment by taxpayers should be in debt that is senior to any other debt, not preferred stock, which would rank behind any and all outstanding debt. On the other hand, if the viral video regarding sub-prime lending and the Community Reinvestment Act is accurate (and I’m not saying it isn’t), then unfortunately, the taxpayers do deserve to carry the water on what Congress (and the Democrat Executive) saddled them with. And if taxpayers/voters are too dumb to figure that out and throw the bums out, well…
Mikey NTH #70:
Yours is the fundamental question that we’ve been put in the position of asking ourselves every election day; Do I vote for Trotsky because he’s better than Stalin? Well, we got our guy Trotsky, but we’re going to end up with Stalin anyway.
Looking past their hysterical verbiage, at what they actually do in office (with a few heroic exceptions), they are two very slightly different flavors of the same statist evil, in my opinion, and thus, opposing them is no mark against one’s patriotism, on the contrary. As I said, these two parties are not branches of the government; they can be purged.
The topic is bailout wranglings, and I’m doing that by offering my opinion that the problem runs deeper than most people suspect, and that understanding it requires more than the often encountered knee-jerk R vs. D treatment, but a reexamination of some underlying premises that so often go untouched. My personal experience was that a several decades-long devotion to a false premise led me, sleepwalking, into voting for and believing in what is now an Orwellian dictatorship. I hope that any one of you in a similar state will consider rethinking things, as I did.
#60: One of two phrases explains that one: “dead cat bounce” or “the fix is in”. Take your pick.
#76 Ralph:
If you think this is a ‘Stalin – Trotsky’ question then there really isn’t much to discuss. If you truly think that the USA is merely choosing between factions in the old USSR, then there is little I can say to persuade you otherwise.
This is similar to what I said earlier this week – if there is a perceptible objective reality, then there is a foundation for debate. If not, then why bother? If there is no difference between the two major political parties and their candidates for the presidency, why bother debating electoral politics? We would all make better use of our time just going to a bar, ordering beer and nachos, and watching sports.
[…] “Bailout†wranglings […]
Mikey NTH #78
In Russia, it was Stalin vs. Trotsky. In Germany, it was National Socialists vs. Communists. All these ended up effectively the same. R and D are Statists, headed in the same direction. That’s all I meant.
What to do? Clear up and attend to the short and long term interests of yourself and your family. Invest in heavy metals. Throw out the TV.
Why argue and post if it is hopeless? I’ll never believe it is hopeless. As I said above I am certain that a way forward is possible, but it will require that “strange bedfellows” realize that their common interests, in national and personal survival, outweigh a lot of these other things we argue about. Let’s reason our way to this understanding now, before its starvation and blood in the streets. I repeat, I am certain that a patriotic anti-government majority is possible. I know that it is close to our country’s natural spirit.
#80 Ralph:
At #76 you said this:
The topic is bailout wranglings, and I’m doing that by offering my opinion that the problem runs deeper than most people suspect, and that understanding it requires more than the often encountered knee-jerk R vs. D treatment, but a reexamination of some underlying premises that so often go untouched. My personal experience was that a several decades-long devotion to a false premise led me, sleepwalking, into voting for and believing in what is now an Orwellian dictatorship.
Orwellian dictatorship? What ever do you mean? If you think that both of the two major parties are just differeing faces of an Orwellian dictatorship, then there is nothing to debate politcally or electorally. If each election poster you see is Big Brother no matter who is on it, then there is nothing to debate because we do not agree on foundational premises – you see an Orwellian dictatorship with sheep; I see a democratically-elected republic with citizens.
No common foundation shared, no constructive debate.
Ralph hasn’t been around long enough yet to realize that we’ve all heard our fill of “Trotsky” this and “Trotsky” that. It’s one of the surest ways to become a laughingstock, along with pegging us all as fundies or as Bush- or McCain-fellaters.
Mikey NTH #81
There is something to debate:
I’m arguing that the debate R vs D has proven to be futile, that we should be arguing about the need to defeat both of them, and that many are ready to get started.
There is a common foundation:
The common foundation is love for and loyalty to our institutions, far above and beyond their occupants.
It is Orwellian:
The inability or disinclination of many, to even imagine the possibility of a national debate that says “neither of the above”, is why I said “Orwellian”, and I defend that characterization.
These two parties are not branches of government; they are not fundamentally or constitutionally necessary and can be replaced. In fact, didn’t the Founders warn us about political parties in general? They also said something about watering the tree of liberty. Yet, the possibility that *both* of these parties is irredeemable, and that therefore our electoral processes have been usurped to the point that we can’t reasonably expect relief therefrom without casting off said parties entirely, inspires such terror that we will cling to a known evil to escape what might in former times have been recognized as a call of destiny to our generation. This is a government owning the people’s minds or souls, hence, “Orwellian”.
Are we spiritually serfs now? There would probably be no return from that in any forseeable future. That possibility seems even more terrifying to me, and I don’t believe it. And if *that* is a blunder that *I* make, refusing to accept reality about what we’ve become, then I would hope that that would be called a symptom of faith in my country, not in a political party.
Someone should start writing about how this economic crisis has ushered in a Post-Keynesian period of finance in world-wide capital, the most significant shift in global power since Christopher Columbus set sail.
Again, and this might be covered upthread: there have to be cheaper ways to do this. There’s only about 300 billion in bad debt out there; why on earth would it take 700 billion to clean it up?
The inability or disinclination of many, to even imagine the possibility of a national debate that says “neither of the aboveâ€Â
It isn’t an inability to imagine the possibility, Ralph, it is a recognition of the practicality. Many of us wish for what you are describing, and hope for it eventually, but in the here and now we have to play the hand we have been dealt.
O.K. the Republicans have stopped the bill in the House. I was sure they would posture as against it, and then pass it anyway. So, I am very happy to be wrong- for now.
94 Democrats opposed it too… Weird being in agreement with Kucinich, etc. “Strange bedfellows”, as I said. Let it be!
[…] “Bailout” wranglings […]
How long will it be before more money is required, Is this just a short term fix ?