Why Is The Bailout Urgent?
Seriously.
I’ve been reading the usual stuff and haven’t seen anyone who addresses the urgency of this bailout. What is so catastrophic out there that it needs to be taken care of this week? Apparently the Europeans don’t think this all that urgent>, and they’ve got lost of exposure too. So why so fast?
I admit to not being a fan of the bailout in any form, but no one really has made a case for doing this now. Have you seen anything that justifies this? Drop your links in the comments, and thanks!
Tags: Bush's Fubar Economy
Cassandra
Not only do I agree that no bailout of the sort proposed is necessary, it is politics not policy driving this train. This is EXACTLY the same hustle Dubya used over the resolution of force against Iraq–and they all seem to be buying it again.
The first thing that should have happened here (and it is fascinating NOT to hear at least the Dems in Congress calling for it) is to have calls for the SecTreas and FedResCh to resign immediately. Not having either (a) seen this immediate crisis coming or (b) having any plan besides “prop up the bank failing this week” appears to be prima facie evidence of incompetence on both their parts. Much as it pains me to say it this way: had this occurred in any other industrialized democracy the first thing to have happened would have been mass resignations.
The prevailing argument is that it will cost a 1$ now or 30$ later. I don’t know if any of that is true but I do know that in Japan, half of these guys would have resigned in shame and/or offed themselves.
Political expediency. They want to look like they’re doing something immediately, even if it’s not the right thing.
I’m in agreement with you guys, this bailout is unnecessary.
Schumer just asked if the 700 billion could be dispersed over time, rather than in one lump sum. The answer… um, no.
Question: What are the odds of this 700 billion bail-out not working?
pandora,
I think the odds of it working are about 50/50. I think we’re in the “do something, anything” panic stage right now. I think the longer this drags out, the more likely we’ll get a better deal for the U.S. taxpayer.
I think we’re in a bad position right now, and no one knows what to do. I certainly don’t trust Paulson to do it. The less power he has in this crisis, the better I feel.
Personally, I think we’d be better off just dispersing the $700 B among the people with the bad loans and letting them pay it off.
I think it’ll “work” in the sense that it’ll give these companies a huge influx of capital to keep them afloat. In the end though that doesn’t really “solve” anything, since it leaves us footing the bill and teaches companies that gross incompetence will be rewarded by the Feds.
Mike,
I think there is an economic term called “moral hazard” that you’re describing in #7.
But what if the markets don’t respond? What if the “bad debt” can’t be sold off? I’m not even referring to making a profit.
Won’t the markets still have to weigh in? 700 billion, or not? And there’s no guarantee that they’ll respond positively.
UI, love the idea of giving the money to the people! 🙂
UI – It would appear so. Thanks for bringing it up. I’ve just learned something new.
What are the odds of this 700 billion bail-out not working?
This is a great question, Pandora, because that also goes to downside risk. I don’t think that the markets should be the arbiter of what we ought to do — they were ecstatic last week when they thought the gravy train was coming and less so after Dodd weighed in yesterday.
It seems that if there is to be a panic, we ought to know what the contours of the disaster looks like. Frankly, I’m not convinced that it would be the end of the world if these banks failed. It would basically give the surviving banks an opportunity to unwind what they could of the mess to see what they could make money on.
Or maybe the question is what is the threat to the surviving banks if the high-flying ones went bust?
[White House Deputy Press Secretary Tony] Fratto said it would be “unthinkable” for Congress not to pass legislation this week, asserting the result would be a “very, very serious situation” for the U.S. economy.
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
There is a rush now, but the plan has been on the books for a while. Sound familiar?
“Or maybe the question is what is the threat to the surviving banks if the high-flying ones went bust?”
I’d say very little. It gives them the chance to emerge as major players. Certainly there’d be short term risks due to the market volatility we’d see if we let the bad banks suffer the consequences of their actions.
Quite frankly I’m pleasantly surprised to see so many DL folks embracing the free market approach here rather than supporting the government bailout.
It sounds like the Patriot Act and all of its surveillance state provisions.
I think that if the White House says that something is “unthinkable” maybe it is time to slow down and actually think it through.
Bush wants one last hurried scam on the American people, rushed through in an election season “crisis”, get…grab…bonk.
This gambit is staggering and incredible, but no more costly than the Iraq war (so far) and no more outrageous legislatively than the way they crammed the Patriot Act down our country’s throat.
They are like bank robbers who have to clean out every last cash drawer, no matter what it takes. They are very much traitors to our country, plundering the treasury.
If the Democrat congress goes along, just adding their own larder tweaks and spins, they are no better than these Bushie pirates.
Let them all fail…like the Bush presidency.
TPN:
This is not just Bush – this is your whole “no regulation, free markets rule!” repub party. Your ex-boss and political mentor Newt Gingrich was a champion of this crap.
It is nice of you to come on here acting like a progressive, but people shouldn’t be fooled. You’re a Gingrich repub all the way.
Care to share who is getting your vote for President?
NO NO NO NO NO NO NO NO NO NO NO.
And NO WAY!
How can you ask that question! Can’t you see the urgency? There are young turks all over the city of New York who might not be able to have their hundred dollar cigars, Johnny Walker Blue whiskey and that second house in the Hamptons. These people are in need – we must help them immediately!
It is necessary because the rich are in financial trouble. See, when the rich are in financial trouble the republicans must bail them out. The fact that they have already transferred most of the nation’s wealth to a few is NOT enough. When the poor are in trouble it’s cause they’re lazy. When the rich are in trouble, they get a blank check. So we spent like trillions in Iraq. So, like, we spent a few trillion more on tax benefits for the wealthy, we can spend another 800 billion on these losers. Forget education, healthcare, infrastructure, the environment, it’s always and only about the wealthy for the Grand OLD (white people) Party.
“Care to share who is getting your vote for President?”
Yeah, when you share which one of the DL bloggers you really are. I know, but others don’t. Please…share.
BTW, To dub yourself the arbiter of anything “progressive” is truly truly laughable, “anonone”. Thanks for the afternoon funny.
Your comments are so shallow and doctrinaire that no one could respond. Free markets? No regulation? Oh yeah, right…these exist.
I supported Ron Paul in this century, not Newt Gingrich, for the record. But asshat away, anonone.
TPN – I think it’s been well established that “Anonone” is a complete idiot.
Yes, she is. A loony obnoxious one, at that.
Nice, Tyler Nixon – you supported racist Ron Paul, a man who wrote in his newsletter in the 90s (for example, and there’s more):
“Many more are going to have difficultly avoiding the belief that our country is being destroyed by a group of actual and potential terrorists — and they can be identified by the color of their skin. This conclusion may not be entirely fair, but it is, for many, entirely unavoidable.
Indeed, it is shocking to consider the uniformity of opinion among blacks in this country. Opinion polls consistently show that only about 5% of blacks have sensible political opinions, i.e. support the free market, individual liberty, and the end of welfare and affirmative action…. Given the inefficiencies of what D.C. laughingly calls the “criminal justice system,” I think we can safely assume that 95% of the black males in that city are semi-criminal or entirely criminal.”
Nice to see who you were supporting, Tyler. I wonder if the people in your district know you were supporting this racist.
LOL. Such a tired lying broken record you are. Spout away some more, love. You got me on the ropes now!
To correct the lie : Ron Paul never wrote any of the above and in fact totally repudiated it repeatedly and strenuously in no uncertain terms. Oh but I forgot…he’s a Republican so he’s Satan himself and should be exterminated…right, a-no-one?
Mike the Racist:
I never thought that Tyler Nixon would have been supporting a racist loon like Ron Paul (even I thought he was slightly more enlightened than that) but I guess you and Tyler are two of a kind.
Tyler,
Where am I lying? Or are you just practicing to be a smear artist like John McPalin?
You just lied two posts ago, repeating the long-discredited race-bait smear of Ron Paul. Jeez, you’re like your own running punchline. But please, keep going honeybaby.
Really, Tyler? Sure he denies them now – but they were in HIS newsletter and even now he won’t release copies of his newsletters to the media.
He didn’t repudiate them at all when he was sending it out to his subscribers. He only repudiated it when he was called on it.
Blah, blah, blah….skip….blah, blah, blah. Love ya, sweet cakes.
Gee Tyler, and I thought you were going to show how this is a “long-discredited race-bait smear of Ron Paul”.
Of course, you can’t.
Wanna see a copy of his Newsletter with his holiday greetings at the bottom? Go here:
http://www.tnr.com/downloads/december1990.pdf
He is just another lying repub.
Ron Paul didn’t write it and has repudiated it for years. End of story, sweetpea.
And what proof, other than his claims not to have written it, do you have? All this racist crackpot crap was, after all, published in HIS newsletter under HIS name. Even he doesn’t deny that. And it wasn’t until years after he published it that he claimed a ghostwriter wrote it.
Paul is just another lying racist repub denying responsibility for his own crap.
By the way, are these names you like to call me indicative of the respect you have for women?
(squirm) This is becoming uncomfortable.
Pandora, as you know, I am not you. 🙂 Nor am I any other DL blogger.
No you are not a DL writer. I meant you regularly blog on DL under your own name, babydoll.
(BTW, thanks for the second guffaw of the day with your umbrage about “respect” for anyone, much less women….dollface. It’s a two-way street, your squealing aside.)
(ALSO BTW, Pandora has more class in her toenail clippings than you (anonone) could ever slouch even remotely close to.)
Tyler, you are wrong again. I don’t have a blog nor do I blog here under any other name.
Even is you really knew what my gender is, your condescending attitude toward women with your name-calling is so last century. Are you this sexist with the women you work with? If I was a black man, would you call me “boy” for your amusement?
No, but Ron Paul might… I kid…
LOL, geek. Nice to see someone has a sense of humor ’round this thread.
I think a-no-one’s head is going to explode from vein-popping levels of PC asshattery.
“Condescending attitude” toward women? What women?
Every phrase I used is a term of affection that is certainly not gender-specific…my sugarbowlpie nonny nonny.
One thing is certain, even for a eunuch you’d be a really uptight a**hole. A real drag.
This heist of US taxpapyers has been in the works for decades. Reagun trickledown economics, which never trickled down to us.
These are white collar criminals who shouldn’t be bailed out, they should be jailed.
If Bush says “do it now” better read the fine print this time or we could have a king in the making: King Henry Paulson!
The bankster/gangsters are the same ilk that FDR had to fight back. Only Obama will keep this country safe from the banksters and the evil doers’.
Sure, Tyler. Ha, ha. Let’s just dehumanize women by calling them demeaning little names. I bet you don’t do that in the court room. If you did it in anyplace that I work, you’d be warned once and then fired.
But, ha, ha. It is sooo funny to demean women. I guess it helps you feel superior and part of your repub old boys club.
*Puffs cigar*
*Sips brandy*
Bwaaaahahahahaha.
TPN, #41
Just like the end on
‘Boston Legal’?
Some resemblance to William Shatner, in the early days.
So, Tyler, what are you doing these days to support the top of your ticket?
Gonna be helping to get out the vote for John McCain?
How about a joint fundraiser with Christine “God, Country and a Vision” O’Donnell? (You could even try using your cute pet names with her.)
I am sure you’re proud to be on the ticket with such quality candidates who share your repub values. Why don’t you tell us all about that?
The bailout is not necessary. Our two financial geniuses, Paulson and Bernanke, give interviews and press conferences themselves flustered and frantic. Not very confidence inspiring.
They want us to believe them when they say that they have a solution to a problem, a financial crisis/catastrophe, that they never saw coming…
Bush comes out with a 2 and 1/2 page solution, which turns into a 115 page bill overnight, to solve a crisis that took years to unfold which no one can agree on what caused it, and we are going to throw $700,000,000,000 at the problem by putting this money in the hands of the people that caused the crisis in the first place?
Crazy, and one of the last nails in the coffin of the American Constitution…
Hell, we haven’t passed the Fiscal Year 2009 budget yet… I wonder if Bernanke will have the balls to deny our borrowing to meet that budget?
The solution is a long one and it starts with getting out of the WTO and GATT and NAFTA… that is the only way for our economy to recover… We should negotiate trade deals with countries on a one on one basis and put Americans back to work while requiring worker and environmental protections with our trading partners similar to our own… then we can talk about saving the American Homeowner and then talk about regulating banks and investment firms properly… before we give them money or buy their bad paper
What do we need to do? The very first thing is to pass our Fiscal Year 2009 budget BEFORE we borrow to buy bad paper…
Then we get out of the WTO GATT and NAFTA which have destroyed the American economy… All politicians are talking about rebuilding the American economy, but on what? What are Americans going to do, build, manufacture, or offer to the world to get our exported dollars back? The only thing we have is American quality and ingenuity… but they have to be protected in order for them to flourish… Copyright and patent infringements are rampant and American businesses and jobs are suffering for it… So much for the protections proffered by our free trade agreements and the WTO…
We should negotiate trade agreements with other countries one on one… We should require worker and environmental protections similar to ours… With those countries that have a similar standard of living and worker/environmental protection we can have “Free Trade”… with all other countries we can have “Fair Trade” based on how compliant they are with our laws and regulations and how they are bringing their standard of living up to ours…
Third, protect American Homeowners by giving bankruptcy judges the authority to renegotiate these bad loans which seem to be at the center of the crisis (or is it the lack of jobs that is causing the foreclosures and bankruptcies?)…
Our regulatory framework is being blamed for the excesses of Wall Street. That’s another crock, Wall Street thieves will find a way around any regulatory framework we try to impose on them, even if they have to resort to lying, rather than building corruption fostering practices in legislation through lobbying. When this framework is revamped, do it without input from Wall Street… we have enough smart folks in government to do this if we eliminate tampering from lobbyists… So force the thieves to lie and put severe criminal penalties in this framework and the ability to go after personal assets (here and abroad, cash and land) for people that aren’t responsible enough to do their jobs honestly… Far reaching and enforced criminal penalties could be the bite that regulations need…
AFTER that is done then we can have a discussion on what form a bailout takes and what price we should pay for this bad paper (that apparently NO ONE believes is a good buy, because no one with money is stepping up to buy it)…
Some side issues… Bernanke and Paulson have been threatening American workers with unspecified and unexplained catastrophe if we do not pass this bailout immediately… Right on cue, after the House rejected the bill, we have reports of denials of loans to meet payrolls, buy Ford cars and do road construction in two states…
The Patriot Act provisions that allow speech to be classified as terrorism if such speech causes fear panic or suffering should be brought to bear on the henchmen (Bernanke and Paulson) and the enforcers who are actually doing damage by denying loans to try to force the issue of raiding the treasury of money that it doesn’t have… Let’s have the FBI and the Department of Justice do some threatening of their own against these criminals and see how they like it… That should make a few heads spin…
Oh, and the last thing that should be part of this Federal borrowing of $700,000,000,000… No one in the financial markets or the banking industry let anyone know about this impending disaster… They all share culpability and responsibility… That loan to the US Government should be INTEREST FREE until profit is realized from the resale of this bad paper… then the profit should be shared between the lenders of this money and the American taxpayer, with strict provisions that taxpayer profit from this transaction be used to pay down the debt…
Michael Polidori