you are still my hero!

These are just some of the "cue words" used to charge through the many pieces of legislation in the past 10 years that have contributed to our current financial fiasco.

Anyone who has a little time can sift through the legislative memory lane at Thomas.gov  .  Phil Gramm lead the charge of "regulatory relief".

It was reported todaythat it will take hundreds of billions to save the financial system.

This is America's gift from the "trickle down tax-cut to the upper 2 % income bracket" brigade.

Americans should be tired of this tunnel vision. Incidentally, in 2003 Diane Fienstein introduced the "Rebuild America Act" S.1409..purpose was:

           1) To invest in the Nation's infrastructure to enhance the safety, security, and efficiency of highway, transit, aviation, rail, port, environmental, water resources, and public buildings infrastructure.

           (2) To create jobs and economic activity to put people back to work and stimulate the Nation's economy.

           (3) To create long-term capital assets for the Nation that will help the United States address its enormous infrastructure needs and improve its economic productivity.

           (4) To demonstrate the commitment of the Federal Government to economic recovery, thereby increasing the confidence of consumers and businesses.

Senator Dayton of Minnesota signed on as a co-sponsor. The bill died in the Finance Committee...(too expensive??!)

In 2008 American taxpayers have been raked over the coals by the recklessness of "hands-off" philosophy. Seems they took their hands completely off the steering wheel.

 

I have to admit that I am enjoying watching Republicans who had, as an ideological and rhetorical matter, uttered this mindless mantra of free markets, now have to come to grips with the inevitable end to which their ideology has led.

But people should understand exactly what is going on here.

For example, the problem is not so much the lack of regulation (although some regulations that worked well, such as the uptick rule, should have been continued)  as the lack of enforcement by an administration that was happy to let its corporate sponsors, big shots and acolytes profit obscenely, even as the inevitable toll of their actions became clear.

Second, it is important to understand that the squeezing of liquidity is quite different than a failing business. LEH's problem, for example, was too much leverage (they borrowed too much given the amount of hard assets they owned),  so that when the value of these investments declined, they had no cushion.

But while the market value of these investments has clearly gone south, the investments themselves have not. For example, as far as I know most, if not all, of these much maligned MBS have NOT defaulted, and are continuing to pay holders as they have always done. For a variety of reasons, some real, some irrational, there are no bids in the market for these investments, so they have to be written down. But the real financial value of these investments is probably considerable.

In the end, I suspect this "bailout" will wind up as a profitable enterprise for the government, as will the government's takeover of Fannie and Freddie. That, at least, is what history shows -- the government turned a profit, for example, on both the RTC and its loan guarantees to Chrysler.

But you want to know where the government will lose money? We are about to offer loan guarantees to the big three auto makers for naked political reasons - to save the jobs of auto workers for another six months or so. I'll bet the government will find itself on the hook for those loans, unlike the guarantees for BS and AIG, which will never wind up costing us a cent.

doesn't sound like a great idea to me.  By the way, Mark Shields made an interesting point tonight on the NewsHour, that just like there are supposedly "no atheists in foxholes" (I strongly doubt that's true, but whatever), there are "no libertarians in times of economic crisis like now."  Something to that effect.  I think Shields makes an interesting point; I mean, isn't what the government's doing now, however necessary it is, essentially nationalization of large swaths of our economy?  Don't we normally hear Republicans screaming "socialism!" at the mere mention of such a thing?  Yet now, they're quiet.  Why?  Because perhaps government IS the solution after all, not just the "problem" as the Club for Growth morons like to say?

And these libertarians are twisting themselves into intellectual pretzels trying to reconcile their ideology with what is happening right in front of them.

The government has no choice but to do what they are doing, and yes, government is the only solution, the only entity capable of addressing the size of the problem. I even think the auto company bailout is a good idea -- we can't just leave all those people hanging out there to bear the brunt of eight years of idiotic GOP economic, trade and taxation policy.

I do think the current mess is very fixable. Based on what I read about the government's plans, it should arrest the current deterioration in the capital markets. That, in turn, should reduce volatility in the stock markets. And both of those will eventually let people get back to business.

But ending the war in Iraq is very necessary. We need those resources for investment here in the US -- roads, energy, education. Stabilizing the capital markets it  a patch, not a solution.

As well as free market types.  Of course, I doubt they will let facts stand in the way of their ideology.  We've been running hundred billion dollar trade deficits for years and they still don't see that as a problem.

Government intervention to protect banks and the priests of finance, in essence insuring against losses and risk for large investors and the super rich? Necessary and important.

Government intervention to insure all American citizens against losses due to illnesses? Socialism.

Government intervention to build infrastructure or schools or protect the environment? Tax and spend liberalism, with regulation that chokes the economy.

Simple!

If it's good enough for single moms, it's good enough for corporate titans.

I agree with you but just need to point out that there are indeed atheists in foxholes.  One of my most beloved uncles was an atheist during WWII, when he was in many a fox hole and remained an atheist his entire life.

And yeah, it's also fun to watch the so-called libertarians and free marketers twist themselves with their pretzel logic :)

I don't think we had much of an option.  I believe we were days if not hours away from a financial meltdown.  People were pulling their money out of money market funds in a modern day run on banks (or is it a heard of mouse clicks on banks?) for Pete's sake!  The whole thing was going down.  I don't know how serious many people think this was, we're talking about a complete failure of the U.S. banking system.  Bernake used the analogy that the credit market was like a knot in a rope that was continuously being pulled tighter.

Its not optimal to have the USG buying damaged companies and bad mortgages, but when facing trillions dollars of everyday citizens' hard earned savings being lost, what they did was appropriate.  I'm never happy to hear about a bailout, espscially when the true costs are ultimately determined.  But, we're not buying this stuff for the fun of it.  Comments to that effect are political red meat, but are not correct.  So, forgive me for being glad the Treasury and Congress took extraordinary measures to protect my retirement and 401k from taking a major hit.

If there was a 50% drop in stocks, 5-10 more major banks fell, and there was a run on banks, everyone would be criticizing the Tresasury for not acting to prevent such a disaster.  Which is worse?

But I just want to point out the hypocrisy of the other side whenever government intervention/action is proposed to try and expand health care coverage or to build infrastructure or to try and stimulate job creation.

Conservatives constantly argue that the regulations that would be necessary to try and prevent these types of situations are wrong and unnecessarily hamstring 'the market'; they argue that government intervention is wrong; then they argue that we have to bail out these institutions for our own good when the chickens come home to roost; and they argue the whole time that government must not raise taxes to actually pay for any of this.

It's a farce.

that there is something good about being "conservative".

other than that, I agree with everything you said.