I'm not thrilled with this bailout. I'm very angry that we ever got into this mess, and I'm mostly angry at the culture of deregulation, "free market" ideology and greed run amok. Yes, this situation is another debacle for "supply side," "trickle down" economics. Unfortunately, now we've got to deal with the situation as best we can, of face a severe economic downturn. No fun, but as The Economist writes, the $700 billion financial rescue plan is "unpleasant but essential" if we want to avoid economic catastrophe, possibly even another Great Depression.
...Devoting $700 billion of taxpayers' money to rescuing the country's least popular industry is not a vote winner. That Democratic and Republican congressional leaders held their noses this weekend and came up with the Emergency Economic Stabilisation Act is encouraging evidence that they appreciate the gravity of the financial crisis. "This is something that all of us will swallow hard and go forward with," John McCain said. Barack Obama added that "What we can't do is do nothing."...Although misgivings linger, the bill should pass. The concessions that legislators from both parties wrung from Hank Paulson, the treasury secretary, provide necessary political cover. In a USA Today/Gallup Poll conducted on September 24th just 22% favoured Mr Paulson's proposal while 56% wanted something different; only 11% preferred that no action be taken.
I also agree with Paul Krugman that "With the economy already looking like it's headed into a serious recession by any definition, the risks of doing nothing look too high."
Finally, I agree with this diary ("Your Verdict On Bailout Should Not Come from DKos"), except I'd broaden that out to pretty much the entire blogosphere - right and left - and certainly not single out Daily Kos in any way. The bottom line is that there are very few people who know what they're talking about here. This stuff's mind boggling; heck, even Paul Krugman is confused. And yes, there are some REALLY smart people on the blogs, including subject experts on economics, finance, banking, you name it. I'm definitely interested in what these folks have to say. Still, I pretty much agree with "dansac" on this one:
Reach your own conclusions about this bailout, but do so by your own research, speaking with people whose expertise in securities and financial issues are real and deep and whose judgment you trust, and avoid reaching any conclusions based on any diary on DKos or any other political blog.
Or TV, or the radio talk shows, or the newspaper, or...
The actual language of the bill (especially in this signing statement, and generally criminal, administration) makes all of the Democratic 'concessions' look like mere puffery. This looks a whole lot to me like Paulson's original plan.
Here is what Nouriel Roubini thinks. He thinks it's a terrible deal. He is among those that has been discussing this ongoing credit deterioration for years, as opposed to sunshine-pumping Hank Paulson and his deathbed conversion to 'this bill or catastrophe for all!'.
But the options are NOT this bill, or nothing. And with only four months remaining of the worst, most unpopular administration in history, the fact that the Democratic controlled Congress seems to surrender on this point is beyond ludicrous, it's potentially stupid and game-changing.
Look at the first two procedural votes on this bill today, here and here. Notice anything? Ah, yes, the fact that only House Democrats are voting for this crap -- all of Pelosi's super duper tactics and strategy appear to have not worked, as per usual (remember, she said that this would not pass without significant bipartisan support).
Well guess what: they were wrong. They'd played the game of capitalism and lost.
The underlying problem is still housing. Houses still cost too much. Propping up the prices is not going to "increase liquidity" or whatever. The government subsidizing rates to the banks for last six years hasn't worked.
The bailout means that Uncle Sam is now going to hold the house that costs too much and Josh Taxpayer's kids get to pay for it.
Goode Blames Financial Crisis on Illegal Immigrants and Foreign Aid
Voted for Deregulation Measures That Caused Current CrisisSeptember 28, 2008-Ivy, VA-In an interview with the Martinsville Bulletin concerning the multi-billion dollar government bailout of financial companies, Rep. Virgil Goode offered no specifics or solutions for how he planned to prevent further economic collapse or help 5th District families. When asked about the proposed bailout, Goode said the "most important thing" the federal government needs to do to stop the financial crisis is to stop giving loans to illegal immigrants. He later added that if government will bail out financial institutions, it must cut foreign aid.
"We need to fire Rep. Goode and the gang in Washington who took money from these lobbyists, voted for risky deregulation schemes and now refuse to take responsibility for putting our economy and retirement security at risk," said Tom Perriello. "People deserve solutions, not blame-shifting, and Rep. Goode has a lot to answer for his votes and the lender lobbyists who have backed him to the tune of $150,000."
"It's outrageous that while the working families of Southside and Central Virginia are watching their investments plummet and their jobs disappear, Congressman Goode is trying to blame illegal immigrants for a problem he helped create," said Jessica Barba, communications director for the Perriello campaign. "The truth is that the crisis has been caused by the pervasive lobbying of Congress by Wall Street looking to make a quick buck. If Rep. Goode was more focused on helping the people of the 5th District, and less on Wall Street lobbyists, he wouldn't have voted against cracking down on predatory lenders and protecting working families here in Virginia."
Virgil Goode's Record on Putting Wall Street Before Main Street:
Goode has taken $45,000 from the American Banking Association and almost $100,000 from the banking lobby in his career. He has also taken $57,000 from real estate companies. [www.opensecrets.org]
July 1, 1999: Rep. Goode voted for the Financial Services Act (Gramm-Leach-Bliley Act) which repealed regulations put into place during the Great Depression to keep banks from taking risks that would lead to another financial meltdown. [H.R. 10, Vote #276, 7/1/99]
December 15, 2000: Rep. Goode voted for the Commodity Futures Modernization Act of 2000, another Phil Gramm bill, that greated the Enron loophole that allowed for the deregulation of the commodity markets, and also baned regulation of credit default swaps, which is what ultimately led to the downfall of insurers like AIG. [H.R. 4577, Vote #603, 12/15/00]
November 15, 2007: Rep. Goode voted against the Mortgage Reform and Anti-Predatory Lending Act, which would crack down on mortgage lenders by forcing them to get licenses, making them responsible for discovering whether borrowers can really repay, and fining them for steering people toward risky subprime loans. [H.R. 3915, Vote #1118, 11/15/2007.]