High-strung House fumbles sensible bailout compromise

Rocky Mountain News

Published September 30, 2008 at 12:05 a.m.

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September 30, 2008

3:38 a.m.

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Ofearghail writes:

Congress, and the rest of the government, let us down far, far, FAR before this vote was taken. Democrats? Republicans? ALL share in the blame, ALL are incompetent, and ALL are currupt. When are we going to wake up and throw these worthless, self-serving idiots out of office?

Please... give me Libertarians, Greens, Independents... anyone EXCEPT a Republican or Democrat.
September 30, 2008

4:21 a.m.

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Brix57 writes:

Just what planet is this editorial from? All parts of the bill shafted every taxpayer, from oversight to executive bonuses to help for homeowners. Bills like this only show just how out of touch the Republican and Democrat are with the people that elected them.

Time for new parties to step in and get rid of these dinosaurs.
September 30, 2008

5:43 a.m.

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mrfxx writes:

Brix57 is absolutely correct. The oversight issue (or lack thereof) is a major problem - no investigations allowed according to this "first pass". As far as the capping of executive pay, that is a joke. There is already a limit of what XYZ Co can deduct as executive pay - so instead of paying the CEO millions, CEOs get perks (like corporate jets, paid-for apartments, etc which the company can deduct) and get "stock options" - which typically are taxed at a 15% rate.

In Europe, what has been done is nationalization of the "problem" banks - and rehiring of management - at whatever one would earn working for the government - which will be privatized again once those banks are making money.

Or - we could do as FDR did in the 30s (for those of you who were unaware, bad loans contributed in large part to the great depression) - and take over the bad loans, make them fixed rate loans at some reasonable rate - a "bottom up" approach (since we have all seen precisely how well "trickle down" works - the trickle is right to the wealthiest folks pockets).

Blaming the representatives who are actually listening to the outrage of their constituencies is just more proof that the so-called liberal slant of the media is a hoax. We understand that there are issues - we are just fed up with privatization of profits and subsidy of losses - when US corporations have brought this on the US (or don't you understand that off-shoring of middle class white and blue collar jobs, making it impossible for even the folks who are careful with their money to meet obligations has a lot to do with the problem?).
September 30, 2008

8:25 a.m.

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jrod193 writes:

they let us down? this is the first time in my entire life when i feel like our politicians didn't sell us out to corporate america. op-ed pieces such as this one continue to make this a political issue rather than looking at it from a purely rational perspective.

1. first and foremost, are we capitalists or socialists? the soviet union tried to manage the economy and what were the results? capitalism is sustainable because it allows for the correction of excess in the markets, both up AND down.
2. how would creating 700 billion in additional DEBT fix a DEBT problem? its not like the u.s. has 700 billion just lying around, we have to borrow it from asia. borrowing on top of our current deficit will ignite inflation causing more long term problems. also, there is no guaruntee that asia will continue to finance our failures both domestic and abroad. if they turn off the spigot, interest rates will skyrocket and create an economic disaster the likes of which we have never seen.
3. an economic downturn is INEVITABLE, so lets just get it over with and move on. we have just lived through 15 years of and economy based on excess and greed, and now its time to pay the piper. the american people understand this bill for what it is: a giveaway to corporate america to cushion the blow for them while putting the brunt of the burden onto the american taxpayers.
4. we will never see a supposed profit from this bailout. this myth has been perpetuated by the same people who stand to gain most from this legislation. if a profit could possibly be had, trust me, someone from the private sector would have stepped in to finance this thing.

so no our congress didn't fail us, they actually responded to one of the largest grassroots protest movements that i have seen in my life. the american people aren't so naive to think that we are immune from a recession, they just don't like the idea that the criminals at the forefront of the problem get a free pass while the rest of us still suffer.
September 30, 2008

9:49 a.m.

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ron65ron writes:

Yes our government let us down, so did the greedy people on Wall St. Look to the mortgage lenders who lent money to people who could NEVER make the acutal payments, which is what started this entire mess. The mortgage compaines HAVE to pay with what they did, and the governement SHOULD investigate them. And the stupid people who got these loans, knowing FULL well that if rates increased, they couldn't afford to pay, well this is also your fault. Now the ENTIRE country has to pay for your stupid mistakes! I say let the chips fall where they may and let's go forward. Lets drop the dead weight, not try to fix it with a band-aid
September 30, 2008

9:49 a.m.

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krvus writes:

Hey jrod19:
You said "now its time to pay the piper. the american people understand this bill for what it is: a giveaway to corporate america to cushion the blow for them while putting the brunt of the burden onto the american taxpayers"
well, I just hope you are not in the market for a house or a car or a credit card. interest rates will skyrocket if we don't do something here. This is not a bailout for the rich, it's a countrywide problem that will affect employees in mass amounts. If nobody can geta loan for a car or a house, auto dealrships go under, losing employees, home builders go under and then everyone behiond them gets affected.
I'm not a fan of bailing out the airlines say, but this again affects everyone on the block including you and I. They- the govt- needs to do something to free up the "paper" that corporations borrow against to purchase things needed for manufacturing, or payroll to then turn around and sell things they build and then pay off the bill they borrowed against.
September 30, 2008

11:17 a.m.

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sstnt writes:

You try to spin this that Republicans should have accepted THIS bill, since the next bill might be Democrat laden pork. If the Dems do that, it will ONLY pass the House. It would NEVER pass the Senate. You forget that. Democrats will have to actually meet and NEGOTIATE to get a bill in a form that the PEOPLE will support. Remember, the House is the PEOPLE'S house. If you supported this bill, the Democrats control the house and could have passed this bill with 12 of the 95 votes from Democrats that voted no. If you were against this bill, so was 66% of Republicans, to only 40% of Democrats.
September 30, 2008

11:29 a.m.

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peterpi writes:

What I want to know is,
Who kidnapped the RMN editorial board and replaced them with George Bush "yes men"?
This has got to be the most ridiculously written editorial I have ever seen.
"The measure was easy to demagogue as a lifeline for the fat cats who precipitated this whole crisis." -- That's because the meausre is exactly that.
It's a bill to console, protect and immunize large financial institutions from the effects of their own stupidity, greed, wishful thinking, lack of hubris, etc. -- while telling homeowners and small businesses facing the same problems "Tough luck. Go bankrupt."
I still want to know how Congress is going to create $700 billion out of thin air.
September 30, 2008

12:20 p.m.

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HopiMedicineMan writes:

We pay for safeguards and get none, zero, zip, nada. Instead we
get regulation that destroys our industrial base and is stampeding this nation to a hard scrabble existence. We're perversely governed by Democrats and weakly governed by Republicans. The only people winning in America lie for a living.
September 30, 2008

12:29 p.m.

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TroyJGrice writes:

The "bail us out or else" rhetoric coming from the beltway and Wall Street is tantamount to blackmail. There is NO economist consensus on what this plan might accomplish. It is just flailing in the dark and creating an absurd level of moral hazard and centralization of the economy.

The credit markets are frozen because the banks are waiting to see what kind of welfare they might get.

It is all moot, anyway since the Fed and Treasury will blatantly ignore this political rejection and end-run the process all together.

We need savings now, not more easy money. People will not save with a -2% real interest rate. Savings drives investment which creates factories and buildings and infrastructure and machines. It is this economic capital that drives output and ultimately consumption

The real question is: How do you want your recession? Short and bitter or long and exhausting? If Hoover and FDR's schemes were an indication, fiscal intervention will cause this thing to drag out for a decade while the politically connected will receive their "market price" for their worthless assets.
September 30, 2008

1:04 p.m.

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gary writes:

Hooray for our Representatives....it is about time that they vote the will of the people.
The majority of us do not want the "buy out", "buy in" or whatever else it is calle.
It is a sham on the American Taxpayer.

NO "buy out," NO "buy in"

Keep up the good work House of Representatives...

Nuff Said!
September 30, 2008

2:20 p.m.

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jonas writes:

The people who let us down are the wannabee "show-up-the-Joneses" no integrity spendthrifts who comprise the vast majority of people who walked away from the debts they signed up for.
September 30, 2008

2:51 p.m.

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Marshdale writes:

What wall street wants is a handout so they can continue the failed trickle down effect. Some of this money needs to go to those who are hurting so it will be spent and percolate up, and some should go to stabilize the credit market, but it should not all fall in the hands of a few appointed chronies who have already shown us that they know how to fail.

There needs to be a Constitutional amendment to allow congress to have oversite of the executive branch in matters such as this.

This is no longer about Democrat or Republican. It is about Americans and small businesses. The big money had their chance and completely screwed it up. If small businesses ran there stores this way we would not have any. It's time for a change in philosophy. Trickle down economics has proven more than once to be a failure unless of course you are a One percenter.
September 30, 2008

4:45 p.m.

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gary writes:

Everyone that is listening to the Democrats trashing the Republicans over the financial meltdown should be required to watch this.

This article is about 8 minutes long but try to watch all of it.

_____________________________________________

Check this out from 2004 when a meeting was called in Congress in regards to new regulations for Fannie Mae and Freddie Mac after an audit by regulators.

http://www.youtube.com/watch?v=_MGT_c...
September 30, 2008

6:50 p.m.

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seeingeyeseesall writes:

Wolf! Wolf! The sky is falling! It always works a few times ....

There's no wolf, This was a banker's coup and the congress finally didn't bend over.

I call this a shining moment for Democracy - nobody got let down but the new welfare class - the ultra rich who want us to pay their bills.
September 30, 2008

7:15 p.m.

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taoistblockhead writes:

“Without a doubt the best thing we can do as a nation is to do the exact opposite of what George Bush tells us.” -Daily Roshi
September 30, 2008

7:28 p.m.

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HopiMedicineMan writes:

The Caymans are the home to the personal fortunes of the US financial principals, the Congress and others. Rather than invest in the US game, they bet against it. Though $700-billion is the net worth of India, and it's loss will ripple through the world, the aggregate investment of Americans in the Caymans is $2-trillion. Bush has said nothing, urged no investigation. An invasion is justified. Let's get those bank ledgers NOW.
September 30, 2008

8:44 p.m.

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Sweetpickle writes:

Will they have the guts to do it again?

It's time we pulled the scab off our economy and got some air to the infection.
September 30, 2008

9:59 p.m.

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Lowtaxequalsfreedom writes:

All economy's have their ups and downs. Anytime the gov gets involved the ups are higher and the downs are lower. The gov also picks the favorites and those first on the list benefit most. Lets wipe the slate clean and start over. Rule number one. The Federal Government shall control no more than 10% of GDP.
October 1, 2008

10:51 a.m.

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BuffDriver writes:

Mark Udall, who votes with his party 99% of the time, voted against the 'bailout'. Why? Because he is in a tight election for a Senate seat. He is trying to show he won't be another Ken Salazar and turn his back on the American people. Of course, he can vote for the next offering and pull a John Kerry by saying "I voted for it before I voted against it." Electing more Dems to the Congress is like flushing a toilet.
October 1, 2008

11:58 a.m.

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malis writes:

Just to clarify a couple of things:

1) the problem is -not- that $700 Billion in mortgage-backed securities are worthless.
2) the rescue proposal does -not- have the govt paying $700bil for those supposedly worthless securities.

The problem -is- that those securities can’t be valued in the market, because no one dares to be the first to buy them and then turn out to be wrong. The primary purpose of the rescue proposal is to break the logjam by forcing a price to be placed on those securities so banks and financial institutions will know the value of their assets and liabilities again, so they’ll start to lend to each other again.

Without the rescue, what we’re getting is an increasing near lockup of the financial system, including the credit market that is the lubrication of day-to-day business activity (side note…businesses neither receive revenues nor pay expenses in a steady stream—the money comes and goes in peaks and valleys, so an efficient business uses the short-term credit market to smooth out that money stream. If they can’t do that, all their processes are greatly slowed. If this happens to many businesses at the same time, the entire economy is greatly slowed and this becomes a self-reinforcing feedback loop leading inevitably to recession (or to a far more severe recession)—and this is exactly what is happening.

Now that the populist bomb-throwers of the far left and far right have had the emotional satisfaction of killing a logical and reasonable rescue package, the adults will come back and save them in spite of themselves. The Republican proposal will be approved by a large minority of thoughtful Republicans, and a majority of thoughtful Democrats, and that will be enough to save the petulant children from themselves.

One more thing. A refrain of the populist Republican opponents has been “Democrats control Congress. If this is so important, why don’t they just pass it themselves?” First it’s the initiative of the Republican Administration and needs bipartisan support as its moral authority. But setting that aside, if this initiative doesn’t pass in the end, it’s entirely possible the Dems will pass an alternative rescue plan on only Democrat votes. That plan would be substantially different, containing things the Republicans will object to far more than the current proposal (i.e., directing banks to refinance failing mortgages directly to homeowners and write down losses, permit bankruptcy judges to direct relief from current mortgage terms, demand part government ownership of banks, mandate much stricter regulation of a far greater segment of economic players, etc.). If it goes that far, the end result will be to allow President Obama to turn himself into FDR, perhaps launching another New Deal ensuring Dem control of politics for another 25 years. No, I don’t think this is a good idea and I hope it won’t happen. But it could.
October 1, 2008

12:02 p.m.

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malis writes:

...and want to know both sides? For a coherent and logical argument against the rescue package, you might try George Will's column in today's Washington post. Sample:

“Voting against the bill -- against putting taxpayers' money at risk in
order to clean up a mess that some people got rich by making -- was easy,
but not necessarily wrong. The $700 billion figure exaggerated the plan's
probable cost but accurately measured something worse -- the enormous
enlargement of government's power.”

http://www.washingtonpost.com/wp-dyn/...

If you'd like the equally cogent argument in favor, check today's Tom Friedman column in the NYTimes. Sample:

“I’ve always believed that America’s government was a unique political
system — one designed by geniuses so that it could be run by idiots. I was
wrong. No system can be smart enough to survive this level of incompetence
and recklessness by the people charged to run it.

“This is dangerous. We have House members, many of whom I suspect can’t
balance their own checkbooks, rejecting a complex rescue package because
some voters, whom I fear also don’t understand, swamped them with phone
calls. I appreciate the popular anger against Wall Street, but you can’t
deal with this crisis this way.”

http://www.nytimes.com/2008/10/01/opi...

Home › Opinion › Editorials

High-strung House fumbles sensible bailout compromise

Rocky Mountain News

Published September 30, 2008 at 12:05 a.m.

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