PeterDavid.net

I'd laugh if the urge to cry wasn't so strong.

I don't know what to say about this bailout bill. Nobody likes it. But none of the alternatives I've heard sound any better. But the stock market just dived through the floor. But if that's just psychological, then we could spend the money on the bailout and a few weeks later the stock market could freak out over something else and dive bomb again anyway.

I just don't have enough of an idea of what Congress even should do. That's where the urge to cry comes from.

Didn't Billy Clinton sign this deregulation into law?

What I bet is that right now Bush is seeing if there's a way to do an end run around the House and get the funding without their approval.

PAD

Jimmie J.: Didn't Billy Clinton sign this deregulation into law?

Some of it, yes. There's been a lot of deregulation over the last couple decades, but Bill Clinton signed the bill that was co-authored by Phil Gram in the last year of the Clinton administration.

I think the Republicans get most of the responsibility for the deregulation, but the Democratic politicians deserve some of the blame, too.

Didn't Billy Clinton sign this deregulation into law?

Yes, after little Philip Gramm and his buddies in the Republican He-Man Girl-Haters Club presented him with a veto-proof majority.

Sure, Billy could have vetoed it and made the other boys vote again, but then the teacher would have made him stay after school to write "I will not engage in pointless partisanism" on the blackboard a hundred times...

A great letter, PAD -- I saw it first a few days ago courtesy of my dad, but it's always hilarious. Grimly hilarious...

TWL

"Didn't Billy Clinton sign this deregulation into law?"

Yep, but it was a last second sneak entry into the bill by Phil Gramm, a bill that desperately needed to pass to keep the government open, a budget bill. Many people didn't even know it was part of the bill. The deregulation bill had been defeated before, but slipped through in the last minute rush.

That is the danger of passing a bill quickly in emergency situations. See also the Homeland Security bills.

Great letter, but it needs some spelling mistakes to really make me bite. I'm sure whatever they voted on today had lots of them!
;-)

Great letter, but it needs some spelling mistakes to really make me bite. I'm sure whatever they voted on today had lots of them!
;-)

Hillarious!

I've read a funny phrase in the Internet today too: "Ask not what Wall Street can do for you - ask what you can do for Wall Street."

So, what does it means that the House didn't approve the bailout package? Is it good? Bad?

I'm astonished that most Republicans didn't support it. For a party that slavishly followed Bush for years, it's like they shouted a big F**K YOU at Bush. If they stuck to their principles of a free market and small government even in such a rough time, then I have admiration for them.

Incidentally, they also made McCain's situation that much worse. Just now that he is losing ground in the polls due to the economy, his own party delay the resolution of the crisis!

McCain jumped the gun by taking credit for the solution before the vote was taken.

But I also think Obama made a mistake by not being in Washington to place his vote -- It comes across like he didn't want to involve himself.

In the end, I think so much of America is angry over the situation that it hurts them both. We'll have to wait a few more days to see who's bleeding more.

Oh, my God... that's funny as hell. I get Nigerian scam letters just like this one every damn day... Thanks, Evil Twin. I've gotta copy this and send it to everybody. I expect to get lots of nauseated chuckles from all my friends...

Lessee, who to send this to? Mike Baron, Chris Moore, everybody on divalea's livejournal list, Favreau, Fillion, Whedon, Wolfman if he hasn't got it already, all the Baen Barflies... Webb Wilder and Buck Dharma, of course... Straczynski's probably got it already...

Miles

Obama didn't need to be in Washington for the vote. He's in the Senate and the bill failed in the House.

Actually, neither of them needed to be in Washington. The bill was worked out by the finance comitees, which neither of them are on. There was nothing for them to do. Also, it doesn't just look like Obama didn't want to involve himself, he specifically said so. He has said several times that he was willing to go if they needed him, but injecting Presidential politics into the formation of the bill would only make things worse. Right now, it looks like he was right.

Finally, McCain wasn't as "there" as he is claiming. He was only on Capital Hill for a few hours. Much of that was in the same White House meeting that Obama was in. The rest of the time McCain was in his office. On the phone. Just like Obama was handling things on the phone, just like McCain could have done from anywhere.

"But I also think Obama made a mistake by not being in Washington to place his vote -- It comes across like he didn't want to involve himself."

Wasn't this just a House vote? I believe the Senate wasn't supposed to vote until Wednesday, and that was just if this passed.

I first saw this wonderful piece of spam on the Dork Tower site www.dorktower.com . The truly sad part is that I'm sure there are plenty of folks who sent in their confidential financial information. Hey, if people fell for the Nigeria scam...

PAD,

Ok, even I found this funny.

While I do find the Bush administration quite at fault in this mess, there is no question that the Democrats bear much responsibility too as this video clearly shows: http://www.youtube.com/watch?v=_MGT_cSi7Rs

The Dems fought reform of oversight of Freddie and Fannie and, to paraphrase Rev. Wright, the chickens have come home to roost.

The fact that Bush did not demand Paulson's resignation is inexcusable.

I am glad the bill failed today. While something must be done, there is still too much money being thrown around like it is Monopoly money.

Keep this in mind: The Dems are now in control of both the House and Senate. They could have passed a reasonable bill. The fact that they did not shows their lack of leadership and their own greed. But I doubt some of you are able to see the truth about crooks like Charlie Wrangle, Chris Dodds, or Barney Frank. At least we conservatives helped boot out members of our own party in 2006 who failed to live up to the reason they were in office. Seldom happens to a Democrat.

Iowa Jim

Iowa Jim:
Keep this in mind: The Dems are now in control of both the House and Senate. They could have passed a reasonable bill. The fact that they did not shows their lack of leadership and their own greed. But I doubt some of you are able to see the truth about crooks like Charlie Wrangle, Chris Dodds, or Barney Frank. At least we conservatives helped boot out members of our own party in 2006 who failed to live up to the reason they were in office. Seldom happens to a Democrat.

Very well put Jim, But you forgot...
George Bush, George Bush, George Bush and his cronies, George Bush and the most corrupt administration ever, George Bush, George W. Bush, Shrub (I like that one) Bush.
There I feel better.
A.c.o.r.n., Earmarks, Fanny and Freddie's contributions to democrats, Golden parachutes??? Follow the money....Follow it all the way to the beginning.
Hey didnt The anointed one work for A.c.o.r.n. at one time?
Wait I forgot the "George Bush"

That was bittersweet :)

Here in Britain, the failed deal is the headline news. A few times I already watched the American stock broker within a very hectic and depressed environment muttering to himself loud enough for the camera to catch it: "These idiots".

During discussions it was also mentioned a few times that especially Republicans don`t think this attempted bail out is "American".

Hm, if this attempted bail out is going ahead after a bit more tweaking and the economy still suffers badly, Republicans will say "I told you so" and probably expect rightly to get more people to vote for them.

And if the next attempt to get it on the way fails again and the economy suffers badly, the Democrats will say to the Republicans "This is your fault" and probably expect rightly to get more people to vote for them.

Lots of people here in Britain are pessimistic that any bail out will work. I am no expert but I think it is better to try and fail or at least save SOME people from hardship than just giving up.

I came to your blog to see what books you've written. I have one, and like your comics. (Assuming you're the Peter David I think you are.)
Could you put a link to your bibliography at the head of your blog?
Oh, I liked that e-mail. Unless you say not to, I'll share it.

Bittersweet, indeed.

It all comes down to greed, greed, greed. I'm glad it failed. Nothing useful can be ironed out that fast, like the kid who wakes you up as the bus is coming down the street and says "Sign this!" and you find out next week you just agreed to direct a 6th-grade musical.

6 months ago, the Republicans were smoothing out the shaking saying "it's not a Depression, the banks would have to fail." Ok. Now what? Where is the Dem Party screaming from the rafters, "Look what they did! No more of the same!"? The lackluster apathy of both parties is annoying me to no end. Why oh why can't we have a workable third party? Can we bring back the Whigs? The Federalists? The Know-nothings (hm. Maybe we already have too many of those)? Anyone else? Please?

Should have accompanied an editorial cartoon which ran in a local paper. Evilly grinning, pin-striped suited banker type (labeled 'Wall Street') is on a ledge high up a building. He's pushing this empoverished type (labeled 'Taxpayer') off the ledge. Caption reads: "You first."

Its funny that Republicans get the Blame when 40% of Democrats voted against this bill too. Not one Republican has to vote for this bill for it to pass simple as that. It seems to me more than a few Democratic law makers aren't happy with this bill either. This has the feeling of giving the finger to Pelosi. Here is some more facts in the Democrats role in the current mess. http://www.youtube.com/watch?v=XvATadLb0Zw

Its funny that Republicans get the Blame when 40% of Democrats voted against this bill too. Not one Republican has to vote for this bill for it to pass simple as that.

It was proposed by a Republican administration.
It gives massive amounts of power to whoever holds an office currently in Republican hands.
The Republican nominee for president "suspended his campaign" in order to fly back and (allegedly) put the bill on track.

As such, it's primarily a Republican bill and should have passed with a lot of Republican votes.

As for the Dems ... roughly 60% of them voted for the bailout. Roughly 30% of the Republicans did, and according to their press conference afterwards it's because they didn't like the tone of Pelosi's speech -- which, by the way, I've read and didn't see as especially inflammatory.

So while I agree that nobody's got much to be proud of here, I think that the torpedoing of the bill falls squarely on GOP shoulders, and an attempt to make it look like anything else is spin at its finest.

TWL

Didn't Billy Clinton sign this deregulation into law?

Wasn't Phil Gramm a republican during Bill Clinton's administration? It's all Bill Clinton's fault. It's all so clear to me now.

I'm astonished that most Republicans didn't support it. For a party that slavishly followed Bush for years, it's like they shouted a big F**K YOU at Bush. If they stuck to their principles of a free market and small government even in such a rough time, then I have admiration for them.

The need for a bailout is a clear and obvious consequence of republican deregulation. It's proof that republican ideals are have no foundation in reality.

The relationship of deregulation to the need for bailouts for its consequences is 1:1. This inherent hypocrisy hasn't been demonstrated for socialism and the historical negative consequences attributed to it.

Tim Lynch: Roughly 30% of the Republicans did, and according to their press conference afterwards it's because they didn't like the tone of Pelosi's speech -- which, by the way, I've read and didn't see as especially inflammatory.

It's worth mentioning that she ad-libbed a couple extra lines that weren't in the written transcript. She said a couple extra things about Republicans and Right Wing ideology being to blame.

It's still not *that* bad, they're still just using it as an excuse. If you look at who had a tough race and who didn't, the congressmen worried about reelection were clearly the ones most likely to vote against this bill. But instead of giving the honest answer that they were listening to their constituents, they decided to whine about the other side being too partisan, which of course is partisan in itself.

I think this failure, and the average Joe's resistance to passing any bill, is a direct result of the current administration's failure to develop any sense of trust with the public. Their actions in mis-leading US to war have spent any credibility they might have had. And now that they've cried Wolf, we don't know if they're actually telling the truth this time or not.

Maybe things really will be as bad as some say. Maybe freeing up all those institutions that are over-invested in bad debt instruments will help. The point is, no one believes anything that comes out of the White House any more, and that's why this bill is failing. And that lack of trust has bled over an infected the public's opinion of the GOP in general.

I think the brass balls being displayed by the GOP in this situation is absolutely astounding.

The GOP goes around blaming the Democrats and Nancy Pelosi for criticizing George Bush. Here's a thought: The country is circling the drain under his watch. Perhaps he DESERVES some criticism. Even more astoundingly, the GOP then blames the Dems and Pelosi for the failure of the bill even though the majority of the Democrats voted for it and the majority of the GOP didn't. Let's say that again: The GOP that for the most part didn't support the bill at all, blamed the Democrats for not supporting it enough.

And right up there leading the hypocrisy is John McCain, who goes out and declares "now is not the time for fixing blame, but fixing the problem," and in the next breath BLAMES BARACK OBAMA. On what grounds? His "no" vote in the Senate which didn't vote on it? His saying, "Let's hear from Senator McCain" at the meeting that combusted wherein Senator McCain sided with the GOP members who were against the bill?

Un...be...lievable.

PAD

Keep this in mind: The Dems are now in control of both the House and Senate

And the Republicans had the White House and Congress for the first 6 years of Bush's tenure.

What did they do during that time, Jim?

They had Congress for several years before that, and had enough votes for that Gramm law in 1999 that it would override any potential Clinton veto.

What did they do during those years, Jim?

They certainly didn't do a damn thing to prevent this from happening, did they? Yet you simply want to point fingers at the Democrats.

Are you ready to pull your head out of the sand and open your eyes?

Not that I expect you to respond to this. Your MO has become to be a 'hit and run' right-winger, like so many other random names that have shown up here in the past few months. You're not interested in discussion and debate, just posting random mud-slinging at liberals without making an effort to back up your claims. It's troll-like behavior, Jim.

Okay, having heard the line about how the Democrats control Congress one too many times, I thought I'd go hunt down some hard data.

According to the info in the official profile of the 110th Congress (at http://www.senate.gov/reference/resources/pdf/RS22555.pdf), the House of Representatives breaks down as 239 Democrats (including four territorial Delegates), and 200 Republicans (including the Resident Commissioner of DC, who has basically the same powers as the Delegates); the Senate has 49 Democrats, 49 Republicans, and 2 "Independent" Senators (who have historically aligned themselves with the Democrats, but are not exactly relied upon for support).

So, in a body with a total of 539 members, five of whom don't even vote (just "advise"), the "majority control" exercised by the Democratic Party is a grand total of 35 votes. That's rather a smaall "majority" - and that's assuming you could ever get all the Democratic members of the House to vote together. (As Heinlein once observed, you can't get that many people to agree to whistle "Dixie"!) The Senate, meanwhile, is basically tied - the only reason there's a Senate Majority Leader at all is because under the current system, there kind of has to be.

So, there's two reasons the failure of the most recent bailout attempt (the one proposed by Republican President George Bush, no less) can't be laid at the feet of the Democratic Party: 1) the D. "control" of Congress is by only a slim majority in the House, and requires the cooperation of Independent Senators in the Senate, and 2) in point of fact, only 40% of the Democrats in the House voted against this measure - while 66% of the Republicans did so. (And while I've heard quite a bit over the last two days trying to blame that failure on the Ds, the closest I've heard anyone come to saying why is that they apparently got their widdle feelings hurt by Pelosi's speech before the vote. Oy.)

PAD said:
And right up there leading the hypocrisy is John McCain, who goes out and declares "now is not the time for fixing blame, but fixing the problem," and in the next breath BLAMES BARACK OBAMA. On what grounds? His "no" vote in the Senate which didn't vote on it? His saying, "Let's hear from Senator McCain" at the meeting that combusted wherein Senator McCain sided with the GOP members who were against the bill?

From what I've been hearing and reading McCain did his little "suspension" of his campaign to go to Washington to try and get more repubs to vote yes on this bill.
Could it be that some (from both sides) just dont think this is going to work and want to see something of more substance?

It is a bit astonishing.

The Republicans have ruled the country for most of the past decade. The Republicans have free market and small government as their central motto. The Democrats have been running in circles like beheaded chicken for most of the last decade.

And now the Republicans want to share the blame with the Democrats for the finantial crisis? WTF? Next they'll say the Democrats are to blame for the Iraq War.

Pat Nolan: Could it be that some (from both sides) just dont think this is going to work and want to see something of more substance?

I'd be okay with that. If anyone had come out and said, "I'm against this bill and here's why..." that would be worth something.

The problem I have is with the whining from some of the Republicans about Pelosi hurting their feelings. If they thought it was a bad bill, they should say so instead of blaming someone else.

What amazes me most is that most people (via polls, speaking with people, looking at boards) are against this bailout...yet when you read a newspaper, all the articles try to scare the hell out of you into wanting it/supporting it.

This economic "crisis" doesn't scare me so much compared to the fact that I don't think you can trust ANY news outlet anymore to give you the proper FACTS about something.

Michael

I can understand why the bailout is unpopular.

I can understand that - even though no one seems to have broken any laws - people feel that someone had to have been responsible for the current mess, and that said someones should be handed their asses as soon and as comprehensively as possible.

Unfortunately, unless someone dumps a truckload of cash into the system real soon now, bad things are going to get a lot worse for everyone.

Somedays, you just have to pucker up and kiss the pig...

Cheers.

This all sounds frighteningly like that Lottery internet scam from some lawyer in South Africa...
Send me your bank info and I'll deposit your winnings....

Yeah . Right.

"Unfortunately, unless someone dumps a truckload of cash into the system real soon now, bad things are going to get a lot worse for everyone."

You know what I'm not hearing from anyone...a guarantee that a bailout plan will prevent bad things from happening to everyone. So let's assume that the plan, if passed, does have some effect...will that be the end of it? Or will we be in the same boat in 6 months down the road?

If cash/credit availability is the problem...meaning short term loans...why doesn't the gov't just skip the middleman, and open up $700 billion in cash that's accissible not to the banks that got us into this mess, but the small buisness owners and families that everyone says they're trying to save? That way, the banks that have overinvested in bad debt can be allowed to fail as they should, but without causing large layoffs as companies that normally need to borrow to pay their employees run out of cash.

And frankly, I don't care who got is into this mess, just that we don't make things worse. Taking on $700 billion in bad debt instruments seems to me to be a bad idea.

why doesn't the gov't just skip the middleman, and open up $700 billion in cash that's accissible not to the banks that got us into this mess, but the small buisness owners and families that everyone says they're trying to save?

Because that would be socialism for many Republicans, and they'll never vote for it.

No, for many it's going to be "save the banks, save the world" or nothing.

Posted by bobb alfred at September 30, 2008 01:47 PM

"If cash/credit availability is the problem...meaning short term loans...why doesn't the gov't just skip the middleman, and open up $700 billion in cash that's accissible not to the banks that got us into this mess, but the small buisness owners and families that everyone says they're trying to save?"

Because governments just don't have the infrastucture, the experience or the basic skill sets needed to handle that type of lending exercise. (Apart from the screams of socialism and the message that would send about the reliability of major financial institutions).

Letting banks go to the wall might be just in one sense, but it's the incestuous nature of finance that people's investments and pensions are often tied to the fate of the bank... (Basically, it's a 'yeah, they may have screwed your dog and kicked your wife, but they have your kids as hostages' kind of deal)

You prevent a recurrance in 6 months time by tightening up the legislation asap. Same as the need to put proper oversight in place for the $700Bn and to ensure that the money invested does come back to the tax payer once the economy rights itself.

You pretty much have to save today's system today, before you can have a better system.

Cheers.

"Obama didn't need to be in Washington for the vote. He's in the Senate and the bill failed in the House."
-- If it had passed the House vote, as was expected and hoped, the bill would have moved to the Senate, at which point Obama would have been expected to vote.

"Actually, neither of them needed to be in Washington. The bill was worked out by the finance comitees, which neither of them are on. There was nothing for them to do. Also, it doesn't just look like Obama didn't want to involve himself, he specifically said so."
--You're right, neither of them needed to be there for the creation of the bill. But when it comes to the vote, that would involve the full House and Senate, not just the finance committees.

Don't get me wrong - I am not trying to bash Obama (heck, I'm voting for the man).

But all that matters is how it plays on the news. And the way it plays is . . . there was a vote and Obama was in Colorado. And I think that was a mistake.

Does it outweigh the mistakes McCain has made? We'll have to wait and see.

I think the way it is playing in the news is that McCain jumped in claiming he was going to fix things, a boast he couldn't back up. Obama doesn't seem to be hurting by his stance of staying back.

In general, I *do* want these guys in Washington. The idea that politicians take a year off from their elected jobs when they are on the campaign trail is absurd. However, the time to go back to DC was about a week before McCain made a big show of doing so. Right now the media seems to be recognizing McCain's trip to Washington for the political stunt that it was.

If the Senate had really needed them (which it didn't, the Senate had way more votes than necessary to pass this), then both McCain and Obama would have been in DC in time for the vote. Obama said it himself, "We have planes. You might have seen them, they have our logos on them."

They had Congress for several years before that, and had enough votes for that Gramm law in 1999 that it would override any potential Clinton veto.

Your assumption is that the Gramm law is the source of the problem. You ignore the fact that it is Freddie and Fannie that actually created the current situation. Their housing policies (giving loans to those who could not afford them) was pushed through and defended by Democrats.

What did the Republicans do while in office? Hold hearings. They clearly stated the problem. In fact, you go back to what they warned and some of it is downright prophetic. However -- and I do fault them for this -- all they did was hold hearings and believe the assurances of liberal democrats and lobbyists with agendas. Stupid mistake. But the Democratic party and its policies are directly responsible for the current situation. This mess was not created by a lack of government regulations. It was created by government throwing caution to the wind and expecting those without financial resources to be able to afford a mortgage and then expecting the government to back those loans.

One of many posts that clearly explain what happened: http://article.nationalreview.com/?q=ZDFkMTc3NWMwOGQxN2Y3MjNkMjQ5ZTJkYmMyMjJlYWQ=&w=MA==

And regarding the vote yesterday, the Democrats do currently control Congress. If they wanted a bill, they could pass it and then dare Bush to veto it. All they needed was 12 more of 96 Democrats to vote for it. Twelve of them were on Barney Frank's own committee who voted against it. I don't think Pelosi wanted this to pass. She wanted what exactly has happened -- a mess that they could use for political purposes to blame Republicans before the election.

If Dems saw this as a true crisis, why take a two day break? Why not come up with their own bill that they could easily pass?

You telling me Pelosi didn't know how close the vote would be? We are talking about almost 100 Democrats voting against the bill. That is huge. They do not need a single Republican vote to pass a bill in the House. Pelosi and company are the ones playing presidential politics right now.

Iowa Jim

Your assumption is that the Gramm law is the source of the problem.

I think it's *part* of the problem. Deregulation, much like the expansion of Fannie and Freddie, brought us to this point where there was a distinct lack of the government stepping in and saying "this is a problem".

And the Gramm bill was an example to illustrate the fact that often times the party that controls both Congress and the Presidency doesn't do anything to fix the problems of this country.

Pelosi and company are the ones playing presidential politics right now.

So you you ignore the fact that the Republicans pushed forth an alternate option, one that nobody save a handful of Republicans supported... then McCain stepped in it and threw his hat in with this second plan?

They're all doing what comes naturally to politicians.

all they did was hold hearings and believe the assurances of liberal democrats and lobbyists with agendas. Stupid mistake. But the Democratic party and its policies are directly responsible for the current situation.

Oh, unbelievable amounts of bright green bullshit.

Your party is the frickin' poster child for deregulation and a zealot's belief in the Power of the Market to fix everything, and this is the Democrats' fault?

Jim, I was going to protest on your behalf earlier when Craig said that you were no longer contributing constructively around here.

Now? I think he might be right. The fact that you cannot even begin to fathom that this clusterfuck might be the fault of officials you supported means that you're either being dishonest, or being self-deluded.

Either way, I don't have the ability to really engage you. You need a professional.

TWL

"Because governments just don't have the infrastucture, the experience or the basic skill sets needed to handle that type of lending exercise."

You're wrong. The government hands out billions of dollars in grants and loans every year through programs to fund just about anything you can think of. I processed grants to 4 airports this year for close to $5 million, and our office issues grants totally close to $100 million each year. Trust me, the federal government is very capable of doling out money and evaluating projects.

Iowa Jim, you're assuming that the Democratic party is unified...if history has shown us anything, it's that they are everything but. They gather under a single title in order to win seats, but for many of them, that's about as close as they get to unification. You see much the same thing in the GOP, but there they have much better ogranization and stronger leadership that's often able to align votes. You're seeing conspiracies where the people allegedly purpetrating them don't have the capacity to pull off. If the Dems could manage that level of control, they'd have squashed the GOP as a party long ago.

This bill failed because it's a bad deal. It's being rammed down Congress and the taxpayers' throats mostly on the say-so of the GOP, with Bush leading the charge. He long ago squandered any good will and trust his actions post 9-11 earned him, and now we all may pay the price. People don't trust him, and no one's really explaining why this bill is so direly needed right now.

As for why the Dems. haven't proposed their own bill? They have...and the Republicans rejected it. The GOP is the party saying we need this, not the Dems. If it's really that critical, why is anyone looking to the Democrats to provide the solution?

Btw, the act that Gramm pushed through:

"Later in his Senate career, Gramm spearheaded efforts to pass banking deregulation laws, including the landmark Gramm-Leach-Bliley Act in 1999, which removed Depression-era laws separating banking, insurance and brokerage activities."

And there's also this Wikipedia note about the Act itself:
"With the new Act, (banks, brokerages, and insurance companies) would be able to do both 'savings' and 'investment' at the same financial institution, which would be able to do well in both good and bad economic times."

Now, and this is just speculation on my part, I wonder how things would look right now if all these activities were still separate? Things are going bad, and people are freaking out as banks fold. There is no part of the financial services industry that is stable for everybody to fall back on save a government bailout.

So, at face value, Gramm's Act has failed completely. This is what deregulation has brought us.

Here are some thoughts from economists about the bailout and ideas for better plans:
http://talkingpointsmemo.com/news/2008/09/bailout_plan_reactions.php

"Right now the media seems to be recognizing McCain's trip to Washington for the political stunt that it was."

Yes, the media does see it that way. But does the average voter, sitting on the fence about the election but desparately wanting *someone* to do *something* to save his/her retirement?

I seriously hope that's how they're seeing it.

I can't imagine the voters seeing it any other way, Jessica. Over the last couple of weeks we've seen that any time someone connected to the economy sneezes, John McCain loses a point in the polls. Voters don't trust him on the economy in the slightest. They give Republicans benefit of the doubt on war issues, but McCain can do no right when it comes to the economy.

I think Obama made as good a call as he possibly could have made. Sure, it's possible to spin his decision a certain way. However, if he *had* gone to DC, that would have been spun as him following McCain's lead. It also would have postponed the debate, meaning that the VP debate would have been postponed also, possibly canceled.

There is no perfect path that couldn't possibly work against him. So far his decision seems to be working out in his favor. Plus, regardless of spin I think it was the right thing to do.

why doesn't the gov't just skip the middleman, and open up $700 billion in cash that's accissible not to the banks that got us into this mess, but the small buisness owners and families that everyone says they're trying to save?

Because that would be socialism for many Republicans, and they'll never vote for it.

Huh? You think the republicans wouldn't back a 700 billion dollar tax cut to small businesses and homeowners? (And wouldn't giving me a, say $5000 tax cut be equal to a $5000 check...only better, since it cuts out the middleman.)

Tim, I think you were unduly harsh to Jim. yeah, blaming it all on the democrats makes about as much sense as blaming it all on the republicans but he made a few good points--like the illogic of congress taking time off. Look, if this thing is going to pass it will require the public to believe that it must pass. Pelosi's speech just made it look like Politics As Usual. Sure, the republicans who said it made them change their vote look like whiny bitches but it's also true that it provided cover for those who doubt that this crisis is all that critical. If your really believe we all need to pull together you act like a leader, not a partisan hack. But maybe that gives her too much credit to think she knows the difference. And taking time off? Crisis, what crisis?

And it wasn't just republicans that responded to her speech. I think it cost a few Democratic votes as well. After all, having heard the Speaker of the House blame everything on the incompetence of Bush's economic plans why would they risk their necks on a 700 billion dollar...Bush economic plan? I don't think she meant for the bill to fail but if she did she might have done the exact same thing.

You think the republicans wouldn't back a 700 billion dollar tax cut to small businesses and homeowners?

Bill, I've already seen other Republicans elsewhere saying we shouldn't give anything to homeowners, that they brought this on themselves. Not to mention, that some of the same think the banks are to be absolved of any blame for this mess.

Apparently no matter what your view on this is you can find some Republican to blame. Don't like the bailout? Craig knows Republicans that think the banks should be absolved! Like the bailout? The republicans voted it down! etc...

The longer this goes on the more it sounds like a bad idea. Which is worrisome since it might actually be necessary...but at this point an awful lot of people are beginning to think this is a bad plan for an overblown crisis and we may have choice but to hope they are correct.

Iowa Jim (aka Pastor Jim) asked:

"If Dems saw this as a true crisis, why take a two day break?"

Because it is a religious holiday.

The reason we are in this mess NOW is because the Republicans screwed up. They lost control of the economy NOW when they really thought it was going to sour 6 months or a year from now WHEN they could blame it all on the Democrats.

They saw this coming, but let it grow because they thought they'd be out of office before the lid came off.

The Republicans thoroughly KNEW they were going to lose the White House this year, but then the Democrats threw a twist at them and nominated a black man, thereby giving the Republicans an even chance of retaining the office.

Iowa Jim (aka Pastor Jim) hasn't had a new thought in years. I suspect the reason there is so much time between his posts is that he has to go ask his lead Pastor what to say next. Or maybe, as he has mentioned the guy so much recently, maybe he is getting his advice from Reverend Wright.

"If Dems saw this as a true crisis, why take a two day break?"

Because it is a religious holiday.

That's not a particularly good reason, don't you think? Assuming we are on the verge of a potential total economic meltdown, anyway.

Tim, I think you were unduly harsh to Jim. yeah, blaming it all on the democrats makes about as much sense as blaming it all on the republicans but he made a few good points

He may well have. I'll admit that my BS detector went off very loudly as soon as I saw the main thrust of his post, so if he made a good point or two I lost it in my general reaction. (I also spent the weekend sick, so am now catching up on school stuff and probably stressing about it a bit.)

As for Congress taking a day or two off because of Rosh Hashanah, they really have little choice. A significant number of members of Congress are observant Jews and would thus be in services today (I assume). If either side of the leadership (Democratic or Republican) tried to force them to come in there'd be a fairly large hue and cry -- a justified one, I might add.

Now, if they just take off for good once the holiday is past and say "y'know what, this can't be that big a deal -- let's wait until after the election," then I think criticism would be quite justified.

TWL

Posted by Craig J. Ries: Bill, I've already seen other Republicans elsewhere saying we shouldn't give anything to homeowners, that they brought this on themselves. Not to mention, that some of the same think the banks are to be absolved of any blame for this mess.

Where do you see this Craig? Who, or Which republicans were saying that banks should be absolved of any blame? Give me a name. Please

Posted by Craig J. Ries: Not that I expect you to respond to this. Your MO has become to be a 'hit and run' right-winger, like so many other random names that have shown up here in the past few months. You're not interested in discussion and debate, just posting random mud-slinging at liberals without making an effort to back up your claims. It's troll-like behavior, Jim.

Man, its any wonder anybody wants to engage in any debate here. God forbid someone have a different opinion then you Craig.
Here's a thought you left-wing hack. (Sucks doesn't it?) Pull "your" head out of your ass. Get the hell over yourself and oh, maybe get a life.
Not everyone has hours upon hours of time to engage in what you laughingly call a debate.
Dont agree= right-wing looney.
Which is fine if thats what your looking for but what your going to end up with is you, Tim patting each other on the back talking about how much Bush sucks.
Wow... great debate guys

Sorry Iowa Jim

"If Dems saw this as a true crisis, why take a two day break?"

Because it is a religious holiday.

That's not a particularly good reason, don't you think? Assuming we are on the verge of a potential total economic meltdown, anyway.

Bill, although Congress is not officially in session, it is my understanding that they are still working on it. i.e. Leadership and members of relevant committees are trying to working out a piece of legislation that will pass a vote. IOW, they're doing exactly what they would be doing if it weren't a holiday. There's no way that anything that will survive an up-or-down vote is going to be worked out entirely on the Floor. There's just too many Congressmen. They've got to get the key players together to work out a deal on something that they can submit for a vote.

They have to get out of the building for the Jewish holidays. That's the rule.

Several members of congress *are* still working on things, however. They're not officially at work, but they're still talking to each other and working on possible plans. So there's no need to harass anyone about not working hard enough in a crisis, they are, in fact, working.

>>Not that I expect you to respond to this. Your MO has become to be a 'hit and run' right-winger, like so many other random names that have shown up here in the past few months.

Nah, I just stick my head in here to see what the Loony Lefties are blaming Bush for now. It's a hoot. How 'bout them Mets?

Well, I'm glad that's the case...but it does send a bad signal to the public. And make no mistake about it, the public hates this bill. But with the president at super low approval ratings and congress at ratings that almost make his look good it's almost impossible to convince people that this is a good idea as it is. taking days off, even for good reasons, doesn't help.

And you're picking on me why, exactly, Pat?

I can guess -- my post to Jim.

Way to judge on the basis of a single post. I've been here a long time, and like to think that I've generally made rational points. You disagree, fine. You think Iowa Jim is a perfectly rational individual, fine. You want to call me out for something specific, fine. Making general smears is kind of dumb, however.

Yeah, I have to back Tim up on this. He's got strong liberal opinions and isn't afraid to back them up, but he's a very intelligent, reasonable guy. And he's willing to at least consider the possibility that he might be incorrect about something, which is like pulling teeth with many others. The only reason I even commented on his reply to Jim was because I thought it wasn't up to his usual standards. That said, he's one of the brighter spots on the board and someone who has earned respect, in my opinion.

Hayek once said the way to demolish the "socialist" infraestructures of Roosevelt's New Deal was to destroy people confidence in the state. And the best way is to cut its funding, redirect it anywhere else so whatever's working stop doing so. Economic terrorism from within to educate the (obviously idiotic) masses. Pretty much what Grover Norquist have been saying every time someone held a mic near his mouth.

Naomi Klein wrote recently on how neo-conservatives take advantage of any catastrophe or disaster to implement political measures that wouldnt fly in quieter times.

That bill is simply a well placed kidney punch... whatever it may solve is less inmportant than the fact it cripples the state's ability to do its work where it is important. When that times comes, you will see pundits pop from behind every trash can telling you how that proves the flawed nature of the public sector, and how private enterprises are much better fit and economically streamlined to do the job.

Yes, the same private enterprises that now need a bail out.

Bill Mulligan: "...but at this point an awful lot of people are beginning to think this is a bad plan for an overblown crisis and we may have choice but to hope they are correct."

That would be a false hope, as the people who believe this is "overblown" are flat-out wrong. The credit markets are locked up right now and if something isn't done soon, we will begin feeling the impact on "Main Street."

Like it or not, want it or not, our economy requires credit in order to function. Businesses need credit in the long-term to expand, and in the short-term in order to finance existing operations. Banks rely on overnight loans from other banks in order to continue functioning. People need credit in order to buy cars, houses, and other purchases that most couldn't afford to pay for with cash.

Unfortunately, banks aren't acting like banks right now. They're not lending to each other nor to businesses right now. It won't be long before we feel the effects. In fact, if this keeps up some large corporations will soon be unable to issue paychecks to all of their employees.

By the way, don't use the stock market as a bellweather. Yes, the Dow crashed yesterday and rebounded today. But the stock market is only a symptom of the problem. The actual problem is financial institutions that have become undercapitalized because they're holding "toxic assets," most notably subprime mortgages or mortgage-backed securities.

Also, I wish everyone would stop STOP STOP trying to affix blame on one political party or the other. There is no one cause for this mess. It's complicated.

During the Clinton administration, banks were encouraged to broaden lending in order to make homeownership more accessible. Government-backed financial institutions Freddie Mac and Fannie Mae were given expanded powers to guarantee loans so that lower-income people could afford to buy houses. This increased the demand for homes, resulting in a continuous increase in home values for over a decade.

In order to lend to more people, banks relaxed their lending standards to borrowers with less than prime credit (hence the term "sub-prime" loans). That was no problem as long as the value of homes kept rising.

Around the same time, the final version of the Financial Services Modernization Act of 1999 was passed, which did away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933. The final version of the FSMA was the result of negotiations between Congressional Republicans and the Clinton administration. It was not the result of one party ramming it down the other's collective throat.

Because the FSMA allowed investment firms to act as banks and vice-versa, it became easy to securitize mortgages. Securitization of mortgages is the process of pooling mortgages together and selling bonds to investors backed by the cash-flow from those securities. Mortgage originators could sell their mortgages and receive their money in a lump sum, enabling them to make more juicy subprime loans. Investors gobbled up these mortgage-backed securities which fueuled demand for more subprime mortgages that could be securitized.

Unfortunately, the government's regulatory infrastructure was never modernized to keep up with changes in the financial industry. The process of securitizing mortgages and other loans is complex, and often assets would change hands so often no one knew who truly held the risk or how great that risk was.

Eventually housing values tanked, and the value of mortgage-backed securities nosedived. So now a lot of financial institutions are either sitting on a lot of subprime mortgages they can't sell, many of which may go into default; or they're sitting on mortgage-backed securities, the value of which have tanked; or both. Because of the lack of transparency caused by a regulatory environment that has failed to keep up with reality, no one knows which financial insitutions are truly solvent and which aren't. Financial institutions are therefore scared to lend to each other, which is making it impossible for them to lend to businesses and individuals. That's choking off the credit which is the lifeblood of our economy.

I can understand people not liking this bailout. I can understand them being livid. Except... most of us were all to happy to benefit from the credit boom. No one complained about the economic expansion of the '90s, which was in part created by the credit bubble.

Democrats and Republicans created this mess. Wall Street and Main Street created this mess. We all share in some of the blame and now we're going to have to take our medicine. Yes, this truly sucks. It places more burden on denizens of Main Street than on Wall Street. But it's far better than doing nothing, which would guarantee a financial disaster for everyone.

Bill, thanks for one of the few genuinely informed posts I've read on this mess.

Wow Bill, Why I couldnt have had you for a teacher for my Government class....

Thanks for the explanation.

It's time for the American people to stop using credit and start living within their means.

The same for businesses, the same for the government. Hopefully this disaster will be a wake up call.

Pat Nolan -
Where do you see this Craig?

Well, this isn't the only blog/message board I read on the whole wide interwebs, so I think it's pretty safe to assume that people, left-wingers and right-wingers alike, are making comments that I'm sure you find hard to believe.

Suffice it to say, I am not going to point you in the direction of where this discussion took place, because, quite honestly, I honestly don't want you there. Either way, I have no reason to lie: a pair of individuals, right-wingers, are trying to pass the buck on the government (Democrats in particular) and homeowners for this entire disaster. It's a disgustingly partisan way of looking at the situation.

God forbid someone have a different opinion then you Craig.

No, god forbid somebody back up their thoughts rather than just drop random mud-slinging without a damn thing in support of their 'argument'.

And that is the problem I, and others, have with you, Iowa Jim and Jerome. You're being called to the floor repeatedly for some of the comments that have been made, and you simply act as if your kings of the world and do not have to back up what you're saying. I've said it before: if you don't like being called out on what you're saying, don't post here.

Here's a thought you left-wing hack. (Sucks doesn't it?) Pull "your" head out of your ass. Get the hell over yourself and oh, maybe get a life.

Let me know when you read my posts and respond to the content of those posts, rather than this stupidity you choose to subject everybody to. I don't take BS from Jerome and his little vendetta in calling me, and I'm certainly not going to put up with it from you, when you are spewing crap.

And since you're so willfully uninformed, I am not blaming Bush for this particular mess. As I've said, repeatedly, everybody is to blame. But don't let the truth get in the way of your baseless smearing.

Thanks Bill for the explanation. Finally I understand what's going on.

I said:

"Because governments just don't have the infrastucture, the experience or the basic skill sets needed to handle that type of lending exercise."

bobb alfred said:

"You're wrong. The government hands out billions of dollars in grants and loans every year through programs to fund just about anything you can think of. I processed grants to 4 airports this year for close to $5 million, and our office issues grants totally close to $100 million each year. Trust me, the federal government is very capable of doling out money and evaluating projects."

OK... (trys to resist urge to get bitchy when faced by statement of opinion as fact...)

My opinion was phrased deliberately as 'that kind of lending exercise' - you're talking about huge loans to 4 'customers', which is apples vs oranges for what we were taling about - making the $700Bn available to thousands or hundreds of thousands of small businesses and individuals who need to keep money in motion. And how long did government take in evaluating these four projects? Even if you look at welfare which does cut cheques for individuals, how long does it take them to evaluate claims and process them? How many trained/experienced civil servants are tied up full time in that process? What percentage of $700Bn is $100Mn?

What you say, and what you've seen first hand may well be exactly what you've desribed above, but I strongly suggest it's not directly congruent to what you were initially suggesting.

Cheers.

Good grief.. I agree 100% with Bill Myers' post above. Another sign of the end times revealed! :)

Cheers

Thanks to Bill on my end as well -- most informative!

During the Clinton administration, banks were encouraged to broaden lending in order to make homeownership more accessible. Government-backed financial institutions Freddie Mac and Fannie Mae were given expanded powers to guarantee loans so that lower-income people could afford to buy houses. This increased the demand for homes, resulting in a continuous increase in home values for over a decade.

In order to lend to more people, banks relaxed their lending standards to borrowers with less than prime credit (hence the term "sub-prime" loans). That was no problem as long as the value of homes kept rising.

Banks dropping proof of income and deposits, folding processing fees into loans and encouraging applicants to lie about taking rental income (re: WaMu) is not a direct outcome of encouraging lending. The relationship is not 1:1.

Stop attributing the natural outcome of republican detachment from reality to the democrats, just because they haven't been severe enough in alienating their republican voters.

An alternate view of the responsibility of deregulation in the current crisis--from Bill Clinton

http://online.wsj.com/article/SB122282635048992995.html?mod=todays_us_opinion

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress's 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that "deregulation" bill into law, and he knows better.

In BusinessWeek.com, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton's reply: "No, because it wasn't a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.

"But I have really thought about this a lot. I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill."

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as "the architect in the United States Senate of the deregulatory steps that helped cause this mess." Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him "a bill of goods"?

Mr. Clinton: "Not on this bill I don't think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can't possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence.

"But I can't blame [the Republicans]. This wasn't something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment."

We agree that Mr. Clinton isn't wrong about everything. The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle -- oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement.

As for the sins of "deregulation" more broadly, this is a political fairy tale. The least regulated of our financial institutions -- hedge funds -- have posed the least systemic risks in the current panic. The big investment banks that got into the most trouble could have made the same mortgage investments before 1999 as they did afterwards. One of their problems was that Lehman Brothers and Bear Stearns weren't diversified enough. They prospered for years through direct lending and high leverage via the likes of asset-backed securities without accepting commercial deposits. But when the panic hit, this meant they lacked an adequate capital cushion to absorb losses.

Meanwhile, commercial banks that had heavier capital requirements were struggling to compete with the Wall Street giants throughout the 1990s. Some of the deposit-taking banks that were allowed to diversify after 1999, such as J.P. Morgan and Bank of America, are now in a stronger position to withstand the current turmoil. They have been able to help stabilize the financial system through acquisitions of Bear Stearns, Washington Mutual, Merrill Lynch and Countrywide Financial.

Mr. Obama's "deregulation" trope may be good politics, but it's bad history and is dangerous if he really believes it. The U.S. is going to need a stable, innovative financial system after this panic ends, and we won't get that if Mr. Obama and his media chorus think the answer is to return to Depression-era rules amid global financial competition. Perhaps the Senator should ask the former President for a briefing.

As for the sins of "deregulation" more broadly, this is a political fairy tale. The least regulated of our financial institutions -- hedge funds -- have posed the least systemic risks in the current panic.

Hedge funds benefit when everyone else is hurting by definition. It's not a fairy tale. JHC, the Wall Street Journal still pays its journalists for crap-analysis like this?

Well, now, I see the light. It isn't de-regulation that caused problems with the savings & loan industry, the energy industry, the airline industry, the banking industry. I now know this because the Wall Street Journal---the mouthpiece of very same CEOs who benefit the most with their multi-million dollar annual salaries and their multi-million golden parachutes when they fail---says so.

Reaganomics/trickledown eeconomics/voodoo economics doesn't work for the vast majority of people, just the rich.

I heard or read something the other day where some guy making over $250,000 a year was complaining about being classified as being rich. WHAT??!! If you are making $250,000 a year, you are in the top 1.5 percent.

75 percent of all full time workers make less than $53,000 a year.

Median wage for a full time worker is less than $32,000.

Median household income is around $45,000.

Well, there were some actual points made in the article (and by famed conservative mouthpiece Bill Clinton). I don't know if they are accurate or not and nothing in your reply does anything to help.

My wife forwarded this to me. Pretty funny.
Sort of.

http://wondermark.com/index.html

An alternate view of the responsibility of deregulation in the current crisis--from Bill Clinton...

Well, there were some actual points made in the article (and by famed conservative mouthpiece Bill Clinton). I don't know if they are accurate or not and nothing in your reply does anything to help.

The blanket hostility of the republicans to any regulation is at the core of the current crisis. Clinton didn't contradict this.

Divesting ourselves of ideas demonstrated to be unfaithful to reality is at the core of our healing, just as it's at the core of the recovery of any addict.

Bill, comparing hedge funds with mortgage-backed securities is simply not an apples to apples comparison. As http://www.investopedia.com/terms/h/hedgefund.asp explains, hedge funds are largely unregulated because U.S. law requires that most investors in a hedge fund must be accredited. In other words, they must have a high net worth and a significant amount of experience. Also, hedge funds by their very nature are designed to minimize risk.

So, no, hedge funds aren't heavily regulated. Nevertheless, that does not support arguments for deregulation.

Banks getting involved in securities trading touched off the first Great Depression; banks made loans to stock traders who then lost their shirts and defaulted on said loans, triggering a wave of bank failures. Glass-Steagall was passed to prevent that from happening again. Glass-Steagall was repealed in 1999, and nine years later we're staring at the possibility of another Great Depression. Somehow, I find it hard to believe that that's coincidental.

By the way, someone should tell the writer of that WSJ editorial that some European banks are also failing or are being nationalized to prevent their failure.

Ironically, this mess exposes the flaws in aspects of both liberal and conservative economic philosophies. The growth of the subprime mortgage market was created in part by liberal government policies designed to reduce the gaps by have and have-nots. That policy contributed to a housing bubble, the bursting of which is threatening to worsen the economic situation of many of the very people said policy was supposed to help.

At the same time, the repeal of Glass-Steagall created an environment in which financial institutions could take just the sorts of irresponsible risks that touched of the Great Depression of the 20th century.

I believe the free marketeers (not to be confused with the Three Musketeers, or the Mouseketeers) and proponents of market regulation are both partly right. I believe ham-fisted attempts to help the lower-income individuals without regard for the consequences must be avoided.

At the same time, the financial services industry is the lifeblood of our economy. If it collapses, it takes the entire nation's economy with it. Therefore there must be regulations to ensure transparency and to place limits on the sorts of risks that can be taken in that industry. The WSJ is correct that the industry remains regulated, but omits the fact that the regulatory infrastructure simply wasn't updated to the extent necessary to cope with the changes brought on by the repeal of Glass-Steagall.

The results of excessive market interference in one sector of the economy, and inadquate regulation in another, speak for themselves at this moment.

Addendum to my prior post: while I appreciate the praise from some, I must apologize for overstating my case. It is incorrect to say that financial institutions have entirely stopped lending to businesses and individuals. Businesses and individuals are only beginning to feel the squeeze. I firmly believe, however, there will be worse to come if something isn't done soon.

I messed up the html coding in my prior post. If you want to follow the link I provided please copy and paste into your browser's address window. It should work. I hope.

One additional apology: I regret not editing my posts before hitting the "submit" button. There are numerous grammatical, spelling, and structural errors in both that are making me cringe!

Ironically, this mess exposes the flaws in aspects of both liberal and conservative economic philosophies. The growth of the subprime mortgage market was created in part by liberal government policies designed to reduce the gaps by have and have-nots. That policy contributed to a housing bubble, the bursting of which is threatening to worsen the economic situation of many of the very people said policy was supposed to help.

Bankruptcy is perfectly compatible with liberal ideological canon. And subprimes are perfectly compatible with the kind of structures imposed on those in bankruptcy. Its recipients are merely given the slack to oversee it on their own, which can be changed.

The only direction a free market agenda can take is for greater deregulation -- to disable the means for a bailout. It's a fundamental flaw in republican ideology. It isn't logically or empirically valid.

Bailouts aren't an inherent outcome for implementing subprimes, as it is for deregulation.

Bill, one aspect of this that puzzles me is the lack of transparency. What exactly is the benefit of this? I mean, it's one thing to complain about regulations that may stifle you from taking advantage of an opportunity. But how did fannie and freddie convince people that what they really needed was the ability to engage in all kinds of secret stuff nobody can figure out?

My own hunch is that they were able to do this so that the same politicians who thought it was a good idea could somehow benefit from it. I would not be surprised to see more than a few of the same folks shedding crocodile tears in Washington revealed to have pocketed huge sums of money. At the very least I'd like to see it established that agencies that are backed by the US government should not be able to contribute to politicians. Imagine if the Army was sending contributions to politicians on military related committees. Yet fannie and Freddie were handing out the baksheesh like it was going out of style, which, I guess, it was.

At the very least, for 700 billion we should get a level of transparency that makes glass look like concrete. I'll bet it will be very interesting what we find.

Those are excellent posts by both Bills.

Unfortunately, the blame game will continue, and I'm not sure if we can expect any transparency going forward.

I've already said enough on the whole subprime lending vs deregulation debate, so I just want comment on this point of Bill Mulligan's:

Imagine if the Army was sending contributions to politicians on military related committees.

Well, let's face it, the military is even less transparent than most government agencies, so can we sit here and discount the possibility?

At the very least, it seems obvious that too many decisions involving the military and military leadership are being made with politics in mind. So there are still back-room deals being made, even if money itself isn't what's being exchanged.

For myself, I've been taking the Wall Street Journal with rather a large grain of salt ever since it was purchased by Rupert Murdoch...

Well, let's face it, the military is even less transparent than most government agencies, so can we sit here and discount the possibility?

that's a good point--but if it were shown to be happening I'll bet there would be people going to jail. With freddie and Fannie it was just business as usual and the politicians who got the biggest (official) donations aren't even the least bit embarrassed by it.

Bill, I just came across an interesting article at http://www.reason.com/news/show/129158.html

Would you take a look and tell me what your think? You have a much better grasp on this than I do. This guy's pov is very anti-bailout bill and he makes a few points I'd like to see addressed. For example, he says that Fannie Mae and Freddie Mac cooked the books a few years back to hide losses. Has anyone gone to jail for the book cooking?

Bill Mulligan: "Bill, one aspect of this that puzzles me is the lack of transparency. What exactly is the benefit of this? I mean, it's one thing to complain about regulations that may stifle you from taking advantage of an opportunity. But how did fannie and freddie convince people that what they really needed was the ability to engage in all kinds of secret stuff nobody can figure out?"

Well, first of all, I believe the lack of transparency was a side-effect of the passage of the FSMA rather than an intended outcome. The FSMA created an environment in which an organization could offer banking, insurance, and investment services under one rool. Yet the regulatory bodies remained separate. As a result, no one regulatory body had all of the tools or expertise needed to adequately keep tabs on companies like Citigroup, with its retail and corporate banking, wealth management, institutional investment, and other subsidiaries.

Also, I don't believe Freddie Mac and Fannie Mae were the ones clamoring for the FSMA. To the best of my knowledge, Freddie and Fannie are government-backed corporations which exist to help underwrite mortgages, and may not even be allowed to move into insurance or investments regardless of the FSMA.

I'll read the article from Reason magazine when I get the chance, and I'd be happy to weigh in on it. But please don't get the wrong impression -- I am by no means an expert on this. What I know about the situation is a merely a side effect of selling technology to national and global financial institutions.

Selling to financial institutions is not a good place to be right now, for reasons I hope are obvious. So I'm paying very close attention to this mess, as my continued employment may hinge on the ultimate outcome.

Okay, in the post above, where I said "rool," I meant "roof."

I need a drink. Or my own government-funded bailout. Or both.

Bail-oots rool.

Hysterical Fox News attempt to paint candidate support as evenly split: www.youtube.com/watch?v=KTkqosRiyYo

On a similar note to the Nigerian scam-like letter:

http://www.dailymotion.com/video/k5mfa38AVqP9tCHSpY

It's somewhat dated (over a year since it was first aired), but, sadly, not at all outdated.

As for the sins of "deregulation" more broadly, this is a political fairy tale. The least regulated of our financial institutions -- hedge funds -- have posed the least systemic risks in the current panic.

This weekend's This American Life demonstrates the categorical f***ing stupidity of this observation. The third act makes it crystal clear that Gramm's end-of-Clinton-era deregulation prohibited CDR regulation -- turning CDRs from something like insurance (which is regulated) into trillion-dollar gambling on the stability of the Closed Books™ of financial institutions.

They nurtured a speculation bubble in what speculation should never, ever enter into, which is insurance.

Glass shows some leniency to the republicans for the democrats who also voted for it so overwhelmingly, but that doesn't change that what those democrats had done was demonstrate faith in republican ideology.

An ideology that nurtures the need for bail-outs with deregulations, while weakening the government's ability to perform them, is a party of theft. That is the republican party's remaining virtue. And if, as a republican, you aren't the recipient of that theft, that just makes you stupid.