Note to some readers here: if you find yourself suddenly agreeing with House Republicans and senators like Jim DeMint and Jim Bunning, you might want to check your meds or reassess your assumptions. Irrational hatred of Wall Street and indifference to financial collapse are signs that you can’t be trusted to govern anything (and also that you own nothing).
About The Author
BooMan
Martin Longman a contributing editor at the Washington Monthly. He is also the founder of Booman Tribune and Progress Pond. He has a degree in philosophy from Western Michigan University.
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I’m not applying for the job of running the country. I don’t own nothing, either. However, I don’t own any bank stock, except Lehman Brothers. I couldn’t resist dabbling in penny stock. Made 60% so far on rumors of candy from Congress.
I do own oil stocks and gold. And as of Tuesday, some Berkshire Hathaway. Warren Buffet is a shrewd dude.
I WAS worried at first. But when I saw Bush’s lying face on TV, I knew that it was just one last giant rip-off for his cronies.
Bullshit.
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BooMan, there’s only so much you can do to educate.
Very few understand economics, especially in today’s global interdependence. Not to be elitist, for many as long as CNN, ESPN plays and the sixpack is available, all is well…we don’t need Wall Street.
Credit financing, auto loans, credit cards, student loans and pensions fall like autumn leaves.
My concern is that $700 billion will not buy ourselves out of this mess. But some effort is necessary to stabilize the ship.
Brutal if it fails.
Huffpost: At White House McCain plays bailout spoiler
Too little. Too late. Maybe there is a way out, but putting another Trillion Dollar noose around the taxpayer’s neck doesn’t seem particularly productive.
Everyone should be deeply concerned because it affects us all.
The end of your first quote tells the story:
Most small to medium sized business operate on credit. They draw down on their lines to buy inventory and make payroll and then repay as products or services aresold. And many of those credit lines are tied to LIBOR – so the cost of funds is rising every day.
I spent 4 hours with bankers from a large national bank this afternoon. The head of regional credit said that he now considers his job to be solely risk management. In other words, he’s not approving new credit he’s trying to manage existing credit. No new credit means no expansion of business. More worrying, lenders have made the decision not to renew existing loans as they come due unless the customer has non-credit banking relationships with the lender (i.e. they pay fees for cash management and other services). So existing companies with loans at decent rates must repay or, more likely, refinance with other lenders. But with credit so tight the refinancing will be at much higher rates. That means contraction of business.
These are the basics on which the companies that employ most of the people in this country run. This affects everyone who is employed by small/medium sized businesses. This affects everyone who is employed by those who supply small/medium sized businesses.
I balked at the idea of giving $700 billion dollars away with no strings attached but I do not doubt that something needs to be done.
Ah, refreshing sanity.
So we abandon all hope of progressive reform because Bush could be telling the truth?
Economic facts? First show me Paulson’s secret presentation. Why is it hidden from the public?
So now it is the Bush-Democratic plan and McCain and the House Republicans are the White Knights responding to the will of the people. Great! Fucking Great!
I didn’t think you would drink Bush’s Kool-Aid, Booman.
Big Ticket goods sales down means no one is buying cars. It’s not lack of credit. The auto manufacturers are offering credit. Durable goods also means Washers and Refrigerators and the like. Those sales are down because house sales are down. House sales are down because people can’t sell their old houses.
Bailing out the banks’ shareholders will not solve the housing problem nor the auto problem.
WaMu shows how it SHOULD go down. Banks that made bad decisions go down and another smarter bank picks up the pieces.
Reuters has a Breaking News story..GOP changes tune
BloombergTV reporting Paulson rejects GOP alternative plans
The proper response is that the taxpayers should own Wall Street (or some portions of it).
from what I’ve heard read, the Agreement stated at mid-day had taxpayers’ protection – equity from companies who participated.
800 hundred small regional banks will fail. FDIC is said to need $150 billion to handle what’s ahead.
I’m really crying for the bastards who have despised me all my life.
If you find yourself suddenly standing with George Bush (Mr. 18%) in opposition to the vast majority of Americans then I think you have an even bigger problem.
But I agree the World seems upside down messed up.
To be clear, I’m not siding with Bush. I am telling you that we have a real financial emergency and that it would be insane to ‘let the markets work it out’ because it would devastate people all over the globe.
That acknowledgment is not the same as agreeing with the details of the bailout package.
Some people’s attitudes around here are to call in mortar fire on themselves just to kill the bad guys.
Yeah. It’s obvious the economy is in the crapper. No one is denying that.
Only problem is that some people have been blowing smoke up our butts about how it’s really been a great economy and we’re just whining . .. and then abruptly switch tactics and use financial terrorism to hold us up for a trillion dollars (and counting) to give to Wall Street.
I want to “fix” the economy too. Believe me. And I, and progressives like me, have some good ideas.
But one thing I know for certain is that giving Bush a trillion dollars in this fashion before we know know how big the problem is and whether we can really solve it and only the very week Bush reverses course and admits there is a problem (which happens to coincide with an election) . . . is utterly foolish.
You want to give Bush the keys to the treasury with specific authorization to hand it over to his Wall Street pals. And I resent that you imply I’m somehow “unhinged” or “off my meds” for being a wee bit hesitant to hand the keys to Bush.
First of all:
The bill isn’t what it started out to be. Can we at least acknowledge that?
It looks like an initial $250 billion doled out in two installments, not $700 billion all in one shot.
It will have oversight boards (two, one congressional, one non).
The public will have an equity stake (thereby, further reducing the cost).
And there will be provisions to prevent golden parachute pay.
That’s for starters. I haven’t seen any official proposal, so I can’t really say whether I support or oppose the bill.
But it’s stupid to act like the proposed bill is still to give $700 bill to Paulson with no strings attached.
But that was the starting point of these “negotiations”. Bush set the agenda. Bush held a gun to your head and said give me 700 billion to give to Wall Street (buy its crap debt–please don’t insult us by saying it’s really a good deal) and here’s a 3 page summary of how I want it to go down (which of course is about as detailed as a picture of a stick figure holding another stick figure up and taking a bag of money from him).
Yeah. You guys are asking a few questions. And the devil is in the details, I guess. You always say you’re getting a good deal from Bush.
But has this play ever gone well for liberals? I mean, Goddammit, I object to the whole procedure! Bush is practicing financial terrorism.
Maybe buying Wall Street debt is good (I’m not convinced in the least) and I may be wrong. But when has a Bush shakedown ever gone well?
And Bush always concedes a few things that the Dems point to as a significant concession but it never turns out to be significant in the long run.
And this smells like every other Bush shakedown I’ve ever seen.
So please don’t tell me how you guys worked out a great deal while Bush was pointing a gun to your face. I’ve heard this story too many times.
If Wall Street needed the taxpayer to buy trillions of its debt to function then the Democrats should have been proposing this months ago–after all, they were admitting there was a problem back then.
Let me repeat:
If you want to know why Democrats are being responsive to Bush’s call to do something, it is because of statistics like that, and not because they have desire to buy piles of shit.
jebus boo, sometimes I just want to reach through the screen and smack you. The world could come to an end unless the gov’t buys a bunch of crap paper for 700 billion. That’s equal to the annual budget of china. Libor is going through the roof? Yeah gonna need a little more than that before handing over 700B. Where do you think that money is going to go once they get it? I’ll tell you, it will be plowed straight into commodies, oil food and energy, driving prices through the roof for all those little people you care about. But at least we bailed out people who write worthless paper, that will come in handy
They are not going to buy the crap back, that’s a fact. But maybe you’re right, we can print enough dollars to get our way out of this. Worked for the Weimar Republic
For one, Obama could announce tonight his intention to introduce a bill to recapitalize the FDIC to ensure it has enough funds to cover depositors with funds under a 100K.
With WaMu about to go under it may be a good thing to get out there and start talking about that problem. That’s a problem that will affect Main Street.
I’m so confused.
I own stuff and I don’t agree with GOPers, but that was a bad bill. I don’t care who scuttled it.
Give them $150 billion, like schumer said: at $50 billion a month (bernanke’s estimate) that’ll hold ’em through January, when a new administration takes over.
And if the markets crash, everyone will know it’s McKKKain to blame for scuttling everything.
Tomorrow’s theme is Song Lyrics, Song Titles
(and also that you own nothing)
I’ve gotten out of dollars. The giveaway would be good for me personally, since it will make the dollar tank more than it is already doing.
Q: Why didn’t John McCain cross the road?
A: Because he was chewing gum.
The House GOP plan is McSame’s Hail Mary into the White House, BooMan.
WaMu’s collapse tonight will turn into a bloodbath tomorrow. Dow futures are already giving back most of today’s Dead Cat Bounce.
McSame will swoop in with this batshit crazy plan and Rush and the GOP noise machine will sell it tomorrow. “Holy hell yeah man, make Wall Street pay for their own bailout!”
MAVERICKED!
If McCain tries that he’ll get the Dealey Plaza treatment in no time.
You can’t commit fake populism in this environment.
Oh I agree it’s a hell of a long shot.
But this entire campaign has been one crazy ass long shot after another.
You and I both agree that McSame’s a gambler. This is a roll of the dice where he needs boxcars to win.
The House GOP plan gains overwhelming support publicly because the GOP noise machine does what it does best: lie and say “Wall Street is gonna pay for it!”
McSame then takes this crazy plan and says “My way or the highway.” Wall Street and Bush put on the screws on the Democrats.
They fold just like every other example: FISA, torture, funding the war, Gitmo.
You willing to bet against McSame rolling the dice like this after Palin?
You willing to bet the Democrats won’t fold after FISA?
I’m not. Obama won’t know what hit him tomorrow. Over the weekend the Kabuki play will unfold, and by Sunday night we’ll have a done deal again.
And by Monday McSame will be the Maverick That Saved America.
that doesn’t even make sense.
How can McCain lead a populist revolt, lose, and then claim he saved America?
Because the House GOP plan magically makes Wall Street pay for it.
Now, you and I know this plan is complete crap. It’s terrible. But what is Joe Six-Pack gonna see?
TADA! And McSame gets behind it!
There’s a deal. Wall Street “pays for it” through BUSINESS TAX CUTS and REGULATORY SUSPENSIONS.
GOP noise machine sells your populist revolt by “making Wall Street pay for it”.
McSame saves the world.
Heh. See while I was doing the post down below Zander found it.
Magic tax cut fairy swoops in.
Now stage two – get the ballpoint pen and run to the National Archives while everyone is standing around confused!
Seriously – except for the mouthbreather base this is going to be a tough sell. You really expect me to believe that people are going to be LESS upset with Wall Street execs getting a fat tax cut than they are with the companies getting a straight up bail out? Really?
Once again, this is predicated on three things:
It doesn’t matter if we buy it. It matters if the undecided voters buy it. Undecided voters have been seeing $700 BILLION BAILOUT for a week now. Now they will see MCSAME, GOP WANTS WALL STREET TO CLEAN UP OWN MESS.
How is this any less ludicrous than the last month politically?
Note that McCain has been slowly failing miserably over the last month and has only been floating along by hopping from gimmick to gimmick. If he keeps doing what he’s been doing, he loses. I hope he keeps it up with the gimmicks.
And to tack on to what I said above …
McCain and company are seriously coming out with a plan that says “Tax Cuts for Banks and Less Regulation” as their great scheme to fix things?
Really?
Less Regulation? Tax Cuts for banks?
The Noise Machine is powerful, but it ain’t that fucking powerful, my friend. If it were, McCain wouldn’t need to be pulling stunts to keep his percentages from falling like a rock every week.
Booman, you can’t argue with conspiracy theories – they’re inherently irrational beasts.
McCain’s campaign has been so insane up to this point that people are giving him supernatural powers.
The only way that I could see something like this playing out is as follows:
Beyond that I got nothing. McCain is losing credibility every day. If it gets confirmed that McCain is the reason that this tanked and the markets plummet tomorrow, he’s going to have calls for his head by lunchtime. If it turns out he doesn’t really have a counter proposal but he tanked this one anyway, that timeline may ramp up. The only way McCain “wins” is if nothing happens – no massive blow up, no economic collapse. But then everyone will be talking about the economy for the next 5 weeks anyway, so it still won’t be a win for McCain.
He’s got nothing but grandstanding and he knows it. And while grandstanding by the House GOP caucus might look good to the GOP mouthbreather base, the portion of the base that works in the finance sector and is scared shitless right now of losing their damn jobs is going to get more and more pissed the longer McCain and the House GOP keep it up.
If McCain tries that he’ll get the Dealey Plaza treatment in no time.
Dude, don’t even joke. If it works well enough to sweep him into the White House then Sarah “mooseburger” Palin becomes our President.
If the economic crisis wasn’t giving me nightmares, that idea certainly will.
ab out the time of the election, the value of Americans’ 401Ks will plumet, the ability of people to get car or home loans will be 0, and the Republicans win.
I am cringing to agree with (bigot) Pat Buchanan: “Gotta have a plan.”
The only way it happens is if the Democrats (including the Bush Dogs) hold together, slam through their legislation and attach it to a bill that Republicans must put through and Bush must sign.
I ask you. What is the likelihood of that happening?
As of the “White House Summit” all proposals have become DOA, courtesy of Conservative Republicans like DeMint and Bunning.
It ain’t happening until November 5. But the Democratic leadership must keep the game alive until November 5 in order to keep the market lemmings from rushing off a cliff.
The clear way for lenders to deal with this is to renegotiate mortgages to permit recovering something instead of forcing folks into foreclosure or bankruptcy. Lender have not shown a willingness to do this. And they will get bitten first for their unwillingness to face up to the situation.
Nonetheless, I’m kinda tired of having my tax money extorted with threats of unemployment.
The only way it happens is after the election. And what happens depends on who wins. Is Wall Street clear on where their interests lie yet, or are they still drinking the deregulation and tax cut kool-aid?