Who Is For and Against the $700 Billion Bailout?

The whole global warming thing is created to destroy America's free enterprise system and our economic stability. – Jerry Falwell

The financial system is close to collapse and something needs to happen. Who is exactly for or against the government’s $700bn Troubled Asset Relief Program (bailout) and why?

For:

Financial Services Roundtable:

The sophisticated interconnectivity of institutional market participants, individual investors, small businesses and pension funds - both large and small – reflects the broad range of Americans who have a great deal at stake in this debate. If the market conditions that have paralyzed the credit markets are allowed to continue and become exacerbated by inaction, every American‘s economic well-being could be at risk. The recovery plan, in its most general sense, offers an opportunity to return to an orderly market while assuring maximum protection for taxpayers and a path to divestiture of private funds purchased by the public facility. While we understand the details of the proposal are complex, we encourage Members of Congress to enact a bill based on the Treasury proposal as soon as possible.

Securities Industry and Financial Markets Association:

To date, Secretary Paulson and Chairman Bernanke have made some incredibly smart and tough decisions, but it is becoming clear that our markets need a comprehensive approach to address the current conditions. Today Secretary Paulson laid out such an approach and it is bold and very necessary. We are encouraged by Congress’ early reception to this plan and hope it will move with haste to approve it.

In a separate news release they go on to state:

The sophisticated interconnectivity of institutional market participants, individual investors, small businesses and pension funds - both large and small – reflects the broad range of Americans who have a great deal at stake in this debate. If the market conditions that have paralyzed the credit markets are allowed to continue and become exacerbated by inaction, every American‘s economic well-being could be at risk. The recovery plan, in its most general sense, offers an opportunity to return to an orderly market while assuring maximum protection for taxpayers and a path to divestiture of private funds purchased by the public facility. While we understand the details of the proposal are complex, we encourage Members of Congress to enact a bill based on the Treasury proposal as soon as possible.

American Boiler Manufacturers Association – see Financial Services Roundtable

American Land Title Association – see Financial Services Roundtable

Associated Equipment Distributors Association of Equipment Manufacturers – see Financial Services Roundtable

Consumer Bankers Association – see Financial Services Roundtable

Consumer Mortgage Coalition – see Financial Services Roundtable

Edison Electric Institute – see Financial Services Roundtable, and

A reliable and affordable supply of electricity is indispensable to the well-being of all Americans and is in fact the very lifeblood of the U.S. economy. Electric utilities (and their customers) depend heavily upon ready access to capital markets to sustain their day-to-day operations.

The Financial Services Roundtable – see Financial Services Roundtable

Mortgage Bankers Association – see Financial Services Roundtable, and

Recognizing that none of this is finished product and that there are important oversight issues that should be addressed, we are nonetheless disappointed that some legislators have decided this is an opportunity to tack on their favorite pet items. The markets need this facility and they need it fast.

National Automobile Dealers Association – see Financial Services Roundtable

National Association of Home Builders – see Financial Services Roundtable, and

We agree with Fed Chairman Bernanke and Treasury Secretary Paulson that immediate steps need to be taken to stem the financial crisis. The financial markets are in turmoil and the flow of credit has been severely curtailed for housing and other sectors of the economy. There’s no time to waste. Congress must pass legislation as soon as possible.

National Association Manufacturers – see Financial Services Roundtable, and

Business and manufacturers depend on the effective functioning of our capital markets. Without access to credit, manufacturers will be limited in their ability to expand their business, make investments, and even carry out day-to-day operations. If the financial crisis means America stops making things, then our country and our economy are in serious trouble. As employers and community members, manufacturers are also concerned about the financial crisis’ impact on our employees and their families, as well as individual investors and pension plans. All of these rely on a secure and stable financial system.

U.S. Chamber of Commerce – see Financial Services Roundtable, and

Whatever the cost of action, the cost of inaction will be significantly higher. “Main Street” and Wall Street are inextricably connected. The funds that flow through Wall Street drive the activity on Main Street that creates jobs and generates income. Americans have witnessed what has happened to equity markets over the past week, and failure to act will only contribute to even greater declines in the markets, which will erode taxpayers’ retirement savings and pension fund assets. However, that may very well be only the tip of the iceberg because a lockup in credit markets will cripple Main Street’s ability to operate and threaten taxpayer jobs and income.

Against:

John Birch Society:

The American people need to make it clear that passage of the bailout bill will be considered as this Congress' final act in abdicating is constitutional authority to faithfully represent us. If this Congress votes to make itself illegitimate, Americans will vote for a new Congress in just a few weeks.

Against as Currently Proposed:

National Taxpayers Union:

Any plan should permanently restructure accounting rules that force massive write-downs for institutions, some of which could otherwise hold the securities to maturity without fear of failure. ……The RSC’s Fannie Mae and Freddie Mac divestiture plan should be codified with an aggressive and enforceable timetable.. The inflation tax on capital gains should be eliminated and, at the very least, the 15% rate should be cemented into permanent law, if not lowered or scrapped entirely.

70% of Voters against or undecided – There is widespread grassroots opposition to the bailout. It is not organized and historically has little voice against the strong lobbies of the pro group. The most humorous is a website dedicated to purchasing bad investments.

Change to Win Leadership Council includes The International Brotherhood of Teamsters, Laborers' International Union of North America, Service Employees International Union, UNITE HERE, United Brotherhood of Carpenters and Joiners of America, United Farm Workers of America, and United Food and Commercial Workers International Union states:

Now, the Bush Administration wants us to pick up the tab to bail out Wall Street, with no strings attached. Congress should not give the Administration a blank check. It needs to structure a bailout plan that will actually work to stabilize the financial sector without leaving taxpayers holding the bag. And it needs to provide relief to the real victims of this crisis -- the working families whose homes are now at risk of foreclosure. Accordingly, Change to Win believes that the following principles must govern any bailout plan, and that Senator Dodd's proposal provides a good starting point.

AFL-CIO:

Our nation is facing a real crisis and we should move swiftly, but we cannot afford to compound our problems with bailout legislation that is hasty at the expense of thoughtfulness and common sense. We want our tax dollars to provide a hand up for the millions of working people who live on Main Street and not a handout to a privileged band of overpaid executives on Wall Street.

Pro Any Plan:

AARP:

The nation faces a historic economic crisis, and failure to act will risk Americans' jobs, homes, and retirements. AARP is urging bipartisan action on a plan that is in the best interests of our members and future generations. [J]oin AARP in telling Congress to come together now on an appropriate economic rescue package.

Want to play asset management roles in the bailout:

• William Gross, chief investment officer of Pimco
• Blackstone Group (BX)
• BlackRock (BLK)
• Morgan Stanley (MS)

Congress has a fiduciary responsibility to the citizens of this country. They have failed to prevent the need for this bailout. Article 1, Section 8 of the Constitution clearly places the responsibility for this situation with Congress. It is clear that action needs to occur immediately, and this action must safeguard the citizens. The vast majority did not create this crisis nor benefit from the economic bubble created. They will indeed suffer the consequences of any solution signed into law. It is up to Congress to minimize the consequences to its citizens.

Disclosures: None.

Comments

[1worldcurrency:]

Right and left aligned against the center. Bipartisan support will be met by bipartisan resistance. Bad timing for incumbents. "My opponent bailed out frauds" will end the careers of several Senators. The new champions of Democracy will get to play the game, as per "Deliverance". Enjoy the last bottle, equity owners. Lend that money wisely.

2008 Sep 28 06:02 AM

[hooligan:]

Here's a back to basics solution and ya boo sucks to anyone who believes that giving drugs to an addict for a year is a great idea!
1. Propping up a failed model is stupid, so start a new one. Take all banks assets onto the Government balance sheet, while a better model is constructed.
2. Make the production of all goods sold in the USA subject to the same workplace standard applied to US goods, with a Federal body (quarterly inspections by different staff members) obligatory.
Ok that fixes the drug and the drug dealer. Next comes rehab.
3. Make individual and company borrowing restrictions the same. There is no reason why a vehicle should have laxer standards than are applied to an indidividual.
4. Cut defence spending by 75%, particualrly on hardware that is of dubious use. So eliminate all spending that doesnt have a purpose. It may not have escaped everyones attention, but before we all forget, the pentagon spends as much as this bail out EVERY YEAR.
5. Set the maximum borrowing amount to the combination of three times income for any individual or company.
6. Stop ratign agencies being paid by the borrowers they rate and make the BIS or IMF insure against downgrades.
7. To fix the MBS problem, break up all the pools into individual mortgages and then re-bundle them.
8. Do no not offer any refinance to mortgage defaulters unless those NOT in default have the same terms applied to their mortgages OR other households are offered thechance to give their existing homes in exchange for the over specified and expensive homes (why should a defaulter have a better home than a non defaulter). This would migrate and give main street the chance for a property upgrade to clear modern houses and put defaulters in worse quality homes.
9. Re-start a mass immigration policy to target 3-5 million migrants entering the economy.
10. Spend 700 billion on broad economy employment programs in infrastructure to rival the standardsbeing put in place in China and Qatar right now.

2008 Sep 28 06:02 AM

[another.ana...:]

hooligan

Thank you Mr Marx & Mr Lenin

2008 Sep 28 07:00 AM

[eddie6442:]

There are 450 billionaires and 3,000,000 multi-millionaires in America with a collective networth of $11 Trillion. The Bailout plan should be funded by each contributing [investing] 10% of their wealth -- a total of $1.1 Trillion! That removes the pain from the already "broke" taxpayer, eliminates the political hostilities and allows these financial elites to "benefit" from the profits of the plan...........
Interesting how those who can afford to save America, many of whom have gorged themselves from our losses, have not volunteered to come to Americas rescue. A country they all so love!!!!!!!!!
IMHO

2008 Sep 28 08:59 AM

[formerhawk:]

Another... you took the words right out of my mouth.
Hooligan you evidently don't have cash equity bonds or any other dog in this hunt. Chavez would welcome you.

2008 Sep 28 11:47 AM

[carey_jim:]

I haven't seen any articles about what's going on economically, behind the scenes.

My guess is that the counter movement which has been building in various influential American economics graduate schools, since Ronald Reagan rose to power in 1981, against the Chicago School of Frank Knight (Milton Friedman, Paul Samuelson, Joseph Stiglitz, James Buchanan, etc.) has finally got a wedge into policy with this crisis.

It would be interesting to get an article here about who the "economists behind the throne" really are and what brand of economics they are pushing, including a list of graduate schools and "think" (ideology) tanks that support them.

It's amazing to me that the Republican party can change its economic philosophy for one that is to the left of the Democrat party platform, just a few weeks from a major election.

It may be a proof that politics is controlled by a cadre of experts (Washington insiders, lobbyists and professors) and that senators and congressmen are only empty suits and dresses whose role is to give us the illusion that America is a democracy.

2008 Sep 28 12:16 PM

[unimpressed...:]

Washington, as usual, is ignoring We the People. I thought McCain and the Republicans were fighting for us. Instead, it looks as if they were fighting for their piece of the pie.

The, only, thing that appears to have changed is that the Treasury will have the funding parceled out to them instead of in one lump sum. And, the taxpayers will be stuck with a lot of worthless paper and a huge debt.

We the People MUST flood Congress and the White House with emails, faxes, and telephone calls expressing our anger and intent to throw everyone, both parties, out of office in November. Then, we MUST do it! Otherwise, the beat goes on and we continue to suffer.

Bottom line: They are all a bunch for corrupt, self-interested, incompetent fools and are not worthy of our trust or our support. NO on everyone in November.

When the economy is debated by McCain and Obama in a few weeks, listen carefully and decide which one is more likely to serve this nation and We the People's interests - Not theirs and their Party!

Remember, Obama is pushing a Marxist agenda that will bring disaster to the economy and the investors with their IRAs. 401-ks, and Roth’s. Vote, accordingly.

2008 Sep 28 02:09 PM

[msoori:]

I think this bailout is the biggest scam that we have seen. We have been outsourcing American jobs for so long, and the results have started to come in. Putting band aids to fix this wont do us much good until we accept the reality and start creating jobs here. No jobs, no homes. simple as that. So, we should start fixing the root cause, instead of bailing out the banks.

digg.com/business_fina...

2008 Sep 28 03:33 PM

[Bruce909:]

The bailout really does not matter. We are past the "Minsky moment". This is just the first of a series of baliouts. They will just print the money to pay for the bailouts and it will be reflected as an inflation tax in the future. I do not see how it can end any other way.

2008 Sep 28 04:12 PM

[User 112088:]

Who is for or against a depression? Large corp. should have tighter regulation. I wonder who gave them such lattitude> washington lobby practice.

2008 Sep 28 05:41 PM

[justanobser...:]

I heard that Wall Street got its name from a wall built around what is now the financial district to keep ravenous, raging pigs out from the area. Hmmm...maybe they should have kept the wall!

2008 Sep 29 12:39 AM

[tonny adamms:]

If the State Administration chose to be reckless in Military Overspending in the excuse of pursuing Terrorists in Iraq,why pin the blame on Wall Street CEO's for the Greed and reciprocal irresponsible overspending?You scratch my back I scratch yours!Politics should never allow this again,taxpayers to be asked to shoulder the Rich and Well To Dooz!

2008 Sep 29 07:42 AM

[phdinsuntan...:]

implement the Washington Concensus now, follow IMF traditional advise and the patient will survive, fuel bailouts and move to Zimbabwe:
The widespread adoption by governments of the Washington Consensus was to a large degree a reaction to the macroeconomic crisis that hit much of developing regions, during the 1980s.

Fiscal policy discipline;

Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;

Tax reform – broadening the tax base and adopting moderate marginal tax rates;

Interest rates that are market determined and positive (but moderate) in real terms;

Competitive exchange rates;

Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;

Liberalization of inward foreign direct investment;

Privatization of state enterprises;

Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions; and,

Legal security for property rights.

wait, if it looks too much like Obama program is not my fault!

2008 Sep 29 08:42 AM

[too old:]

Squashnut saying this would end the career of several senators should realize that the senate should not be considered a career. Our constitution was written to have citizen legislators - not career politicians.
I will not vote for anyone that has served 12 or more years in a given office. TERM LIMITS should be a must.

2008 Sep 29 04:59 PM

[sblservices:]

Great work...
Regards,
accounting services

Aug 05 06:53 AM