Don't Get Sanguine About This Bill 51 comments
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After the lessons we learned on Monday, it's a good idea to pay attention to people who say that the bailout bill is going to have difficulty getting passed in the House. And Andrew Leonard, today, says just that:
The prospects in the House are still up in the air, complicated by the reality that this new bill is anything but "clean" -- it is, in fact, three, or even four four, bills, squashed together. What was once a three-page plan from Henry Paulson that became 110 pages long when considered by the House is now a 451-page monster.
The "Emergency Economic Stabilization Act of 2008" now also includes the "Energy Improvement and Extension Act of 2008" and a smorgasbord of other add-ons...
A House of Representatives that has already rejected this bill will now confront a new bill stocked with unpaid-for tax breaks that conservative House Democrats -- the infamous "Blue Dogs" -- have been stalwart in opposing.
"Are you trying to jam the House?" one reporter asked Reid. The Senate Majority Leader denied he was attempting to do any such thing, but it seems self-evident that in attempting to rally significant support for the bailout in the Senate, he has orchestrated the creation of a piece of legislation that is guaranteed to ruffle feathers in the House.
Now is no time for fiscal conservatism, so I doubt that House Democrats will oppose the bill just because it extends a bunch of tax breaks for things like motorsports racing track facilities. But I do wonder why the Senate is going first, here: the Senate was meant to be the easier chamber to pass. By forcing the House to vote on a massive bill larded up with something for everybody to object to, they're just making life harder on the House.
What's more, the financial markets knew exactly what they were getting with the original Paulson three-page bill. The amended version voted on Monday was more complicated, but still within the ken of traders. This monster, on the other hand, has far too many moving parts. And I do fear that if and when it does pass the House, the markets will drop. Two days ago, the $700 billion bailout bill might have been sufficient to unfreeze credit markets. By the end of this week, with massive bank bailouts going on around the world, there's a good chance that it won't be enough. Not even with exemptions from excise tax for certain wooden arrows designed for use by children.
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This article has 51 comments:
How many times in history has the outgoing power tried to raid the treasury on their way out the door?
I am sick of the supposed "inevitability" of this legislation. Talk about a pig with lots of lipstick! At this point I'm beginning to think that Congress, even with everything we know today, would still let Bush invade Iraq just because he and his advisers say so. Spineless...
Let's put a bit of legal language at the end that says something like: If Congress discovers any deception or withholding of information by the Executive Branch in regards to any aspect of this bill it will be deemed NULL AND VOID. I'd love to see Bush sign that... Of course he wouldn't do it, would he?
A friend of mine is a staffer in California and he said that the information provided by the media (mostly owned by Disney, GE, Time-Warner) is totally false. Overall, calls are running about 85 percent AGAINST this bill in any shape or form. (I guess there are a few death threats thrown in there from time to time...)
But to answer your question Felix, I think that the "elitist Senate" went first for the following reasons:
1. For an overseas show -- since many countries do not understand that in our legislative system these things require passage in the House of Representatives.
2. To put pressure on the House of Representatives to pass the bill and make it look like they are the ones holding everything up.
3. Buy more time so Pelosi, Frnak, Dodd and others can bribe and coherse Reps - possibly with pictures of them in a bathroom stall with an guy, who will remain nameless, from Idaho.
4. Bush didn't want to end up in a position where the bill...
* Passes the House of Representatives
* Gets a 50/50 vote in the Senate... Then...You guessed it...
* The VP casts the deciding vote, thus throwing the whole enchilada back on George and Dick. They would forever be known (as if they aren't already known) as the administration who wiped-out the American economy with just one vote.
So, the U.S. Senate, although Democratic, is covering Bush's butt. Why, I haven't a clue.
As for Congress fattening it to 110 and then 410 pages, it's Congress at its best: raising pigs. I have zero doubt the new bailout bill will pass the House. Now, that they've been given the permission to fatten the bailout bill with tax brakes for cows in New Mexico and bridges to nowhere, this malnourished 410 page piggy will turn into a 1100 page obese ..... no word really fits here ... and it will be a triumph of The Process.
Congress will take all the credit for saving the world. The difference between this and the previous bill that failed? Pork.
The financial industry machinations of the past years that got us into this mess, are nothing compared to what happens in Congress. Exactly when do we pay the price for that is anybody's guess.
We are in for a hellish 4 years. It hardly matters which Senator is the next President. They are both clueless.
Em... I guess Bush-Paulson were anticipating that everybody went to a public school in the United States when they ran this scam. It may play Peoria, but it ain't going to work anywhere else... Not Asia and Europe, that's for sure.
And confidence? Name something the U.S. Government has done with our economy in the last thirty years that has given you confidence. Good grief Charlie Brown!
1. There are enough police to control the situation?
2. Enough military to control the situation?
3. Enough National Guard to control the situation.
This would assume that nobody, of course, would leave there post if there was a breakdown. As we know from New Orleans, this is not true. I think 30-50 percent of the police force abandoned their positions and decided to help their own families.
MSmailbox. There are not enough police, military, National Guard, DEA, FBI to control the situation if there were four or five cities in a bind, let alone if there was a massive problem throughout the country.
To think that the U.S. Government would have the ability to be in control of any situation that would ensue from a massive breakdown of our economic system that led to mass chaos is not realistic. Besides, Bush-Paulson types, and Washington DC for that matter would head to a cave somewhere. If you look at the failure of natural disaster after natural disaster, I think you get my point.
I don't think that such a thing would happen in our country. I could be wrong, but I just can't see it. I've seen things like that happen overseas in West Africa, but I just don't see it here... Maybe I don't want to see it here...
U.S. Government... Big brother? No. Big bother? Yes.
Congress will heel and pass this bill Friday.
Each of you is to whip out your checkbook and write
a $2500 check payable to "My Favorite Wall Street CEO".
Welcome to the United Socialist States Of America.
USSA! USSA! USSA! USSR! USSR! ooopppsss...
Okpulot Taha
Choctaw Nation
Good work people.
I wonder how things ever came to this...?
I wrote wrote every Senator in office with my view on the bailout on October 1st, including both Obama and McCain.
On November 4th, I am going to write "Ron Paul" on my ballot.
tear out your chip!
droid no more
land mothership.
return my soul
utopia is near
no more bottomless hole
of human fear
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
The most important issue ,is the misrepresantation of the cost of the "stability act" ,the value of add ons and the effectivness of overall program.
When the program was initially proposed just about every article published on this platform ,reflected whining about the cost and the implications of the "stability act"
The 700 billion dollars "aid" is basically collateralized loan.
True ,the collateral is illiquid at this time ,but it is bought at a fraction of the dollar.
In more stable environment ,the collateral will appreciate potentially to par.
In this case tax payers will have an opprtunity to"rape and pillage " Wall Street.
The 700 billion dollars"Aid"will provide approximately 5 trillion dollars in stimulous(using multipler of 7) which equals to about 40% of the GDP.
This will be a pnenomenal catalyst to kick start economy.
Main stream America needs to understand that this program is aimed at their economic welfare as financial/economic failure would cause unquantifiable hardship to the masses.
The add on to the "aid" proposal will contribute to psychological objectivity and add relatively little to the 700 billion dollars collateralized loan.
While Europe and Asia are trying to benefit from our "rescue",they will have to identify and address their own issues.Either way they will face a major turmoil in the period ahead.
In the meantime it should be clear that the program approved by the Senate is an incredibly effective economic/financial catalyst.
The global investment community understands this .As a result we will witness a geometric expansion in the dollar inflows.
This momentum will drive the dollar to record highs and will contribute to the U.S dynamic recovery,as the dollar inflows will be invested in the dollar denominated assets(including the stock market)
We are on the verge of unprecedented economic and market recovery subject to the passage of the bill by the house.
I am sick and tired of the peanut gallery which appears to wish the economic implosion which would inflict unprecedented misery upon Americans.
Betterr times lie ahead .We will see the Dow At 20,000 in the period ahead.
Let the market pay for the banks' garbage
What matters to me is what, if anything, has been changed or hopefully improved in this "new" bill. Who the hell has time to read 400-some pages? Who, besides an attorney, could understand it? 100 pages was bad enough, and the old bill's language was totally unacceptable. Hopefully the House reps got to read it, or maybe their flunkies, overnight. Maybe they will delay the vote so they can do further consideration.....but wait! That would make too much sense.
The proposed legislation does not focus on the right problem. The critical underlying problem in our economy is the growing number of foreclosures and associated decline in the US real estate market. This bill will not address the core problem in any meaningful way.
The proposed legislation is inadequate to the task it is intended to tackle. Even if all the $700 billion were made available as credit by the receiving banks, it would be insufficient to bail them out of the multi-trillion dollar liquidity shortfall they face. the Treasury and Federal Reserve have already extended over a trillion dollars in direct aid or guarantees to Wall Street—and credit conditions have worsened.
The proposed legislation will not result in significantly expanded credit available from Wall Street to Main Street. Because of their huge leverage—20-30 times their capital—the banks will need virtually every cent to shore up their capital reserves. The half-trillion dollars already extended to Wall Street has accomplished nothing in easing credit conditions.
The proposed legislation rewards the outrageously poor, if not outright corrupt, financial management of the banking industry. Banks that knowingly failed to be diligent about risk management and some that participated in fraud will be bailed out. Indeed, the mismanagement of major banks is systemic and has metastasized the illness in the housing industry into a global financial cancer. It needs to be cauterized, not subsidized.
The proposed legislation will ultimately leave the US taxpayer with hundreds of billions of dollars in losses added to the national debt and our taxes. To make any sense at all in achieving its intended goal, Treasury will have to pay a premium for this toxic financial waste. The taxpayer will ultimately eat this waste no matter what warrants, equity, or other arrangements are introduced.
However, 9 out of 10 people don't have a clue about how 'teaching Wall Street a lesson' will impact their own very lives. Short sightedness at its finest.
Now would be a good time to make sure you have enough cash in your hands (ie. not in the bank) to sustain your lifestyle for a month or more. Your bank might be next, or they all might take a few days off to figure out how to get the system running smoothly again.
Better safe than sorry.
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this subject takes less than a quarter of this marvelous piece of statesmanship.
Much better.
TAKE YOUR M F BILL&SHOVE IT WHERE THE SUN DON'T SHINE!!!