Much of the political left, with a good dose of help from libertarians and fiscal conservatives, have been mobilizing to defeat the financial bailout plan. Congressional representatives in the House have been bombarded with emails, faxes and phone calls, in some cases running 100:1 against the legislation. The pressure was greater than anything Congress has faced in decades.
Those opposing the legislation were victorious, but chances are that the celebrations will be short-lived as banks continue to fail, interbank loans are denied, payroll loans are rejected, and the financial domino effect spirals out of control. Passage of the legislation was certain to reduce confidence in the US’s ability to repay its mounting debt, but that is not the most pressing current financial problem. Right now, those on Main Street need to worry about their current employer’s solvency and credit lines. As credit markets freeze further, both domestically and internationally, the ability of employers to continue paying employees will be in jeopardy.
It is impossible to tell how far the domino effect will spread if bank-to-bank, and then bank-to-business loans continue to fail, including payroll loans. That puts further pressure on the mortgage loan system, because more people will undoubtedly default on their mortgages.
It is also difficult to tell which businesses will begin to fail first, but they are likely to be in sectors that are already hard hit, like automobile manufacture and sales, airlines, construction, and financial services.
Main Street failed to organize to stop the Iraq war, to begin impeachment hearings, or to hold the Bush administration accountable for spying, torture, privatizing war, or any other malfeasance. But Main Street did finally organize to write and call Congress and put enough pressure on them to stop the economic bailout that would have kept banks solvent, at least for now. But they are going to find soon that it was a classic Pyrrhic victory, where few are left unscathed to enjoy the outcome.
This was a classic Heads I win, Tails you get crushed into the dirt scenario. There was no 'Happy Days' answer by voting against it, but the 'Happy Tree Friends' answer that passing it would have been was far worse. Saving some banks is not worth destroying the Dollar. We will definitely have a sucky year w/o it, but hopefully then, we can move on and get back on our feet again.
by
E Philipp (0 articles, 0 quicklinks, 0 diaries, 8 comments)
on Monday, September 29, 2008 at 3:28:33 PM
A vote against the bail out is not a vote against looking for solutions that make sense. However, the latter will not be in the interests of those who caused the mess and control the system.
What we should do is declare those who intentionally try to harm the economy by collusion and market manipulation to be terrorists ,and begin immediate investigations into Wall Streets market manipulations. Send in the Feds, hire Spitzer as a consultant and start rounding up these CEO's for interrogation. And send a couple of carriers to the Cayman Islands and Britain.
Of course, this is delusional on my part. It ain't going to happen. We serve the Queen, and must pay tribute.
by
pft (0 articles, 0 quicklinks, 0 diaries, 576 comments)
on Monday, September 29, 2008 at 6:28:21 PM
This article falls into the fairly obvious trap that the Bush Administration has set for us again and again and which Congress has fallen into again and again.
There are more alternatives than either passing exactly what the Administration asks for or doing nothing. Among other alternatives, the Congress can take some time, study the situation, talk to some real experts and do something sensible. Let us hope that Congress now takes some steps in this direction.
Many have suggested that if we are to spend $700 Billion, a better approach than the Bush-Bank-Bail-out would be to provide support for individuals holding these sub-prime mortgages. This support would trickle-up to Wall Street, but in the process would save neighborhoods and keep families from having to live on the street. It would pump money into the economy in the very best way - by putting the money into the hands of consumers who would spend it at home, not in the hands of billionairs who would put it in Swiss bank accounts.
by
PrMaine (13 articles, 12 quicklinks, 2 diaries, 417 comments)
on Monday, September 29, 2008 at 6:35:45 PM
Everyone thinks this whole thing stinks. No one is happy. No one wants to reward malfeasance, and no one wants to pay for other people’s mistakes, or crimes.
But this is about to go way beyond politics. This may be the big one. I don’t know, and neither does anyone else at this point.
The way I see this as a biologist is simple.
The detectives arrive on the crime scene, and the victim is bleeding to death. The detectives have choices. They can examine the crime scene to determine who is responsible, or they can attend to the victim’s wounds first. If they attend to the victim, they could just apply a tourniquet, and be done with it, or they could call paramedics to stop the bleeding, give a transfusion, and then repair the damage.
If congress passes a bill that stops the bleeding, but doesn’t give a transfusion, and then fix the damage, they will be acting irresponsibly. This problem needs a full blown solution, including a transfusion, and damage repair. Just applying a tourniquet isn’t going to make sure that the patient doesn’t die.
by
John R Moffett (83 articles, 17 quicklinks, 2 diaries, 652 comments)
on Monday, September 29, 2008 at 6:50:23 PM
The analogy is flawed and plays into the bankster’s script. My re-write is, “The detectives arrive on the crime scene, the victim is bleeding to death from a gunshot wound, and the attacker is standing over the victim with a smoking gun.The attacker sees the detectives and holds the gun to the victim’s head and begins dictating terms to the detectives.The detectives are in a fix but they still have choices. If they say they have to examine the crime scene to determine who is responsible then they are incompetent or lying.The attacker and his threat is plain to see.
Instead the detectives choose not to talk much about the attacker or even the weapon he is is threatening the victim with, or the fact that they received 1,000 tips by competent sources over a period of years that this attack was coming, because they will look stupid and incompetent if they do.They cannot attend to the victim’s wounds because they have neither the means (a gun* of their own) or the opportunity to do so at this time (it’s a “crisis”).The only way to “safely” treat the victim immediately is to give in to the attacker’s threat, and although Americans love to make threats, they hate giving into them.Plus, if they do that, it is likely the attacker will escape capture and punishment only to strike again in a few months or years.
*The gun is the monetary system.The attacker has control of it, and there is only one.Congress doesn’t have one.
There is no solution “inside the box” without pain and suffering.Give in, and the victim will remain sick, and more threats will follow indefinitely.Don’t give in, and both the attacker and the victim will get very sick, but both will recover, and the same scenario will play out again, but not for a long time.
The only way to end this and catch the attacker immediately is for Congress to shoot straight, and not miss.How can they do that if they don’t have a gun?They need to make their own.Better yet, make one, and make the attacker’s gun disappear, too.Or, “credibly threaten to do so”.(Declare, or threaten to declare a national emergency, requiring every bank to mark all its assets to market, and if that means they are in fact bankrupt, then immediately nationalize them.Begin or threaten to begin directly issuing a new national currency via the nationalized banks, buy up the entire national debt with it, and make commitments to foreign creditors and holders of existing dollars that this new currency will not be debased as the old dollar was.)
Essentially, expose the whole bleeding victim analogy as a sham, a mirage.The real threat is not the possible loss of the bleeding victim (the economy), who in fact will not die, but will only suffer for while.The real threat is the attacker and his gun, the monetary system, which was ironically stolen from some incompetent detectives in 1913. Even if the victim is freed, the doctor will be none other than his attacker, holding his gun under his hospital gown.No transfusion or damage repair will occur.
This victim will recover when his attacker is disarmed, stops shooting him, and he gets proper treatment. The needed treatment only requires the detectives to recover their gun, which isn't as difficult as it appears. All the power is in their hands really; they just refuse to use it wisely.
by
Paul Rye (7 articles, 2 quicklinks, 19 diaries, 377 comments)
on Tuesday, September 30, 2008 at 1:18:10 AM
This is not an example of the golden hour saving the life of a trauma victim.
Capitalism is a cancer patient, not a trauma patient.
You can't save something that is terminal, metastasizing and consuming the lifeforce of the body that sustains it.
To think that a transfusion of funds will save the patient now, when it didn't last week, with the transfusion to AIG, or the week before, with the transfusion to Fannie Mae and Freddie Mac, is the kind of delusion that keeps people from realizing when something just needs to die a natural death.
Capitalism is a cancer on the face of Earth. We need to let it die and replace it with a system that provides for the needs of all people without profit for the few.
by
wagelaborer (5 articles, 0 quicklinks, 5 diaries, 135 comments)
on Monday, September 29, 2008 at 9:13:12 PM
Welcome to the "October Surprise" Only it's in September. The idea here seems to be to make an outrageous request basically as a trial balloon. If it goes through, great, the banksters can steal a lot more money before the end of the Bush Regime. They get the Democrats to support it by lying about the immediate and enormous effects it will have on the economy. After all, they expect to win in November and don't want to have an unmanageable situation on their hands. Then have the Republicans balk, insist on "Free market" principles while mouthing some platitudes about helping the homeowner and taxpayer, and run out the clock. Then engineer a massive stock market slide on Monday and Tuesday, then have McSame come back to Washington to "save" the situation by convincing the Republicans to vote for the bailout, which then causes the stock market to surge in October, thus changing enough minds to get him elected. Voila!!
by
Papá Kokopelli (0 articles, 0 quicklinks, 2 diaries, 13 comments)
on Monday, September 29, 2008 at 9:33:50 PM
It is unfortunate that we may have finally wielded our populist power at precisely the wrong time. John, you astutely said,
"Main Street failed to organize to stop the Iraq war, to begin impeachment hearings, or to hold the Bush administration accountable for spying, torture, privatizing war, or any other malfeasance. But Main Street did finally organize to write and call Congress and put enough pressure on them to stop the economic bailout that would have kept banks solvent, at least for now."
The initial 3 page plan and power grab by Bush and Paulson was quickly shot down which it needed to be shot down and for good reason. But I would guess that 95% of the people calling their congressmen and women did not know that the bill that was voted on yesterday was a 100 page bill that did provide some congressional oversight and protections to the taxpayer. Maybe these revisions didn't go far enough but we will soon find out if Progressives and "free market" libertarians are correct that the disease won't be worse than the cure. I hope, for the sake of our senior citizens, that they are right.
by
E. Nelson (29 articles, 5 quicklinks, 25 diaries, 335 comments)
on Tuesday, September 30, 2008 at 12:07:31 PM
Could you just imagine going to a lending institution, ask to borrow $700,000,000,000.00 then declare your demands must be met? How fast would you be shown the door?
Hopefully all parties who said Yes to H R 3997 are atoning for their greed and not following the wishes of their constituents. Vote Yes when there is a more suitable deal for ALL Americans.
by
Restore democracy (0 articles, 0 quicklinks, 0 diaries, 8 comments)
on Tuesday, September 30, 2008 at 2:04:19 PM
12 comments
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