I never thought I'd see so much belligerent parochialism on DU

[jpgray]

Dub me "concern troll" as you will, but the dismissive reaction of some to the economic crisis is freaking me out. What makes people so sure that if no bailout goes through that only the rich Wall St. types will suffer? What has convinced so many that the bailout amounts to some novelty-size check written out to tophat-wearing doppelgangers of the Monopoly guy and nothing more?

Is it just the immediate, superficial narrative aspect of it? After reading Krugman, Buffet, etc. on this I am at a loss how people can be so nonchalant about the risk of inaction. I freely admit I'm no expert, but are people reacting to the prima facie class aspect of this without considering broader possible consequences? Is it just "Ha! No bailout money from -me-, you rick fucks?" Where is this coming from?

If there is a disaster, the poorest and the working class will take the lion's share of suffering. I think it's worth investigating if there will be a disaster rather than just proudly thumbing one's nose at a superficial caricature of the situation.

EDIT: I'm not talking about disagreements about getting a proper value on the bad debt, the exact amount of bailout $ or how it's staged and regulated, I'm talking about those who are saying "just let whatever happens happen." Concern and disagreement over what form the bailout should take is pretty natural given the circumstances.

[alittlelark]

1. Read this Reuters article.....

http://www.reuters.com/article/bondsNews/idUSNYG00131920080925?sp=true



UPDATE 1-Banks snap up Fed cash at record $188 bln per day
Thu Sep 25, 2008 5:16pm EDT



By John Parry

NEW YORK, Sept 25 (Reuters) - U.S. financial institutions borrowed a record $187.75 billion per day on average directly from the Federal Reserve in the latest week, showing the central bank went to extremes to keep the financial system afloat amid the biggest crisis since the Great Depression.

Federal Reserve data showed on Thursday the total amount borrowed nearly quadruples the previous record of $47.97 billion per day notched just the week before and comes as the Bush administration and U.S. lawmakers work on hammering out an agreement on a $700 billion rescue package for the financial system.

"This looks like the balance sheet of a central bank that is keeping the financial system on life support," said Michael Feroli, U.S. economist with JPMorgan in New York.

Primary credit borrowings averaged a new record $39.36 billion per day in the latest week ended Sept. 24 compared with the previous record of $21.60 billion a week ago.


It's pretty clear.

[Newsjock]

4. They get to borrow $187B a day at low interest

And yet we can't even get help on a meager credit card balance that's running somewhere near 30% APR for many of us.

This is why so many of us want to see the wealthy suffer in this -- and suffer dearly. No compassion left.

[lligrd]

27. It Will Hurt Us Either Way - It Is Simple Blackmail

They want us to simply give them our money and bankrupt the government while they take the money and run. Either way we lose but I'll be damned if I would simply hand it to them.

[King Coal]

87. If you owe the bank $100,000 and can't pay, you have a problem.

If you owe the bank $100,000,000 and can't pay, the bank has a problem.

[leftofthedial]

2. there is a major difference between inaction and *this* action, take it or leave it

[readmoreoften]

48. Excellent point.

[Indiana_Dem]

3. I agree. nt

[MrModerate]

5. a) people are reacting to the original Paulson plan, which was clearly designed . . .

To feed the rich everyone else's money. Of course some action needs to be taken, but at this point no one (Paulson and Bush especially) has come up with anything that sounds both effective and just. That's why we have a deliberative legislature: to (in theory) come up with wise, workable policies (I did say "theory).

b) You're surprised at the level of belligerent parochialism around here? Have you been paying attention? That's something we never run out of around here. Think of it as the crickets that enliven a spring evening's conversation.

[Richard Steele]

6. I don't assume that "only the rich will suffer", I believe this plan addresses only THEIR suffering.

Different. And not acceptable to me.

[readmoreoften]

50. Another excellent point.

[dailykoff]

7. If Krugman is shilling for it, you know it's bad.

Seriously, that guy is a neocon go-to hack. So is his paper. Don't let yourself be brainwashed.

[Trajan]

9. ....

Hmmmm .... Really ? ......

[aquart]

55. Really, really NOT.

Good grief.

[Richard Steele]

13. And if Dubya is yelling "We have to do this right away!" you know it's MONUMENTALLY bad.

It's not exactly the first time we've heard that
from him, now is it?

[pnwmom]

59. The Bush/Paulsen plan is completely different than the plan that the

Congress has been working on, and that Krugman and others support.

[DeltaLitProf]

34. Could you tell me a bit about this?

I have never seen Paul Krugman called a neocon hack. Are you sure you don't mean Thomas Friedman, who really IS one?

[dailykoff]

53. He's a former Enron economic advisor who claims he was shocked by their collapse.

Krugman: "some people did send me letters claiming that major corporations were cooking their books, but - to my great regret - I ignored them."

http://en.wikipedia.org/wiki/Paul_Krugman

Okay, he believes corporations are models of virtue, even when he's working for one of the most corrupt petro pirates on the planet. And that was before he started writing for the NYT which definitely IS a neocon propaganda organ.

No, he's probably not as bad as fellow shameless shill Friedman, and no, I don't know all that much about him, but it does seem that whenever his wise words are invoked here, it's to support some grotesque policy scam like this one.

[aquart]

60. Do you only believe rightwing talking points?

Golly, who would want to smear Krugman? And who would be stupid enough to believe it?

[dailykoff]

63. iggy 4 u.

See ya.

[RandomKoolzip]

35. Whoa...Krugman is a neocon hack?! What the fuck are you smoking?!

:wtf:

Get thee back to Bizarro DU immediately....

[pnwmom]

57. Seriously, he's a progressive economist, not a neocon in any sense.

And he makes much more sense than many of the people around here lately.

[dailykoff]

61. Rallying to defend Wall Street predators does not strike me as remotely progressive.

And if he works for neocon propagandists, I'm sory, he's a neocon propagandist.

[pnwmom]

66. He isn't rallying to defend Wall Street predators. You obviously haven't read

anything he's written about the Paulsen plan, which he has said should be rejected.

[dailykoff]

67. Baloney. And he's using the same bullshit scare tactic as Bush:

Krugman: "It’s true that we don’t know for sure that the parallel is a fair one. Maybe we can let Wall Street implode and Main Street would escape largely unscathed. But that’s not a chance we want to take."

http://www.nytimes.com/2008/09/26/opinion/26krugman.html?_r=1&oref=slogin

Nice lipstick Krugster, but it's still a pig.

[pnwmom]

68. You obviously didn't read the whole article.

It also said:

"The Congressional plan, then, looks a lot better — a lot more adult — than the Paulson plan did. That said, it’s very short on detail, and the details are crucial. What prices will taxpayers pay to take over some of that toxic waste? How much equity will they get in return? Those numbers will make all the difference."

From the very first, he's been against the Paulsen plan. And he hasn't yet signed on to the Congressional plan, though he thinks it's an improvement.

[dailykoff]

70. WTF? He's shilling for a bailout. Get it? Pipeline from Treasury to Wall Street?

What part of "bailout" do you not understand? :wtf:

[pnwmom]

75. No, he's not. You're reading words that are not there. He's rejected the

Paulsen plan, and he hasn't yet supported any Congressional plan.

Show me where he once said that he supports "the bailout." What part of "the details are crucial" do you not understand?

[aquart]

58. Try a fact. And THINK: who would need to discredit Krugman?

To make it easier for anyone who is still interested in this story to get the facts right, here are some frequently asked questions about my role on the Enron advisory board, with answers.

1. What did I do? In early 1999 I was asked to serve on a panel that offered Enron executives briefings on economic and political issues. As far as I knew at the time, they genuinely wanted to learn something. I resigned from that board in the fall of 1999, when I accepted an offer to write for the New York Times.

2. What was I paid? It turns out that I was actually paid $37,500 - the last quarterly payment did not take place, because of my early resignation from the board.

3. Was this exorbitant? It didn’t seem so at the time. In 1998-1999 my normal fee for a one-hour business speech in Boston or New York was $20,000 - more if the speech involved long-distance travel. The Enron board required that I spend 4 days in Houston. So the sum they offered didn’t seem out of line - if anything it seemed rather low compared with my usual rates.

4. Was I being paid off because I was a journalist? That Enron board, when I was on it, did not strike me as a board of pundits. It included Larry Lindsey and Bob Zoellick - future Bush administration officials, though I had no way of knowing that, but certainly not journalists. It also included Pankaj Ghemawat, a strategy professor at Harvard, and Irwin Stelzer, an economist at the American Enterprise Institute. (Stelzer had a column in the London Times, but I didn’t know that) The only person there I thought of as a journalist was William Kristol - I thought he was there to regale us with Washington gossip. And I regarded myself as being in the same category as Ghemawat - an academic expert, who was there because of his expertise.

An amazing number of people seem to think that I was paid by Enron while working for the Times. I wasn’t - when Enron approached me there was no hint that a Times connection lay in my future. As soon as I shook hands with the Times, I resigned from that board.

I did write monthly columns for two magazines in 1999, but I would not have described myself as a journalist - no more so than, say, Laura Tyson, Robert Barro, or or Gary Becker, respected economists who write monthly columns for Business Week. I wrote a monthly column for Fortune; that column was neither a major commitment of time nor a major source of income. I also wrote a monthly column, for very little money, for Slate. My main sources of income were teaching, consulting, and business speaking.

5. Did I disclose my connection? Yes. I reported it the one time I mentioned Enron in Fortune, almost three years ago. I reported it again the first time I mentioned Enron in the New York Times, in a highly critical article more than a year ago. I didn’t say that I was paid to serve on the board, but I thought that was obvious: who volunteers his services to for-profit corporations?

One point that seems to have been missed in all the mud-slinging: I was the only member of the board to declare my connection voluntarily. Lindsey and Zoellick, as government officials, were required to disclose their consulting; none of the other members uttered a peep before the January 2002 New York Times article about the board.

6. Should I have disclosed the sum of money I received? I have always understood that when writing about someone you disclose the fact of a potential conflict of interest, not the financial details. If I had disclosed the sum back in January 2001, when I first wrote about Enron for the New York Times, it would have sounded strange - I’m sure people would have accused me of bragging.

7. Did the payment from Enron cause me to write anything I would not have written otherwise? No. Some people seem to think that because I had nice things to say about Enron’s energy trading in a Fortune article - in which I disclosed my connection - I was being out of character. But I have always been a free-market Keynesian: I like free markets, but I want some government supervision to correct market failures and ensure stability. Some of my pro-market Slate pieces enraged people on the left - check out The accidental theorist , or In praise of cheap labor . My Fortune piece about the rise of markets, illustrated by Enron’s energy trading, was an attempt to take a sunshine break from the dark pieces I had been writing about the Asian crisis; it was also a favor to my editors, who devoted that issue to e-business. It wasn’t at all out of character. In fact, the next column I wrote for Fortune was also a pro-market piece, with kind words for Milton Friedman and Margaret Thatcher.

8. Was Enron trying to buy my soul? That’s for them to answer. But I wasn’t selling.
November 16th, 2007 at 2:46 pm

[dailykoff]

62. I don't give a shit about Krugman or his rag, okay?

He worked for Enron, he writes pro-corporate propaganda for the pro-neocon NYT, and if he was a "progressive," he would not be involved in such enterprises.

[Confusious]

72. He probably eats meat too

Ever notice hard line radicals
Can go on start trips too
Where no one's pure and right
Except themselves "I'm cleansed of the system."
('Cept when my amp needs electric power)
Or-"The Party Line says no.
Feminists can't wear fishnets."
You wanna help stop war?
Well, we reject your application
You crack too many jokes
And you eat meat
What better way to turn people off
Than to twist ideas for change
Into one more church
That forgets we're all human beings.

DK - where do ya draw the line

[adamuu]

81. that is a stupid comment.

comment fail.

[SammyWinstonJack]

82. wtf?

:shrug:

[billyoc]

8. Different reasons for different people.

For some, it's the fact that they pulled the $700 billion figure out of their asses.

For others, it was Warren Buffet sinking $5 billion of his own money into Goldman Sachs in one day.

For still others it's an absolute abhorrence to giving workers' money to billionaires for any reason.

For still others it's a perverse desire to simply set the whole fucking world on fire.


For my part, I'm in favor of a small($100 billion) cash infusion with so many fucking strings attached that these Wall Street motherfuckers will think they woke up in Sweden.

[jpgray]

11. Sweden seems an excellent role model for this sort of thing

They spent a comparably enormous portion of GDP on their bailout, if I recall.

[TahitiNut]

18. And that's exactly the approach that Boehner&Co will oppose like their lives depend on it.

They'd go so far as to torpedo the economy, imho.

[LiberalAndProud]

10. The bailout request is a caricature.

They tell us they need $750B --(is it really 1 million dollars every day for the next 2000 years?)-- and they cannot even defend the number. This feels like ROBBERY, it smells like rotting fish and we SHOULD NOT be railroaded.

[jpgray]

14. Which bailout request? Paulson's isn't even on the table anymore

[LiberalAndProud]

19. If our representatives in Washington didn't see this coming

soon enough to provide enough time to formulate a reasoned and reasonable response and reach out for an international coalition, then that is too bad, so sad. I have always been wary of the "MUST BUY NOW" sales pitch, makes my spidey senses tingle. If January 9 is too late to act, then we have already passed the point of no return.

[jpgray]

26. It's a total "boy who cried wolf" scenario

The marketing stakes have been jacked up so high by this White House that every policy they want to shove down our throats is framed as the be-all end-all crisis. People are often making the IWR analogy, which is fair--as the Daily Show pointed out the rhetoric from the administration is very similar. Now I found Powell's cartoon trucks ridiculous, as I assume many DUers did. But the more I read about this, a more comparable scenario would be if Saddam had a proved connection to 9/11, El Baradei believed he had nuclear weapons, and Hans Blix was tripping over mustard gas canisters on every third Iraqi dune. Maybe it's because economics isn't as familiar to me as world history, but there seem to be far more signs and a far greater consensus that we're in trouble here than there ever was for any other Bush "Crisis! OMG act now!"

[LiberalAndProud]

28. It's the mushroom cloud syndrome.

I have no confidence in the Resident in chief. As someone said upthread, if Bush wants it, it no..t goooood.

[TahitiNut]

43. There's a very salient difference, however.

The alleged "imminent threat" posed by Iraq had some very reality-based fabrications. Saddam did not have the capability that was alleged AND the inspections and regimes had already discovered that. That's physical, tangible, and REAL. We didn't even have to assess such ephemerals as intent or plan. It was very FACT-based. The OBJECTIVE reality did not support even the barest minimum of what the administration alleged.

The economic system, however, is about as reality-based as tea leaves and chicken bones, Decisions are made every second based on "gut feel" and "confidence" and crystal balls. Even in the CNBC soap opera, the market is described in behavioral terms instead of financial fundamentals. The term used to describe this school of market-watchers is "technical" analysts. They don't look at the nuts and bolts of the actual companies and their business plans - they look at the herd ... the "business cycle" and phases of the moon. Businessmen are constantly making decisions based on some vague notion of some future societal behavior. Will the Christmas shoppers g spend or stay home? Will people spend or save?

To the degree there's a 'crisis' it's a "crisis of confidence." The chicken littles are tucking in their feathers and getting constipated. Credit is ALL about confidence and trust and expectations.

Hell... if there wasn't a problem a month ago then the kabuki and scare language Junior peddled would sure as hell cause one.

[LiberalAndProud]

45. It is the President's obligation to inspire confidence.

Bush is an utter and complete failure. I will not trust him with the fortune of my great (how many greats should follow) -grandchildren.

[TahitiNut]

49. That's why Reagan got away with so much.

No matter how I detest what that administration did, Joe and Jane Public liked his cheery face.

[LiberalAndProud]

52. He did inspire confidence.

Hence the moniker confidence-man.

I was thinking more along the line of Eleanor Roosevelt's husband, Franklin Delanoe Roosevelt. He inspired Americans to hope again.

[TahitiNut]

56. Yup. I was born into a family of New Dealers in 1943. I vaguely remember .

Growing up, I was immersed in the recent history of the Depression, FDR, the Holocaust, WW2 and all politics all the time. Not partisan politics but world events and the United Nations and Europe and the Marshall Plan and such things. My father's side of my family gave me contact with Governor Soapy Williams, on whose staff my uncle worked in Lansing. My mother's side of my family gave me contact with Walter Reuther who was a neighbor and family friend out in the "country". Such was the world I discovered growing up.

FDR was a hero and a secular savior to the vast majority of people ... and detested with a venom I never understood by some. It wasn't until Dubya that I've found what it is to REALLY detest a President.

[LiberalAndProud]

65. I'm discovering new threshholds of detest ...

the REALLY detest mark keeps gaining volume: Reagan - some, Bush Sr more, shrub much (I mean MUCH) more.

[Fumesucker]

32. It doesn't matter...

That someone would even make such a proposal is clear evidence they aren't really serious, that wasn't a negotiating position it was an outright slap in the face.

Either that or they are monumentally stupid.

This is a shell game, the closer you watch where you think the pea is the less likely it is there.

[HCE SuiGeneris]

47. I have to agree.

There are a lot of moving parts to this stagnating economy. I could not have my hackles raised any higher than they are right now -- largely due to the poison pill, 2 1/2 page 'Paulson proposal'.

[TexasObserver]

12. It's because we aren't as gullible and as easily duped as those in a panic.

[jpgray]

16. How is "just do nothing!" anything other than a kneejerk response?

I just can't see it.

[TexasObserver]

24. then my explaining it won't help you

so I won't waste my time or yours

[jpgray]

33. That was me asking you to explain your view, actually

But if you don't wish to, that's fine.

[TexasObserver]

39. No, that was you using a phrase that is pejorative and accusatory

[Fleshdancer]

21. out of curiosity, how bad or good do you think things are right now?

We just experienced the biggest bank failure in US history tonight.

[TexasObserver]

25. As bad as they were in the late 1980s, when failures hit.

This is NOT worse than the late 1980s.

Bad banks will fail, and we will go on. The loss is to those who own bank stock. To the extent that FDIC funds are required, it costs all of us, but most of these banks in trouble have plenty of good assets and accounts.

There is no reason to save the shareholders' equity in these publicly traded companies. Let them fail.

[jpgray]

29. But this is on a different order due to deregulation's steady march

WaMu for example is a uniquely enormous collapse, and moreover we have giants like AIG with their fingers in all too many pies. Again, I'm not going to pretend I have any perfect certainty with regard to the crisis, but haven't things gotten worse rather than better since '87 in terms of deregulation?

[Fleshdancer]

41. So if it moves beyond the banking industry, would that make it worse?

and FYI, I'm honestly not trying to argue, I really want this discussion because I'm still learning. I was a child in the 80's so I have no personal memory to compare today to but I promise to look for online references after writing this post.

Today's problems started with prime mortgage loans but isn't the problem moving past that now into more legitimate mortgages? Because of this, isn't it harder for people to get credit which makes it harder for the smaller things like credit cards and auto loans? Dealerships are going under and the House allocated $25B for automakers this week. Did the 80's crisis affect other industries too?

Did the problems in the '80's cost the American taxpayers more than what we're dealing with now? We've already spent $900B in bailouts not including the $25B for automakers and the latest proposal is for an additional $700B. What was spent in the 80's?

:shrug:



on edit:
I know I'll have to find a better source but according to wikipedia (regarding S&L): The ultimate cost of the crisis is estimated to have totaled around USD 160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government—that is, the U.S. taxpayer, either directly or through charges on their savings and loan accounts<1>—which contributed to the large budget deficits of the early 1990s.

http://en.wikipedia.org/wiki/Savings_and_Loan_crisis

[LiberalAndProud]

40. Funny thing about that...

I owe WaMu money ... probably about $x,000.00. I filed my tax return early this month. Uncle Sam owes me $x,000.00+. I'll be paying WaMu as soon as Uncle Sam pays me, any day now. My credit performance hasn't been outstanding in the past several months. I'll bet they've written my debt down already.
Translation.... I don't know how bad or good things are, but I'll not be woooed by another Colin Powell-type incident.

Impetuous rush to war followed by a precipitous rush to ... what?

[Fleshdancer]

44. hmmm....I wonder how long it takes WaMu (JP?) to figure that one out

I personally wouldn't like any plan to fix this mess if it didn't heavily favor the avg taxpayer over everything else. I just want to make that point clear somewhere in this thread. :)

[LiberalAndProud]

46. Seems that McCain has ruled that particular feature out.

I don't think he gives a fig for the avg taxpayer.

[Fleshdancer]

54. For someone who married into $100M....

Well let's just say I would love to be able to ask him what tax bracket he's in because I don't think he knows.

[bridgit]

15. wurd!

[FedUpWithIt All]

17. I believe the lion's share will fall on the backs of average Americans no matter what.

The really BIG issue for me is what will happen to the Dollar in a bailout. The suffering may be just as painful but longer lasting WITH the bailout. This is the concerns of many economists (as far as i can tell). I am already pretty low on the food chain, mostly by choice. I suspect i will feel the crunch a little less then others, at first, mostly because i have only $800 extended to me as credit. A credit freeze will only impact me once the cost of goods and services inflate more rapidly. As the weeks roll by we will all begin to feel the hurt.


I wish i understood the whole scenario better. Economics are NOT my strong suit but i have been able to piece together a little of what is being said. This info combined with my gut and i am voting for us to simply take our lumps so we at least have a chance to try and come back from this catastrophe.

[Fleshdancer]

20. Thank you for this post

An American depression means a lot of people suffer...not just here, but around the world. It's not just the CEO's people.

[Double T]

22. 'fear' has been bushco's controlling force throughout his presidency.

bush, cheney and their henchmen and women are no longer believable when they continually play the 'fear' card. The "F"ing rich always want their damn asses and wealth saved by the the masses; 'WE' take the hit in jobs, wages, benefits, pensions so these GDMFers can be stinking, filthy, obscenely rich while attempting to hoard ALL the wealth. The ONLY hope for our nation is to take away the power from these greed mongering no good bastards and bitches. To give 750 billion dollars to these true criminals is nothing short of insane. Time to pull the plug on the wealthy, not enable them to complete their destruction of the masses.

[magellan]

23. No one has yet sufficiently proved to my liking that another bailout will make things better

I've seen no evaluation of the risk to the dollar -- accelerating inflation -- as a result of this bailout. I've seen nothing that says this bailout will definitively stop the failure of banks and other financial institutions, or addresses the trillions in Credit Default Swaps (CDSes) floating around out there.

(For reference, see this March 2008 Times article about Credit Default Swaps)

Simply put, I want assurances that this bailout won't just put us taxpayers on the hook for an additional $700 billion+ (or however much they hand out) while still facing the same economic collapse due to the unregulated gambling on WS.

[Regret My New Name]

30. I'm just cynical and skeptical if it will work or if it's just some scam..

Of course I don't enough about economics to even pretend I do. So I pretty much keep my mouth shut and don't pretend like I understand it. :D

Just my two cents that I wanted to put out there before it's worth less than it already is.

[jpgray]

31. I would never claim to "know enough" either

And maybe this whole thread is misguided as a result of that. Certainly skepticism is warranted, and I never thought I'd agree with the Bush admin that "immediate action" was necessary on anything these days.

[SoCalDemocrat]

36. Those with liquid assets did well in the Depression

People who had liquid assets after the crash did well as real estate, land, and other hard assets were greatly devalued and no one could afford to invest. Prudent investors bought up stocks and real estate for pennies on the dollar.

Who will have money after a crash? Not the middle class, since 60% of them are solely dependent on the equity in their homes for their savings. Certianly not the typical American who owes, what is the current figure, almost $20,000 of debt vs. having savings?

The same wealthy Americans that lobbied to bury the OFHEA report in 2003 about an impending crash, the same that lobbied for bankruptcy laws to be weakened so you have to file Chapter 13 vs. Chapter 7 when your home is foreclosed, those same Americans are going to be buying up your former homes and businesses and shattered 401K plans at bargain prices while we sell apples on the corner to try and keep our families from starving.

[Two Americas]

37. we suffer no matter what

There is no good choice here.

A bailout turns us into peasants; no freedom, terrific poverty, and we are a banana republic.

No bail out probably means a depression. Things will be bad, but no worse than the first scenario, and at least we have a fighting chance and are still free.

Either way we suffer. Either way there will be a depression. The question is do we want to be free to fight our way through this, or will we fasten the chains of servitude onto ourselves for the sake of keeping the illusion alive that things will be OK?

We can do down fighting, with a fighting chance, or we can go down cringing and whimpering and cowering and condemn ourselves and future generations to permanent poverty and servitude.

The bail out is about the fat cats saving their own skins. Does anyone here still think they care what happens to any of us? That illusion may be comforting, but it could be deadly.

[some guy]

38. for my part

a. I think the empire is well-past the tipping point, so the bail out is only throwing bad debt after worse debt, and will not solve anything, only postpone the crash for a month or maybe a year. And make crawling out from under the wreckage that much more difficult.

b. there is no clear idea of what is proposed for bailing out.

Is it predatory primary mortgages? I might be okay with that. Giving people an option to rewrite a mortgage that should never have been written in the first place (as long as it is for primary residences - not flippable homes, not second or third homes.)
The Dodd plan at a quick read seems to cover at least some of this.

Is it bailing out credit swaps? Derivatives? Bets that mortgages would not be paid - all that "exotic" paper that was generated so investors gamblers in the market could make a killing? Fuck 'em.

c. where is the discussion of putting regulatios in place to a) stop this wreckless gambling, and b) punish those who engaged in it up to now? Without that sort of thing being part of the bail out - fuck it.

[JDPriestly]

42. I am convinced that I will suffer severely no matter what happens.

My life's savings are in retirement accounts which are probably not worth much at all at this time. Nothing is going to change that. The rich brokers and the bankers, the Wall Street swindlers have been living off my 401(K) and the 401(K)s of others in my class for a long time.

I'm 65. Employers will pay a 30 year old with my degrees at least twice what they will pay me. I'm not worth much if anything in this competitive labor market. And I'm not stupid. But, you know what, that bail-out is not going to do anything but delay the inevitable crash of the system.

I've watched a lot of people around my age, some younger, some a little older die. A number of them died very suddenly. When its your time, you go. That's the way it is.

Our system has been on the decline ever since 1974 when Nixon refused to get out of Viet Nam although our currency was already in such bad shape that oil producers raised the price of oil in order to get what they felt was fair compensation for an irreplaceable natural resource. Our economy has been going downhill ever since.

Republicans offered the comfort of denial to the American people, and we bought into that comfort when we elected Reagan. Instead of realistically trying to build a self-sufficient economy that rewarded hard work, we escaped into an ultra-capitalistic fantasy that rewarded speculation. It could not last.

We are not going to lose what we really have. We are just going to lose our illusions about what we had.

[TahitiNut]

51. I'm also 65 and in a smaller, leakier boat. I'm doubting I'll live to see 70.

Even 68 sounds overly optimistic. I have degrees and superb experience ... but the 'kids' doing the hiring don't want someone as old as their father.

:shrug:

[Douglas Carpenter]

64. belligerent parochialism -- well said!!

What truly bothers me on this forum is that I am seeing people act just as emotional, just as as irrational and just as bone-ignorant as the kind of posters at freepers that we liberals love to ridicule.

I just feel so deeply ashamed of the majority (but by no means all) DUers right now. I'm afraid my "liberal elitist" attitude that Democrats, progressives and liberals are smarter than Republicans has been wrecked forever and it was wrecked right here on DU.

There are rational arguments against a bipartisan bailout. But I sure the hell haven't read any of them here on DU. What I'm reading is that a lot of people hate investors more than they love their children.

I'm no economist myself, not by any means. But anyone with even a cursory interest in economics or a slight curiosity in economics knows and has likely known for some time that catastrophe was and is looming and has been looming since the real estate bubble collapsed.

Anyway, selling mattresses might be a good business worth considering. That will likely be safest place for people to keep their money if liquidity in the markets collapses. And that WILL happen and it WILL happen soon if a bailout in some form that will cost hundreds of billions of dollars does not go through.

There is no way the Democrats will back a bailout without certain conditions - and there is no way the Democrats will back it without the majority of Republicans including Sen. McCain backing it too

The failure of a bailout deal will almost certainly mean the complete drying up of liquidity and thus the collapse of the economy producing a situation comparable to the depression of the 1930's.

Could this happen even with a bailout? Yes it could!

But the bailout would buy time that hopefully could allow for markets to stabilize.

Without a bailout - liquidity will quickly dry up and the economy will quickly collapse.

The simple fact is - the massive decline in real estate equity values - has created a massive worldwide withdrawal from the credit markets - this created panic among the markets all over the world - thus triggering the failure of multiple banks and other insurance and investment institutions.

This massive withdraw of credit - removes financial liquidity from the markets and will - basically cause the economy to grind to a halt.

Could this happen anyway even with the bailout? Yes it could. But this buys some time and gives the chance for markets to stabilize.

If some people simply don't want to understand the situation. Then nothing can force them to.

I am not supporting the bailout as a supporter of Wall Street. I got rid of my stocks a long, long time ago. I say this as someone who does not want to see a depression. I say this as a lifelong democratic-socialist who believes humanity is more important than ideology.

[MilesColtrane]

90. I too believe that the consequences of doing nothing are so horrible that it...

...justifies trying to engineer a soft slump into a recession.

The taxpayers will be on the hook for billions either way. Where do they think the FDIC will get it's money to pay depositors after the first big bank fails and no company offers to buy it?

Dodd and the Democrats need to look at what Buffet did. Buy these bad loan instruments at pennies, keep the banks afloat, but don't reward their shareholders. (And, pass laws to keep this from happening ever again.)

[enigmatic]

69. It's an abstract revenge/vengeance fantasy

From people who don't/won't realize that they will be screwed the most by this, not the rich. But for alot of them, I imagine they realize that they don't have much money/equity-wise anyway, so what's left to lose?

[Truth2Tell]

71. I never thought I'd see so much advocacy of trickle-down economics on DU. nt

[McCamy Taylor]

73. Bush/Paulson have given the term "bailout" a bad rep. Try "oversight plan"

That is what we need. Do not set a price tag. Set aside a fund and use it wisely.

[lonestarnot]

74. You are finding that people here are flatly dismissing any kind of fix?

I haven't seen that. I think people here know something must be done, but the freight train still has brakes. Just slow it down for a real fix of the situation rather than just giving them the pen number to the budget ATM and that includes doing nothing when in doubt, well so be it. That doesn't put an end to deliberation and a calculated plan to reduce future risk, return on investment of bail money, while insulating us from further rip-off than absolutely necessary.

[On the Road]

76. What's Particuarlay Amusing About It

Is that every few days since the origin of DU there have been threads on how the economy is getting worse, the stock market is about to collapse, and we are on the verge of a depression worse than the 1930s.

Now a real crisis comes along -- probably the only crisis in our lives that could actually trigger a new depression in a matter of weeks -- and everyone thinks its all a hoax. Or that a new string of bank failures are not going to effect anyone except Wall Street executives.

It's pure opposition thinking -- a complete inability to reach an independent conclusion. If Bush did a 180 and reversed all his positions tomorrow, half the people here would reverse all their positions just so they still could oppose Bush.

People who hate Bush and don't know anything about economics will read some populist right-wing crank and think he's a genius just because he opposes Bush, not realizing that their progressive forebears fought against these exact same positions a hundred years ago. And that now, in partisan terms, they're siding with congressional Republicans and the opposition candidate against their own parties' leaders.

I want the terms and conditions to be right, but they are secondary. I think the Congressional Dems are being responsible and I am glad they negotiated some changes. I just hope we don't get a lesson the hard way.

[soothsayer]

77. this lawyer who worked on the S&L crisis explains how this bails out the crooks

By Carolyn Betts, Esq.

I agree with every point in Bernie Sanders’ proposal but have a suggestion.

I worked with lead counsel to the RTC (the government entity that served as receiver for defunct savings & loans) in designing and implementing the sealed bid auction program for non-performing commercial mortgage loans during the S&L crisis. I also worked for FHA’s lead financial advisor in carrying out the Congressional mandate that HUD enter into “negotiated” sales of its nonperforming multifamily loans to state housing finance agencies. Based on what I saw in these contexts and in carrying out sales of pools of VA, Farmers Home and HUD performing and nonperforming single-family loans, both in auctions and in mortgage backed securities form, my conclusion is this: the Wall Street players made out like bandits, ultimately at taxpayer expense and borrowers were not helped.

I suggest we try another tack, in addition to what Congressman Sanders proposes: support the BORROWERS of the troubled loans, not the OWNERS of the loans. I believe there is a good chance that there is collateral and other fraud in these mortgage loan portfolios. I.e., loans with no properties to support them, multiple loans secured by a single property, loans used to launder money through government guarantees. This conclusion is based in part on the numbers, which don’t make sense, and upon observation of the number of HUD-insured loans that have gone into default before a single payment was received. If the lenders are just paid for these loans what is the theoretical value in a good market for these loans, assuming they are performing (i.e., above current market value), the lenders will get a windfall and be rewarded for making fraudulent and/or predatory loans. And the bailout as proposed will be a perfect way to hide the evidence of wrongdoing.

Would it cost anywhere near $700 Billion to have the government stand behind the borrowers’ obligations, in concert with a program to address unemployment/ underemployment and health care issues that are the primary sources of financial problems that cause these loans to go into default? I think not. I would impose a condition that the existing “problem” home loans in portfolio, and maybe also related home equity loans, be marked to decent rates of interest and reamortized over 30 or 35 years, with write-off of penalty interest, late fees, etc., at lender expense. Then, to the extent the borrowers still cannot make their payments but want to stay in their homes, have the government funding program (with a local-level administrator NOT controlled by those who caused the current crisis) make up the difference. Perhaps the government gets a lien on the property for only the amount of the borrower’s shortfall after a period of time during which the health care fix and jobs programs can take effect (say, 18 months).

I agree that the bailout bill will be a disaster, in so many ways I can’t even list them all. Allowing the market to crash, with all its consequences, would be better than giving away $700 billion + to the perps that brought us to the brink of world economic collapse. The longer we keep putting fingers in the dikes to avoid the consequences of bad decisions, money laundering and theft by the corporadoes, the worse the eventual flood will be.

http://solari.com/blog/?p=1605#more-1605

[Marrah_G]

78. I think it is fear and ignorance of the reality of the situation

People don't understand the effects it will have and have dug in their heels on a position that feels good on an emotional venting level.

[Indenturedebtor]

79. Alot of us are already farked

I've worked hard all my life. I lost my job and am going bankrupt. I am not alone. This economic system of ours needs a COMPLETE overhaul. It benefits the few and screws the many.

[Political Heretic]

80. Because there are SEVERAL alternative BETTER ways to address the situation

that don't do the most massive handover of power in the history of America and hang taxpayers with the bill.

All of them would focus on assisting Wall Street in bailing ITSELF OUT of its OWN MESS. Such as the 0.25% tax on selling (not buying) stocks, which would discourage speculation and generate over 100 billion dollars a year.

Hell, I am actually behind House GOP members who object to this federal bailout and suggest alternatives that would require wall street to take the lead role in cleaning up its own mess.

[Gin]

83. its one thing to buy up regular mortgages...but they are buying sliced and diced

deals that can never be recovered....at least with a house you have a hard asset that can be sold for some amount of money....the swaps are worthless paper....

and.... the Paulson plan wasn't a plan...it was absurd....they threw it out to get the masses riled...and boy did it work....

if it works ( even if it's a different looking plan) they win...and win big ...one last chance to rob the treasury before the recess and election.

IMHO

[soothsayer]

84. here's a good white paper on why the plan won't even work

http://solari.com/blog/docs/Final-Bailout-White-Paper.pdf

[ProfessorGAC]

85. What Has Convinced You. . .

. . .that this bail-out will actually accomplish anything for the average american? Because Paulson says so? There are many economists out here who are fairly certain that this is not treating the causes, and only band-aiding the symptoms. A solution that doesn't address the cause is no solution and helps nothing, and nobody.
The Professor

[JackRiddler]

86. Not to worry: There will be a bail out - AND a crash. So everyone's happy then, no?

[galileoreloaded]

88. Boomers and others with vested interest, clawing to keep what is "theirs"......

at the expense of near generations. I read a financial article about a month ago that said anybody aged 10-35 today, will despise the Boomers and I dismissed it. Now, it seems more plausible. I am looking for a CNN Money article I read six months ago, where it outlined net worth among age groups, and the statistic was something along the lines of a 30% increase in net worth versus a 10% reduction in younger age groups. AARP did a study and here it is.

http://assets.aarp.org/rgcenter/econ/dd99_distribution.pdf

More to lose for an older crowd, that tends to become more conservative as they approach a fixed income, versus the younger crowd, who is losing money at a rapid pace, overloaded in debt, more ready to suffer for a few years or 10 for the sake of their progeny, and looking for a way out.

That is more than likely where the pushback is coming from, in my opinion. Can't blame them though, as we all feel squeezed, and will do what we can to survive a meltdown.

[Romulox]

89. I tend to agree with your assessment. Naked self interest is not the opposite of

"belligerent parochialism" ( :rofl: ) .