No tycoon left behind
The Center for Responsive Politics reports that lawmakers who voted in favor of Monday's bailout bill have received an average of 51% more in campaign contributions from the FIRE industries than those who voted against it. (FIRE stands for finance, insurance, and real estate.) On the Democratic side, the 140 representatives that voted yes collected an average of 78% more than those Democrats who opposed.Finance committee chairman Barney Frank (D-MA) has accept $800,000 in FIRE contributions this election cycle alone, and the ranking Republican committee member Spencer Bachus (AL) has collected $822,000 and $3.7 million since 1989.
---
Tonight, the Senate passed a very similar version of the same bill the House rejected Monday by a vote of 75-24. (Only one-third of Senate members stand for re-election November 4th.) In an effort to lure disgruntled House Republicans, fear-mongerers the likes of Obama, McCain, and Biden goosed the House offering by signing off on the extension of popular tax breaks that will ultimately place an even greater financial burden on the American people.
It's a bribe, people! Don't fall for it! Hold your Congressional rep to task in November! Wall Street CEOs still get their golden parachutes under this measure, homeowners get no new protection or industry re-regulation, and Main Street gets no economic stimulus. The only leverage the American people hold to rein in the nation's lawless banking industry might be pissed away before we reach the end of the work week. Mark these words-- if this no-strings Senate-approved giveaway passes the House, taxpayers will find themselves grabbing ankle again within two years.
---
Last night was opening night for the stage musical "Church Basement Ladies" at the Hoyt Sherman Theater two blocks down the hill. A total of seven additional shows run between tonight and Sunday. The role of the minister is being filled by none other than William Christopher, television's most popular member of the clergy as Father Francis John Patrick Mulcahy during 11 seasons of "M*A*S*H." Jocularity! Jocularity!
posted by CM @ 8:48 PM
6 Comments:
Yes, taxpayers will be bending over in 2 years - because Democrats will be in charge of the Congress and the White House when the Bush tax cuts expire. Can you imagine how much worse the American consumer would be right now if you added higher taxes to the high food and gas prices, the lack of wage growth, and the current inability of anyone without money to get a reasonable rate on a loan.
The fear mongers are the people like you saying this deal is a bad deal for the taxpayer when in fact it is at worst a break-even deal, and could be quite a profitable deal based on the "market" prices for the debt the government wants to buy from the troubled banks. These loans are selling at 30-50 cents on the dollar, but the actual house values behind the loans are certainly worth more than that, probably 70 cents or higher. So, it is possible the government uses $700B in taxpayer money to buy loans at 50% of their original value. Then as the financial market returns to normal operation, and consumers can get loans again to buy houses, the house prices will stabilize and the government can then sell those loans for 70% of their original value. So, that $700B "bailout" can turn into a $300B profit for the government/taxpayer.
I agree that banks never should have gotten into this mess in the first place and the Congress (both under Republican and Democratic control) can take some blame for not putting a reign on Fannie and Freddie. But this package is more of a bailout for the taxpayer that can't get a home loan because the market is seized up with lack of liquidity.
That's just more of the same rhetoric of Republicans blaming Democrats, and vice versa, when the House and Senate votes this week re-confirm something altogether different. The real economic conflict is between the American people on one side, and Wall Street and the Washington power structure (Bush, Obama, Cheney, McCain, the Clintons, Biden, Pelosi, Reid, Hoyer, McConnell, Boehner, and the finance committee chairmen) on the other. I'm going to have to change the talking points of my state legislative campaign-- screw the third parties, I'd be satisfied with a second party at this point.
The Bush tax cuts are part and parcel of what got us into this mess. The richest Americans get the benefit, and everyone else is stuck with the high food and gas prices, lack of wage growth, and the inability to get a reasonable rate on a loan. Under what thriving economic system do you put such a strict limit on revenue when you're so deeply in debt? Unless debt is the objective, which it is, so that thriving and successful social programs, like Social Security, can be effectively slashed.
You're right that action needs to be taken so why are we only getting proposals for Wall Street bailouts? Why not a freeze on foreclosures and defaults? Why not hearings on bankruptcy reform and campaign finance reform? This would be protecion and stimulation for Main Street America.
We've been in this type of crisis before, and the moneychangers with their hats now in hand are well aware of it. But FDR didn't lead us through it by parachuting the perpetrators and buying up the rotten-est of Wall Street's rotten assets with no strings attached. He promoted the Reconstruction Finance Corporation, which recapitilized the surviving banks and put them under tough regulatory supervision. Nearly all of the loans were eventually repaid, which is more than we could ever say for the under-regulated loans Wall Street's been disbursing since the dawn of the Reagan Revolution.
I don't know who does your speculative math, Dave, but he or she should probably already be in prison for landing us in our current predicament.
I do my own speculative math, but the idea of the government making a profit off the deal was espoused by Warren Buffett and I think he knows a little more about financial markets than either you or I.
We could play the blame game all day long, but the fact is we are in this situation and I believe this is a reasonable attempt at a solution. These banks probably deserve to fail, but the panic that has been caused by only a few failures has caused the financial cog that drives America to virtually shut down. I know of people who got a construction loan to build a house a year ago and now can't roll into a mortgage because banks are afraid or don't have the money to lend. That is the situation that must be addressed. The "bailout" allows banks to sell loans to the government (hopefully at market price) and thereby free up space on their balance sheet to make new loans. Yes, I agree there need to be new regulations in place so they are making loans to people that can afford them. But putting a freeze on foreclosures would only delay the market returning to normal operation because it does not allow homes to find their true value.
Look, this is not a bailout of banks or Wall Street investors, this is a rescue of the American financial system, which is not currently operating as it should be. We have already seen several banks fail and/or be taken over by another company. Those shareholders were not bailed out, the employees were not bailed out, and the CEOs' careers are over. Warren Buffett thinks the "bailout" was the right thing to do and so do I.
I don't doubt this is a good deal for Warren Buffett, the world's richest man. He didn't get to be where he is today by performing like Alfonso Soriano in the post-season.
"The Bush tax cuts are part and parcel of what got us into this mess."
OMG! Chris, c'mon! You still have my vote, but damn!
You must not be in my tax bracket.
Post a Comment
<< Home