September 29, 2008
It is bizarre to me that middle-class-unfriendly Republican policies continue to be popular in the red states that would benefit the most from Democratic policies.
It is also bizarre to me that here in the Northeast, the Republican party is seen as the "party for rich folks." I think the willingness of twelve Republican congressmen to send the stock market down by $1.2 trillion today in the name of "less government" should make rich people realize that Republicans aren't really on their side.
Voting Our Pocketbooks?
Rich people bankroll the Republican party because of billions of dollars of promised tax savings. But whether you are wealthy or not, it should be clear now that Republican non-governance can destroy a lot more value than you might save from some stupid tax cuts.
Republicans have become anarchists. They are the party of people who don't believe in government. You can't expect the very highest quality of politicians to be inspired to run for office on a platform that government shouldn't do anything.
Sometimes there is a reason for a bit of governance.
Democrats Take Equity
The deal forged by Democrats on the floor of the House today fixed the main problem with the original Paulson bill: the new bill requires the Treasury to take an equity stake as payment for the credit, just like Buffett received in exchange for giving Goldman a capital lifeline a few days ago. It also ties strings to the equity ownership that make it harder for bank executives to drain bank coffers into their own wallets. This type of thing is par for the course when you give a lot of money to somebody who is in trouble. You need to make sure they don't steal the money.
But Republicans hate the idea of government watching over anything.
So they have actually been trying to push the bill in the opposite direction: they are proposing an insurance plan that would attach no strings on how bailout money is spent. Insurance might be a fine idea in calmer times.
But think about it: Republicans are offering insurance for a house that is already on fire. When Paulson points out that these sort of "no-government-involvement" ideas don't actually fix anything, the Republicans just seem to be confused. They are revealing themselves to be blindingly ideological and more than a little bit stupid.
Vote the bums out.
Posted by David at September 29, 2008 06:41 PM
"I think the willingness of twelve Republican congressmen to send the stock market down by $1.2 trillion today in the name of "less government" should make rich people realize that Republicans aren't really on their side."
92 Democrats voted no on the bailout as well, but it's 12 Republicans fault for the trillion dollar stock market?
Yes, it is clearly a Republican failure. The bailout funds the Republican-controlled Treasury and the Democrats could have easily hung Bush and Paulson out to dry for political gain. But the Democrats swallowed hard, beat back their distrust of Bush, and delivered votes for the unpopular bill from 60% of their congressmen.
The Republicans could only muster 33% support for helping their own President clean up his mess, despite begging from their President, Vice-President, and Presidential candidate. And it's not because the unhappy House members have a better idea.
The issue is that nobody wants to follow Bush, Cheney, and McCain down - the Republican party is falling apart.
David, where exactly are you getting your facts? It would help if you cite sources.
The fact that anyone is for this bailout in any form is a disgrace. Obama is on the record as for it, with conditions: http://thecaucus.blogs.nytimes.com/2008/09/23/obama-says-bailout-should-include-4-conditions/.
For a more I think reasoned economic view, check out pieces like http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview.
I originally liked Obama because he talked sense and seemed to take an intellectaully honest approach to problems. His speech after Iowa was fantastic. But lately Obama feels like a just another demagoguing politician.
You call this problem "his mess" as in "Bush's mess." While Bush has created a lot of messes, the blame for this current problem goes all around. The Bush admin did nothing to detect it and fix it in advance. But the dems control the banking committees in congress - what did they do? And you can trace the unnatural increase in the Case-Shiller curve all the way back to the early 90s when the Community Reinvestment Act (which penalizes banks if they don't make loans to 'underpriveleged' persons) met the Clinton administration's acceleration of subprime lending.
No one should be bailed out - not the big banks, not the borrowers who borrowed more than they could afford. The fact that Bush, Paulson, Obama, and McCain are for any kind of bailout is a disgrace on all of them.
Assigning blame to a single party or person (ie, "Bush's mess") seems very narrow-sighted. There is more than enough blame to go on everyone involved in this sorry mess ... lenders, wall street, both parties in dc, and the borrowers.
Maybe it's Johnson's fault for privatizing Fannie? I think it's more fruitful to try to look forward and peek around the corner.
The $700b bailout may not work. But here is one data series that suggests that if it doesn't work, the only other real alternative will be to nationalize the U.S. banking system and rebuild it from scratch. I'm sure libertarians will love that.
The truth is, our banks have no money, and they have had no money for months. OK, it is a bit concerning when my brokerage account is whacked by 10% in a day, but as fools around me sell their stocks to deposit in their bank accounts, I think the stock market is one of the best places for money at the moment. Hint: look for companies like Microsoft, Google and Apple that do not rely on credit to run their business.
What will be really something is when my checks stop clearing because my bank is insolvent. This is not just risk at a few unwise banks. The collapse of Fannie and Freddie preferred shares whacked bank assets across the board. When our libertarian friend suggests we should let banks should go bankrupt and let "creditors own the company," the fact is that as the lender of last resort, the government will quickly end up owning all the banks.
The basic problem is that we Americans borrow to spend. We don't save or invest enough for the future. It is partly our own fault as a culture. But since our government borrows so much of our money, I blame Bush and Reagan too.
If our banking system is sitting on a trillion dollars of bad debt, it seems fair to blame a little bit of the problem on the $2.4 trillion we borrowed to blow up Iraq.
"And you can trace the unnatural increase in the Case-Shiller curve all the way back to the early 90s when the Community Reinvestment Act [...] met the Clinton administration's acceleration of subprime lending."
So the liberals and the PC police caused this mess? Seriously?
The CRA thing has been debunked about a dozen times already. See, for example:
Not to mention that the CRA was passed in *1977*. And exactly which part of the 90s increase looks unnatural for the C-S curve?
I see the increases as rather unnatural once the record surpluses were squandered and replaced with record deficits while we dealt with a costly war and a lackluster economy. To top it off, the president *encouraged* everyone to *spend*. That awful Clinton. Whatever.
You are right that this thing has been simmering for quite a while, but your specifics are lame. Moreoever, it ignores the plainly awful governance of the last seven/eight years.
"But Republicans hate the idea of government watching over anything."
Wrong, they love the idea of the government watching over what people do in their bedroom, watch on TV and in movie theatres, do in their own home (except when it comes to buying lots and lots of guns), say over their phones, and where private contributions go if it goes to the Middle East.
Oh and I love how the "reason" that the Republicans decided to not vote for the bill was because of what Representative Pelosi said on the House floor. Do the Republicans realize how much more petty and ridiculous they sound by saying they will not support a bill because of Representative Pelosi bashing a President that 90% of them want to distance themselves from because of his unpopularity? Compared to the reasons Democrats who decided not to support the bill have given, such as, they did not feel it was the right thing to do, either because they do not feel it is right for taxpayers to bailout people who were going around giving 40 million dollar bonuses a couple years ago, or because they felt the bill was inadequate in supporting homeowners facing foreclosures.
I really hope people listen to what Representative Boehner was saying, and realize, if this is true, why would we want such people making legislative decisions for us, and if not, Representative Boehner is either intentionally misrepresenting what happened, thus a liar; or a moron and either way, I would not want him making legislation. I would love the names of those 12 Republicans who changed their minds because of what Representative Pelosi said, because I would love to have their consituents know that they are in Congress, not to protect their rights, but to make sure that people do not talk badly of President Bush.