Was there any new information provided that would explain an emergency

[Emillereid]

so dire that it necessitates fleecing the American people to the tune of a trillion dollars? I mean we've known for a while that Wall Street firms had a lot of toxic mortgages on their books that no one would buy at any price -- so what changed last weekend that made them fear a total economic meltdown.

As a poster over at eschatonblog said:

0 To $1 Trillion In 4 days Flat

It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option. We've seen this game played before.

It's unrealistic to imagine that I'd be able to really get enough honest information to have an informed opinion, but I spent some time thinking about what question all the Very Serious People should, at a minimum, want answered before the start cheering on pony plans. This is what I came up with:

What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?


And, no, tumbling stock prices or babble about "deteriorating credit conditions" don't count. Bernanke, Paulson, the SEC, the FDIC should have had access to a set of facts independent of day to day market turmoil. What actually changed over the week? If it was new information, what was it? If it was newly discovered information, why didn't you know it before?

-Atrios 11:03
http://www.eschatonblog.com/2008_09_14_archive.html#6187592536358678953

[Emillereid]

1. I think we're buying a pig in a poke - and it doesn't wear lipstick. Democrats

should be asking 'what changed?' Me thinks this may be a maneuver to transfer social security funds to Wall Street and totally bankrupt the government so that when Obama takes office the till will be empty.

[DJ13]

2. With my tinfoil hat on.... Anyone else notice the suddenness of this "emergency"

....right after McCain's post convention bounce disappeared?

It was almost as if it looking like the GOP werent going to stay in charge triggered a Plan B to take as much as possible before leaving town.

[Emillereid]

3. Could be - but it's not helping McCain.

Another question I have is if the big investment firms have too much bad mortgage debt on their books why not have the government intervene at the level of the homeowner who took out the loan and make it good -- then the stuff on their books would be good and they could once again sell it.

I really think they are doing their best to re-inflate the housing bubble.

Read this excellent article by my favorite economist:

Will the Cure be Worse Than the Crisis?

The Paulson-Bernanke Bank Bailout Plan

By MICHAEL HUDSON

Saturday’s $700 billion junk mortgage bailout is the largest and worst giveaway since a corrupt Congress gave land grants to the railroad barons a century and a half ago. If it goes through, it will shape the coming century by giving finance unprecedented power over debtors – homebuyers, industry, state and local government, and the federal government as well.

But what threatens to be even worse is the government’s move to let the financial sector make even higher, unprecedented gains by working its way out of negative equity to “make taxpayers whole” by repaying the government’s bailout by bleeding the economy at large. nticipating congressional capitulation in this license to engage in predatory credit, the latest Sunday evening surprise is that Treasury Secretary Henry Paulson’s own firm, Goldman Sachs, is to become bank holding company picking up the financial wreckage now that the government is covering the bad loans and investment gambles Wall Street has made.

What Mr. Paulson did not say in his weekend TV interviews, organized as what he hoped would be a series of victory laps. Neither he nor Fed Chairman Ben Bernanke nor any other Wall Street spokesman has acknowledged that the government has helped promote today’s $46 trillion debt bomb. This enormous overhead consists of the product that banks are selling – interest-bearing debt that is being added to real estate, corporate industry and personal income to price the U.S. economy out of world markets.

We have heard nothing about how Wall Street lobbyists have succeeded in killing the financial cops on Wall Street – and done the same with the consumer cops on Main Street. There is no public recognition of the fact that more money in tax cuts went to the top 1% than the bottom 80% combined.

So how much credence should we give the newest proposals for the United States to commit economic suicide by turning over the powers of government in effect to Wall Street? When they talk about “making taxpayers whole,” what really is their game? ................ http://www.counterpunch.org/hudson09222008.html