Why should any taxpayer not associated with giant investment banks be in favor of the bailout?

[mhatrw]

Please explain to us as simply as possible why giving Goldman Sachs $700 billion of taxpayer money to buy up assets no one in the private sector will touch with no reform and no oversight is the only reasonable way out of this crisis.

[Clovis Sangrail]

1. right after you explain why you no longer beat your children /nt

[mhatrw]

3. If you have a different characterization of the current bailout, let's hear it.

[Clovis Sangrail]

15. well... pretty much everything you wrote was a *mischaracterization

why giving Goldman Sachs $700 billion of taxpayer money
I haven't seen any plan where Goldman Sachs gets all the money.. not even to manage.

no reform and no oversight
you obviously haven't read the text of the proposal.
(don't say you have, because it *does contain oversight.. maybe not as much as you'd like but it's very definitely there)

I've said it before.. we got screwed and anything we do to try to help fix things is GOING TO SUCK.
However, we need to do something.. because thinking that this isn't going to effect anybody but those on Wall street is insanely myopic.

[mhatrw]

18. Paulson gets the money and he's Goldman Sach's boy.

He gets to do whatever he damn well pleases with the money and you know it.

I'm not saying to do nothing. I'm saying to directly solve the credit crunch by getting the Fed in the commercial paper business. Let the investment banks go bankrupt. That's what bankruptcy courts are for.

[Odin2005]

21. Just because Paulson was at G-S doesn't mean G-S is getting a $700B check.

Work on your logic.

[mhatrw]

24. But it does mean the smart money (Buffet's, for example) is on GS to get more than their share.

Any controls on this written into the bill? Didn't think so.

[Odin2005]

38. Yes, read the damn bill.

Oversight is there.

[martymar64]

48. "Oversight" is a joke

This is coming from the Administration that won't even honor subpoenas by Congress.
The Bush Admin has broken law after law after law after law. Do you think they'll obey this one? You're being naive.

Where have you been the last 30 years?

When the bailout passes, which it eventually will, say goodbye to that money forever. You'll never seer it again, at least a few tens of billions will be safe in Paulson's personal Swiss bank account.

[mhatrw]

49. Oh, sure! Oversight is "there." Trust us! n/t

[polpilot]

50. Oversight is not there. That's meaningless garble in there. Once they get the money it's gone.

The 'money guys' control it all. You would have to catch them stealing (ambiguous at best) then try to recover the money.

[Tallison]

74. I understand people's disillusionment, but since this is an activism board

it's dismaying how little hope some have here on the power within constitutional government to change the status quo. My hope remains alive, and I believe in this beginning of Congressional Dems' efforts to, yes, enact oversight over the free market.

[Clovis Sangrail]

wait... are we giving GS "more than their share" or "giving Goldman Sachs $700 billion" ? /nt

[mhatrw]

69. We are giving Goldman Sach's homeboy $700 billion to spend any way

he sees fit.

[Clovis Sangrail]

78. so now we're not giving GS *any of it.. but giving it to their homeboy... ?

First GS was getting all of the $700 billion
Then GS was getting a disproportianate part of the $700 billion
Now GS isn't getting any of the $700 billion and it's all going to their 'homeboy'

I think you need to examine the actual situation.
(not what somebody has told you to think about it)
Then you should re-examine what you thought you knew and why you held those beliefs.

[mhatrw]

83. Goldman Sach's current CEO, Lloyd Blankfein, was present with Paulson when the decision

to save AIG was made. GS's would have lost 20 billion if AIG failed.

Bush's own Chief of Staff is yet another longtime Goldman Sach's alum.

Are you actually defending these outrageous conflicts of interest? Do you actually think that we can trust these guy with $700 billion and no real oversight? Because they did such a bang up job with their original investors' money?

[Clovis Sangrail]

87. if you were even 1/2 rational you'd see that I'm not defending them

I'm pointing out that while you may be passionate you're ill informed.
You've made 3 contradictory statements about what is happening.

That indicates you need to research the issue a tad bit more.

[EFerrari]

2. Small business people are because they need lines of credit

to conduct business. It's not so much that they want to hand over a brazillion dollars but more that they are being cut off by their usual lenders and for no reason really and their businesses are stalling. So, it's not really being in favor of the bail-out. It's more that they are being held up by Big Money.

[mhatrw]

4. Banks are pointing guns at their own heads and saying that they will shoot

themselves if we don't give them our trillions.

If we have to nationalize commercial paper, let's do it. Commercial paper makes money. It's not a give away.

[EFerrari]

9. It's difficult when you have to trust either BushCo or Nancy Pelosi

to move in the right direction. We know what bunch of felons BushCo is and Nancy's first priority is the election. All my friends who own small businesses are walking around sort of ashen right now. They're all lefties and between a rock and a rock. :(

/grammar

[Marrah_G]

88. Yup- it's a very scary place to be.

[BrklynLiberal]

10. EXACTLY!!!!

[jtrockville]

5. Why bail out failing institutions? Provide credit if that's what's needed.

Have the government set up a temporary loan program. Lend at reasonable rates to credit worthy applicants.

When Wall Street cleans up their mess (free-market style, without any government assistance), auctions the loans and shut down the program.

[EFerrari]

11. Make is so, Number 1.

:shrug:

Seriously, who is going to make it happen?

[slampoet]

6. For the same reason investment banker should have been concerned about the minimum wage.

Unfortunately they weren't so they can all go to hell.

[BrklynLiberal]

7. There is no reasn why anyone should be bullied into approving a bill that was put together

in a hurry, with no public hearings, no consulting of economists of renown, and no guarantees to the taxpayers that we will see any benefit from this.

And..there are no provisions in this bill to prevent it from happening again...

It is a bailout for the very same people who caused this situation by being so greedy. Now they are saying that we will all suffer if we don't fix it for them. It sounds a lot like blackmail to me.

[EFerrari]

12. Imho, that's exactly what it is. n/t

[Dr.Phool]

27. Oh, you'll get a "benefit" all right.

Just think of all the benefits of higher inflation, because the printing presses will be rolling non-stop.

Just think of all the benefits when Wall Street takes ALL the money we need for infrastructure improvements, health care, job creation, mass transit, not to mention all the benefits to cutting existing social programs.

[BrklynLiberal]

28. Isn't that what they will be doing anyway if we give them 700B of taxpayers' dollars?.

[martymar64]

52. Break out the wheelbarrow

You'll need it to cart all your cash to buy a loaf of bread.

[On the Road]

8. It Is Not Giving $700Billion

The net effect will be a lot smaller, because the government gets mortgages backed by property.

The benefit to everyone is in the form avoiding a deep recession caused by a credit crunch. We saw the very beginnings of it this week and it was scary. That will effect everyone in the country.

[girl gone mad]

13. Not quite.

Mortgages are only a small piece of the puzzle. Mortgage backed securities are a much bigger problem.

Some experts think it would take at least $5 Trillion to buy up all of the bad assets. A significant number of these securities have absolutely no underlying value. They were created out of thin air.

[mhatrw]

14. Why can't the Fed solve the credit crunch directly?

Shouldn't the folks who made all the highly leveraged losing bets have to take their losses?

Shouldn't they at least be barred from doing so again?

[Irish Girl]

16. The Big Money has taken us all hostage

Still waiting for Americans to get fed up and take back the control of issuing our own money again as was granted in our Constitution. If the Federal Reserve banking cartel fucks up this much, why do we need them again exactly?

We have the power, we're just not seizing it.

[Odin2005]

23. Anti-Fed conspiracy BS is annoying.

:eyes:

[Irish Girl]

30. Alan Greenspan fucked up, plain and simple

Without flooding our economy with all his cheap credit, we'd be much better off. Doesn't matter how you try to argue it Odin. Call it a 'conspiracy' all you want, LOL

[Odin2005]

39. Where did I say Greensh*t didn't fuck up?

:eyes:

[EFerrari]

32. Until it's happening to you. n/t

[martymar64]

54. Go ahead, trust the Bush Administration

See how far it gets you.

[gizmo1979]

20. Why does the money have to start

at the top and work down?Could it work the other way?

[Greyhound]

22. Pithy reply?

waiting...

waiting...

[Tallison]

17. "You don't fool around with a credit crisis" -Thomas Friedman

You can't understand the necessity of this bill's importance to the little guy unless you understand the role of credit liquidity in market infrastructure. The following are some good pieces expositing its role:

1) Thomas Friedman in NYT yesterday: "Yes, this bailout is necessary. This is a credit crisis, and credit crises involve a breakdown in confidence that leads to no one lending to anyone. You don’t fool around with a credit crisis. You have to overwhelm it with capital. Unfortunately, some people who don’t deserve it will be rescued. But, more importantly, those who had nothing to do with it will be spared devastation. You have to save the system." http://www.nytimes.com/2008/09/28/opinion/28friedman.html

2) Washington Post's editorial today: "IF THE UNITED States does experience an economic catastrophe in the months and years ahead, and if future historians wish to identify the date on which it began, yesterday may turn out to be as good a candidate as any for the title of Black Monday...Given the poor marketing of a proposal whose advertised $700 billion price tag will probably never materialize in full, and given the fact that the rapidly developing credit crisis has not quite been felt on Main Street, we are not surprised at the angry correspondence from voters -- or, rather, from certain self-selected voters. But among the 133 Republicans and 95 Democrats who voted no yesterday, there are certainly some who know better, and their lack of political courage is stunning..." http://www.washingtonpost.com/wp-dyn/content/article/2008/09/29/AR2008092902701.html

Of note, Obama's shown great political courage in expressing his support for a wildly unpopular, albeit necessary, bill.

3) Paul Krugman, "Conscience of a Liberal" 9/20, New York Times: "Where will the money for the big bailout come from? I keep being asked that. In the long run, of course, it will come from you — the taxpayer. But what about the immediate cash flow? The answer, if you think it through, is that it doesn’t have to come from anywhere. Ultimately, the Paulson Plan will move money in a circle." Diagram on the function of credit liquidity: http://krugman.blogs.nytimes.com/2008/09/20/follow-the-money/

4) And, finally, a good NYT general article on the long roots of a credit crisis, and why it constitutes a current emergency: "Can't Grasp the Credit Crisis? You're in good Company." http://www.nytimes.com/2008/03/19/business/19leonhardt.html

[mhatrw]

19. Oh, yes. The guys who sold us the Iraq War are all in favor of this.

None of your quotes explain why the Fed can't just intervene to handle the credit crunch directly while the investment banks are processed in bankruptcy court.

[Tallison]

25. They are handling it directly, but that have to do it through existing infrastructure

These are all good questions you're asking, BTW.

The Feds can't possibly afford to extend the necessary credit that keeps our economy afloat and sustains the average Joe's quality of life - only commercial institutions can. But they've stopped extending this credit. Why? Because they're too spooked to do business with each other right now. Why? Because toxic debts are everywhere, pulling institutions down every other day. No one wants to be stuck in a transaction with someone who's liable to be the next Wachovia, AIG, Bear Sterns, or Lehman. The Feds, however, can afford to take these toxic debts off these business' books for below-market value with the goal of reworking them over time to a break even over time, in an effort to restore these corporations confidence to resume doing business with one another again. If corporations don't do business with each other, they don't do business with the average Joe. Our credit cards stop working. Small businesses don't get credit with which to buy inventory on spec. We don't get student loans. We don't get mortgage loans. Feds can't afford to be a Central Bank, but they can restore confidence to the market.

[mhatrw]

40. The Fed can keep the investment banks afloat with billions, but can't loan

small businesses a dime overnight?

Yes, I know banks are spooked about other banks. But taxpayers' buying banks' worthless instruments at high prices is not the way out.

Here is just one better way out:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4136244

[martymar64]

57. They can simply nationalize these banks

If the problem is that bad, the free market will never fix it. We need direct government control of those assets, not giving it directly to the thieves that fucked us in the first place. And that can wait until Obama takes office.

[fla nocount]

26. You're quoting Friedman, here, at DU, as being credible?

What's BillO's take on our situation?

[PVnRT]

33. People are citing a letter signed by economists from the U. of Chicago

as support against a bailout.

[mhatrw]

41. There are many good economists at the University of Chicago.

And all of them are better than the globalists' best friend Friedman.

[PVnRT]

44. Yeah, they did wonders with Chile in the 1970's

[mhatrw]

47. That's like saying that Kerry sucks because Bush went to Yale as well.

Try again.

[PVnRT]

55. Yet, if you weren't agreeing with them right now, you'd say the same thing

Not that I expect you or anyone else here to admit that.

Considering the number of times, daily, we're told to consider sources on this website, being taken to task for considering the source here makes no sense.

[mhatrw]

70. Show me the better economists who are whole heartedly endorsing this bill.

Let's see the list.

[Tallison]

34. Did you read the link to his editorial?

[fla nocount]

65. No, sorry, I didn't get past the Friedman part.

He must have wrote that in the morning because he goes home for lunch, puts on a skirt and comes back in calling himself Kathleen Parker, you knew that, right.

However, upon further review, I don't know why we must go through the mistakes made by the Cleveland, McKinley and Hoover administrations of enabling this nag that refuses to work for the common good of us all. I say hobble it now and just jump directly to a "New Deal."

Many Americans don't use credit all, might benefit from others using it, but personally don't use it at all. Many can't, bad credit, too young, some are horrified by the concept itself. Many have tried
and have fallen afoul of it's usurious and predatory nature and look at the present situation with glee hoping the sorry bastards will finally get theirs. Now we're telling them that they are being forced to fund what can only be called a stop-gap measure and that their grandchildren will finally pay it off, unless more is needed of course.

Let's face it, credit and it's liquidity benefit those who handle it and those in retail who see the public as marks, general statement I know. Taxes give them the benefits they need, credit gives them the hassles they don't. Far too few have far too much and it's becoming apparent to even Joe that tax and spent and tax and lend are cut from the same cloth.

Don't look for Joe to vote and support any of this or a candidate who does and Joe will vote because I registered him and will give him a ride to the polls if he needs one.

A poster in another thread made the observation that this is polarizing as a battle of philosophies, Libertarian vs. Populist, crossing party boundaries. I agree and I welcome it.

[Liberal In Texas]

29. Friedman!? Now there's a guy you can trust!

He and his cronies are the ones who brought us this mess.

Break up the mega corporations, tax the rich, and sensibly regulate the finance sector. End of crisis.

[Tallison]

35. How about the fact that our own Obama supports the bailout?

And the Times and the Post in their editorials? And our own Congressional Democratic leadership?

[mhatrw]

42. Friedman & Times & Post & Obama = The establishment.that got us into this.

How about explaining this to us without the appeals to "authority"?

[Tallison]

58. This is getting conspiratorial and surreal

How are the Times and Obama part of the establishment that got us into this?

[EFerrari]

31. Friedman?! I can't think of a bigger print media shill than he is for BushCo

who maintains a pretense of objectivity.

[Tallison]

36. Hmm, well, on this issue Obama and Congerssional Dem leadership agrees with him nt

[mhatrw]

43. When has the Dem "leadership" not caved to Bush in a crisis?

When?

[EFerrari]

51. Unfortunately, that's no recommendation. n/t

[fla nocount]

67. Many here on this board will be holding their nose while voting for Obama.

It was founded as a left leaning discussion group and many had just voted for Gore. Many pretend a belief in party difference the same way that children pretend a belief in Santa Claus. Many will kick a blue-dog square in the ass on sight just for shits and giggles, well, there's the whining and the yelping too.

[polpilot]

53. Be afraid. Be very afraid.

[Tallison]

59. Oh, I am, of otherwise well-intentioned folks here

who have no comprehension of credit liquidity crises.

[martymar64]

56. And how much of that money will "go missing"?

Just like the billions that suddenly disappeared in Iraq.

Trust the Bush administration at your peril.

[Tallison]

60. Our guy, Obama, agrees on the need for a bail out

does that mean he's a Bush-bot?

[martymar64]

63. It just means he's wedded to the financial status quo

I wish it was different. I thought Bill Clinton was different, but he's an oligarch just like the rest of them.
I given up on believing in the American system. It's proven to be nothing more than a cruel joke upon the people, making them believe that we actually have a voice and can make a difference.
And for that reason, I'm not even going to bother to vote. Oh don't worry, I live in Texas, so my vote won't count to begin with.

[Tallison]

64. Wow...that's sad that you won't vote for Obama now

:(

[martymar64]

66. I live in Texas, my vote won't count anyway.

This is the belly of the beast. This is the state that lets tom Delay run free with impunity and that thinks that public education is the tool of the devil.
This is the state that lets racists drags black people behind trucks until their heads pop off.

In short, this state is fucked and I would move if I could afford to. I won't even dignify their corrupt black box voting system by playing along with this charade.
If I thought that my vote and voice will mean anything to those in power or vying for power, I'd vote in a heartbeat. But it doesn't. It makes me sad too, but it is what is.

To me, hope is just a word that means nothing.

[Tallison]

73. I know, but if enough people feel that way

it informs history's record of the popular vote.

[martymar64]

75. Maybe I'll vote in 2012

I'll see if Obama lives up to his high-flown promises first.

Hope may be nice for a Hallmark card, but it doesn't pay the rent.

[Tallison]

76. Hey - the Republican DMN columnist Charles Dreher is on Larry King

right now disowning Palin, and vehemently. He writes for the National Review, too. Wow, just...wow.

My sister wants me to move to Alabama. Guess my vote wouldn't count much there, either.

[martymar64]

81. Not in Talibama it won't.

If you want it to count go to a state where it may have an effect. I have no doubt that Obama will win next month with me or without me. Hopefully he'll live up to his promises, although I'm not going to hold my breath.

As for my vote, I'm just one ordinary guy. I have no investments. I live paycheck to paycheck. People in City Hall and the State Capitol and in Washington DC have no interest in what I have to say or in how I feel about anything. To them (including Obama) I'm just another cash cow to be milked for my last penny before I'm thrown into the gutter. I have no illusions about politicians giving a shit about my interests. As far as they are concerned, I am a non-entity. The only time I and others like me get the governments attention is when we get fed up and fight back against our oppressors, like in L.A. in 1992 and in Seattle at the WTO, then it's only to beat us down and gas us into submission. That is the true face of our government.

I'd like to be optimistic like everyone else here but I've seen the business end of what the government and it isn't pretty. It's all about the hobnailed boot on the neck. I don't see Obama changing any of that. I had hoped Bill Clinton would change things but nothing changed, and now I'm convinced that nothing ever will change. Hope is something for other people.
I have already decided that I can't live under a McCain regime. If he wins I'll go get really drunk and then jump out in front of a train like that guy in England did yesterday. Because if McCain wins, then I know all is lost. They may have my dead body but they won't have my submission. Maybe my death will be the statement that gets their attention.
I know you are enthusiastic for an Obama win and I salute you for it. I'm not trying to bring you or anybody else down or dampen your enthusiasm. I'm just telling you my perspective unvarnished by false hopes. Anything else from me would be a lie. I hope you understand.

[dailykoff]

80. Friedman is the fattest of fat pieces of shit and his little buddy

Freddy Kruger is turning out to be a shit off the old block.

[pnwmom]

37. Because we're all associated with the liquidity crisis.

We all go to grocers and hospitals that operate with credit lines. Almost all of us are employed by or own businesses that need credit lines -- the rest are retired or dependents.

If we have a major recession, those of us who manage to escape is worst effects will be helping our friends and relatives who have not.

[mhatrw]

45. We are already in a major recession.

How is $700 billion from the tax payers to Wall Street going to stop the recession?

[pnwmom]

68. It's about how long and deep the recession is. Yes, it's not the end of the

trouble -- it's a necessary first step. Once Obama and the new Congress takes office, they'll have more options.

[mhatrw]

71. How will they have any options after we spend another trillion we don't have on this? n/t

[pnwmom]

72. For one thing, we'd only be releasing some of the money right away.

The bill could be amended before we released any more.

[dailykoff]

79. WHAT liquidity crisis?

Is there something wrong with your toilet maybe? :shrug:

[ddeclue]

46. SHORT ANSWER: THEY SHOULDN'T...

[dailykoff]

61. That is a VERY good question.

Sorry, my sympathies do not lie with gullible dopes who got caught playing the freaking derivitives market.

[Dr Fate]

62. Why should any giant investment banks be in favor of a bailout for struggling taxpayers?

You ask a good question- And wouldnt it be neat to see the question asked & answered in reverse?

Why would a giant investment bank want to have their taxes "bail out" ordinary people who are under crushing debt?

The answer- they wouldnt!!! The reality- they dont!

Imagine that-but us taxpayers are supposed to not ask questions and bend over backwards for these crooks & liars.

[depakid]

77. No one is "giving" "Goldman Sachs" $700 billion dollars- that's not the plan

:eyes:

[mhatrw]

84. What is the plan, then?

Please feel free to characterize "the plan" for all of us in the best light possible.

[davidthegnome]

82. I confess to not understanding it that well

I can count on one hand the people I know that say they do - and I won't need all of the fingers. What I do understand is that we've all been screwed for eight years - we've just passed an enormous military defense budget which was basically ignored due to this economic crisis. The 700 billion dollar bail out amounts to more than the federal government's budget.

I am worried about the people who will struggle, but it's like the powers that be are trying to threaten everyone into submitting to this bill. There aren't enough details, and the few economists who know what's really going on are telling us that it sucks - although they encourage doing something over doing nothing, even if it's to pass this bill.

I don't know who to trust, so I'm really going with my instinct which tells me to trust none of them. I'm neither in favor of or against this bill, the financial forces in power will eventually do whatever the fuck they want, with or without my (or your) approval.

[OakCliffDem]

85. Kick

[doyourealize1]

86. These people benefit

1) Small business owners who need to take loans to make payroll
2) Companies who need to take loans to fund new projects
3) People who would like to retain their jobs. Companies have leverage over their workers, and a company which cannot pay them will release them
4) People who would like to buy a house or sell their houses
5) People who have children who need to take out student loans
6) People who need to take out any loan or pay using credit
7) The elderly who rely upon their 401k to keep them afloat. Social Security is dwindling.

NO CREDIT = NO JOBS. DO YOU PEOPLE UNDERSTAND?

There is a downward spiral which will occur. No jobs will decrease consumer spending. Decreased consumer spending causes companies to fail, causing more unemployment and more strain on the elderly.

If done correctly, this program comes almost cost neutral because the government will be able to recoup the losses incurred as a result of this bill. The ignorance on this board is suffocating.

It is not in the best interests of the banking system that credit freezes. Therefore, saving them is a win-win situation.

PS: Who said anything about the lack of oversight?