I wish I had the knowledgable certitude....

[Old and In the Way]

that this rescue bill was definitively good or bad for our economy. I just don't have the onboard intelligence to know for sure. I can't comprehend $700BB dollars. I can't comprehend $55 Trillion dollars of CDO's. I can't understand the market mechanisms that created the problem or why this bill will resolve it.

There were 3 potential solutions-

(1) Do this
(2) Do nothing
(3) Do something else

How do know how to choose the right option? By choosing to do this, we'll never know if (2) or (3) were better options. Or worse options. And we won't be able to return to this point for a 'do over'. Whatever the future economic conditions are, they'll be influenced by the option our Congress chose.

I've read lots of posts here and around the net about the rescue plan...opinions that are passionately pro- and anti- bailouts. "If we do this we will face certain financial Armageddon" "if we don't do it, we will face certain financial ruin". To me, both sides could be right...or could be wrong....maybe both at the same time. For one thing, we really don't have our "own" economy. Our economy is interdependent and influenced by the economies of hundreds of other countries and business plans of hundreds of corporations. Our economy is influenced by wars and climate changes. It's influenced by the spending decisions of 7 billion people. So we could have made the right choice with terrible results...or fantastic results. The other choices could have been even better, the same, or even worse.

I do know this. I wouldn't want to have been a Senator or Representative of either Party having to cast a vote on this issue. I suspect that there are no theoretical economic physicists or financial weather casters or even crystal ball readers casting their votes in Washington. I didn't write or call my Congressperson to demand/beg that they vote for or against this bill. Why? Because I really don't know what the right vote was on this issue. I wonder how many people really did?

[Hydra]

1. Plenty of people, actually

and (3) would be the correct answer.

Wanna know why? This "plan" came from the Bush Administration. When has the Bush Administration done ANYTHING that didn't involve putting the money in their pocket and screwing everyone involved(Katrina and Iraq, for instance)

If you know nothing else, you should know that.

2nd, on the matter of the economy- the banks are refusing to loan. If this was really a crisis, the Fed could choose to loan at 0% to get the money moving again. Simple, and requires no extra powers or even congressional approval. Why do they need the $700 Billion to start loaning again?

[babylonsister]

4. The banks are refusing to loan=isn't that a crisis?

I think you are making this too simplistic.

[Hydra]

5. As pointed out today

The smaller Banks are NOT refusing to loan. The ones who want their losses covered ARE refusing to do their job. Also, as stated, the Fed could loan, thus making the ones currently "Holding their breath" until we agree to take on their losses irrelevant.

I also posted earlier today that when someone is trying to make an issue look or sound complicated, it's because they're trying to roll you. They either caused the problem and are trying to cover it up, or are selling you something you don't want.

This crisis has simple causes and simple answers that have nothing to do with $700 Billion dollars. That would just be a nice gesture on the part of the taxpayer to Paulson's cronies.

[babylonsister]

6. This crisis has simple causes and simple answers that have nothing to do with $700 Billion dollars

Please unencumber me, or allay my fears, or let me know what the answer is. I am all ears, because that is not what I'm witnessing.

[Hydra]

8. You may want to read some of the posts today

If you just got on. There was a lot of very interesting information that came out. In a nutshell, here's what we've got, though:

Banks were gambling on money that didn't exist. The numbers vary based on who you're talking to, but I've heard somewhere in the realm of $450 trillion dollars. They won't admit the actual number, which is where you're hearing them say "complicated."

Now, for the credit crunch: Money has to move, and loans have to be made in our system, otherwise money dries up. The problem here is that lots of people can't afford their living expenses, so they are defaulting on mortgages and credit cards(That problem is about to hit us in the face soon, from what I've heard). Now, supposedly the banks don't want to loan to each other because they might take a loss. The fact is that the smaller banks didn't play in this ponzi scheme and aren't having trouble making loans, so something is up.

Meanwhile, with the major banks refusing to loan, suddenly there is a "liquidity crisis"- which can't happen without the Federal Reserve sleeping on the job. They are the ones who control the money, after all. They can lend to any bank at any interest rate they choose- including 0%. So really, the system isn't "Frozen" after all- a couple of higher rollers smell blood and so are pushing for free money.

Anyway, supposedly the problem at it's root are the mortgages- so why does this bill do nothing to keep these people in their homes, paying their mortgage? Why no help for falling wages and medical bills? Programs that would address these core issues have been put forth.

And finally, why do even this plan's defenders have nothing better to say about it than "This won't make things better, but they could be far worse without it"?

It's all a scam. Paulson will pay his cronies(Who include Rudi Giuliani- he wants in on this) and buy up toxic properties that will never resell while the Banks will keep the profitable stuff and will become "stable" so they can lend to us with interest again.

And the worst part? This may push inflation through the ROOF. All of the other markets have already signaled their displeasure with us in the form of moving away from the dollar whenever we even SUGGEST it.

I hope this helps- the crisis is largely manufactured and the "cure" is likely to kill us. Read up on the what's coming out of the woodwork for a better idea. This is IWR 2.0.

[babylonsister]

11. Wow. Thank you for laying that out. So what happens iyo, if

it passes? And there's a guy out there who will change it, but now isn't the time?
I know it's serious and a lot of people, including us, are anxious.

[Hydra]

15. This is likely to pass, so the issue is moot

We'll get to see in gory detail what's going to happen. The best overall item I read yesterday came from a link posted to Democracy Now(Amy is such a treasure).

http://www.democracynow.org/2008/9/30/bridge_loan_to_nowhere_house_rejects

[girl gone mad]

2. Read this:

http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf

It's an IMF policy paper from about a month ago comparing this crisis with past events and looking at what actions were taken in the past and how successful they were.

ETA: they found that bank bailouts had a low rate of success and tended to prolong recessions.

ETA2: Existing empirical research has shown that providing assistance to banks and their borrowers
can be counterproductive, resulting in increased losses to banks, which often abuse
forbearance to take unproductive risks at government expense. The typical result of
forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank
bailouts, and even more severe credit supply contraction and economic decline than would
have occurred in the absence of forbearance.4

[Old and In the Way]

9. Very detailed analysis, but kinda lost on me.

It will be worth reading the epilogue when they write up the current crisis.

[babylonsister]

3. Great post, and rec'd. I don't know what the 'best' solution is,

but taking action with reservations that can be reversed doesn't sound that bad. I think most Dems are biding their time until 2009.

This bill sucks, but shutting down doesn't sound like a solution to me.

[EFerrari]

7. Nicely done.

:hi:

[cui bono]

10. 3 is the correct answer.

There is a better way to do this that will address underlying issues and create cash revenue to throw at this.
See: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4143183&mesg_id=4143183

Also DeFazio and Kaptur have come up with an alternate plan in the House. I have to check out the details on it.
Here's a write up and link to press conference video:
http://www.economicpopulist.org/?q=content/house-progressives-introduce-their-own-bail-out-bill
There's also a good video of them talking to Lou Dobbs in the political video forum.

This version of the bill is worse than the one that went down in the House. They added a lot of pork to make it more palatable to the Repubs, so you know what that means. And it was already a version that was a Bush/Paulson plan, so you know what that means.

This whole thing is a scam for the banks and investors to get us to pay for their fuck up, plain and simple. It's a bunch of bullshit. The House better not pass this and I hope this time it's more Dems that don't vote for it so they can say well, the Repubs had to have all this pork put in and that's unacceptable.

Oh, and Thom Hartmann has a good article up on CommonDreams.org. Probably also on his own website. A way to fix this mess without the taxpayers paying for it. He had a great hour on today's show where he read a bunch of articles from the NYT about when they were trying to fix the 1929 depression. I didn't get to hear all of it but he was commenting that it was the same thing they're talking about now, trying to do the same thing that didn't work then. I think you can hear it on whiterosesociety.com or maybe he archives on his site. Or you airamericaradio.org.

Plus, any time someone is giving you the hard sell means it's time to say no thank you, I need to think about this. And usually you realize that person was giving you the hard sell precisely because they didn't want you to think about it because if you did you would realize they are selling you crap.

[ForeignSpectator]

12. I'd bet on option 3. Something needs to be done but "THE" bailout just smells really bad

for so many reasons. Just look at WHO came up with it ( from Goldman Sachs and the makers of IWR and Katrina ) and how, i.e. "we just wanted a really big number". No solutions to the root problems and accountability ( another root cause for all kinds of catastrophes that happened ) and NO consequences for the criminals that profited so wonderfully from all this. ( HELLO? )

[OakCliffDem]

13. I am suspicious of all the 'experts' on the television that tell us the bailout is necessary

My gut feeling is the American people are being sold a bill of goods by the Bush Administration that is going to FVGK us in the azz as soon as it becomes law.

I have no documentation of this, just a little voice in the back of my mind telling me the bailout is not what it appears on the surface.

[barbtries]

14. i'm for option 3

bottom up instead of trickle down. look, the financial wizards are the ones who brought us to this point. who's to say we don't know better than them? could we have done worse? the "experts" have fucked it right up.

[tomp]

16. i look at it this way:

...if bush and cheney want it, how good could it be?

I mean, c'mon! if i had to bet my life, literally, i would bet it AGAINST bush/cheney.

if kucinich were on board, i'd feel a whole lot better.

this reasoning gives me a very high level of confidence that "do this" is not the best option.

[SammyWinstonJack]

17. Reason #1 to be against this, bu$hco pushing hard for it.

Remember george pushing hard for his tax cuts in '01? Ran around the Country selling it and see how badly that turned out for the economy?

[dhpgetsit]

18. Something to keep in mind

Never act on fear.
That is when people are most easily manipulated.

Working together, ordinary people can do extraordinary things. (Thanks, Obama)

[Laelth]

19. They lied to us before ...

... so it's easy for me to believe that they are lying again. Most likely, this is fear-induced robbery. There must be another way to fix this problem than to hand the Treasury Secretary a $700 bil. blank check.

-Laelth