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Cross-posted from the Campaign for America's Future

There's news this Sunday afternoon of a congressional deal to bailout Wall Street fat cats with $700 billion of taxpayer cash (you can read the draft legislation here). Though the deal negotiated between congressional leaders and the White House is better than what Treasury Secretary Henry Paulson originally proposed early last week, it remains an insulting atrocity, having omitted even basic aid to homeowners, bankruptcy reforms and any modicum of future financial industry regulation. Now, the New York Times reports that the Democratic leadership may not have the votes to pass this bailout. So without further ado, here are the top 5 reasons (in no order) why every single member of Congress - Democrat and Republican - should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now - let them hear your voice.


When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it's akin to check kiting, which is is illegal. Apparently, though, when the government does it, it's billed as Serious Public Policy. Because that's what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan's underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is "not based on any particular data point" - that is, they created it out of thin air because "We just wanted to choose a really large number." Slapping that amount of money onto the national credit card when our government can't even justify the amount is beyond absurd - it is insane.

It didn't have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed  a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to "submit a plan to Congress on how to recoup any losses," according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street's misbehavior.


Primum non nocere is the latin phrase for "first do no harm" - the priority principle for any EMT working on a sick patient. It should be the same priority for Congress at this moment - and a growing group of esteemed experts on both the Right and Left are insisting that this bailout bill could make things worse. Here's a review:

  • The Washington Post reported on Friday, almost 200 academic economists "have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear."
  • NYU's Nouriel Roubini, the visionary who had been predicting this meltdown, says "The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan."
  • Harvard's Ken Rogoff, a Former Federal Rerserve and IMF official, insists that the prospect of this bailout is, unto itself, taking a manageable problem and making it into a more intense crisis. He says that credit is frozen primarily because banks want to avoid dealing with other banks that might drive a hard bargain, and instead would rather wait for free money from the government. Without the prospect of that free money, Rogoff suggests that credit would probably begin moving again, if slowly.
  • Dean Baker of the Center on Economic and Policy Research says that spending so much cash so quickly on such a poorly conceived plan could have the effect of making it impossible to fund economic stimulus that is the real way out of this mess. "Suppose the Paulson plan goes through," he writes. "It is virtually certain that the economy will weaken further and the number of foreclosures and people without jobs will continue to rise. This is the fallout from a collapsing housing bubble...When families respond to their loss of home equity by cutting back their consumption it will deepen the recession. In this context it might prove very important to have the resources needed to provide a substantial stimulus. [and] there is no doubt that this bailout will make further stimulus much more difficult to sell politically."

Meanwhile, it's not even close to clear that this is a problem that requires such an enormous response. As mentioned above, the Treasury Department admits it has absolutely no factual basis for requesting $700 billion - an amount equivalent to about 5 percent of our entire economy. Additionally, the Washington Post reports that "Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets." Indeed, "many smaller banks said they were actually benefiting from the problems on Wall Street" and "even some of the nation's largest banks, which have pushed hard for a federal bailout, deny that the current situation is forcing them to reduce lending."

The questions, then, are simple: In the face of this bipartisan opposition from objective experts, why should a lawmaker instead believe the same Bush officials who helped create this crisis with their deregulation, the same Bush officials who just months ago said everything was AOK? Shouldn't there be almost complete unanimity among both objective and partisan observers before spending 5 percent of our entire economy after just one harried week of White House demands? Fool me once shame on you, fool me twice, shame on me. It's time, as The Who said, that we "don't get fooled again."


The mantra throughout the week has been that America has "no choice" but to pass Treasury Secretary Henry Paulson's $700 billion giveaway - that, in effect, there are no alternatives. But that's an out-and-out lie - one with a motive: Making it seem as if the only thing we can do is hand the keys to the federal treasury over to both parties' corporate campaign contributors.

The truth is, there are a number of alternatives. Here are just a few:

  • In the Washington Post last week, Galbraith outlined a multi-pronged plan shoring up and expanding the FDIC, creating a Home Owners Loan Corporation, resurrecting Nixon's federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.
  • The Service Employees International Union has drafted a plan based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their bad mortgages.
  • For those in the mindless, zombie-ish "someone has to do something, so we have to do what the White House says!" camp, consider the possibility that you are under the spell of the same kind of White House fear that led us to invade Iraq because of Saddam's supposed WMD. Consider, perhaps, that there may not even be a compelling basis for doing anything just yet (or at least not anything nearly so huge), and that the whole reason there is this urgent push right now has nothing to do with the financial situation, and everything to do with creating the political dynamic to pass a wasteful giveaway - one that couldn't be passed otherwise without a sense of emergency. And ask yourself why you would listen to this White House instead of listening to those experts who have been predicting this crisis and are now advising against this bailout - experts like CEPR's Baker. In two separate posts (here and here), he says that letting the problem play out could be the best path, because Treasury and the Fed may already have the tools they need. Following this path, the worst thing that happens is "The Fed and Treasury will have to step in and take over the banks [which] is exactly what many economists argue should happen anyhow," Baker writes. "So the outcome of the worst case scenario is a really frightening day in which the whole world financial system is shaken to its core, followed by a government takeover of the banks. Eventually the government straightens out the books and sells them off again. But the real threat here is not to the economy, it is to the banks."
  • Then there is the idea of simply taking the $700 billion and simply give it to struggling homeowners to help them pay off part of their mortgages. This hasn't even been discussed but the thought experiment it involves is important to understanding why there is, indeed, an alternative to the Paulson plan. If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks' mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity. That would be a bottom-up solution helping the mass public, rather than a top-down move helping only financial industry executives.

On this latter proposal, some may argue that giving any relief to homeowners is "unfair" in that those homeowners created their problems, so why should taxpayers have to help them? But then, is helping homeowners any less fair than simply giving all the money away to Wall Street, no strings attached? I'd say no - and helping homeowners also serves a second purpose: namely, keeping people in their homes, which not only helps them, but helps an entire neighborhood (as any homeowner knows, nearby properties can be devalued when foreclosures hit).


As a preface, let me state that I think we live in a country where politicians too often listen to their donors and to the Establishment rather than their constituents, not the other way around. America is a country where our leaders dishonestly invoke the concepts of "Statesmanship" and "Seriousness" and their supposed hatred of "pandering" to justify ignoring what the public wants (as if giving the public what it wants is somehow not the objective of a democratic republic). So, in short, I don't think there's anything wrong with this bill being "politicized" by coming down the pike right before an election - in fact, I think it's a good thing because the election - and the fear of being thrown out of office forces our politicians to at least consider what the public wants. I mean, really - would we rather have this decision made after the election, when the public can be completely ignored?

Polls overwhelmingly show a public that sees voting for this bill as an act of economic treason whereby the bipartisan Washington elite robs taxpayer cash to give their campaign contributors a trillion-dollar gift. As just two of many examples, Bloomberg News' poll shows "decisive" opposition to the bailout proposal, and Rasmussen reports that their surveys show "the more voters learn about the proposed $700 billion federal bailout plan for the U.S. economy, the more they don’t like it." Put another way, this bailout proposal has unified both the Right and Left sides of the populist uprising that I described in my new book and that is now even more angry than ever.

Any sitting officeholder that votes for this - whether a Democrat or a Republican - should expect to get crushed under a wave of populist-themed attacks from their opponents. We've already seen it start. In Oregon, Democratic challenger Jeff Merkley (D) is airing scathing television ads hammering Republican incumbent Gordon Smith for potentially supporting the deal. Similarly, this morning on Meet the Press, we saw Republican Senate challenger Bob Schaffer (CO) dishonestly papering over his own votes for deregulation and ripping into his opponent Rep. Mark Udall (D) for potentially supporting the deal. Incumbents, get ready for that kind of election-changing heat in your face if you vote "yes."

This, by the way, could play out in the presidential contest. Barack Obama has been taking the advice of the Wall Street insiders in his campaign in endorsing this bailout. McCain has endorsed the vague outline, but he may ultimately back off once he sees the details, allowing him to then run the last month of the campaign as the economic populist in the race. I'm not saying it would work, considering McCain's 26-year record of supporting the deregulatory agenda that created this crisis. But such a move could end up help him flank Obama on the defining economic issues of the race.


The amount of brazen corruption and conflicts of interest swirling around this deal is odious, even by Washington's standards - and polls suggest the public inherently understands that. Consider these choice nuggets:

  • Warren Buffett is simultaneously advising Obama to support the deal, while he himself is investing in the company that stands to make the most off the deal.
  • McCain's campaign is run by lobbyists from the companies that stand to make a killing off a no-strings government bailout.
  • The New York Times reports that the person advising Paulson and Bernanke on the AIG bailout was the CEO of Goldman Sachs - a company with a $20 billion stake in AIG.
  • The Obama campaign's top spokesman pushing this deal is none other than Roger Altman, who Bloomberg News reports is simultaneously "advising a group of investors who are trying to prevent their shares from being diluted in the U.S. takeover of American International Group Inc." - that is, who have a direct financial interest in the current iteration of the bailout.

Add to this the fact that the negotiations over this bill have been largely conducted in secret, and you have one of the most sleazy heists in American history.


If this bill passes, it will be a profound referendum on the dominance of money over democracy in America. That - and that alone - would be the only thing an objective observer could take away from the whole thing.

Money will have compelled politicians to not only vote for substantively dangerous policy, but vote for that policy even at their own clear electoral peril. Such a vote will confirm that the only people these politicians believe they are responsible for representing are are the fat-cat recipients of the $700 billion - the same fat cats who underwrite their political campaigns, the same fat-cats who engineered this crisis, and want to keep profiteering off it. Any lawmaker who takes that position is selling out the country, as is any issue-based political non-profit group - liberal or conservative - that uses its resources to defend a "yes" vote rather than demand a "no" vote. This is a bill that forces taxpayers to absorb all of the pain, and Wall Street executives to reap all of the gain. It doesn't even force the corporate executives (much less the government leaders) culpable in this free fall to step down - it lets them stay fat and happy in their corner office suites in Manhattan.

Even if they believe that something must be done right now, lawmakers should still vote no on this specific bill, and force one of the very prudent alternatives to the forefront. They shouldn't just vote no on Paulson's proposal - they should vote hell no. Our economy's future depends on it.

Originally posted to davidsirota on Sun Sep 28, 2008 at 02:13 PM PDT.

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Comment Preferences

    •  My tip and my respect (6+ / 0-)

      I haven't quite believed the urgency and have never understood why anything coming from the Bush administration should be given any consideration at all. That said, I've got to believe in my candidate at this point.
      I still think the R's have some heavy tricks up their collective sleeves. One of my concearns is that Pres Bush may try to use provisions of the Patriot Act if there are any bank runs of civil disobedience.
      Thanks for the diary. Let's hope this isn't the exact wrong thing to do.

    •  David, have you read the final draft (2+ / 0-)
      Recommended by:
      SJLeonidas, Predictor

      that's been posted online already?

      Here is CNN's direct link to the 106 pg PDF file.

      I'd be interested on your take, as it's likely to pass.

      A ship adrift in a sea of rhetoric & recycled clichés.

      by Terre on Sun Sep 28, 2008 at 02:38:34 PM PDT

      [ Parent ]

    •  Discussion Draft - NOT Final (2+ / 0-)
      Recommended by:
      SJLeonidas, Predictor

      And thanks to Data Pimp below for pointing it out.

      A ship adrift in a sea of rhetoric & recycled clichés.

      by Terre on Sun Sep 28, 2008 at 02:41:16 PM PDT

      [ Parent ]

    •  For three years I have paid off old credit cards (1+ / 0-)
      Recommended by:

      with a new credit card that charges 0 interest no transfer fee, no fee whatsoever card.

      If it is illegal, every credit card company is guilty of enticing DH and me into committing a crime.

      Who knows? Maybe they think I will run into some bad luck and end up paying their 23% interest rates.   That won't happen.  We can pay it off at any time.

  •  Reason #6: Until Paulson, etc. step down .... (14+ / 0-)

    ... we're just giving more power to the same idiots who got us into this mess.

    Great oversight board they chose, those Congresscritters -- the same people who just weeks ago were saying there would be no bailouts.

  •  You are swimming against the tide (13+ / 0-)

    I couldn't agree more though.

    "A noun, a verb..." and P.O.W Thanks, Joe Biden

    by UneasyOne on Sun Sep 28, 2008 at 02:18:22 PM PDT

  •  Well done, David. (4+ / 0-)

    I'm hoping there is more to this new plan than Paulson's but so far, I'm not seeing it.

    What's a good atheist substitute for "God bless America and Godspeed to you all"? Have a nice day and drive fast?

    by Pager on Sun Sep 28, 2008 at 02:19:07 PM PDT

  •  I wanna see the text of the final bill (3+ / 0-)
    Recommended by:
    Cedwyn, Tanya, drlevant

    Something will need to be done sooner or later.

    Fight the stupid! Boycott BREAKING diaries!

    by VelvetElvis on Sun Sep 28, 2008 at 02:20:47 PM PDT

    •  Here is a plan that would work (5+ / 0-)
      Recommended by:
      corvo, Tanya, SJLeonidas, cynndara, drlevant

      Diaried a few days ago.

      I propose taking the 700 billion and chartering new banks 51% owned by the citizens of the United States.  There is a standard multiplier of 10X for capitalization of banks so that would make 7 trillion dollars immediately available for lending to sound businesses - instantly ending the credit crunch!  Not only that, but 49% of the shares could be sold to investors - nearly doubling that amount to 14 trillion.  Since these banks would be mandated to make only sound loans, they would attract depositors, further (and enormously) increasing their capitalization.  

      Heretical as this is to "free marketers" these banks would actually make a profit.  There is so much "scared money" out there that there are literally trillions in money market funds - and short term Treasuries are in such high demand that they are actually paying negative interest rates!  There will be no shortage of investors or depositors in these new institutions.

      Some of our current banks will fail.  They are going to fail anyway - and if we simply keep printing money to bail them out, the United States will fail!  When all the 250 trillion in toxic derivatives start to unwind - and they will, bailout or no bailout - it is important that we haven't inflated our currency into wastepaper status and that is crucial to our survival as a nation.

      Some of these banks are going down.  Period.  The question is, will we allow them to drag our nation down with them.

      "A noun, a verb..." and P.O.W Thanks, Joe Biden

      by UneasyOne on Sun Sep 28, 2008 at 02:25:53 PM PDT

      [ Parent ]

    •  here's a link to the current proposal (3+ / 0-)
      Recommended by:
      Tanya, SJLeonidas, Terra Mystica

      Free Sarah Palin so she can protect us from Putin's head flying over Alaska.

      by k8dd8d on Sun Sep 28, 2008 at 02:38:41 PM PDT

      [ Parent ]

  •  couldn' t agree more david (1+ / 0-)
    Recommended by:

    this is a bullshit plan that puts money in the wrong hands

    To sin by silence when they should protest makes cowards of men~~ Abraham Lincoln

    by Tanya on Sun Sep 28, 2008 at 02:21:17 PM PDT

  •  Until I see the text of the bill ... (3+ / 0-)
    Recommended by:
    Tanya, Pager, jaf49

    ... it would be sorta reckless to comment.

  •  The Number One Reason to Support (4+ / 0-)
    Recommended by:
    Pager, costello7, appletree, puella

    ... the bailout is that without one we are probably looking at stocks losing about a third of their value, and an implosion of the bond market, and the possible pull out of T-Bills and other securities by China and other Asian markets. That's economic apocalypse and completely unacceptable for a First World Nation.

    Sent from a Blackberry, a miracle made possible and invented by John McCain

    by Larry Madill on Sun Sep 28, 2008 at 02:23:11 PM PDT

    •  Well, you have a point there. (2+ / 0-)
      Recommended by:
      Tanya, Larry Madill

      From David's link, I just saw this:

      Meanwhile, published reports said Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz), the sixth-largest U.S. bank, began merger talks with potential partners after a 27 percent drop in its shares on Friday.

      What's a good atheist substitute for "God bless America and Godspeed to you all"? Have a nice day and drive fast?

      by Pager on Sun Sep 28, 2008 at 02:26:10 PM PDT

      [ Parent ]

    •  That is a reason to support (7+ / 0-)

      reasoned, and reasonable action.  It's not a reason to support a bailout of the very people who created this mess.

      "When those who are accountable are right, they take the credit. When they're wrong, they take the heat. It's a fair exchange." - Lehman Bros ad ca. 1980s

      by Mehitabel9 on Sun Sep 28, 2008 at 02:27:40 PM PDT

      [ Parent ]

    •  Yes, fear the mushroom cloud that hasn't happened (4+ / 0-)
      Recommended by:
      corvo, Mehitabel9, Tanya, UneasyOne

      Where have I heard that before?

      Maybe we could send someone before the U.N. with vials of cash to wave around.

      This is just a FINANCIAL version of the Bush Doctrine.  

    •  Dumb Question (0+ / 0-)

      What would that mean to folks who do not have money in stocks and such

      •  The Economy Stops (2+ / 0-)
        Recommended by:
        spookthesunset, drlevant

        Corporations don't have the ability to expand or possibly even make payroll in certain cases without credit. Expect mass layoffs.

        Credit for just about everything continues to dry up to the point where even if you had excellent credit, and still had a job, you won't be able to get a car loan, or a store credit card for that new Plasma TV. or Wash and Dryer. And forget about any sort of home loan. Thereby causing more lay-offs.

        The lay-offs and mass unemployment cause the housing crisis to get work as more home get foreclosed on, and more mortgages go bad, causing even more tightening in the credit market, causing more layoffs and even more unemployment.

        And if China, Europe, and Asia  lose confidence in U.S. back securities and start dumping dollars and T-Bills ... You are  then looking at mass unemployment  and a worthless currency which leads to inflation which means you will then have mass unemployment, a few jobs, and basic staples of life costing triple or more what they cost now.

        Within a couple months the United States would be a Third World Nation. Or close to a Third World Nation. Best case scenario it would be like the Great Depression. Worst case scenario would be ... Pretty much the apocalypse without a war.

        Sent from a Blackberry, a miracle made possible and invented by John McCain

        by Larry Madill on Sun Sep 28, 2008 at 03:04:31 PM PDT

        [ Parent ]

      •  Worst case scenario (0+ / 0-)

        1930 style depression.  4x current unemployment rate, etc.

        The problem is that we are drifting in uncharted waters because so much credit is tied up in new financial instruments.  No one really knows how the markets will react if we do nothing, or even if we wait one more week to see if we could get a better deal.  No one can tell you that the worst case scenario is certain to happen, or that it is not.

        As David correctly points out, we don't know how they will react to the bailout either.  It is clearly not ideal from a progressive perspective, and It may not be the best solution for the very markets it is supposed to protect.  It may fail badly and lead to depression or hyperinflation itself.

        I'm not an expert, so I have to listen to experts.  The more I think about it, the more I think that the divide between the experts and who listens to them breaks down along academic vs. pragmatist lines.

        The 200 economists that David cites are from academia and not Wall Street.  To paraphrase David, fairly, I hope, he would say that's the point, they don't have a skin in the game, so they can be objective.  

        The people that Obama, Pelosi, Frank. Dodd et. al. are listening to tend to have close ties to Wall Street.  This gives them a more pragmatic understanding of the crisis.  I discount their financial motives because I think that at heart, in a crisis, most people at that level actually do want to do what's best for the country, and I certainly don't think they'd be able to sway Obama in particular with specious arguments.

        So, I read David's diary with fear, but support the bailout nontheless because a number of people I have come to trust do as well.

        I didn't mention Paul Krugman, because he is technically and academic but is talking like a pragmatist.  I trust his instincts in particular, having been a fan of his back in the 1998 Asian crisis. (His great commentary on that crisis got him the popular reknown that led to his NYT gig)

        As of Friday, he was for the "Thursday compromise, which McCain disrupted, but which does seem to have formed the outline of this bill.

        For those who haven't read it, here's a link to my diary from yesterday What is the Bailout and Why am I for it. which gives a laymans explanation of whats going on and why I think its worth supporting.

        Numbers are like people . . . Torture them enough and they'll tell you anything.

        by Actuary4Change on Sun Sep 28, 2008 at 03:26:16 PM PDT

        [ Parent ]

    •  But stocks are going to fall anyway... (2+ / 0-)
      Recommended by:
      corvo, cynndara

      if this is a bad plan (which it is).

    •  Let it burn. (1+ / 0-)
      Recommended by:

      I say that, having a tidy amount set aside in stocks ... and they've already lost 20% of their value in the last year.

      If I can trade the money for a functioning economy in which my work earns decent returns without breaking body or spirit, I can survive the loss.  And the poorer 50% of the American public, the ones who can't afford to lose anything, doesn't own stock.  So a one-third hit to the assets of the wealthy, in proportion to their total net worth, sounds perfectly reasonable to me.

      We haven't been a First-World Nation for a decade at least. First-World Nations have functional public safety, medical, and educational systems. What has become "unacceptable" is acknowledging the facts.

  •  what do you suppose we do? (3+ / 0-)
    Recommended by:
    costello7, jaf49, appletree

    Something has to be done.  Don't get me wrong i don't want to pay for this, but what the hell do you want to do if the economy goes to hell in a handbasket?  If you have a better idea please submit it to congress!

  •  Instead of buying all this bad paper, we could (5+ / 0-)
    Recommended by:
    Cedwyn, corvo, Mehitabel9, Tanya, Terra Mystica

    ... just as well fix the bad mortgages and CDSs.

    But hey, that's fixing the problem for the little guys.

  •  Have you read the plan??? (5+ / 0-)

    Its $350 billion upfront.  Now that's not a cheap number, but, you have to read between the tea leaves on this one...

    I've read just about every article I can read on this subject in the last few days.  You're correct...the $700 billion plan is a financial roll of the dice...

    But, what you and everyone else has failed to do is come up with a coherent strategy to counter what is obviously going to be a global financial catastrophe if nothing's done.

    Chris Dodd and Barney Frank are two exceptional economic people in my opinion.  You have to take into account what they've been saying about this.

    Beyond the politics of the bill, something needs to be done and if the latest proposal of the plan is accurate, $350 billion up front, it sounds very agreeable.

    Don't forget, McCain said during the debate that he'd support the if he votes no, he'll look bad.

  •  My argument against it is (4+ / 0-)
    Recommended by:
    corvo, Tanya, cynndara, appletree

    You have Wall Street and the Republican Party over a proverbial barrel and all you are getting is a couple of pennies?  I'd go in and ask for Warren Buffet-esque terms...although when it comes to credit rating nowadays Warren Buffet is probably higher than the US Government.

    OH-16: John Boccieri will finally end 36 years of Regula Rule.

    by marcvstraianvs on Sun Sep 28, 2008 at 02:25:25 PM PDT

  •  David, you're preaching to the choir. (7+ / 0-)

    I've been contacting my Congresscritters daily on this one, but I have no hope that my efforts will make a damn bit of difference.

    What you doing -- and, for that matter, what else can we do -- to convince our Congressional idiots leaders that they must not allow this bill to pass?

    "When those who are accountable are right, they take the credit. When they're wrong, they take the heat. It's a fair exchange." - Lehman Bros ad ca. 1980s

    by Mehitabel9 on Sun Sep 28, 2008 at 02:25:46 PM PDT

    •  There is only one threat that would work (3+ / 0-)
      Recommended by:
      corvo, Tanya, Terra Mystica

      What you doing -- and, for that matter, what else can we do -- to convince our Congressional idiots leaders that they must not allow this bill to pass?

      Threaten, en masse, not to vote for them.

      The fear of losing their power is the only leverage we have.

      •  I have worked against (2+ / 0-)
        Recommended by:
        corvo, Tanya

        my three Democratic Congresscritters in the primaries of the past few elections.

        If I could help to primary all of them out, I'd be fucking ecstatic.

        "When those who are accountable are right, they take the credit. When they're wrong, they take the heat. It's a fair exchange." - Lehman Bros ad ca. 1980s

        by Mehitabel9 on Sun Sep 28, 2008 at 02:29:10 PM PDT

        [ Parent ]

      •  but what's my alternative on Nov 4 (1+ / 0-)
        Recommended by:

        not vote or vote for the Repug challenger?

        What the hell kind of leverage is that?

        Free Sarah Palin so she can protect us from Putin's head flying over Alaska.

        by k8dd8d on Sun Sep 28, 2008 at 02:32:40 PM PDT

        [ Parent ]

        •  it depends like my congress creep (3+ / 0-)
          Recommended by:
          catullus, wonmug, Terra Mystica

          is in a safe district so i will just skip his name so that his margin is a lot closer than normal. that will give them the message that they are really on very shakey ground and need ot start representing us instead of K street

          To sin by silence when they should protest makes cowards of men~~ Abraham Lincoln

          by Tanya on Sun Sep 28, 2008 at 02:37:47 PM PDT

          [ Parent ]

          •  I'm in a safe district too (0+ / 0-)

            and I'm just not sure that's enough of a message.

            I'm interested in what Kos has been talking about for 2010, challenging some Democrats at the primary level who think they are safe but who are not "progressive" enough.

            Free Sarah Palin so she can protect us from Putin's head flying over Alaska.

            by k8dd8d on Sun Sep 28, 2008 at 02:43:05 PM PDT

            [ Parent ]

            •  we need to send a message now, i truly believe (1+ / 0-)
              Recommended by:
              Terra Mystica

              that if lamont had won in connecticut we would see a very different congress. Having Lieberman win sent the exactl wrong message to them and so we got the whimpiest majority in history.

              To sin by silence when they should protest makes cowards of men~~ Abraham Lincoln

              by Tanya on Sun Sep 28, 2008 at 02:49:13 PM PDT

              [ Parent ]

              •  well, my Senators are not up this time (1+ / 0-)
                Recommended by:

                and my Congresscritter is safe (Jay Inslee, WA-01), so I'll have to rely on those of you who can send a message!

                Free Sarah Palin so she can protect us from Putin's head flying over Alaska.

                by k8dd8d on Sun Sep 28, 2008 at 02:57:51 PM PDT

                [ Parent ]

    •  Shut the society down (3+ / 0-)
      Recommended by:
      crankyinNYC, Predictor, cynndara

      Mass strikes, blockades of Federal buildings, Wall Street, the Chicago Board of Trade.  An effort by a few thousand people to enter the Capitol and take it over peacefully to prevent Congress from meeting and passing the bill.

      Yeah, it sounds crazy, but in people in other countries actually do this kind of thing.  Our "representatives" will only stop this if they think pulling the trigger will lead to mass unrest.

      "Run, comrade, the old world is behind you!" -- Situationist graffito, 1968

      by Pesto on Sun Sep 28, 2008 at 02:41:01 PM PDT

      [ Parent ]

      •  Do nothing. (2+ / 0-)
        Recommended by:
        wonmug, corvo

        And it will shut itself down.

        Karl Marx's predictions about the inevitable self-destruction of capitalism have finally come true.  It just took a while because we kept shoring the system up with half-measures that neither pulled the demon's fangs, nor left it free to savage everything that it would naturally destroy.

        Well, now it has.  And 700 billion won't fix it.  All Congress can do is paper over the gaping wound in our economy and pray, and that isn't going to keep it alive.  So look to your networks; evaluate your group's real assets and abilities, and get prepared to barter and negotiate and wheel and deal and survive.  Have a family reunion at Mom's and figure out who's got what and can do what.  Chickens can't go back to eggs ... get ready to move forward into a different kind of future.

    •  Pea Ess (2+ / 0-)
      Recommended by:
      corvo, Predictor

      David, I've taken you up on your offer to let us use this post in emails to our Congresscritters.  I've now emailed mine three times in two days.

      I suppose that if everyone on DailyKos were to do the same (hint hint), maybe it would start to sink in with these people.  Maybe.

      "When those who are accountable are right, they take the credit. When they're wrong, they take the heat. It's a fair exchange." - Lehman Bros ad ca. 1980s

      by Mehitabel9 on Sun Sep 28, 2008 at 02:44:30 PM PDT

      [ Parent ]

  •  So, David, I take it (0+ / 0-)

    you've invested heavily in gold?

    My bank isn't going to last the week if we don't pass something on Monday.  If your bank were in a similar situation, I'd bet you'd be for this bill.

    •  Funny, my bank is just fine. (6+ / 0-)

      My credit union, rather.

      Yours is just the kind of panicky reaction the Bushies and their good friends the Pelosis are (if you'll pardon the pun) banking on.

      Nobody's saying "Do nothing".  What we're saying is "Don't do something stupid."

      "When those who are accountable are right, they take the credit. When they're wrong, they take the heat. It's a fair exchange." - Lehman Bros ad ca. 1980s

      by Mehitabel9 on Sun Sep 28, 2008 at 02:33:26 PM PDT

      [ Parent ]

      •  But your choices aren't do this or something else (1+ / 0-)
        Recommended by:

        I thought this was a reality based community.

        Your choices, whether it is what should be or not, are this bill or no bill, at least until Jan.  That's the reality.

        I'm glad you can afford to be so disdainful of people who have their money in banks rather than credit unions.  Kudos.

        I don't feel mine is a panicky reaction.  I opposed the bailout, initially.  But I've been reading, watching, and analyzing the situation.  I've looked at the options.  Not the options we'd like to have in a perfect universe, but the options that we actually have.

        It is my reasoned and informed opinion that we are out of time and that this is the best we're going to get.  It is my reasoned and informed opinion that rejecting this bailout will, in practice, mean doing nothing until next year.  It is my reasoned and informed opinion that there is nothing "more stupid" than doing nothing until next year.

        But, hey, maybe some of you credit union folk can get together and negotiate and write a better bill by noon tomorrow that both Rethugs and Dems will sign on to.  We bank folk are just too stupid.

        •  "We bank folk are just too stupid." (0+ / 0-)

          If you're talking bankers, then "stupidity" would at least be a mitigating factor.

          •  I'm sorry, I meant "we who have money in banks" (0+ / 0-)

            If only I had my money in a credit union, I'd have been smart enough to phrase that more clearly.

            •  Of course, it looks like most banks (0+ / 0-)

              are still reasonably safe.  So I'm not exactly sure how the failure of a few more banks is going to result in not only the economic collapse you're preaching, but an economic collapse that will be irreversible before the start of the next Congress besides.

              •  It's a huge interconnected system (1+ / 0-)
                Recommended by:

                including foreign banks, which are also failing.  These are dominoes and the dominoes are falling.

                In truth, the only "sound" banks we have are the credit unions.  Because they don't have shareholders.  But the people I've talked to (who have economic training or background) tell me that, if the banks start to fail, it will quickly crush the credit unions too.  The entire system is dependent upon the entire system.  It's like one of those strings of Christmas lights where, when one goes out, they all go out.

                Yeah, we need to come up with a better design for our Christmas light string.  But we don't have the time for that right now.

                •  Even if what you were saying were true, (0+ / 0-)

                  $700 billion would be an awfully paltry sum to prop up the entire banking system.

                  But hey, you're accepting the "solutions" of folks who denied there was a problem until little more than a week ago . . .

                  •  It is a paltry sum (0+ / 0-)

                    and it's not designed to prop up the entire system.  It's designed to buy time.  The wheels of the (global) economy are grinding to a halt.  Credit has frozen up.  The entire economy is run on credit.  If the credit doesn't flow or, at the very least, ooze--then the economy collapses.  The 700 billion is designed to grease the gears of the economy to keep it running long enough that we can reach a solution to the problem.  The economy has to be fundamentally restructured, re-regulated, completely overhauled.  But that can't be done in the short period of time we have available.

                    Honestly, I'm not saying I like it.  I just don't see any other choice.  You can say there are better plans out there.  I don't disagree.  But, for a variety of reasons, they aren't going to happen.  The Bernie Sanders plan?  I love it.  But you wouldn't get House Rethugs to sign on and Senate Rethugs would block it.

                    If the bailout does what it's supposed to do, we can come back next year with President Obama and huge majorities in both houses and we can do what needs to be done to fix this thing without having to worry about appeasing Rethugs and Bush.  If it doesn't work, then it really wasn't going to matter anyhow, one way or the other.  If it doesn't work, it was already too late.

                    The next set of unemployment numbers are going to be well over 6.5.  Those are the ones that have already been compiled.  If something doesn't pass early this week, it will be over 10 by next Monday.

                    Seriously.  I know some folks want to wait for a better life raft to come by.  I think we need to grab the one in front of us now because its likely there won't be another one before we drown.

                    (I just can't stop with the metaphors.  Oy.)

                    •  Aha, so it's a paltry sum (0+ / 0-)

                      that only buys time.  That means the next bailout, and the one after that, and all the ones following them, will cost us  . . . how much?

                      How many more bailouts do you want to finance with public funds?

                      •  Less than the Depression we'd get without it. (0+ / 0-)

                        I know you don't believe it, but I do.

                        There shouldn't be any more after this.  This gives us the time we need to fix it.  If we can't fix it in the allotted time, we will no longer have the luxury of doing this.  It's a one-time deal.

                        •  As with religion, (0+ / 0-)

                          you may believe what you will.  Just don't expect me to worship your God, or to pay for Him.

                          •  Were I so inclined (0+ / 0-)

                            I could say the same thing about healthcare, or any other social program, or the military or anything else our government does with tax dollars.

                            If that's your argument, you should be posting at redstate.

                            I have avoided personal debt and irresponsibility my whole life.  I didn't have a credit card until my late 20s (sadly, there are things in this society you can not do without a credit card) and I've never had a balance of more than $1,500 on it.  I've only ever had one new car in my life and I paid that off in about 2 and a half years (ahead of schedule) and I didn't buy a house until I was 47 years old.  I put over 20% down and have a fixed rate mortgage.  Other than my 401k, I have no money in the market and, were it my choice, my 401k wouldn't be there either.  This is not a problem of my making and I am not asking the government for a handout or a personal bailout.

                            True, I make some deal out of my bank failing.  I do so not because of the personal losses I may suffer, but because that moment (when it was clear my bank will fail) focused my thoughts.  The economic abyss we are looking at was no longer theoretical to me.  I could see that it was not concept, but truly existent.  It's like the old joke: when your neighbor loses his job, it's a recession; when you lose yours, it's a Depression.

                            This isn't in the least about me or you.  It is about government doing what it is supposed to do--using our resources for the common good.  People think so small scale on this issue.  Oh, gee, I won't be able to use my credit card and, at worst, I'll lose my house--I'll live.  You just have no idea.  None.  And, unlike Iraq and The Patriot Act (where the arguments were a joke from the beginning), the evidence of what's coming is clear and open for all to see.

                            If you've even been to Nebraska (which literally translated means "land without trees") you can see rain storms coming from at least 40 miles away.  You can stand there and watch what looks like a two dimensional curtain as it moves closer and closer.  And, when it happens as such, you can watch as a tornado begins to form in the midst of that storm.  It's quite something to see from 40 miles away.  But, when that tornado starts to form, you immediately seek cover.  You do not stand there like an idiot saying "bring it on".

                            That last comment of yours is so completely wrong headed, I don't even know what to say.  It suggests to me that you are very young.

                            If you have relatives who are nearing retirement, I suggest you ask them where they stand on this issue.  If you have any relatives who were alive during the Depression, I suggest you ask them what their position on the proposed bailout is.  I'm not saying you should automatically agree with them, but you should at least listen to them and not reject their positions out of hand.  I'm not at all implying that there is a monolithic "older" position.  I am suggesting that there are different perspectives that you should not dismiss out of hand simply because you don't believe them.  You should at least understand the depth and breadth of what you may be inviting.

              •  FWIW, my bank looked safe a week ago. n/t (0+ / 0-)
            •  So GET IT OUT! (0+ / 0-)

              And if you're so completely aware that your bank is going under -- Wachovia? -- why haven't you been sneaking it out slowly for the past two months?  I've got more money than I like in National City, but I've got a thousand dollars less there than I would have had, if I was sitting around waiting for a taxpayer bailout instead.  And of course everything's insured.  I just remember a friend whose bank went under in the S&L crisis; they sent her a letter explaining that it would be NINE MONTHS before she actually got her insured deposits back.  So you want to be covered for at least six without access to any one account.

              Needless to say, you wanted to have been protecting yourself against something like this as an ordinary habit of doing business.  THIS is why the economy is falling into a death-spiral.  People haven't bothered to take simple, ordinary, precautions against risks that anyone who has either read or lived through a single lifetime should know exist.

              There are no NEW risks in the marketplace; nothing that wasn't there in 400 BC Athens.  But the OLD ones never went away, either, no matter what Alan Greenspan might have said.

        •  Then wait till January. (1+ / 0-)
          Recommended by:

          Seriously.  (Not that I agree that these are the only two choices we have -- I don't.)

          Doing something stupid on Monday is NOT going to fix a damn thing.

          I don't disdain "bank people".  But right now I have to say I'm getting a little fed up with the panickers who are adopting your "WE HAVE TO PASS THIS BILL RIGHT NOW" mentality.  A bad bill is not going to fix anything, it's just going to make things worse.

          Did you see The Daily Show's Bush montage the other night?  The one that put his speech from last week side by side with his 2003 "The Terrerists Is Coming, The Terrerists Is Coming" speech?  It's the same kind of fearmongering and it's apparently getting the same results - a willingness to follow that lying bunch of sonsabitches yet down another primrose path wherein we're going to get reamed one more time.  It's a lovely parting gift we're getting from George Bush, and this time he's got Nancy Pelosi gift wrapping it for him.  Charming.

          Would that we weren't doomed to repeat history yet again.

          "When those who are accountable are right, they take the credit. When they're wrong, they take the heat. It's a fair exchange." - Lehman Bros ad ca. 1980s

          by Mehitabel9 on Sun Sep 28, 2008 at 05:32:29 PM PDT

          [ Parent ]

    •  you have over 100k in one account (0+ / 0-)

      To sin by silence when they should protest makes cowards of men~~ Abraham Lincoln

      by Tanya on Sun Sep 28, 2008 at 02:35:06 PM PDT

      [ Parent ]

    •  Printing 700 billion is gonna KILL the dollar (3+ / 0-)
      Recommended by:
      corvo, Terra Mystica, nu2u

      Gold will soar - the dollar will crash.

      "A noun, a verb..." and P.O.W Thanks, Joe Biden

      by UneasyOne on Sun Sep 28, 2008 at 02:35:23 PM PDT

      [ Parent ]

    •  Insured deposits will be protected (0+ / 0-)

      So I wouldn't worry about your bank.

  •  If I may paraphrase William Shakespeare: (5+ / 0-)

    The first thing we do is kill all the lobbyists.

    Character, in the long run, is the decisive factor in the life of an individual and of nations alike. T. Roosevelt

    by jaf49 on Sun Sep 28, 2008 at 02:31:03 PM PDT

  •  Would the alternatives do the job with MBS? (0+ / 0-)
  •  Final Draft of the bill already available (0+ / 0-)

    Check out Jimdotz' diary for PDF links provided by CNN and hosted also by Jimdotz.

    PDF file is 106 pages long and about a 159k download.

    A ship adrift in a sea of rhetoric & recycled clichés.

    by Terre on Sun Sep 28, 2008 at 02:34:36 PM PDT

  •  Well might suck for us this year but hey (2+ / 0-)
    Recommended by:
    corvo, Catrina

    Reid,Pelosi,Rangel and the rest need to go sometime soon.  I want to win, but these Dems stink to high heaven.  Are they going out for wine and cheese after there victory.

    •  Gotta agree with you (1+ / 0-)
      Recommended by:

      The Dem leadership need to be ousted ASAP.  They made a great many promises when they came into their majority and haven't delivered.  They haven't been willing to stand up to barely anything the Bush administration has said in the last couple years.

      If we got Dems in there two years ago, we can do it again the next time around.

      The fact that they don't listen to one peep that their constituents make except when it is to ask for pork makes me ill.

  •  The more things change (1+ / 0-)
    Recommended by:

    the more they stay the same.  This is from the man who brought us universal health care (in Canada):

    Tommy Douglas' Mouseland

    Mark Twain -Let me make the superstitions of a nation and I care not who makes its laws or its songs either.

    by Kingsmeg on Sun Sep 28, 2008 at 02:39:31 PM PDT

  •  On the safer alternative #4 (2+ / 0-)
    Recommended by:
    Terra Mystica, cynndara

    It wouldn't be nearly as "unfair" to more prudent homeowners if the assistance is in the form of a "silent second" type loan payable, with interest, at the time of sale, secured by a lien against the property. That would keep them in their homes now, prevent the defaults and foreclosures, but not allow them to get an unjust enrichment at the taxpayer's expense. It would also mean that the government would ultimately recoup its money as well.

  •  You're so right (0+ / 0-)

    but I wouldn't worry too much about McCain running as a populist based on this. I suspect he'll fall in line with the rest of them...

  •  I've posted this earlier.. (4+ / 0-)
    Recommended by:
    wonmug, corvo, Terra Mystica, juancito

    I find it humorous, but not at all surprising that the same people who 2 weeks ago were saying everything is fine.  The fundamentals are strong.  yadda yadda yadda.  Are now shrieking like stuffed pigs about an imminent depression.

    They have given us another false choice and the shills are rampant on the intertubes claiming they 'guarantee' the choice is between rewarding the wealthy for failure or an economic depression?

    None of this makes sense.  

    I will not trust anyone that says it is this bailout or depression.  That says we have to act now or depression.  

    Extraordinary claims require even more extraordinary evidence.  

    The same people that have failed us time and time again are the same people that are pushing this latest theft.

    This is a failure of an ideology, economic system and of our politics.  This the failure of the democrats to act as an opposition party and as a check and balance on the worst excesses of right wing ideology.  

    All right, everybody be cool, this is a robbery! -GW Bush

    by audiored on Sun Sep 28, 2008 at 02:54:15 PM PDT

  • - a Tax Payer Revolt (0+ / 0-)
  •  When Obama takes office he should be able to (2+ / 0-)
    Recommended by:
    drlevant, Actuary4Change

    ammend this with the help of the Democratic congress. Nothing is forever.

  •  change in ACCOUNTING RULES?? (0+ / 0-)

    Read elsewhere and it's greek to me--something about a change in the accounting rules Re: FAS to market? People said  it was bad?

    is there an accountant who can explain that in the house??


    To be, rather than to seem.--NC State Motto

    by make a difference on Sun Sep 28, 2008 at 03:08:02 PM PDT

    •  Quick bottom line (0+ / 0-)

      Mark to market means that if you hold a security like a Collateralized Mortgage Obligation you have to report its value as of the end of the quarter by ascertaining (or estimating) its market price.

      The alternative (which is used by insurers for bonds in their statutory reserves) is amortized value (though it might not be called exactly that --I'm not an accountant).  In this plan, you value the security as if the same conditions held now as when you bought it.

      Amortized value makes sense for the insurer who is holding the bond and will collect the interest and principal payments over time as specified in the original bond.  If interest rates go down, the bond may go up in value but then drop when interest rates rise again.  Over the long haul, as long as the bond issuer stays solvent, the Amortized value ignores fluctuations cause by interest rate moves, which makes management and regulators lives easier, and provides adequate safety for the consumer unless there is such a huge economic downturn that a lot of bond-payers default at once.

      Mark to market makes sense when companies buy and sell securities frequently, and when the "value" of the security is so dependent on unknown variables that an amortized value is impossible to ascertain.  The complex securities involved in the present crisis clearly (IMHO) need to be marked to market, but that is one cause of the problem.  Right now the market says they're worth a lot less than the companies paid for them.

      For further reading, please check out my Diary describing the Stuff behind the bailout. and its sequel what is the bailout, and why am I for it.

      Numbers are like people . . . Torture them enough and they'll tell you anything.

      by Actuary4Change on Sun Sep 28, 2008 at 03:47:50 PM PDT

      [ Parent ]

  •  I am afraid that McCain is going to vote "No" (6+ / 0-)

    and focus the rest of his campaign on this legislation. You can forget everything that has gone before. He will pit his "No" against Obama's "Yes" to the exclusion of every other issue right up until election day, doing his best to make the election a simple referendum on Wall Street investment banks.

    Forget that he was a principal enabler of the whole fiasco, from his Keating 5 days to the repeal of Glass-Steagall and beyond. He knows how this is playing with the American public, and he's planning on drowning out any criticism by pumping up the bass on his proclamations that he won't put up with this kind of violation of the American Taxpayer.

    •  If McCain votes no and Obama votes yes, (7+ / 0-)

      McCain will be the next president.

      That's precisely why there's so much armtwisting going on right now: The big challenge is to make the Rethugs own the bailout to the same degree the Democrats will.

      •  Democratic leadership (3+ / 0-)
        Recommended by:
        corvo, crankyinNYC, Catrina

        practically capitulated.  They had no reason to do so.  This legislation is widely viewed as a bail-out of Wall Street.  Which side are you on?

        McCain will surely find a way to vote against it because there is very strong opposition on the left, right, and center.

        Obama must find a way to oppose this in its present form also.

        •  Democratic "leadership" capitulated (2+ / 0-)
          Recommended by:
          wonmug, WedtoReason

          because it serves the same financial and corporate interests as the Republicans.

          Savvy Rethugs are pretending to be populists right now.

          The few populist/progressive Democrats don't have to pretend.

          I haven't seen any sign that Obama intends to oppose the bailout in any form; have you?  He's criticized its more appalling features, but hasn't expressed any fundamental opposition -- AFAIK.  But do correct me if I'm wrong; I'd really love to be wrong on this.

  •  Number 4 is wrong (2+ / 0-)
    Recommended by:
    corvo, Ham08

    ANY politician who votes yes for this better buckle up for a recall or a date with hot tar and feathers.

    This bill is career suicide for any elected official.

  •  Ha! (0+ / 0-)

    Did you just email this to Schuster over at MSNBC?

    The lesson of that history is that you must not despair, that if you are right, and you persist, things will change. -Howard Zinn

    by blueyedace2 on Sun Sep 28, 2008 at 03:22:37 PM PDT

  •  I agree with you, davidsirota. Great Diary! (1+ / 0-)
    Recommended by:


    Time, as a coordinate measure, is sometimes confused with the perception of time. -- Ham08

    by Ham08 on Sun Sep 28, 2008 at 03:28:55 PM PDT

  •  thank you so much (1+ / 0-)
    Recommended by:

    for writing this.

    it belongs at the top of the recommend list, for the next week.

  •  Let's not forget... (0+ / 0-)

    If we think we have problems now, wait till hyperinflation kicks in after this 700 Billion dollar giveaway.  Wages never keep up with inflation, so even the people that are not in trouble with mortgages will be crushed into default.  This bailout will cause the very depression it seeks to stave off!

    Time, as a coordinate measure, is sometimes confused with the perception of time. -- Ham08

    by Ham08 on Sun Sep 28, 2008 at 04:23:58 PM PDT

  •  I am watching the markets (0+ / 0-)

    They are talking the markets up.

    Those who invested Thursday ran into trouble when an kink happened in the talks on the Hill on 'bailing out' Wall Street or as they say 'buying into Wall Street'.

    I am no expert, but I read the experts.  Watch the volume, low volume could mean just a few are pushing the prices up.  You need to compare it to the average volume.  

    I don't know how many thousands  it needs to be to be considered a decent volume.

    I quit the market Friday when gold went down when the market did.

  •  Stupid us (0+ / 0-)

    Moodys thinks the bill is good. They're one of the ratings companies that rated sub prime AAA.

    America really did lose it's mind on 911.  We are just seeing the nervous breakdown in slow motion.

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