Against AIG Bailout Before He Was For It
When I saw the following dialogue on the Today show yesterday, I got this crazy idea in my head that if the federal government decided to do a takeover/bailout of AIG, that McCain would oppose such action:
MCCAIN: No, I do not believe that the American taxpayer should be on the hook for AIG and I’m glad that the Secretary Paulson is apparently taking the same line.
LAUER: If we get to the point middle of the week as we heard in that report where AIG might have to file for bankruptcy, they’re on their own?
MCCAIN: Well, quote “on their own,” we cannot have the taxpayers bail out AIG or anybody else.
It didn’t seem like a very ambiguous statement to me, though McCain did arguably look (as he often does when discussing anything other than the need to kill foreigners) a bit out of his depth:
55 Responses to “Against AIG Bailout Before He Was For It”
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September 17th, 2008 at 12:53 pm
Maybe what McCain meant by all that was “American Workers Are Strong.”
September 17th, 2008 at 12:58 pm
Sarah Palin has a bank account, so she probably knows more about American monetary policy than anyone else.
September 17th, 2008 at 12:59 pm
Give the man a break. When McCain had to bail out over Hanoi and became a POW he had 5 years to decide whether that had been a good decision.
September 17th, 2008 at 12:59 pm
He was against the bailout before he was for it!
He was against the bailout before he was for it!
He was against the bailout before he was for it!
He was against the bailout before he was for it!
He was against the bailout before he was for it!
September 17th, 2008 at 1:01 pm
P.S.
Dear Mark Ambinder:
John McCain did not understand the severity of what an AIG collapse would mean yesterday and despite his position change, he still doesn’t understand it today.
This has been another edition of simple answers to simple questions.
Best regards,
Bob
September 17th, 2008 at 1:01 pm
Although I agree if you were paying attention he seemed out of his depth, you have to love the conviction with which he said his key lines (”I do not believe that the American taxpayer should be on the hook for AIG” and “we cannot have the taxpayers bail out AIG”).
September 17th, 2008 at 1:02 pm
Mi amigos, the fundamentals continue to be fundamental among fundamentalists. That is a fundamental truth.
Now, when can we start using AIG as loan collateral.
September 17th, 2008 at 1:05 pm
Paulson was saying the same thing as McCain on Monday. The hope was that a consortium of banks could be assembled to make the loan. In essence, it was a game of chicken between the banks and the feds as to who would step up, but as the amount of capital needed grew, the private option fell off the table . Bankruptcy wasn’t really an option because of ripple effects and complexity (all the insurance subs and state regulators, for example). Bernanke eventually chose the least bad option.
September 17th, 2008 at 1:16 pm
Paulson was saying the same thing as McCain on Monday.
So when do we arrest the bastard for massive fraud?
September 17th, 2008 at 1:16 pm
While Paulson may have been playing chicken, McCain clearly wasn’t. He was claiming that greed led to failure, and the public should not be on the hook for it. Does it ever get tiresome coming up with excuses for your candidate?
September 17th, 2008 at 1:22 pm
1) Anyone remember my question from two days ago:
“Anyone hear if the Shorts making up nooses for Morgan Stanley and Goldman Sachs?”
( http://yglesias.thinkprogress.org/archives/2008/09/bad_day.php#comment-642474 )
2) Morgan Stanley has since fallen around 39 percent and Goldman Sachs around 26 percent. Much of it today.
September 17th, 2008 at 1:27 pm
Maverick does not define McCain, McCain defines maverick!
September 17th, 2008 at 1:28 pm
jmack, I don’t expect coherent, reasoned economic analysis from politicians a few weeks ahead of an election. Have you been listening to the simplistic finger-pointing nonsense coming from The One, who probably never took an Economics course in his life — except for Marxist ones in college?
September 17th, 2008 at 1:30 pm
simplistic finger-pointing nonsense coming from The One
I think most people try to ignore Petey.
September 17th, 2008 at 1:32 pm
I don’t expect coherent, reasoned economic analysis from politicians a few weeks ahead of an election.
I hear excuses are like assholes, everybody’s got one…or something like that.
Funny how everytime a McBuss 44 supporter is pressed on an issues they invariably twist the issue into something Obama related.
Reporter: John, why do you continue with the myriad lies?
McCain/Every McCain supporter: Well, Obama did this that or the other.
No accountability for their own actions.
Typical.
September 17th, 2008 at 1:33 pm
jmack, greed was a big factor. Wall Street bonuses are driven by short-term profits, and these banks took on way too much leverage and risk to maximize yields. That works great in a bubble. Credit default swaps have got to be the dumbest idea since Russian Roulette. These bankers were the smartest guys in the room and the masters of the universe until they weren’t.
September 17th, 2008 at 1:35 pm
Look, I agree with the suggestion that McCain probably initially underestimated the significance of an AIG collapse, and believe that he just isn’t that swift, generally speaking, when it comes to economic issues. But we also might need to cut our politicians some slack in their public statements for the time being.
The whole point of the bailout and similar measures is to restore confidence among some very nervous financial players who are at risk of succumbing to an acute case of scared shitlessness, and perpetuating a chain reaction of failure. It’s not all about numbers; there are psychological factors at work as well. The government and the financial industry are trying to work together to prop up some tottering institutions of our economy by backing them with the “full faith and credit” of the federal government, and by projecting the image that the government knows what it is doing. If an influential major party candidate starts mouthing off about how he doesn’t have faith in the competence of the government, then these government actions will not be as effective as they might be in restoring confidence.
If I were a politician who disagreed with some of the actions of the Fed or the Treasury Department right now, I might be inclined to button my mouth for a few days and keep my doubts to myself. I might be saying that Ben Bernanke and Henry Paulson are total geniuses who are absolutely on top of things.
Let’s try to remember that there is some very serious shit going on here, and it’s not all politics.
September 17th, 2008 at 1:36 pm
who probably never took an Economics course in his life — except for Marxist ones in college?
Please don’t turn this into an issue of education. Obama is far and away more intelligent than Mr. 894/899 McCain and Mrs. 6 schools 7 years Palin.
A McIdiot supporter making fun of Obama’s education—classic.
September 17th, 2008 at 1:38 pm
Note when one of Matt’s posts backfires on him (see “Massive Socialism”) he always falls back on the easy stuff – sniping at his political bogeyman and thereby preaching to his choir.
September 17th, 2008 at 1:40 pm
McCain and, apparently, E. O’Neal want to expunge greed from human nature, or something. Any other of the Ten Commandments you want to wipe out with a Bolshevik-like Cultural Revolution?
Meanwhile, sane and smart people will deal with human nature’s shortcomings by implementing…regulations that take account of how people will behave in a given situation and attempt to obviate or address any resultant dysfunction.
September 17th, 2008 at 1:44 pm
O’Neal, you’re such an enormous brain power in search of a body to express itself in. But you know that of course. That’s why you take great joy in acting your fantasies in public.
I don’t doubt that Paulson said the same thing The McCain would say. Great QED for John McYesMan. He doesn’t merely echo Bush in his voting record, he echo’s Bush’s cabinet secretaries public flip flop. A twofer. Keep driving the meme… Flipping about wars in sandy places is one thing, flushing liquidity down the toilet tends to irritate tax payers (well, not really, but I can hope).
“Bernanke eventually chose the least bad option.” That’s really magically insightful. I doubt Dr. Bernanke is as certain as you are about what constitutes the least bad option for as things unwind, yesterdays least bad option may become tomorrows sh*t storm trigger. There’s some C/B dice rolling going on here. The scope of potential failure in the global financial market hasn’t anything remotely approaching certainty. Or, have you not been paying attention. This is the kind of garbage they talked about during the Bear Stearns bail-out.
I would guess that the tax payers won’t be able to attach the Bush/McCain generation with “playing chicken” with the future of their children. They do it in foreign policy and they do it with financial policy. The Treasury is the magic checkbook theory for the Laissez Faire crew. Tax payers will completely miss this point. Too bad, we get the government boneheads deserve.
What other mind melding exercises have you done lately? You spend so much time here screwing around, I fail to see how you could possible understand what either the best or worst options are.
“I don’t expect coherent, reasoned economic analysis from politicians a few weeks ahead of an election.” Submitted as meta comment for the inane without a defensible posture. They call this sort of language an ill conceived strategic retreat. They may have a surrogate gig for you open at McCain HQ. Carly and Gramm have left some vacancies. No, let me guess, you’re a blog surrogate for McCain? Or, is it strictly a labour of love? What sort of rise do you get diddlin’ around with the Marxists Lefties? Tell us what you wear when you’re diddling around over here…
September 17th, 2008 at 1:48 pm
kafka:
All McCain had to say was, I take the issue of moral hazard very seriously, but I don’t have access to the information needed to make this judgement. This is a very complex situation with no easy answers. What Hank Paulson needs to do, and what my Treasury Secretary and I will do, is weigh the risks against moral hazard. We in Washington have been alseep at the switch, but my administration will regulate Wall Street so this doesn’t happen again.
September 17th, 2008 at 1:50 pm
That ambinder is a pretty intrepid reporter! I think he should ease back with all that muckrakin’ he’s a doin.
September 17th, 2008 at 1:53 pm
who probably never took an Economics course in his life — except for Marxist ones in college?
Where else would you take an economics course, but in college? Unless the Heritage Foundation has an online course, with Larry Kudlow, Stephen Moore, and Donald Luskin as lecturers.
September 17th, 2008 at 1:54 pm
While Paulson may have been playing chicken
I was just responding to the post that said that Paulson had been saying the same thing. If he did, he needs to go to jail. Government officials shouldn’t be in the business of lying about anything, much less something with such huge financial implications. People with such amazing responsibilities have “No comment” at their disposal. If Paulson didn’t say “No comment” and instead denied what was in the works, he should be impeached, removed, and prosecuted.
September 17th, 2008 at 1:56 pm
Classic, why won’t The One release his grades if he was such an outstanding student? No one at Columbia even remembers him.
Dan Kervick, you nailed it. These are treacherous times. No market can survive a panic and everyone rushing for the exits.
elle loco, greed and fear are part of human nature. It’s correct, though fatuous, to point out that greed played a big role in the banking crisis.
September 17th, 2008 at 2:04 pm
J.D., Paulson didn’t absolutely rule out a bridge loan to AIG, but he made it clear that was unlikely — that Lehman was a one-off. Obviously, his only leverage with the banks he was negotiating with was their fear of bankruptcy. He acted properly. He just had a losing hand, and the banks turned out not to have the capital needed anyway.
September 17th, 2008 at 2:07 pm
E. O’Neal:
Damn don’t tell anybody, but Obama was such a shitty student and had such shitty grades that Harvard Law School took pity on him and accepted him. Then his fellow students, getting the memo from the administration that Obama was to be pitied for his stupidity and laziness, elected him editor of the Harvard Law Review–Harvard’s equivalent to thos free newspapers people read on the metro.
September 17th, 2008 at 2:09 pm
I think it is time E. O’Neal found a job. A little too much time to spend on the internet, eh? Try porn. Probably more satisfying.
As to his grades:
I don’t know his Colombia grades, but he graduated magna cum laude from HLS. Mull it over if you like.
But maybe we should be a lil’ more concerned about one’s own grades: Perhaps a correlation to job success and the availability to post on blog’s from the confines of mom’s basement.
September 17th, 2008 at 2:09 pm
P.S. I forgot to add that the University of Chicago got in the game and, purely out of pity, asked him to teach Constitutional Law–pushing him to become a full professor.
September 17th, 2008 at 2:14 pm
By the way, Obama graduated magna cum laude from Harvard Law, which I believe means his grades up him in the top 10% of his class.
September 17th, 2008 at 2:15 pm
David, he hasn’t released his grades and LSAT score, so we can only speculate about whether he got in Harvard Law due to affirmative action and recommendations from his radical community organizer connections (which would appeal to the admissions committee). I don’t think he’s dumb, but he doesn’t exactly dazzle us with his brilliance when the teleprompter is off. He’s probably in the Gore, Kerry, Bush IQ range.
September 17th, 2008 at 2:19 pm
It’s really shocking just how stupid O’Neal is. Every day he reveals himself to be a little dumber.
September 17th, 2008 at 2:25 pm
DTM, you’re right about magna cum laude. That is indeed impressive. I was more impressed with the Law Review thing until I read that Susan Estrich was the first female president.
September 17th, 2008 at 2:47 pm
It’s really shocking just how stupid O’Neal is.
Certainly his stupidity is impressive, but I wouldn’t call it shocking. Throughout history, authoritarian political movements have always attracted the very stupid. For instance, if you visited East Germany fifty years ago, you would have found the mid-ranks of the communist party to be full of people like him.
September 17th, 2008 at 2:47 pm
O’Neal, my point was related to your attempts to create nuance with McCain’s statements. He stated unequivocally that Americans should not be on the hook for AIG and now he says that putting Americans on the hook for AIG is a good idea. Whatever Paulson’s statements were intended to do, it is clear that McCain’s purpose was to be on both sides of this issue so he could claim victory no matter what.
As for what each candidate says on the matter, McCain continues to favor fewer regulations, even when lax oversight contributed greatly to messes here and in mortgage industry.
September 17th, 2008 at 2:51 pm
It’s really shocking just how stupid O’Neal is. Every day he reveals himself to be a little dumber.
Conservatives really are in a sorry state. The readings on my coginitive dissonance geiger counter are off the scale/in the red.
Look, McCain is like Bush and the rest of the conservatives, they talk a lot of populist bullshit (we should never bail out those greedy bastards!!!) but when the rubber hits the road they govern the same way. At least Bush appointed Bernanke and I guess he could have done worse than Paulson (who ran Goldman Sachs at one time).
I haven’t had a chance to look at the Wall Street Journal Oped pages but I bet the’re blaming something like high tariffs or something.
Many liberals and many of the left recognize how amazing capitalism is in certain ways (especially when compared to, say, feudalism) but we also recognize its many problems and are not that surprise by crisies. Is was FDR who saved it the last time around, and today we have McCain and other big mouths in Congress who want to push it to the collapsing point.
But I think Matt has the right attitude: it’s an opportunity. Terrorist attacks can be good news for the right, politically, but economic crises can provide opportunities to the left, especially if the Right has been running the government for so long.
September 17th, 2008 at 3:05 pm
CNBC says big hedge funds are starting to come in on the buy side. When everyone is throwing stocks and other assets out the window, it’s not a bad idea to pick some up. They say great fortunes are lost at the end of bull markets, and great fortunes are made at the end of bear markets. But, as they say, no one rings a bell at the bottom. I hope the shorts trying to take down Morgan Stanley get their clocks cleaned.
September 17th, 2008 at 3:10 pm
E. O’Neal said:
so we can only speculate about whether he got in Harvard Law due to affirmative action
Fact: Obama didn’t list is race on his application. So no need for your biased speculation on that one.
As the resident troll, I ask that you plesae stop proving your ignorance with every post.
You are a classic fuck job.
Editor in Chief of Harvard Law Review v. 894/899 = end of discussion
September 17th, 2008 at 3:19 pm
After being exposed for Lying, McCain is now Engaging in Identity Theft — as he is now sounding more like Barack every day — Change we can believe in, Enough is Enough and now Regulation! Maybe he thinks he can lie, steal and cheat his way to the Presidency. After all its been done before!
Yesterday McCain said we needed a 911 Commission-like study to investigate our failing economy, however, yesterday in his speech in Colorado Barack hit back at McCain with “Instead of offering up concrete plans to solve these issues, Senator McCain offered up the oldest Washington stunt in the book — you pass the buck to a commission to study the problem,” . “But here’s the thing – this isn’t 9/11.” Barack went on to elaborate — we know how we have got here, and what we need is Leadership!” This shows a distinct contrast from a Party with no new ideas and failed policies to Barack, who does have ideas and who is ready to lead!
I quess there is a light at the end of the tunnel because Five Conservative writers have now come forward to speak out and tell the truth that Sarah Palin is not qualified and is not experienced to lead as Vice President or the Presidency. They are making it clear to the public that John McCain made a poor judgment call, a rash judgment and an unneeded risk when times are bad and in a crisis mode. As a gambler, McCain should know you never take an unneeded risk in a crisis when things are already shaky. Enough is Enough! The American people will not reward a dishonorale and immoral man to the top job in the land, someone they cannot have confidence in. A Wizard as in Oz, who blusters and pretends but has no real solutions. American people want someone they can trust and believe in. They want a renewed Government working and looking out for them again, not just corporations and Fat Cats — Giving welfare bailouts and support to Corporations and none to everyday Americans.
So you got your guns, but you can’t afford to pay your mortgage? We have to get rid of that mentallity and embrace unity and change for all. Look, there is a message in Ground Zero — that afer 7 years, it is still a dark hole. This is is a symbol of the failed polices of Republicans, that after 7 years, Ground Zero is still a hole, left desolate and it speaks volumes that we are a country unable to find leadership, unable to unite and unable to rebuild and show ourselves and the world that we know how to overcome adversary, yet trillions of dollars go daily to Iraq, to allegedly rebuild a country which should never have been invaded in the first place. Talk about selling someone the Yellow Brick Road, I mean OIL! Because continued Drilling is not going to end our addiction, it is a band aid. We need 21st Century ideas and innovations, we need Intelligence instead of experience. We need the intellectual capacity of someone who can see the way forward when it is dark and to lead us out of the dark and into the light. We need a Rudolph whose nose was so bright, only he could lead the way from darkness to light and from the unreal to the real.
September 17th, 2008 at 5:50 pm
Angelight @ #40 – We need a Rudolf with his nose so bright??? WTF? Even the GOP didn’t want him. You had a good post going until you started getting carried away with your rhetoric.
Barack Obama is not the ONLY person who can lead us out of this swamp; however, he is the only available Presidential candidate who stands a prayer of doing so. A little less godlike worship seems to be in order, don’t you think?
September 17th, 2008 at 6:30 pm
Classic, I just asked why BHO won’t release his transcripts. He’s obviously bright, and the magna cum laude, which I was unaware of, certainly proves it. The reason I brought up transcripts was that earlier I had seen this article about a million-dollar challenge to BHO from the Libertarian VP candidate. http://www.reason.com/news/show/128461.html
September 17th, 2008 at 6:45 pm
Carter comes in. He is not snappy-peppy as Mel Brooks would say. Flat speeches. Gives a speech about what we need to do about energy conservation. Boring. The baby boomers (I’m one b 1946) now that Vietnam is over are in a hurry to make some dough. Volker comes in and tames inflation. Reagan comes in and life FEELS better. Like staying at your rich uncle’s home in Beverly Hills with the gentle winds, the refrig on the deck, and the pool. Nice. Rich uncles taxes are cut and SoCal and WDC/VA defense businesses are doing great. I could learn to love this. Oil prices low and lower. Coincidentally, USSR crashes. Aunt Nancy puts hubby rich uncle out to pasture. So what if we have a huge deficit. GHWB says it: “Had to.” “Had to” No new taxes. Dukakis that Harvard technocrat looks like a doofus in that tank. The real Harvard are the geniuses coming out of the Harvard Business School. Marketing. Deregulate. Unleash. Robust. Clinton raises taxes to the dismay of the unleash us/robust crowd who say how can we, the masters of the universe, be unleashed, be robust, if you take our money? Amagadden–the economy is screwed. WJC then disses Bob Reich and his infrastructure/deficit is manageable ideas and gives his ear to the other RR, Bob Rubin, the GS alum, cogent, cautious, respected, elegant,rich, brilliant, though not a Rhodes Scholar like the other two alums of YLS. (And by the way, Good luck in getting in there, guys, though the Berkeley High alum, Joshua Redmond, did, then said no and continues to this day to create with his saxaphone.) But I digress. Rubin says the markets i.e. Wall Street needs the Pres./Govt to use the money to pare down the deficit rather than repair the other roads and bridges too. WJC who it seemes preferred talking policy to talking stocks and bonds, unleashing his robust appetite for boobs rather than bobka markedly changed as he got deeper and deeper in debt owing to the cost of lawyers and bimbo erruptions. The high life wasn’t so bad. So WJC cut the deficit on the advice of BobR and the bond markets (nice name for a babyboomer rock group), and began listening to desires of the richies like Terry McAulliffe whose lifestyle he liked more and more.He signed the bill doing away with Glass-Steagall also listening to the advice of the the cool, cautious, sublimated Rubin and his fellow traveler Sandy Weil, head of Citicorp; thereby allowing the fellow traveler’s company to purchase The Travelers. He triangulated on the advice of Morris the toesucking Dick who will be voting for JM in 2008 and whom the master politician relied on for political advice (can you believe it? as HRC relied on her compromised guru who didn’t know the meaning of caucuses.) With smart, sublimated guys like Bob Rubin on Wall Street and Al Gore running the country, WJC thought he could party with Ron Burkle, make up for lost time with bobka, and stick it to the guys much richer (who despite his 40 million was too paltry a sum for the real richies, and people they party with; he knew the richies only hang out with him because of his Presidential pedigree) than him for library dough and good works dough . Well, we know how it all turned out. Margaret Carlson and her crowd had alot of fun making up stuff about poor, prissy Al Gore, and the rightful ruling class, heirs to the throne, deeply pissed off since 1992, returned to claim in the words of one Dick Cheney, “our due.” The cautious, brilliant,respectful Bob Rubin whom it must be remembered said in 2001 that if Bush insisted on a tax cut, cut the taxes of the middle class because they, at least, will spend it became Vice (as in Bunko) Chairman of Citicorp, became compromised forced by his new corporate master to calling his friends in Washington for a favor or two; Greenspan oked the tax cut, 9/11, the military and the industrial complex as well as Wall Street were unleashed
and dumbing down became the norm. Even the high falooting (as in loot) instruments created by the Wall Street business school crowd, the new, unleashed marketers as well as the high school drop out crowd in cities and towns all over, making 75k a month as mortgage brokers in hot back rooms selling residential real estate to people with no assets and no or little income, knowing that a bank would buy the loan and give them a fat commission, up until they wouldn’t. (Listen to the one hour This American Life program on NPR from the Spring of this year to be enlightened)As Paul Krugman said, the Democrats didn’t understand they were dealing with radicals, not conservatives; the press to be fair had to give credence to both sides, even when they knew one side was lying;
In the last couple of days with the collapse of the economy, the unbelieveable Socialism for the Rich in full progress, the average guy being smacked on the side of the head and may have awakened somewhat. Suddenly Palin doesn’t look so good; nor does McCain. Ruth Marcus of the WaPost does a mea culpa for her and the media’s wrongs since 2000, forgetting how they lapped up the stuff put out by Deaver and Lee Atwater etc. David Brooks says maybe smarts and judgment matter in running a country and Palin and McCain don’t have it. Don’t take heart yet. Krugman doesn’t know what will happen next and pity poor Obama who has to try to clean up this mess.
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