No Alternative
Back from Rosh Hashanah services, one striking thing about the rejection of the bailout is that the deal’s conservative opponents don’t seem to have any real alternative in mind. By contrast, the deal’s critics on the left mostly have a pretty clear critique — the want more equity, tighter controls on CEO pay, more mortgage modifications, and more direct economic stimulus. In fact, they mostly want the same things that the deal’s supporters on the left want — they’re just making a different judgment call about the relative weight of various factors, the contours of feasibility, etc.
But the deal’s critics on the right have . . . an irrelevant capital gains tax cut? And perhaps a plan to suspend “mark-to-market” accounting so as to allow financial institutions to recapitalize themselves through handwaving and cooking the books. I’m fully in sympathy with people who have their doubts about the desirability of the bill that was brought to the floor today, but surely one has a responsibility to lay out some alternative course of action. Even spelling out “we should do nothing, let large banks fail, assume money will flow elsewhere, etc.” could qualify you to participate in the conversation. But just bleating vaguely about socialism and saying mean ol’ Nancy hurt your feelings doesn’t really cut it.
85 Responses to “No Alternative”
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September 29th, 2008 at 9:09 pm
how does a jewish guy get to be called ‘churches’?
yours
mike synagogue (catholic)
September 29th, 2008 at 9:10 pm
great post — I agree.
http://culturedecoded.wordpress.com/
September 29th, 2008 at 9:18 pm
Well Matt, their leader is Mike Pence and yesterday you crossed the Rubicon and told us that he’s stupid. So I assume they’re all stupid, more or less. Therefore no alternative plan, or even a defense of having no plan. Stupid doesn’t do that kind of thing.
September 29th, 2008 at 9:21 pm
I’m pretty clear on the absurdity of ending capital gains taxes. But ending mark to market accounting? I’m not even sure how that can really be done. Essentially, every transaction done over the past few years would have to reviewed because current receipts were booked years ago. It sounds like a huge accounting nightmare. And I have no idea what the possible upside would be. Mark to market accounting rules were surely abused in the Enron debacle, but it seemed like it was a problem mainly because insufficient hedges were put in place to justify the accounting. The real problem seems to be overleveraging. Maybe I’m missing something here, but it seems like the Republicans have no idea what they are talking about (more so than usual). Can someone help me out here?
September 29th, 2008 at 9:22 pm
I was hoping that Chris Matthews would ask Darrell Issa (who voted no) tonight if there was an alternative, but no it was mainly blather
September 29th, 2008 at 9:24 pm
Even spelling out “we should do nothing, let large banks fail, assume money will flow elsewhere, etc.” could qualify you to participate in the conversation.
Ah, the Paul Plan. I endorse it.
September 29th, 2008 at 9:24 pm
This conference call should torpedo this bill if we truly have a representational democracy.
http://www.nakedcapitalism.com/2008/09/mussolini-style-corporatism-in-action.html
September 29th, 2008 at 9:25 pm
Shouldn’t Paulson be offering his resignation about now?
The guy spends months saying that everything will be fine, when it was obvious to many people that things were bad and getting worse. Then he decides it *is* bad, so bad that he needs 700B NOW!!! Of course his plan is a joke (indicating he obviously wasn’t anticipating that anything like this would be required), and a week is wasted hammering something out that most economists seems to agree isn’t horrible (at best). Then he can’t get the damn bill passed!
No credibility, no ability to get legislation passed that, according to him, is vital for the country.
Paulson failed. Time to let someone else take a crack at it.
September 29th, 2008 at 9:26 pm
Of coure, the Fed is doing the bailout anyway.
September 29th, 2008 at 9:35 pm
Their plan, if you want to call it that, is political, not economic, and basically amounts to trying to dump all the political costs of an unpopular measure on the Democrats.
September 29th, 2008 at 9:37 pm
________________________________
Aren’t these just two sides of the same coin? Conservatives claim that the bill socializes large sections of the financial sector, and say that letting the market work things out is preferable, e.g., “let large banks fail, money will flow in from elsewhere,” and even if it doesn’t, it’s preferable to large-scale nationalization.
I’m not saying I agree with conservatives (quite the contrary). But I’m not sure their criticism is so incoherent or empty (I just think it’s wrong).
September 29th, 2008 at 9:37 pm
From a personal standpoint, this “crisis” is kind of fun (I have all my wealth in a conservative money market fund). I say don’t do a thing.
September 29th, 2008 at 9:48 pm
Is anyone even going to be paying capital gains tax this year? I don’t think anyone is sweating their capital gains tax bill right now.
September 29th, 2008 at 9:50 pm
Does this gambit work in other situations?
I mean, did opponents of the Iraq war have to explain how they would contain Iraq in a world without an effective sanctions regime?
It’s perfectly fine to oppose a bad bill because it’s a bad bill.
And the House Republicans, who were locked out of the negotiations until at the last minute the idiots leading the Dems in Congress realized that the Republicans weren’t going to vote for the bill, don’t owe the Democrats anything. Certainly they don’t owe them political cover. They should make the Democrats support this, and then shove it down their throats for a dozen elections. The Democrats need to lead, and then they need to pay the price.
September 29th, 2008 at 9:52 pm
One of the campaigns has now openly, if clumsily, adopted the “if caught in a scam or blunder, blatantly pin it on the the other guy” tactic.
September 29th, 2008 at 9:58 pm
if you suspend the capital gains tax it will only accelerate the sell off in the stock market as folks rush to get out of long held positions to take advantage. the house republicans ARE that stupid. and how on earth changing mark-to-market accounting is going help is beyond me. yeah, the real problem here is that everyone trusts each others’ accounting TOO much.
September 29th, 2008 at 9:59 pm
Republicans locked out? That implies that they wanted in.
September 29th, 2008 at 10:05 pm
I mean, did opponents of the Iraq war have to explain how they would contain Iraq in a world without an effective sanctions regime?
Yes, they did. Those who didn’t were the ones that didn’t think Iraq was a threat (who were, y’know … right).
If conservatives want to say that there’s no crisis, they don’t have to offer a plan. Otherwise, they should.
September 29th, 2008 at 10:09 pm
And perfect idiot Thomas weighs in with an irrelevancy about Iraq. Though he does provide the perfect opportunity to ask: What exactly needed to be contained in Iraq? Was it their Weapons of Mass Destruction? Odd that we never found any. Was it their support for terrorism against America? Odd, there has emerged zero evidence even though we now own the country. Perhaps it was their plan for global domination by infiltrating our banking sector and causing a meltdown in the financial markets…wait, no that was Republicans, not the Republican Guard.
So, Thomas, you want to talk about plans for Iraq, when will the Republican Party have some?
September 29th, 2008 at 10:12 pm
Yesterday’s rants: phucking GOPers want to give $700 billion of our money to their slimeball Wall Street pals.
Today’s rants: phucking GOPers won’t let Pelosi & Reid give $700 billion of our money to their slimeball Wall Street pals.
Think of how silly this sounds – some people need to get their heads glued back on.
September 29th, 2008 at 10:17 pm
The House Republican position is ridiculous. I swear, they’re like dogs that caught the car. They have no idea what to do now.
That’s why they like deregulation–you don’t actually have to know anything or be right. It’s all just the market working its magic.
September 29th, 2008 at 10:17 pm
The Republican “find somebody to blame” game works when people aren’t really paying attention.
Republicans are effective when the “Blame” seeps into the consciousness without any analysis, which happens when the shit they are bitching about doesn’t directly and obviously affect most Americans (e.g. Iraq war).
But this “crisis” is very different. People’s life savings are on the line here and their stupid little game, and its a game, is going to bite them in the ass.
couldn’t happen to a better bunch of bastards
September 29th, 2008 at 10:20 pm
My guess is that after the Dow tanks another 7-8% Republican “principles” will go the same way as nay votes and the 100/1 against quickly become 50/50 yea.
September 29th, 2008 at 10:22 pm
“the deal’s critics on the left ” . . .
Why are you being so coy, Matt? You’re one of those critics. And you got what you wanted — the deal’s dead. Wall Street was punished. It didn’t get what you called “free candy.” You should be celebrating, and you certainly should be embracing the Republicans instead of criticizing them — without their opposition, this bill would have passed, and you’d be unhappy about it. Now you can take your time and come up with some new scheme that satisfies your populist instincts, and while you fiddle, we can lose another trillion in market capitalization and watch the TED spread get out of control. Of course, American workers are watching their pensions and 401(K)s evaporate and now have to worry about whether their boss will be able to meet payroll, but at least Wall Street got what was coming to it.
Job well done, Matt.
September 29th, 2008 at 10:23 pm
This is what burns me. I understand being against the bailout. You have offered a number of arguments against the move, as have others. I’m nervous; I feel like something ought to be done, but I could be wrong.
But what happened today – or at least it feels this way – is that a bunch of people felt like their constituents said “I hate this bailout – I don’t understand it – but I’m going to punish you if you support it.” And so they voted against it. And that’s where their interests end. Solve the crisis? I’m not hearing it. Where are the alternatives? Either help explain to your constituents why this bailout needs to happen or come up with an alternative or at least explain why we should do nothing.
Right now, it just feels like you’re protecting your seat.
September 29th, 2008 at 10:33 pm
Lucretius,
Surnames are inherited through the father, and membership in the Jewish religion through the mother. So it’s not at all impossible (although I agree it’s rather amusing) that a Jewish guy should be named ‘Churches’.
I didn’t realize though that Mr. Yglesias was particularly devout or faithful as regards his Jewish faith?
September 29th, 2008 at 10:37 pm
Issa’s plan is here, so there you go:
http://issa.house.gov/index.cfm?FuseAction=News.PressReleases&ContentRecord_id=a5619b9b-19b9-b4b1-1201-970709a07318&Region_id=&Issue_id=
September 29th, 2008 at 10:42 pm
Hector Says:
I didn’t realize though that Mr. Yglesias was particularly devout or faithful as regards his Jewish faith?
Attending services on Rosh Hashana (or Yom Kippur) is the most bare of minimums a Jew can do, short of not actually doing anything. Not that I presume to speak for Matt, just throwing that out there.
September 29th, 2008 at 10:43 pm
Was the purpose of the bailout to prevent the stock market from going down 15%? That’s not how it was sold.
If that had been the purpose, it wouldn’t have worked except in the very short term, and at a governmental cost that has never been paid for anything similar.
The bailout had to be passed two weekends ago to prevent a Great Depression. The stock market is falling, but we’re far from a Great Depression.
The alternative now is to pass the smallest bills possible to stave of the Great Depression until a new President and congress are able to come up with a bill Americans understand and that representatives are able to vote for even if they are running opposed, instead of concentrating on the congresspeople who are retiring.
When the Bush administration came to congress and said the world would end if congress didn’t direct $700 billion dollars to the financial industry – and then admitted they just made the $700 billion number up, that should not have even been entertained. The country’s attention is rightfully on a political campaign right now so we’ll take reasonable and relatively inexpensive steps to avoid a Great Depression and we’ll come up with a long term plan later.
What the Bush administration was attempting was extortion, and under those circumstances, the correct action is as little as possible.
The House Republicans were exactly right. Bush and the Democratic leadership were exactly wrong. Fortunately, the left has already identified this craven behavior of the Democratic congressional leadership (see Iraq war, Patriot Act and Fisa) and are already beginning to put in place measures to empower non-craven political leadership some number of elections from now.
September 29th, 2008 at 10:49 pm
K. Williams, you clearly are not an investment banker. You don’t have the stones for it. I’m a little surprised by the fact, but apparently Congress does. Wall Street assumed they had successfully panicked Congress and held out for a sweetheart deal. Now it’s their turn to be panicked.
September 29th, 2008 at 10:50 pm
Arnold, the purpose of the bailout was to avoid a systematic failure of the banking system that will restrict the capital available to (non-financial) companies, cause the economy to sputter, and destroy jobs. Not to mention Americans’ savings. The stock market crash of 1929 looked like it just wiped out people investing in the stock market at first, until the ripple effect of that much value destruction and crisis of confidence in the banking system led to 25% unemployment.
But now that you mention it, Americans were so concerned about the government borrowing $700 billion that taxpayers would need to repay later, that they didn’t even notice the fact that American investors (through their direct holdings, mutual funds, 401(k), pension plans, IRAs, endowments, etc) lost more than twice that much in the value of their stock investments today.
Oops.
September 29th, 2008 at 10:53 pm
Walt,
I am an investment banker, and I agree with K. Williams. The idea that ensuring that a few unnamed “fat cats” on Wall Street get their comeuppance is worth sinking the entire U.S. economy and prolonging and intensifying what will already be a recession, is beyond stupid. It’s childish and absurd.
September 29th, 2008 at 10:55 pm
What the Bush administration was attempting was extortion, and under those circumstances, the correct action is as little as possible.
We’ll find out, and there will be no way to prove a counterfactual that this could have staved off some “we’re all eating dog food and warming our hands over burning trash cans” scenario, but if we *do* wind up there this wasn’t a good deal.
I’m not sugesting handing Paulson $750 billion dollars to do what he feels like he needs to is reasonable, but you are looking at a run on the banks. The run is irrational, it gets stopped by people believing they aren’t going to be the last sucker left with money in there and it’s going to be gone. You need something out there to combat that and despite a bunch of glibertarian idiocy, you *don’t* want to let the market sort this out.
September 29th, 2008 at 10:59 pm
I am an investment banker, and I agree with K. Williams. The idea that ensuring that a few unnamed “fat cats” on Wall Street get their comeuppance is worth sinking the entire U.S. economy and prolonging and intensifying what will already be a recession, is beyond stupid. It’s childish and absurd.
Oh, I gotta disagree with that. Saving them from their comeuppance is childish and absurd. I’m all for yanking a bunch of peoples compensation, and if they don’t like it, their other option is a freeze and seize of assets and they get sent to gitmo on a meathook. If you think saving them from such a fate is worth voting no, that’s childish and absurd.
September 29th, 2008 at 11:01 pm
Oops is right, I guess. It is not congress’ job to prevent the stock market from dipping and if it was congress’ job, congress couldn’t do a good job of it in the long term. If that had been the point, the government within six months would have committed the $700 billion while the stock investments almost certainly would have lost the same amount of value anyway. Every semi-respectable proponent of the bailout, for example Krugman and Delong among others, acknowledged that the bailout would not prevent either a contraction in the economy or a decrease in the stock market over the next year or so.
I guess your argument is that it is impossible to prevent the capital available to non-financial companies from reaching catastrophic levels without the bailout. We’re about to see. I bet the other way. Without the bailout you are about to see the government take other steps to put off this “catastrophic return of the Great Depression” long enough to put together a real long-term plan without Paulson pointing a gun at anyone’s head.
September 29th, 2008 at 11:03 pm
I’m surprised that my hasn’t noticed that the gop is in a death grapple at the moment. The Republican base turned out almost unanimously against Bush’s bill (while still keeping Bush at around 30 percent popularity – the Republican base is prone to schizophrenia). This was Russian roulette, and the GOP chose not to squeeze the trigger on themselves. But of course this is the first round. The second round is the Republican base looking at their investments and coming back to demand that the Republicans do something.
The Dems, so far, have accidentally been brilliant. Making the bill better meant making it extremely difficult for the right to vote for. And they really don’t have an alternative on hand. Everybody expects that a market will go down a couple thousand in a recession, but only the GOP could make themselves responsible for a one day drop. The hilarity is, of course, that they would love to proclaim that they are heroes, that they stopped the bill, but the second wave is mounting, so they are claiming that they are sensitive, and that Pelosi stopped the bill. Pelosi made me do it!
This is too funny. Of course, Bush has told lies that are as absurd, and they were defended with froth and fury by the base. Wonder, though, what they will think when it is their savings at stake?
September 29th, 2008 at 11:05 pm
Without the bailout you are about to see the government take other steps to put off this “catastrophic return of the Great Depression” long enough to put together a real long-term plan without Paulson pointing a gun at anyone’s head.
Like what? What are they going to do?
September 29th, 2008 at 11:05 pm
My point is that we had time and resources to stop the run without giving Paulson $700 billion dollars to spend with no practical restraints this weekend.
A long term solution should be found in a more reasonable environment. This $700 billion dollars, that Paulson didn’t even envision beginning to spend immediately, is not a reasonable stopgap measure to stave off impending doom.
September 29th, 2008 at 11:09 pm
And you guys want this crap passed?
FROM: http://www.boom2bust.com/
The $700 billion price tag for the failed U.S. government bailout of Wall Street and the financial system was conjured up. Where’s the evidence? Forbes’ Brian Wingfield and Josh Zumbrun wrote on September 23:
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
September 29th, 2008 at 11:10 pm
Say while you are figuring this thing out, FDIC keeps running out of money while banks fall over. That’s kind of exactly what’s happening right now. FDIC is broke. It needs recapitalization right now. Ok, Paulson doesn’t get it, but this money is going to be spent. This is a dominoe theory you can believe in because this is how it works: Banks collapse, capital freezes, that freeze just keeps knocking over banks. You will wind up spending billions in Federal money just insuring checking accounts. If you don’t have a solution to stop the thing it’s pissing away the same money you are grousing about.
September 29th, 2008 at 11:12 pm
Well a “catastrophic return to the Great Depression” hasn’t happened yet.
We just might be shocked to learn that doing nothing, while not preventing the stock market from falling, is enough to prevent a “catastrophic return of the Great Depression”.
If not, then arranging private purchases of some banks adding public assistance to purchases or other banks and maybe buying some banks outright may be enough to prevent the Great Depression until it can be dealt with reasonably.
If not, then the government may be required to supply credit directly, or nearly directly to the non-financial sectors of the economy for a short time until a long term solution is found.
I don’t have to predict exactly what Government, the lenders and the borrowers are going to do, but I do not expect that because the bailout failed they are now unable to prevent a Great Depression.
I’ll watch what they do, and when they do it, I’ll tell you then.
September 29th, 2008 at 11:18 pm
Absolutely wrong. Spending “billions” (hopefully well under $700 billion) to insure checking accounts AS THIS MONEY BECOMES NEEDED is not the same money as preemptively giving Paulson $700 billion because Paulson came up with some horror scenario and scared everyone.
Paulson’s rationale, according to Krugman has shifted, which means that we can’t even trust that the $700 billion would work to prevent us from eventually insuring the same amount of checking accounts in addition.
Better use real, small stopgap measures and wait until we have more information and better explanations and it is possible to actually bring the American people on board rather than put pressure on Congresspeople who don’t have to face their voters.
September 29th, 2008 at 11:24 pm
Did anyone follow Calderon’s link to Issa’s plan? It’s idiotic. Issa’s “plan,” in a nutshell, is to have the Treasury make loans to the banks that would be collateralized by the banks’ MBSs. Utterly clueless. If the banks were simply suffering from a liquidity problem, the Fed’s existing lending program would have resolved the situation. The problem is that the collapse of the value of their mortgage portfolios has left the banks insolvent. Merely adding cash to one side of the balance sheet and debt to the other side does not improve the banks’ capital position.
This probably sounds naive, but I find it astonishing that someone in Congress would come up with a plan to solve a problem that reflects such a fundamental lack of understanding of the problem they are allegedly attempting to solve.
September 29th, 2008 at 11:30 pm
Absolutely wrong. Spending “billions” (hopefully well under $700 billion) to insure checking accounts AS THIS MONEY BECOMES NEEDED is not the same money as preemptively giving Paulson $700 billion because Paulson came up with some horror scenario and scared everyone.
No, don’t give Paulson a blank check, we agree here, right?
Don’t get pissy with me. Hear me out.
The market isn’t magic. This is why every libertarian you talk to is an idiot. In the event of a bank run (and this is what you are looking at), the dilemna is that as a group investors would be better off not panicking. As individuals, however, the rational choice isn’t to assume a benevolent collective but to be the first guy out the door before the rest of your brethren play screw-your-neighbor first.
It doesn’t end there, that money goes somewhere, and then *they* start playing the same game. The floor of this game really is eating the family pet territory.
September 29th, 2008 at 11:40 pm
TH, I’m sorry that you didn’t get to stand in line for bailout money like you were hoping.
September 29th, 2008 at 11:44 pm
I hear you. Listen to me.
We can prevent reaching the floor of this game without rushing a bill through yesterday.
As a matter of fact, it is preferable to wait and come up with a reasoned way to prevent reaching the floor of the game than to accept the deadlines Paulson tried to impose and present a rushed bill.
Even if it was economically preferable, Paulson’s “we have to commit an amount over half of annual government tax revenues right now during the most critical part of a presidential campaign” is politically unpreferable to coming up with real stopgap measures and solving the problem permanently without this supposed emergency environment. And the politics does matter in a democracy.
We have time to really explain what has to be done, what the very least it can cost and how it should work to the American people so they aren’t writing their congresspeople 100 to 1 against. (And with good reason, Paulson is trying to extort them.)
I think we can agree that if it is at all possible, it is better to wait. Then if you’ll continue to insist that it is not possible to wait, then we can agree to disagree on that – but if the bailout fails we’ll definitely find out if it was possible to wait.
September 29th, 2008 at 11:56 pm
Re weichi at 8: “Shouldn’t Paulson be offering his resignation about now?”
———–
You’re assuming that Paulson’s working for the People of the United States.
September 29th, 2008 at 11:58 pm
We have time to really explain what has to be done, what the very least it can cost and how it should work to the American people…
Um, is the explaining gonna take a really long time? Because “Dancing With The Stars” is on soon.
September 30th, 2008 at 12:03 am
I’m glad you are hopeful. I’m clearing out my bank account tomorrow and adding to the irrationality. I’m not going to be the last sucker in.
September 30th, 2008 at 12:03 am
I’m not sure I see why reducing the capital gains tax is a bad idea. It’s not that big of a revenue generator, and the last 2 capital gains tax cuts were followed by fairly serious increases in investment/market growth (http://time-blog.com/curious_capitalist/2008/01/do_capital_gains_tax_cuts_incr.html). Not a serious long term solution, but a decent short term fix.
September 30th, 2008 at 12:13 am
Fix what?
Who is paying capital gains taxes?
If you were going to throw money in that pile and didn’t because you didn’t want to pay gains taxes, you are a mouth-breathing retard. What do you think you are “fixing”? What do you think the problem is here?
September 30th, 2008 at 12:16 am
I didn’t even bother with your link, but did you know you linked to something making fun of you?
September 30th, 2008 at 12:39 am
Re Ed Marshall’s comment “In the event of a bank run (and this is what you are looking at), the dilemna is that as a group investors would be better off not panicking. As individuals, however, the rational choice isn’t to assume a benevolent collective but to be the first guy out the door before the rest of your brethren play screw-your-neighbor first.
It doesn’t end there, that money goes somewhere, and then *they* start playing the same game. The floor of this game really is eating the family pet territory.”
————-
I think there are several misstatements being made by the Bailout advocates.
1) The FDIC is NOT pissing out money away by buying a lot of toxic trash and making US –vice the Wall Street assholes –eat the loss. The FDIC does orderly liquidations –up to three years long — of banks. Assets are used to offset liabilities. If nothing’s left over, stockholders and creditors take it in the shorts.
Yes — taxpayers can lose money temporarily via FDIC insuring deposits — but FDIC can then assess the other viable banks with an insurance premium.
2) yes some banks have failed –and we knew they were rated D and E well before this. There are also thousands of much stronger A, B,and Cs. Wachovia may fail –but because of a stupid shit acquisition by a moronic CEO who didn’t do adequate due diligence,not because of the monetary enviroment.
3) The organizations suffering the losses deserve to do so — because they made the irresponsible bets. I see no REASON why we should make the taxpayer take the losses.
4) We need to ensure a healthy flow of credit to deserving businesses — but why can’t the Fed, FDIC and Banks rated A-C do this? As I’ve suggested over a week ago, why can’t the US Government serve as a bank until the healthy banks can hire laid off employees of D and E banks and grow enough to handle the additional new business.
5) I think the TED spread is misleading. The Libor rate is an aggregate — but it doesn’t tell us what rates the different banks are paying and it can be easily gamed. If you look at the corporate rates, the healthy companies can still borrow at 5 percent –it’s marginal companies that are suffering from stronger credit standards. But is that a bad thing?
6) I think the underlying problem is extremely bad management — criminal corruption actually — by the Bush Administration and the Republicans.
Stealing $3+ Trillion out of the Social Security /Medicare Trust Funds — and borrowing Trillions from abroad — and then PISSING the money away doing favors for special interests is NOT sustainable and we are beginning to see what happens when the party stops. Bush has done practically NOTHING in the way of INVESTMENT — our infrastructure is falling apart, our military is greatly degraded , and we have done NOTHING to develop alternative energy supplies.
7) Yes , a storm is coming. But the last thing we want to do is give another $1.5 Trillion to our drunken incompetent President to hand on to his rich buddies.
I’m sorry for the people of this country. But George W Bush’s brother Neil fucked the taxpayers out of $1 Billion in the Silverado Savings and Loan debacle in 1989. People should have known what they were electing.
If people are stupid enough to elect incompetent, lying , crooks to be President, they can’t complain when they get fucked.
Let the economy collapse, if that is what it takes to teach people to be responsible citizens. Maybe then they will cut the Republicans’ nuts off as the Republicans deserve.
I don’t think it should be the productive sectors of the economy — the people who do the real work.
I suggest again that the Democratic Congress impose a $2 Trillion Income Surtax on the Richest 3 percent to pay for this mess. Wall Street works solely for the Superrich — let the Superrich discipline and fix Wall Street.
September 30th, 2008 at 12:48 am
l’shana tova
September 30th, 2008 at 12:48 am
Don, it doesn’t work like that.
This bit:
Yes — taxpayers can lose money temporarily via FDIC insuring deposits — but FDIC can then assess the other viable banks with an insurance premium.
That premium keeps rising as banks keep folding. It eventually kills them. Then you raise the premium on the tier above them. Do you see where this is going?
September 30th, 2008 at 12:48 am
I also think it’s misleading to speak of the voters losing money in their 401Ks — while proposing a remedy that dumps a $31,000 loss on middle class households for the crimes of others.
Most American households don’t have enormous savings — it’s the irresponsible financial assholes who caused this mess who have a lot to lose. Let them.
September 30th, 2008 at 12:52 am
Re Ed Marshall’s comment “That premium keeps rising as banks keep folding. It eventually kills them. Then you raise the premium on the tier above them. Do you see where this is going? ”
——–
Sure. As of 2005, there was over $40 Trillion in fixed, tangible wealth — much of it held by a relatively small percentage of the population. Take what you need from them with a fucking bayonet. Squeeze till the pips squeak.
That’s the only way to give the Superrich who run Wall Street and Washington an incentive to clean up the fucking stables.
When THEY start suffering for their irresponsibility.
September 30th, 2008 at 1:01 am
Somewhere upthread I sugested freeze-seize of their assets and sending them to gitmo on a meat hook.
That does not exclude the possiblity that you need to shore up confidence that there is an American credit market that still functions.
September 30th, 2008 at 1:03 am
But just bleating vaguely about socialism and saying mean ol’ Nancy hurt your feelings doesn’t really cut it.
Tell that to McMegan.
September 30th, 2008 at 1:24 am
Don Williams –
touche
September 30th, 2008 at 1:43 am
Ed, it was not my intent to criticize you or your comments. You have valid points and I don’t totally disagree. I’m annoyed with the Congress and it makes me testy. Sorry.
I’m agnostic re whether that Bailout should be done –because both sides have thrown a security blanket over the info re how bad the situation really is. I do think the burden of proof is on Paulson et al to justify their request for $700 Billion and no one has really made a case for that request yet.
I’m am, however, strongly in favor of not making the middle class pay , in making the guilty pay to ensure this conduct doesn’t occur again any time soon, and in saving capital for productive uses — in order to erect as much of a shelter as we can in the time left to us.
September 30th, 2008 at 2:41 am
general observation: yglesias has become too stridently partisan. i know it’s an election year, but i used to love him for his even-handedness.
oh well. people like me just read it less.
September 30th, 2008 at 2:54 am
I agree that mean ol’ Nancy isn’t at fault here, but what exactly was she trying to do? Look at Boehner’s speech by comparison:
http://www.youtube.com/watch?v=UVOS1CC6V5I
September 30th, 2008 at 6:47 am
You don’t understand. Republicans have nothing to offer because this collapse is a repudiation of everything they believe about the purity of the free market and the evil of government. Unless the solution involves more of the same — more free market principles — Republicans cannot accept it because to do so is to endanger their entire world view. Ronald Reagan is their icon, their god, and they can’t stand the thought of living in a world where his ideas have lost currency. They literally have no identity without that. They are ideologues, not governors or leaders. That is what this crisis is exposing. We must get rid of them before we can solve these problems.
September 30th, 2008 at 7:41 am
I just think opposition to the bill was PR: to give the nay-sayers a bold point of difference between themselves and Bush. Hence the lack of a reasonable alternative. There is no alternative. Just re-election.
September 30th, 2008 at 8:26 am
I will mention that a class war, in this instance, would be akin to the Georgian situation.
While my preference is for a repeat of the Tulip Bust, we have to mass the mob of angry Dutchmen first.
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