Matthew Yglesias » Quote of the Day

Sep 24th, 2008 at 9:12 pm

Quote of the Day

“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.”

Doesn’t this seem like a very strong argument for a much smaller appropriation designed to last for another couple of months? There’s nothing to stop congress from appropriating more money in mid-November if the situation seems to warrant it.

Comments
76

76 Responses to “Quote of the Day”

The Overhead Wire Says:
September 24th, 2008 at 9:31 pm
Seriously? I still think it’s related to that $700 billion Boone Pickens was talking about. We’re getting shafted by the oil exporters there, and shafted by wall street here. WTF?
Adam Smith (yes, really) Says:
September 24th, 2008 at 9:36 pm
Heh.

Yesterday you were (correctly) pointing out that it’s misleading to refer to a $700 billion bailout plan as costing “nearly $1 trillion”. And now it turns out the $700 billion figure was just pulled from somebody’s ass anyway.

It’s like the Bush administration saying “Get bent, Yglesias. We don’t need your help; we just made that shit up anyway.”
ACS Says:
September 24th, 2008 at 9:36 pm
If they wanted to pull a number out of their ass, they could have picked eleventy-gajillion, which at least has the advantage of having an indefinite number of digits, confounding attempts to add it to our debt..

– ACS
Dr. Grzlickson Says:
September 24th, 2008 at 9:47 pm
The wealthiest 1%—the sole beneficiaries of the past eight years—are actually demanding $700BIL from the same people they stood on (read: raped) along the way.

Civil disobedience is called for.
kafka Says:
September 24th, 2008 at 9:47 pm
“Why $700 billion?”

Simple – because it’s far less than the actual cost.
msw Says:
September 24th, 2008 at 9:48 pm
Another Quote for the Day
From Ambinder

Hugh Hewitt:
Today was Obama’s Katrina moment and an example of great leadership by John McCain. This contrast was telling and will matter.
El Cid Says:
September 24th, 2008 at 9:55 pm
‘…And besides, this will all pay for itself. It might take 6 days, 6 weeks… I doubt 6 months.’
Don Williams Says:
September 24th, 2008 at 9:58 pm
Re msw quote from Hugh Hewitt: “Today was Obama’s Katrina moment”
————-
I TOLD you what those goddamm , dirty dog-fucking Republicans were up to.

But did you listen? Nooooo.
nukev Says:
September 24th, 2008 at 10:00 pm
I read somewhere (maybe here?) that the reason Bush didn’t make it $800bil or more is so they could technically claim that the national debt HADN’T DOUBLED during the Bush administration. They only missed by $100bil.

As to why Congress doesn’t limit the amount is a little more disturbing. Fear if it doesn’t work they’ll get blamed for failure by being “cheap?” Anticipation of an Obama appointed Treasury Secretary to hand out the goodies to all the right places? Not understanding that with congressional majorities they have distinct advantage in any negotiation with Mr. 24% and congressional Republicans?

None of these reasons is very comforting.
El Cid Says:
September 24th, 2008 at 10:12 pm
Don Williams: So far there’s zero evidence that this is, in fact, anything but an embarrassment from McCain. I might be wrong, but everyone I worked with today thought it was a silly move by McCain. So what if f***wad right wingers try to chew on this turd and tell us it’s chocolate?

If John McCain came out on TV today, dropped his pants, and started playing with his weenie on national TV, Hugh Hewitt could not restrain himself from calling it a master stroke.
kafka Says:
September 24th, 2008 at 10:19 pm
Rep. Peter Defazio – “We should not be rolled by a Wall Street exec who is masquerading as the Secretary of the Treasury”.

Well, one gets it. Just 534 more to go.
El Cid Says:
September 24th, 2008 at 10:23 pm
Via McClatchy, Bernanke actually gives some reasoning for the $700 Billion ransom note:

“It’s not science to figure out how much is going to be needed to stabilize the firms and the markets,” Bernanke said. “But there are various metrics one can use.”

Among them, he said, is that “there’s about $14 trillion outstanding of residential and commercial mortgages. So $700 billion is about 5 percent of that amount, which is similar to some of the loss rates we’ve seen in some of these categories.”

He also said that assets of U.S. commercial banks are “in a similar $10 (trillion) to $12 trillion category,” so the $700 billion “seems an appropriate size relative to the scale of the problem.”

Many lawmakers were not convinced.

“Would there not be merit in considering an initial set of purchases of certain classes of troubled assets in the amount of, say, $100 billion?” asked Sen. Sam Brownback, R-Kan. “Then we could evaluate results, and move on with $100 billion worth of purchases of other classes of troubled assets.”

Schumer pressed Bernanke hard on this point, asking him as an economist why $700 billion was necessary.

“You asked me my opinion as an economist,” Bernanke said with a smile. “Unfortunately, this is a matter for psychology.” A $700 billion federal commitment would reassure global financial markets that Washington was committed to the rescue in a way that $100 billion increments would not, he said.

But $700 billion, Schumer replied, “is an awful lot for psychological reassurance.”
scythia Says:
September 24th, 2008 at 10:23 pm
Re msw quote from Hugh Hewitt: “Today was Obama’s Katrina moment”
————-
I TOLD you what those goddamm , dirty dog-fucking Republicans were up to.

Say it with me now!

“It. Just. Doesn’t. Matter.”

Obama breaks 55% by Monday.
Steve LaBonne Says:
September 24th, 2008 at 10:27 pm
The concern trolls are just slaying me here. I mean, seriously, what we’re watching is McInsane committing political suicide. Good riddance to bad rubbish.
JJF Says:
September 24th, 2008 at 10:28 pm
Just a guess, but I say Congress passes a package this weekend … for $250 bil.
Owen Says:
September 24th, 2008 at 10:29 pm
Is there some way to make sure Bush and Paulson can’t benefit from this financially by going to work for a bank in 6 months or getting paid $100k for speeches at banks that benefit from the bailout?

Something like the prohibitions that they have for congressmen, but specific to Bush and Paulson because $700 billion is kind of a lot and Bush has been untrustworthy in the past.
Don Williams Says:
September 24th, 2008 at 10:32 pm
1) Nah. The Master Stroke is when a lame duck President with a 20 percent approval rating REFUSES to let the Democratic Congress recess until they hand over $1.5 Trillion to his rich buddies.

2) US Constitution, Article 2, Section 3:

“He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper ”

3) If Democratic Congressional incumbents can’t campaign at home –but their Republican challengers can — then who does that fuck?

Especially with the Republican challengers telling their constituents that the Big Spending Democrats in Washington DC are about to cornhole said constituents with a $2 Trillion gift to the rich.
msw Says:
September 24th, 2008 at 10:33 pm
Just to be clear the Hugh Hewitt quote is crazy, as in Petey crazy. It’s almost as crazy as the J-Lo’s peeps seriously suggesting that Palin stand in for McCain in the debate.
kafka Says:
September 24th, 2008 at 10:33 pm
Our new world image: 3rd world country:

From “The People’s Daily”, the official newspaper of China’s ruling Communist Party:

“The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States’ financial oversight and supervision.”

“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”
GL Says:
September 24th, 2008 at 10:35 pm
$700 Billion? 3 Trillion?

Here’s an idea: why not just give every US citizen (300 million or so) a one million dollar check – imagine all of that money pumped into the economy.
El Cid Says:
September 24th, 2008 at 10:36 pm
F***. Oh, well, so much for foolish optimism. Looks like many, many reports are emerging that the Democrats really are going to hand Bush his $700 billion, not fix the economic crisis, and give away all our money for the potential Obama administration. They’re going to get permission from Lord Chancellor Paulson to use just a tiny bit of vaseline, though, so it’s all okay.

Yeah, I guess all the calls in to the offices etc won’t matter if there’s a trillion dollars to give away to rich people.
scythia Says:
September 24th, 2008 at 10:38 pm
Citation, Cid?
Ed Marshall Says:
September 24th, 2008 at 10:39 pm
I keep waiting for someone to take a serious look at Paulson. He replaced Rubin at GS. I’m not a Rubinomics guy and I don’t want that sort of shit coming in the next administration *but, what he did when replaced him was take GS out of a mode of protecting and being cautious with capital and spend all that old boring shit Rubin bought on….exotic derivatives and securities. That was why he such a genius and a brilliant pick for Treasury Secretary. He is the original asshole who started this mess at GS.
Jason Says:
September 24th, 2008 at 10:40 pm
Bend over and take it in the ass middle class America. Not only are we going to run this country into the ground but we are going to rob your asses blind just before leaving office. And you are so fucking retarded that you’ll fall for this hook line and sinker despite the Iraq WMD fiasco that was based on the same fear mongering ignorance.

Regards,

Congress
scythia Says:
September 24th, 2008 at 10:42 pm
N/m, it’s front-paging now. Fuckers.
Don Williams Says:
September 24th, 2008 at 10:45 pm
1) You guys –and evidently Obama’s campaign staff — have a big blind spot. You think all the voters are like you –they are not. There’s the Republican Base and there’s the Democratic Base. Bush and McCain are using asymmetric warfare.

2) Within the Republican Base there are the Smart Whores and the Dumbshits. The Smart Whores see what is going on but think it is a law of the universe that we should all kiss the Rich Peoples’ ass. The one who kisses hardest prospers. So the Smart Whores will vote for the McCain because they accept Bailouts for the Rich.

The Republican Dumbshits will also vote for McCain — because otherwise Black Obama will steal their guns, abort their babies, and screw their white daughters.

3) So the Bailout won’t hurt McCain with the Republican Base. But it will piss off a lot of Democrats. One , we’re smart enough to realize we’re being screwed. Two, we’re smart enough to realize Democrats control Congress. Yes, Bush caused the trainwreck. But only Democrats can stick the common citizen with the Bill.

4) You don’t even have to have disgruntled grassroots Democrats voting for McCain. You’re screwed if even a small percentage of them stay home on Election Day here in Pennsylvania and in other swing states.

5) Obama going to Debate Camp — and standing aloof while the people are being badly screwed — will be all the excuse several million Hillary Supporters will need to tell Obama to go fuck himself.
Steve LaBonne Says:
September 24th, 2008 at 10:47 pm
F***. Oh, well, so much for foolish optimism. Looks like many, many reports are emerging that the Democrats really are going to hand Bush his $700 billion, not fix the economic crisis, and give away all our money for the potential Obama administration

I’ve never doubted it for a moment. This is the Democrats we’re talking about. This is what they do.
El Cid Says:
September 24th, 2008 at 10:48 pm
Maybe it’s more open to interpretation than my first impression would have. But I really sense a weekend rollover coming here.

The Hill, via OpenLeft:

Paulson, Senate Dems reach tentative bailout deal
By J. Taylor Rushing
Posted: 09/24/08 07:48 PM [ET]

Senate Democrats emerged from a meeting Wednesday with Treasury Secretary Henry Paulson to report a general, conceptual — but fragile — agreement on a $700 billion plan to rescue the U.S. financial markets.

Senators said Paulson and the Democrats struck very tentative deals on Democratic demands on oversight and transparency, executive pay limits, and equity interest on taxpayers’ behalf as part of the massive plan. A hard-fought Democratic provision to allow bankruptcy judges to revise mortgage terms was not likely to survive the horse-trading, however, as Paulson would not agree to the provision that is already in the House and Senate versions.

Majority Whip Dick Durbin (D-Ill.) said a bill could be produced as early as Thursday, with debate and a vote likely over the weekend. Ideally, Durbin said the Senate would finish the bill before Wall Street opens on Monday.

“There is high anxiety about the opening of the markets on Monday,” Durbin said. “It’s good to have a deadline, and we have a deadline now, with the Jewish holiday and the opening of the market. Frankly, I want us to stick to that. If we start talking about another week or two, it will take another week or two.”…

…The Senate has just two more working days before its scheduled Friday adjournment, with an agreement still outstanding on a continuing resolution to fund the government.

Most seemed resigned to the idea of weekend work, especially on the financial bill, and several also said they weren’t convinced that a Monday morning deadline was even feasible or necessary.

“I’m not sure that’s possible,” said Sen. Robert Casey (D-Pa.) “For the life of me, I can’t see the difference from an economic or even a confidence circumstance, the difference between Friday and a day or two days later or Monday.”
kafka Says:
September 24th, 2008 at 10:51 pm
FROM:
http://www.reuters.com/article/bondsNews/idUSN2448412920080925

The fix is in. Welcome to our one party state. All hail the GOPocrats.

But hey! Now we can go back to bickering about “family values”, “gay marriages”….you know, the important shit.

NADER 2008!
El Cid Says:
September 24th, 2008 at 10:52 pm
And a contrary opinion from some guy at some office no one cares about, the Congressional Budget Office, so, you know, how could they know more than what was in the Paulson ransom note?

Bailout Could Deepen Crisis, CBO Chief Says
Asset Sales May Lead to Write-Downs, Insolvencies, Orszag Tells Congress

By Frank Ahrens
Washington Post Staff Writer
Thursday, September 25, 2008; Page D04

The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.

During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.

“Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,” Orszag said in his testimony. “Establishing clearer prices might reveal those institutions to be insolvent.”
Jay Says:
September 24th, 2008 at 10:55 pm
Don Williams,

I mean this sincerely, you are a fucking moron.

Cheers.
rea Says:
September 24th, 2008 at 10:56 pm
Looks like many, many reports are emerging that the Democrats really are going to hand Bush his $700 billion, not fix the economic crisis, and give away all our money for the potential Obama administration

Spent a bit of time looking at Google News–didn’t see anything like that. Seems likely a bailout bill of some sort will pass, but it will be more like Dodd’s proposal than Paulson’s.
matt Says:
September 24th, 2008 at 10:59 pm
Surely they could have googled for a larger number.
El Cid Says:
September 24th, 2008 at 11:00 pm
rea: My sense is that it will look to Democratic leaders and progressive bloggers like the Dodd plan, and to everyone else in the country, it will look like Paulson & Bush Jr. got just what they asked for, with a couple of other minor add-on’s.
scythia Says:
September 24th, 2008 at 11:03 pm
Look, of course there’s gonna be a bailout. This is Capitol Hill, not blogger fantasyland. But all the details mentioned above are waaaay too vague to pass judgement on.

The only thing that’s really disappointing in the three cites from 28-30 is the lack of mortgage and foreclosure relief. That’s the real way this capital could have a positive, lasting impact on Americans, and it’s a absolute shame they’re not moving in that direction.

[And kafka, take your Nader horseshit out of here. If he was polling at 30% instead of .3% he'd be making the same goddamned noises as the rest of them. It's easy to take shots at the power structure when you have none. Not so easy when you make it to the show. The only thing he's going to do is throw close elections to the right.

Show me a single congressional district--hell, show me a state house district--where the Green Party is sufficiently mobilized to run a legitmate campaign or shut the fuck up, please.]
kafka Says:
September 24th, 2008 at 11:03 pm
Obama administration will now be financially castrated even before it takes office. Obama’s already admitted he will have to put of his proposals for health care, middle class tax cuts, etc.

Got to hand it to the GOPers. They know they can’t win the election, so they make the outcome worthless to the Democrats. And the fucking stupid Democrats play along.
scythia Says:
September 24th, 2008 at 11:03 pm
My sense is that it will look to Democratic leaders and progressive bloggers like the Dodd plan, and to everyone else in the country, it will look like Paulson & Bush Jr. got just what they asked for, with a couple of other minor add-on’s.

You know what? I don’t give a fuck what it looks like to whom. What will it do?
kafka Says:
September 24th, 2008 at 11:09 pm
Dear scythia:

Grab a cold brew. Chill out. Seriously. Before it all spins out of control.

Love and kisses…
Don Williams Says:
September 24th, 2008 at 11:09 pm
Re “What will it do?”
————
It will fuck us in the election. Because when 50 million Democrats ask us why we gave away $2 Trillion to the most despicable motherfuckers on the planet, our only reply will be that George W Bush and a former Goldman Sachs Partner thought it was a good idea. And with Democrats in control of both Houses of Congress.
scythia Says:
September 24th, 2008 at 11:09 pm
And Don? This has the capacity to shatter the Republican base. I grew up in a red state. I didn’t have a Democrat representing me until I was 26. I worked a red district in ‘06 and flipped it to blue.

You wanna know our narrative? The one that worked every time? “Does this party share your values?” “Well, gee, I dunno…I used to think so, but now I’m not so sure…”

Main St. Republicans don’t want this bailout. Wall St. Republicans do. Simple as that; there’s your wedge.

Granted, it would take some political acumen on behalf f the Democrats for this to work, so…unlikely…but I don’t see this leading to a loss in any way, shape, or form. And McCain is gonna get crushed Friday night, regardless of whether he shows up. This is an “unfit to lead” moment. I agree with Steve above: political suicide.
scythia Says:
September 24th, 2008 at 11:12 pm
Grab a cold brew. Chill out. Seriously. Before it all spins out of control.

Oh, for sure. This country’s economy is fucked long-term. House of straw. But I’ve been saying that for years, so I’m not gonna lose my shit every time a breeze passes through.
Don Williams Says:
September 24th, 2008 at 11:18 pm
First talking Point up tomorrow morning from Rush Limbaugh and the Red State right wing propaganda machine:

1) This Bailout WAS NOT Necessary.

2) NO ONE showed it was necessary.

3) The Big SPending Democratic Congress Buckfucked you again.

See how that goes over in blue collar districts where people get up before dawn and do backbreaking work all day for a few dollars.

YES — George Bush partnered with the Democrats. But he’s not running for reelection — THEY are.
jTh Says:
September 24th, 2008 at 11:18 pm
Actually, when you earlier said that “we shouldn’t round up to a trillion,” the first thought that crossed my mind was:

They picked this sum as the ideal largest that couldn’t be legitimately rounded up to a trillion.
The Bag of Health and Politics Says:
September 24th, 2008 at 11:27 pm
We’ll see how much it really is. There seems to be broad agreement in the Senate for a lot less than $700 billion. The media is just reporting that figure because nobody bothered to change the number yet.

McCain is screwed. This is going to take into the weekend. He’s going to blow off a debate. And he’s going to look like he’s more interested in insider Washington than the problems of Main Street. Worse, he’ll have to take a position that will either alienate the Evangelicals (it was no accident they sent Palin out of the undisclosed location today to talk “Great Depression” and try to scare the Evangelicals) or the Wall Street crowd. He looks like a crass political opportunist who is throwing a temper tantrum. Obama looks measured and calm.

Obama wins–especially if he gets to debate the symbolic empty chair.
Don Williams Says:
September 24th, 2008 at 11:35 pm
Over on the Ralph Nader site , they have some suggestions on how to sell this:

” To beat back the quarrelsome skeptics, all we need now is a Power Point presentation from Colin Powell. This time in the U.S. Senate rather than the UN.

Re-tool the message from WMD to GFM — “Global Financial Meltdown.” Instead of “invade,” they could just use “give us all the money we want from taxpayers with no questions asked, no strings attached. Now.”

Powell could even hold up a little vial and announce that is all of the money left in the U.S. unless we fork over the bailout.

Mercifully, we have not heard Bush bellowing warnings about mushroom clouds. The problem with the boy crying wolf is that when there really was a wolf, no one believed him. As for the Wall Street wise guys, we should have heeded the warning that if we didn’t fight them there, they would just follow us to Washington and we would have to fight them here.”
kafka Says:
September 24th, 2008 at 11:40 pm
You get what you pay for:

FROM: http://www.opensecrets.org

From their Top All-Time Donor List for 1989 – 2008:

Goldman Sachs $29,322,212 Dems 63% GOPs 36%
Citigroup, Inc. $24,751,845 Dems 49% GOPs 49%
American Bankers Association $19,973,343 Dems 40% GOPS 59%
JP Morgan Chase $18,510,240 Dems 50% GOPs 48%
Morgan Stanly $17,006,587 Dems 45% GOPs 54%
Bank of America $15,294,250 Dems 46% GOPs 52%
Merrill Lynch $13,734,924 Dems 35% GOPs 63%
Credit Suisse Group $11,437,818 Dems 43% GOPs 55%
Freddie Mac $9,735,290 Dems 43% GOPS 56%
RKU Says:
September 24th, 2008 at 11:59 pm
There was a big article in today’s Los Angeles Times about how the local city council—about 100% Democrat—spontaneously and pretty much unanimously voted a resolution to oppose the bailout. Mayor Tony V. said exactly the same thing.

I don’t know that the bailout will on net hurt Obama or the Dems too much in the upcoming election, but it just proves to all ordinary Democrats who really owns their party—and it sure ain’t them!

It’s a little funny. Warren Buffett got a nice big potential ownership stake in Goldman PLUS a very high interest rate for his $5B. But the federal government won’t get much of anything in return for its $700B.

Buffett seems like a pretty decent, patriotic fellow. Why don’t we give HIM authority over the $700B and have him cut the deals on behalf of the government. Boy, that would really scare those crooked Wall Streeters. He’d probably be able to stabilize the markets, buy a big public stake in all the major financials, and have about $500B left to return to the taxpayers.
Owen Says:
September 25th, 2008 at 12:47 am
PALIN NAKED – Now that I have your attention: Is there some way to make sure Bush and Paulson can’t benefit from the bailout? Otherwise, they could get golden parachutes from a giant bank in 9 months or get paid $100k for speeches at banks that benefit from the bailout.

I say something like the prohibitions that they have for congressmen, but specific to Bush and Paulson because $700 billion is a lot and Bush has been untrustworthy in the past.

Anyone who opposes it in Congress (or the White House) will look like a complete genital. Humiliating Bush now is the right thing for the republic.
Nick Kaufman Says:
September 25th, 2008 at 3:49 am
Matt, you re missing the point.

The 700 billion isn’t a number solely based on fixing the actual problem. It’s a number meant to boost confidence. Since this is the case, you do need to overshoot.
Richard Steven Hack Says:
September 25th, 2008 at 4:27 am
“Got to hand it to the GOPers. They know they can’t win the election, so they make the outcome worthless to the Democrats. And the fucking stupid Democrats play along.”

You ain’t seen nothing yet. They’re going to do the exact same thing in foreign policy with an attack on Iran, or starting a war in Pakistan, whichever they think they can pull off, before the end of the year. That will seriously tie the hands of the next administration, no matter who it is.

So the oil companies continue to profit from the oil spike, and the military industrial complex continues to get fat contracts for the next four to eight years.

And the Democrats – and Obama – will support it because Obama BELIEVES that Iran and Pakistan have to be attacked. And as a result, Obama will have nothing to counter McCain’s ten point “war bounce” in the polls.

The Dems have already lost this election, despite all the bullshit about poll leads and McCain’s antics. The people who aren’t on THIS planet are the Dem morons who think this election is in the bag simply because of McCain’s antics.

Once again, NOT ONE SINGLE DEMOCRAT has yet addressed what really matters – another war before the election, and vote fraud in the swing states.

No, clowns like Matt want to make fun of the stupid bitch from Alaska, while McCain waltzes into the White House.

Suckers.
fuckWallStliberals Says:
September 25th, 2008 at 5:01 am
This is what happens when economic royalists take control of the opposition party.
BruceMcF Says:
September 25th, 2008 at 6:51 am
I’ve seen a number floated about that the Fed has anywhere up to $600b in dodgy assets in its balance sheet, because of Bernanke’s notion coming in that accepting dodgy assets would be a good idea for the Fed if it was facing a liquidity trap.

Except we have been facing a solvency crisis, which means that some of that bridging lending may be to firms that go belly-up, saddling the Fed with the shoddy financial assets allowed to be used as the instrument for the short term lending.

If Paulson does not want to go down as the Treasury Secretary that collaborated in destroying the balance sheet of the Fed, $700b would be enough to buy assets from firms that owe money to the Fed, so that they can either repay the loans with cash or buy Treasury securities to use as an instrument the next time they roll the loan over.

Plus a little extra left over to actually address the crisis on the private sector side.

So there’s one explanation for the $700b that makes sense … now to spend the weekend spelunking to find out whether that %600b figure can be firmed up.
Don Williams Says:
September 25th, 2008 at 8:32 am
Re BruceMcF’s comment “If Paulson does not want to go down as the Treasury Secretary that collaborated in destroying the balance sheet of the Fed, ”
————-
Give me a Fucking Break. What do you think Paulson was doing at GOldMan Sachs before BUsh made him Treasury Secretary?

And why do you think none of Democrats at the Hearing asked Paulson what he did at Goldman Sachs?
Njorl Says:
September 25th, 2008 at 9:29 am
During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.

“Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,” Orszag said in his testimony. “Establishing clearer prices might reveal those institutions to be insolvent.”

That’s the whole point.

People are not lending now because they don’t know who is really a black hole that will swallow all cash they borrow and still be insolvent. If all of the insolvent firms fail, people won’t be worried that they are lending them money. It’s OK for them to fail. The problem th ebail out is supposed to address is credit-phobia.

The bailout will allow solvent firms to get some money for their bad (but not worthless) assets, then get on with business. At least that’s the idea. The problem is, there are two groups who will not take part in the buyout:

1-Those with good mortgage backed securities that they believe will increase in value because they are based on good loans that will be paid off.

2-Those with bad mortgage backed securities who will go under once their true worth is discovered.

I don’t see how the bail out solves this.
Njorl Says:
September 25th, 2008 at 9:50 am
Obama wins–especially if he gets to debate the symbolic empty chair.

I genuinely believe he would do better against McCain. The benefit to Obama that the debate offered was a chance to show that he is just as good as McCain on foreign policy. I think he would have done that and more. Without McCain there as a foil, many uninformed voters will not be able to make a good comparisson. They will continue to swallow the tripe about McCain being a foreign policy expert.

For McCain the question is, does he lose more running away from the debate or being exposed as inferior to Obama on foreign policy. I think it is the latter. He loses either way, but he loses less by hiding. He’ll be able to defray some lost reputation by showing up at the other debates where he won’t risk losing his fake foreign policy cred.
F. Andy Seidl Says:
September 26th, 2008 at 11:03 am
When history judges the Bush administration, it will not be kind. This bunch wields fear as an effective policy making tool (viz., a ramrod).

I’ve written more about this here:

The Paulson Plan: Bad News For The Bailout
http://seidlweb.com/public/item/213401
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