The Bailout Bargain
Paul Krugman explains why he thinks going for a nationalization plan wouldn’t have worked as legislative strategy:
Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.
But such a plan would have had next to no Republican votes — and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.
So that, I think, is why it had to be done this way. I don’t like it, and I don’t like the plan, but I see the constraints under which Dodd, Frank, Pelosi, and Reid were operating.
This is what most informed observers think, so perhaps the informed observers are right. But it seems to me that if a rescue is really as necessary as informed observers think, then why shouldn’t the GOP’s friends in the business community have forced them to go along? Financial services firms might have been strongly opposed to a Swedish-style scheme, but most companies (of course) aren’t financial services firms for them the strong interest is just in having something done rather than nothing. At the end of the day, I think the Democrats had the strongest hand and just blinked at the thought of going “all-in” with it. Arguable that was the responsible thing to do. But on another level, you really can’t ever get anything done in the American legislative process if you’re not willing to engage in a little brinksmanship and I’m not sure this mentality bodes well for the prospects of health care reform or whatever.
57 Responses to “The Bailout Bargain”
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September 29th, 2008 at 12:07 pm
But could a nationalization plan have passed with a long, bruising fight in Congress? It’s not clear we really have the luxury of weeks to debate on a plan without risking serious damage to the economy. If your house is on fire, you don’t quibble too much about whether the firetruck is a lousy model as long as addresses the problem at hand. Is the economy on fire? Hard to say, but a number of knowledgeable observers seem to think so. Will this plan address the problem? Unclear, but again, a number of people think it’s good enough. And of course there is no law against revisiting it when there is more time to hammer a better bill out.
September 29th, 2008 at 12:12 pm
Matt, I couldn’t agree with you more. If “doing something” is so critical, the Democrats would have been rewarded for doing it right. The fact that they’re demanding significant Republican votes means that they’re pretty worried this thing will fail.
It’s not clear we really have the luxury of weeks to debate on a plan without risking serious damage to the economy.
The economy is going to manifest serious damage over the next few weeks whatever happens to the bailout. The bailout just transfers wealth from those who are not responsible for that damage to those who are.
And of course there is no law against revisiting it when there is more time to hammer a better bill out.
You don’t “revisit” dumping $700 billion on Wall Street. You might regret it later, but whatever happens, that’s your economic policy.
September 29th, 2008 at 12:13 pm
Here’s my question, and I ask it genuinely. We have heard what calamity awaits us if we don’t offer up this Wall Street Welfare plan, but would it be so bad? Obviously the financial system in this country doesn’t work too well, so what would be so bad about it collapsing? We’d have a tough few years, sure. But isn’t this artificially propping up the system for the next guy to deal with?
What assurances are in this welfare bill to ensure that this kind of thing doesn’t happen again? Why isn’t *someone* looking these financial firms in the eye and asking them where their precious “market forces will correct everything” mantra is now?
September 29th, 2008 at 12:14 pm
Politics is, after all, the art of the possible. I’m personally less than sold on the need for this kind of bailout, but too many smart people whose opinions I respect think it’s necessary. When someone like Krugman is on board for a Bush administration plan, that speaks volumes.
I think the Democrats could have done a better job on this one. When the House GOP came back with their batshit insane “counter,” the Democrats basically agreed to split the difference between sane and insane. That’s disappointing. But then, too, perhaps they have their eye on the bigger picture, and plan to come back to this from a stronger position after the elections. We’ll see.
September 29th, 2008 at 12:15 pm
Does this surprise anybody about the Democratic leadership in Congress? I don’t think you could hope to get a better result right now.
September 29th, 2008 at 12:17 pm
Latest news from George Bush
————–
Still, the president hinted that this may not be the last intervention required.
“It’s been a volatile time for our financial system and our economy,” he said. “Even with the important steps we’re taking to address the current crisis, we will continue to face serious challenges.”
————–
Shorter George: This is TWICE that the Democratic cowards have given my rich donors $700 Billion.
Let’s see if I can make them cough up a THIRD Tranche of $700 Billion before I leave office. Heh heh.
Hell, let’s go for FOUR Slices — make it a cool $2.8 Trillion.
and let the dumbfucks figure out later how much interest they’re going to be paying.
September 29th, 2008 at 12:18 pm
Nationalization couldn’t have passed because it was the best plan and the best plan only gets out of Congress once every century. Like Brigadoon.
http://thesebastards.blogspot.com/
September 29th, 2008 at 12:19 pm
There is a timing issue at play here (i.e., the November elections) that is constraining the degrees of freedom the Democrats have to work with that won’t be operating during the upcoming health care debate (if Obama wins the WH and the existing Congressional majorities are increased).
September 29th, 2008 at 12:19 pm
Confused,
I don’t know that we’d have a tough few years…The last time the entire financial system collapsed we had an enormously difficult decade.
What this plan buys us is time…time for the housing market to settle down. Once it settles down, then these bad loans can begin to be extricated from the system.
Granted, the price we pay is going to be in the form of inflation, but avoiding catastrophe is the better alternative. Indeed, if we’re really going to be serious about getting things back into order, the first step is to cut government expenditures or raise taxes…although the latter in this economy would be a monumentally bad idea if we’re trying to keep things growing IMHO.
September 29th, 2008 at 12:19 pm
At the end of the day, I think the Democrats had the strongest hand and just blinked at the thought of going “all-in” with it.
For once, I don’t blame them for blinking. If Obama is elected – which might happen soon – we’ll seen how the Democrats behave then.
September 29th, 2008 at 12:21 pm
Re Demisod’s comment “And of course there is no law against revisiting it when there is more time to hammer a better bill out.”
———-
Yeah, right.
You mean like the way the Democrats brought the troops home from Iraq after we gave them control of Congress in Nov 2006?
September 29th, 2008 at 12:23 pm
Rewarded by whom? Certainly not the voters. If the plan succeeds, then the Republicans who voted against it argue that it wasn’t necessary, and you can’t trust the Democrats who are colluding with Bush and Wall Street to steal money from working people. It’s unfortunate, but it seems perfectly reasonable to want to avoid that political trap if you want to actually win the election and accomplish any of the great things you hope to in the next four years.
September 29th, 2008 at 12:25 pm
Re Ed Smithe’s comment “the first step is to cut government expenditures or raise taxes…although the latter in this economy would be a monumentally bad idea if we’re trying to keep things growing IMHO.”
———–
Sure. The last thing we want to interfere with is the right of our Superrich to lay off US workers and invest in building up the military-industrial complex of China.
Compare US Foreign Direct Investment to US business investment if you want to see where that 2001 Tax Cut went.
September 29th, 2008 at 12:27 pm
Rewarded by whom? Certainly not the voters. If the plan succeeds, then the Republicans who voted against it argue that it wasn’t necessary, and you can’t trust the Democrats who are colluding with Bush and Wall Street to steal money from working people.
That’s a non-sequitur. You asserted that Democrats would not be rewarded by voters because the Republicans would make a particular argument. The question is whether the voters will believe that argument; it’s inevitable that Republicans will make it.
In any case, I think we basically agree. Democrats are very worried, correctly, that the voters won’t like the result of spending $700 billion on Wall Street. Hence they’re taking steps to protect themselves politically. Matt’s point was that they could have adopted a more aggressive strategy that would have been better in substance, but their fear prevented them from doing so. In that case, better to do nothing: they won’t be punished for that.
September 29th, 2008 at 12:30 pm
Was a Swedish-style plan even under consideration? Although such an approach is what I favor, I’m under the distinct impression it has about as much political relevance as single payer healthcare. I certainly don’t recall any high profile democratic lawmakers, you know, actually calling for nationalization. He’ll, the Dems couldn’t even manage to have a few sane (read “lefty”) economists invited to the hill to testify. I had at least hoped a smart, economically-literate liberal like Barney Frank might broach the subject of a Stockholm-style plan. No dice.
I’m adding “having a Treasury secretary who isn’t a wall street lackey” to my list of reasons (941 and counting) to put a democrat in the white house. Lord knows the ones in congress need a lot of help.
September 29th, 2008 at 12:31 pm
Don,
Please…give the class warfare argument a rest. Both the Republicans and the Democrats tried that last week and it blew up in their faces when all of the community banks in the United States couldn’t access credit. Apparently rich people on Wall Street do serve a useful function.
The government spends too much money. Whether it’s welfare or the Department of Defense…It spends far too much money. I think we really need to take a look at across the board cuts and then we can talk about who to soak with taxes. But then again, I’m the only Conservative on this board…God forbid I raise the spectre of bloated, out of control bureaucracy.
September 29th, 2008 at 12:33 pm
What is the point of having a Democratic Congress if its one consistent activity is to cave in to the Republicans?
September 29th, 2008 at 12:38 pm
But on another level, you really can’t ever get anything done in the American legislative process if you’re not willing to engage in a little brinksmanship and I’m not sure this mentality bodes well for the prospects of health care reform or whatever.
Health care reform? I got your health care reform right here.
The US government isn’t going to have money for health care. At this point health care reform means we cut back on Medicare and Medicaid. That’s it. That’s our health care reform.
We bet the farm and we lost.
September 29th, 2008 at 12:40 pm
Matt asks:
This is one of the downsides to the GOP coalition gradually breaking apart. The House Republicans clamoring for a “free market” approach and decrying the bailout as a “road to socialism” didn’t necessarily represent business interests as much as a certain cultural constituency, and therefore the business community might have had less influence with them than Matt is suggesting.
September 29th, 2008 at 12:41 pm
Why would Wall Street force Republicans to go along with a bill that would pass with minimal GOP support in Congress? The best case scenario for Wall Street is to a) get some free money now, and b) do so in a way that benefits Republicans later. They should want Republicans to be able to run against this bailout so that they can continue to get freebies from the GOP in the future.
September 29th, 2008 at 12:42 pm
…. it blew up in their faces when all of the community banks in the United States couldn’t access credit. Apparently rich people on Wall Street do serve a useful function.
That’s rich.
These rich people on Wall Street corner the market on credit, and they say you can’t have any unless you give them a whole lot of money first, and you want to believe they’re serving a useful function.
OK, pull the other one. It has bells.
September 29th, 2008 at 12:42 pm
The Democrats don’t understand that in a political environment where no one is faring well, they are still outperforming everyone else.
For instance:
1) They get to spend all of last week railing against Bush, trickle down economics, and the entire structure of Republican ideology, AND PEOPLE ARE ACTUALLY PAYING ATTENTION!
2) They get to appear like responsible adults, placing the health of the nation’s economy above partisan gain, even as they successfully use this as a wedge issue against every single Republican house member.
3) Even if things go South after this bill, the Republican economic positions will continue to be deeply unpopular. They might try to blame Democrats for fiscal irresponsibility, but you can’t win votes if, at the same time, you’re advocating slashing every single economic program that helps the average American. Tax cuts work when you feel like your wealth is growing, government intervention works when you feel like nothing you can do will earn you more money.
September 29th, 2008 at 12:48 pm
What is the point of having a Democratic Congress if its one consistent activity is to cave in to the Republicans?
You got me there, Chris.
Bush may not be very smart, but the one game he’s supposed to be good at is Texas Holdem. Maybe McCain won’t be as good at that sort of thing.
September 29th, 2008 at 12:52 pm
J. Thomas,
Great argument…Because you say that it’s a vast conspiracy…then it’s a vast conspiracy. Yes, last week as the markets were seizing up and the dems were running around trying to get a deal done–this was all due to rich Wall Street bankers that we’re playing the system. Brilliant. And those big banks have no interest in lending out money…no, banks just want to feel powerful. That’s they way they run their businesses.
I mean, some of the folks on this forum really do understand this…it’s not that difficult. But then there’s folks like you that have absolutely no concept of what the hell is going on. No, we don’t need those large banks…not at all. The rest of the world will just bend to our preferences to have tiny little community institutions where Mom and Pop serve out loans to rich and poor alike.
If you’re going to disagree with me on a fundamentally simple observation, try and use some facts.
September 29th, 2008 at 12:53 pm
The Democrats always seem to be reaching compromises between batshit-insane plans proposed by the Republicans and centrist plans proposed by the Democrats. When the Republicans were in charge, the compromise reached was “democrats will vote for batshit-insane because we don’t have the votes,” now that the democrats are in charge, the compromise seems to be “we’ll split the difference because we don’t have the votes.” If any progressive has any hope for any progressive law passing, they need to get a reality check. You can Barack Obama win the Presidential race, House democrats get a 2/3rd majority, the senate get a filibuster-proof democratic majority, and they’ll STILL cave. I finally see the truth in the Republican caricatures, Democrats truly are girlie-men (or girlie-girls as the case may be), and they desperately need to grow a pair.
September 29th, 2008 at 12:53 pm
Well, I’ve seen no defense to the argument, at least none that I believe swing voters will be swayed by. Any bill that is passed will be painted as a bailout for Wall Street. If only Democrats and Bush are supporting the bill, then that’s politically very, very bad, regardless of the details.
Doint nothing is better only if you believe that the crisis is fake, or that the bill won’t help. I don’t think the Democrats voting for the bill believe that.
September 29th, 2008 at 1:00 pm
It’s a pretty obvious situation. The GOP’s friends in the business community are perfectly happy to let the House GOP demagogue the bill, as long as this demagoguery is ultimately unsuccessful (i.e., the bailout passes). In terms of political capital, the Democrats would be left holding the bill, while Wall Street gets what it wants.
September 29th, 2008 at 1:05 pm
Just to add, I guarantee you this crisis is not fake. We face two realities, one where Congress passes this bill and we send the clear message that the U.S. government will do what is necessary to ensure the long-term solvency of the financial sector in this country and throughout the world. Or, Congress scuppers this bill in a fit of populist passion and we watch as the global financial system grinds to a halt. AND IT IS GLOBAL! This is not like Sweden or Japan, this will be a global depression for at least two to three years. Last night’s bailouts in Europe suggest, and this is terrifying, that the U.S. might be AT THE LEADING EDGE of responding to this situation. Europe may well be facing the same prospect that we are right now in as little as two to three weeks.
September 29th, 2008 at 1:06 pm
Re Ed Smithe’s comment “Don,
Please…give the class warfare argument a rest. Both the Republicans and the Democrats tried that last week and it blew up in their faces when all of the community banks in the United States couldn’t access credit. … But then again, I’m the only Conservative on this board ”
—————
I suspect Conservative Ed and I have different understandings of how “class warfare” is waged.
Here’s mine:
———-
“Comrades! The insurrection of five kulak districts should be pitilessly suppressed. The interests of the whole revolution require this because ‘the last decisive battle’ with the kulaks is now under way everywhere. An example must be demonstrated.
1. Hang (and make sure that the hanging takes place in full view of the people) no fewer than one hundred known kulaks, rich men, bloodsuckers.
2. Publish their names.
3. Seize all their grain from them.
4. Designate hostages in accordance with yesterday’s telegram.
Do it in such a fashion that for hundreds of kilometres around the people might see, tremble, know, shout: “they are strangling, and will strangle to death, the bloodsucking kulaks”.
Telegraph receipt and implementation.
Yours, Lenin.
PS Find some truly hard people”
———-
Ref: http://en.wikipedia.org/wiki/Lenin%27s_Hanging_Order
September 29th, 2008 at 1:08 pm
I think the biggest fact that bothers me is the role the financial industry’s lobby is playing in all of this. They’re about to get a $700 Billion bailout, and they’re still trying (and succeeding!) to dictate the terms on which they’ll accept this Wall Street Welfare.
Absurd.
September 29th, 2008 at 1:16 pm
RE Braden’s comment “The Democrats don’t understand that in a political environment where no one is faring well, they are still outperforming everyone else”
————-
Oh, bullshit. Democrats are giving $1.5 Trillion of our taxes to rich cocksuckers.
A significant percentage of that $1.5 Trillion will then be passed on from Wall Street to support the Repubican Party in the next election –or to fund fifth columns within the Democratic Party like Joe Lieberman, Chris Dodd, Chuck Schumer,and Barney Frank.
What kind of a stupid fuck buys guns for the very goddamm muggers who rob him?
September 29th, 2008 at 1:22 pm
Don,
Apparently we do. I never realized that the “Superrich” spent their money on the “military-industrial complex.” Do you mean to tell me that after Bill Gates drops billions of dollars into Africa or George Soros drops millions of dollars into MoveOn, that they take the rest of their money and spend it on creating wars or buying weapons? I thought that the neocons or the Department of Defense had the market cornered on that one, but apparently I’m mistaken.
Again, the class warfare stuff just sounds stupid…and apparently your party agrees with me after they took a look at the abyss that was staring them in the face.
Bottom line, the dems took this issue off the table–that helps them with the election. Isn’t that what you folks want…to win?
September 29th, 2008 at 1:34 pm
Don,
You have to stop hating money! I’m not sure what you think actually causes positive changes in the long-term fortunes of this country’s working class, but I assure you it isn’t the collapse of the country’s financial institutions.
Ed,
Most democrats don’t know a damn thing about financial markets. Witness the current discussion on Daily Kos. I read the vitriol against this bailout and the various conspiracy theories popping up all over the place, and it brings to mind spending an afternoon on RedState reading about the impending creation of a world government.
September 29th, 2008 at 1:37 pm
Re Ed Smithe’s comment “Apparently we do. I never realized that the “Superrich” spent their money on the “military-industrial complex.” Do you mean to tell me that after Bill Gates drops billions of dollars into Africa or George Soros drops millions of dollars into MoveOn, that they take the rest of their money and spend it on creating wars or buying weapons? ”
—————–
Sigh. That’s what I get for using a complex concept like “metaphor” on a Conservative.
I wasn’t talking about Real, Actual guns, Ed.
I was saying that some of the money that the Democrats are passing to Wall Street will be used to fuck those same Democrats in future elections/battles.
Will be used to fund their Republican opponents. Or to sustain the deceitful propaganda apparatus which argues giving $1.5 Trillion to the Superrich sonsabitches — while fucking the homeless, the sick without health insurance, and the poor — is The Right Thing To Do.
Why do you think the Washington Post and New York Times are being so careful to NOT examine this Bailout deeply. Like my corgi, they know some morsals will fall off the table and into their dog dish if they keep quiet.
September 29th, 2008 at 1:47 pm
“Comrades! The insurrection of five kulak districts should be pitilessly suppressed. The interests of the whole revolution require this because ‘the last decisive battle’ with the kulaks is now under way everywhere. An example must be demonstrated.
1. Hang (and make sure that the hanging takes place in full view of the people) no fewer than one hundred known kulaks, rich men, bloodsuckers.
Betcha old Vladimir Ilych would have been a MUCH better negotiator on the terms of our $700B Bailout gift to Wall Street.
At the very least, he would have gotten a whole lot of preferred stock and equity warrants…
September 29th, 2008 at 1:51 pm
Re Braden’s comment “Don,
You have to stop hating money! I’m not sure what you think actually causes positive changes in the long-term fortunes of this country’s working class,”
————-
Well, I suspect STEALING $3+ TRILLION out of the Social Security/Medicare Trust Fund accounts of those workers is not a “positive change” in their “long-term fortunes”.
After all, the workers paid REAL MONEY into those accounts –payroll taxes they had to work long hours to acquire. And what’s there now? Bush IOUS that the workers themselves are on the hook to pay off.
Why is Enron’s Jeffery Skilling in Jail?
What did Bush do with the $3 Trillion he stole? Gave $2 Trillion to the superrich as a tax cut — so they could invest in CHina. Another Trillion to grab some oil deposits in Iraq for Houston.
I suspect all Mitch McConnell has to do is whisper “Tax and Spend Democrats” to ensure that this Wall Street Gift will be paid for in the same way.
Meanwhile the “long term prospects” for many of you is that you will be eating dog food when you are too old to work and will be dying years before your time due to lack of medical insurance and health care. If you’re lucky they might let the drug dealers sell you some heroin for when the cancer pain hits. But probably not.
The people who are fucked includes all of those Republican middle class ass-kissers who are too stupid to realize what’s going on.
Which is kind of a silver lining.
September 29th, 2008 at 1:53 pm
Don,
You see, unlike you I use language to convey information. Therefore I am very careful with my language so not to create confusion. That’s how adults communicate effectively with one another.
As for your “metaphor” I fail to see how this is a metaphor: “Sure. The last thing we want to interfere with is the right of our Superrich to lay off US workers and invest in building up the military-industrial complex of China.”
Perhaps you meant to say that you were being facetious, as in putting forward a stupid example that we are all supposed to recognize is a stupid example? Please see the above.
With respect to the Wall Street money, perhaps you haven’t been to New York in a long time (or ever). Most of that money these days is being funneled into democratic candidates because the perception is that they’re going to win. Moreover, that’s just accounting for the wealthy folks that can afford to pay 60% (or more) of their income just to live there. As for the “Superrich” I think that the democratic party has them locked up. With the exception of Jack Welch and Murdoch, most of the really rich folks give their money to democrats…if not for the sole reason that they throw better fundraisers.
Finally, with respect to the Washington Post and the New York Times…it’s not a conspiracy, they just don’t have the time, space or intellectual capacity to do it. Moreover, their readers (what’s left of them) wouldn’t read it.
I’m sorry that life is so uninteresting. But that certainly doesn’t entitle one to make up an alternative reality to explain the obvious. As I’ve said before, the problems in the Republican party mirror those in the Democratic party…A bunch of folks that are more prepared to think with their hearts rather than their heads.
September 29th, 2008 at 1:59 pm
If you’re going to disagree with me on a fundamentally simple observation, try and use some facts.
Well, Ed, you have used absolutely none so far. You’ve expressed a few opinions which have no support.
And the facts we need are mostly not available. It’s like a game of Texas Holdem, by the time you find out about the hidden cards the deal is done. But here’s something — if we do go through with this stupid plan and we get a bad result *anyway*, then do you agree at that point you’ll apologise and admit you were 100% wrong? (Although you had the justification that the key facts were unavailable to you.)
Well, but right now, before the facts come out, are you willing to put your money where your mouth is? If you believe this plan is the right one that will make the difference we need, send $500 of your own money to the Treasury to help out.
If you agree to do that, I’ll put up my money too. I’ll spend $500 on nonperishable food to feed my family in the coming crisis.
September 29th, 2008 at 2:04 pm
Looks as if the House GOP isn’t on-board. The wing-tips and wingnuts are divorcing as we speak.
So: time to go for the Swedish-style nationalization model. The Dems will have full ownership of it, but at least they won’t be beholden to the GOPpers on it.
September 29th, 2008 at 2:05 pm
Re RKU’s comment “Betcha old Vladimir Ilych would have been a MUCH better negotiator ”
———–
First thing Vladimir always did was exterminate internal “enemies of the Revolution.”
Of course, that approach would decimate most of the Democrats who served on the Banking Committees over the past 8 years. Including those now arguing so strongly for Wall
Street’s Gift.
September 29th, 2008 at 2:08 pm
Re Ed Smithe’s comment “With respect to the Wall Street money, perhaps you haven’t been to New York in a long time (or ever). Most of that money these days is being funneled into democratic candidates because the perception is that they’re going to win. ”
—————
I certainly agree that Wall Street is just as happy to buy Democratic Whores as they are to buy Republican Whores.
How that benefits the average citizen escapes me.
Maybe Ed will explain it. Right after he finishes explaining why it’s a good thing for us to give $1.5 Trillion of our wages to Wall Street.
September 29th, 2008 at 2:17 pm
As always, the Democrats are stupid shits:
———–
“2:00 pm : The current Emergency Economic Stabilization Act vote tally comes at 207 for the plan, 226 against, with one vote remaining. A total of 218 votes were needed to pass the vote. House members can still change their vote, and as a result the number of yes votes did tick a few points higher.
Democrats voted 141 for, 94 against.
Republicans voted 66 for, 132 against.”
—————
So if the economy later fails, Republicans can point out that a lot of Democrats also voted against the Bailout.
ANd if the economy muddles alone, Republicans can point out that most Democrats voted for an unnecessary $1.5 Trillion bailout for the Rich at the expense of the common citizen.
Don’t see where you left yourself any upside , Nancy. Looks like you’ve managed to fuck yourself no matter WHAT happens. That takes skill.
September 29th, 2008 at 2:19 pm
I think its about time to close down the 110th Congress.
Although George W Bush can FORCE them to stay in session. Check the Constitution.
September 29th, 2008 at 2:27 pm
Don,
I’ll assume that because you’re not correcting my lesson on how to use language, that I’m making progress.
Your 1.5 trillion number assumes that this money is lost forever. I don’t think that will be the case. The money that the Feds poured into AIG and Fannie and Freddie, yeah, that’s pretty much gone. But this 700 billion isn’t gone yet (assuming they use all 700 billion).
That paper that they’re buying up isn’t worthless by any stretch. The reason why their getting it out of the system is that because in the hands of banks (that don’t have the ability to print money) it will soon be worthless. For the government, which does have the ability to print money, it becomes a waiting game. Over time, I guarantee you that we won’t be out that much money (or any at all).
Granted, in the short term, inflation is going to rise. But as I said before, the way to halt that is to cut spending (and that includes DoD and all the money we’re flushing down the toilet in Iraq/Middle East). Frankly, given the amount of money that the government has spent on a variety of different things since the Great Society, this 700 billion or 1.5 trillion is peanuts when you think about what we’re getting for it…a rescue of our financial system and the economy.
September 29th, 2008 at 2:38 pm
Well,
It looks like I’ve spoken too soon. So the Republicans want to play with matches. Unfortunately, in addition to their party, the country is about to get burned.
September 29th, 2008 at 3:36 pm
Ed, it looks like we won’t find out how the bailout would have gone. But if I get evidence that things are significantly worse without it than they would have been with it, I’ll apologise and admit I was wrong. I’ll be sure to do that before I lose my internet connection, or if I get suddenly evicted I’ll post from the library.
I don’t see that it will hurt the GOP. A whole lot of citizens thought the bailout was a bad idea. Not that the idea was necessarily bad, but that trusting the Bush administration to do it was a *terrible* plan.
It’s likely to hurt the Democrats a whole lot more. First they let Bush sucker them into this rathole of a plan. Then they let the GOP sucker them into thinking they had a deal, something they could announce to the world. They come off looking real real trusting. So naive. Do you want people like this negotiating for us with china, russia, and iran?
I’d rather have a hard-nosed Republican do that bargaining, if only I could believe he had the US citizens’ interest at heart….
Well, we’ll see. At least we’ll see some things. These are interesting times.
September 29th, 2008 at 8:59 pm
Re Ed Smithe
Don,
Please…give the class warfare argument a rest.
Mr. Smithe must be kidding. How else is the blogs leading Bolshevik going to respond. Better he should go back to trashing Hiam Saban.
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