Congress has no right to give the White House and its Secretary of the Treasury the power to transfer the people’s money to the richest bankers in the country. Vote No to the Bailout legislation. The Bailout legislation is being rammed through Congress in a matter of days. This is an illegal power grab by the White House and their richest friends on Wall Street. The Legislation allows the Treasury Department to appoint the same bankers who created the crisis to administer and dictate the use of trillions of our tax dollars. It is also one of the biggest transfers of wealth from working families to the ultra-rich in the history of the United States.
Congress should help families stay in their homes. Wealthy executives should be forced to disgorge their obscene profits, fees and bonuses that made them ultra-rich while they ran the economy into the ground.
I suppose it was only a matter of time, wasn’t it?
VoteNoBailout.org
Larouche? Got one of those handed to me this morning….scary group
PS. First!
i think they have a point. How about subprime people get kicked out of thier homes along with executives refunding this bs CDO/structured credit bonus!
“A project of ImpeachBush.org”
why did you take down Gasparino phone message?
@3
No way, man. People should be able to lie on credit applications and defraud banks without any recourse in order to put themselves in homes that they can’t afford. It’s the American Entitlement Dream.
@5– just updating the post, after getting comment from No Sleeves.
This is exactly why I cannot stand Democrats. Ugh.
working class guy here, I dunno…. , these same corporations have always provided me a job, they have financed my mortgages, my credit cards, my car purchases .. where would I be without them?
Where will I work, for some “middle class” family?
I’ve tried to get a government job but I’m white .. so, no takers there.
i’d like to see what the average american does with money they get to help them stay in those dream homes instead.
another SUV anyone?
Hey, comment from an admittedly relatively uninformed economics newb here-
I think the reason relatively oblivious “causes” like these work is because the public, even the relatively well-educated ones, have no access or education or information about the processes involved here.
Take me, for example. I’m not a morom or anything, and I can tell that that’s a pretty vacuous bit of writing, but I have no knowledge or info that I can mobilize to disprove it.
How can we expect folks to do better when their understanding of the topic area is so limited, and when it’s so easy to point to the economic inequalities that are associated with it?
You have to consider that there really might not have been risk of collapse. Just risk that GS and MS would be owned by banks from the new financial center of the US: Charlotte, NC
I always thought Social Security was the largest transfer of wealth EVAH!!Who knew it was this bailout plan.
Ok, so who wants to do some sleuthing and see if this org is somehow connected to David Axelrod?
“This is an illegal power grab by the White House and their richest friends on Wall Street. The Legislation allows the Treasury Department to appoint the same bankers who created the crisis to administer and dictate the use of trillions of our tax dollars.”
Hey, idiots, it’s time to wake up – it’s not the bankers that created this problem, it’s the moronic American public. Joe Schmoe was making 10k a year and somehow assumed that he can afford a $3mm house. Your tax dollars are bailing out these morons — and you’re likely one of these morons yourself, as you can’t understand this simple concept; essentially, you’re bailing yourself out — not the bankers who “created” this problem.
Uninformed economics newb again.
This term, “Bailout”, really seems custom-made for this kind of cause. It’s like the economic equivalent of “Flip-Flop”, or “Illegal(immigrant)”.
Cayne where are you!??!!?
Can the government freeze the 0% 6 month intro rate on my credit card? I didn’t know what I was getting into when I applied.
#14
You fool. The brokers from the banks get them lots of misinformation during their hard sell that lead them to believe so.
@ 14 it was the government that got us in this mess 1st, it was the American’s who took advantage of the system and it was the bankers who bet.
All of us are to blame and it is time everyone accepts the responsibility instead of acting like victims. This plan is absurd, but I also have not heard the alternate and I have no ideas myself.
Mayo and Shamwow need bailouts.
no cash for trash
http://www.nytimes.com/2008/09/22/opinion/22krugman.html?_r=1&em&oref=slogin
I didn’t know my car was going to depreciate. Please reduce my loan to less than current asset value. Thanks.
@14:
The response I usually hear to that is that homebuyers didn’t realize they were getting in over their heads, and that this was due to a lack of information or education about how the process worked- “Predatory Lending” and all that. There certainly has been an aggressively portrayed view that everyone can afford a house- it would have an effect on folks putting themselves in debt.
But shouldn’t there be other systems keeping this sort of thing from happening? The fact that homebuyers did make these mistakes, regardless of fault, seems to indicate that more regulation is needed.
That said, the rhetoric in the argument is coming from a group that targets outrage at class disparity.
@19:
Uninformed econ newb here, saying:
I agree, the blame for this state of affairs seems to spread everywhere- I think that the way of preventing this from occurring again is almost certainly re-regulation- maybe federalizing credit rating, I dunno.
Like you, I have no idea what would be an effective way to deal with the current damage. Looking around, I see a lot of (justified) criticism and no truly good ideas.
Dude…lets just go hide out in the garage and listen to ‘the band’ until this all goes away…righteous
@18 – Yes, some people were misled. But don’t forget the people who were hoping to refinance at a higher value or took out equity loans to finance their vacations and other luxuries in life. Also, where were the critics when American consumers were maxing out their credit cards and saving nothing for the future? This is just like suing fast-food chains for making you fat. Way to push all of the blame on the “evil corporations”.
Just because the sentiment is stupid doesn’t mean the idea is wrong.
If I were a financial co right now I’d be boatloading this crap in advance of flipping to uncle sam for a tidy premium.
I think we all need to shut up. The cheap populists with their anti bailout rhetoric need to understand once and for all that the worker would be destitute if the banking system collapsed, but also the Wall Street social darwinists that were shaking in their boots last week, the same ones who through the magic of structured finance enabled the “lair loan” industry and reaped millions in bonuses over the last decade. Have some shame people!
I think it has to be recognized that several groups are responsible here. Yes there are many people that refi’d to buy an Escalade or went out and bought a 5 bedroom house on $100k a year not thinking about when the rate re-adjusted. But there are also millions of people that were misled and misinformed about what they could afford. I feel bad for those people. But many of our firms went balls to the wall loading up on this crap, leveraging to the hilt when the going was good, to make money. Now the bottom has fallen out and their stuck.
And the other thing about these people against the bailout – you can’t really get mad at them because they don’t fully understand the interconnected nature of the banking system and the economy.
The American public should just give up. No one cares about them because they aren’t smart enough to merit being saved. Save the elite in hopes that they can bring future market-wide prosperity for those who think gay-rights and abortion are important issues in a national election.
I’ll be happy to contribute my tax dollars if I can hear; the admin., the neocons, many repubs, some democrats, kudlow/cramer etc., 1/2 the University of Chicago economics dept., Greenspan, Paulson, Bernake, the G8, and other misc. fiscal miscreants..admit that the Milton Friedman school of economic thought is wrong.
-C
I think we all need to shut up. The cheap populists with their anti bailout rhetoric need to understand once and for all that the worker would be destitute if the banking system collapsed, but also the Wall Street social darwinists that were shaking in their boots last week, the same ones who through the magic of structured finance enabled the “lair loan” industry and reaped millions in bonuses over the last decade. Have some shame people!
@26:
There were lotsa folks complaining about credit overuse before this mess started, but they were largely ignored, and got only a little press.
At the same time, yes, this group is capitalizing on the discontent of folks with companies, when some of them are also to blame. Corporations are being used as a synonym for evil in the text, but they seem to have earned it. As far as McD’s, you might be surprised how meritorious lawsuits like that might be. It’s taken the FDA about a decade to even draft rules about displaying nutritional content, with all the protests from food distributors.
#14 is right.
if you hand a loaded gun to a child and they shoot themselves in the head, that’s their fault.
all you did was hand to them. someone else loaded it. heck, you didn’t even cock the thing! you had no idea whatsoever that the gun would or even could go off.
all kinds of things have to happen first.
the kid had to cock it, point it at themselves, pull the trigger …..lots and lots of variables that rarely all happen in succession.
the mess is of the governments making – no im not talking about the federal reserve either. That’s right, it was freddie and fannie. Fannie got it going as a product of the New Deal. Created by a liberal government to transfer wealth to poor people (read make housing more affordable) it relied on implicit or explicit governemnt backing to survive. pushed to the extremes of stability by ever increasing demands of the public – the economy simply ran out of credit to supply the public with bread and circuses. The poor created this problem by appropriating wealth that didn’t belong to them, and the rich used the program to become even more rich in the market it created. As always the middle class is left holding the bag and protecting the poor from their own folly, and the greed of their intellectual superiors. If you think the fallout from the failure of this Ponzi scheme product of the “Raw Deal” is bad, wait until Social Security needs to be bailed out.
@30 — hardly any politician running for national office has anything intelligent to say about economics or finance. At least with gay-rights and abortion you can easily tell if they’re rotten or not.
#34 – except for one thing – grown adults who are poor are not children. They are responsible for their own actions and the debts they incurr. I know nothing about playing blackjack – nevertheless, the casino gladly takes my money when I double down on 16 against a picture.
How about no bailouts for anybody–Wall Street and homeowners included! How about getting government’s dirty hands out of the economy altogether, allowing individuals the freedom to conduct business in the way they see fit. How about a discussion of rights amidst this turbulence. VoteNoBailout.org is not the answer. They are merely angry because they are not at the receiving end of this massive transfer of wealth. Vote no to statism of all kinds!
How about no bailouts for anybody–Wall Street and homeowners included! How about getting government’s dirty hands out of the economy altogether, allowing individuals the freedom to conduct business in the way they see fit? How about a discussion of rights amidst this turbulence. VoteNoBailout.org is not the answer. They are merely angry because they are not at the receiving end of this massive transfer of wealth. Vote no to statism of all kinds!
how about a “new, new deal”. let’s create a plan that allows the gov’t to save the unwashed masses from…themselves. how about making people pass an exam prior to getting a credit card or mortgage – just like a driver’s license (only tougher). talk about a wake up call, think about it – fewer escalades would make driving to work faster, fewer people seeking mortgages would make credit cheaper (and banks would be able to reserve less because defaults would decline), and no more sunday night bailout shenanigans to distract your viewing of the latest episode of entourage…where are levit and dubner when you need them?
“Hey, idiots, it’s time to wake up – it’s not the bankers that created this problem, it’s the moronic American public. Joe Schmoe was making 10k a year and somehow assumed that he can afford a $3mm house.”
I really don’t understand how people can say this honestly with such conviction. Every Wall Streeter should know that any trade is a two-way transaction – it takes agreement from both parties.
Yes, he was stupid for signing a loan he couldn’t afford, but the lender was equally stupid for handing him the money!
@blndebnker,
You are my new best friend, sir/madam.
The great difficulty, I think, is the disconnect between those who know at least something and those who don’t. There’s a sense of inside-outside to knowledge in economics that I’ve only ever seen in some areas of medicine before.
When something like this hits, it makes the communication between the public and the policy particularly hard. Rhetoric by groups like this one fill the gap on both sides of the issue. It’s true in all politics, but it’s easier with something that people know less about, like economics.
When rhetoriticians can provide a single, easy target to blame, less gets done. Hence, short will be blamed, as will companies, as will idiot consumers. But never together.
@blndebnker,
You are my new best friend, sir/madam.
The great difficulty, I think, is the disconnect between those who know at least something and those who don’t. There’s a sense of inside-outside to knowledge in economics that I’ve only ever seen in some areas of medicine before.
When something like this hits, it makes the communication between the public and the policy particularly hard. Rhetoric by groups like this one fill the gap on both sides of the issue. It’s true in all politics, but it’s easier with something that people know less about, like economics.
When rhetoricians can provide a single, easy target to blame, less gets done. Hence, short will be blamed, as will companies, as will idiot consumers. But never together.
somehow I doubt a comprehensive education in finance, economics, and monetary policy will be possible for the majority of America prior to a) the election, or b) the collapse of the entire banking system. Odds on which one will be first, anyone?
in the words of Lynyrd Skynyrd: “the south will rise again!”.
I, for one, welcome our new hick overlords from Charlotte…
Can you say Dow at 5000!
can you dow at 5000!
no dow at 1000!
I think it all should be left to rot rather than try and prop it up. I understand how interconnected things are in the modern economy, but they way things have been going I wonder how much worth this economic system is really worth. It’s not helping me a lot, but if your are a big wig executive it sure seems swell.
So I say let it all die, if it leads to worldwide recession/depression, so be it. If it was all based on garbage that was so lacking in initial substance, why fear it going away?
@48:
Because if what you propose is done, more people suffer and die.
How about bailouts for EVERYONE?
Hey Hank, I’ve got an Amex bill that needs dealing with. Better issue a few new T-bills, bro.
@34- Government can’t adopt you. If folks who took out loans were too stupid to know what they were doing, basically you’re suggesting that those of us who DO know what they’re doing adopt them.
Which we basically have already- They don’t pay taxes in any great percentage, they get an EITC, and now they’re getting breaks on bad loans so they can stay in their over priced properties, while those who did the right thing, saved their money & waited for the bubble to burst (ie, did the righ thing) get to deal with higher interest rates on loans to offset the “forgiveness” rates for the losers who otherwise would have lost their homes.
So basically, living within your means & intelligently is punished, while being a spendthrift idiot is rewarded.
Stop blaming the world for your own idiotic decisions. Or, if you’re admitting your a child, act like one, and be seen, not heard, here.
blndebnker wins. i’d say i can’t believe people are still trying to pass around blame, but i can, especially given current political agendas. in response to her argument, the general public HAS to be made more aware of how this situation came about (through the faults of many, themselves included to whatever extent), as well as how MBS pricing and the CDS market have been affecting balance sheets and share prices
Dang! Hey Ben, toss me another cat! This one didn’t work!
- Hammering Hank
#51 – your post was inaccurate, but only because it wasn’t strong enough. the bottom quintile of taxpayers receive far more benefits of the tax system than they pay. the second to bottom quintile are net positive too. The middle quintile break even. The fourth quintile net pay taxes, but barely more than they spend on McDonalds and Gucci handbags in a year. The rest is payed by – you guessed it the “rich” which currently means anyone who is employed, can afford their home and 2-3 kids, and has enough left over to save for college and retirement commensurate with their expected lifespan and kids probable college costs.
this one merits some thought:
“What I really really like is the idea of subjecting CEOs to the same petty humiliation everyone else gets treated to. I suggest that for every separate asset these CEOs sell to the government, they be required to write a Hardship Letter over a 1010 warning (that’s a reference to the statute forbidding lying in order to get a loan) explaining why they acquired or originated this asset to begin with, what’s really wrong with it in detail, what they have learned from this experience, and what steps they are taking to make sure it never happens again. Furthermore, the Treasury Department will empanel a committee of the oldest, most traditional, and bitterest mortgage loan underwriters–preferably those downsized to make way for automated underwriting systems–to review these letters and opine on their acceptability.”
http://calculatedrisk.blogspot.com/2008/09/what-we-should-get-for-700-billion.html
@51
but Mush Mouth, I mean Barney Frank, promised to adopt me and get the evil doers to pay off the mortgage for me!
When is the last time any of you morons got a purchase money ARM? Did you not read the TIL Disclosures or not sign any of the 4″ stack of government required disclosures?
Fraud perpetrated by mortgage brokers and borrowers on the poor investment bankers and rating agencies. Good ‘ol Uncle Sam to the rescue.
Hopefully, Israel will bomb Iran and we’ll become a bona fide war economy once again and put all these troubles behind us.
http://www.taxfoundation.org/files/sr151.pdf
see whose really paying taxes.
EP you are an idiot. This doesn’t bailout the ultra rich – the ultra rich have already got the money in the bank, or will cash out in their golden parachutes – this is to save our financial system from collapsing. This is all you in the media do, always color your reporting to get the most attention of the common people. When screaming meltdown, disaster, US bank failures don’t work, you go on the attack against any effort to normalize. What do you suggest we do? Let GS, MS, Wachovia, Wamu, then an array of regional banks, more insurance companies, even big US Banks like Bank of America, JP Morgan, Citigroup … let them all fail? When USA is wiped out of the financial markets, and hundred of thousands people are unemployed – most of them regular joes – then the ultra rich you mention can come back with their millions and in the name of capitalism start re-building? How about you write one post here where you voice your solution to this problem instead of writing yet another whiny post to attract more traffic?
From the New York Magazine article ‘The Rage of the Previously Rich’, the following excerpt begs the question: Why should I feel anything but contempt and disdain for this whore?
“Another headline read, “Should I leave my fiancé? … I guess I already know the answer. My boyfriend … rather fiancé, is/was employed by Lehman Brothers,” the posting stated. “In less than a week we went from being millionaires to just having a couple of 100K … I suppose this means it’s over. I am who I am. I personally blame all this on [Lehman CEO] Dick Fuld. I blame him for ruining my happiness.””
“I blame him for ruining my happiness”???
My suggestion…Go back to pole dancing, you piece of shit. As the bumper sticker says, “Life is Good”. Don’t you know that?
The Guy from Delaware
Hummmm
http://www.buymyshitpile.com/
Also, there are no shortcuts to this problem. We, Americans have borrowed against our homes. By some accounts home prices have gone down 25% in last one year or so. That’s trillions of dollars in wealth gone. Things are not going to be better until that trend reverts, until markets normalizes and home prices starts going up or at least flattens out. Sooner that happens, is the better for everyone. Can’t happen unless confidence is back in the country and in the markets.
I don’t care. I don’t want to create King Hank and you shouldn’t want to create him either.
Maybe they should not have messed with the markets to begin with. Maybe they should have enforced the existing laws, thanks Mr. Cox for nothing. Maybe Billy boy and Alan should not have put this all in motion while tricking us into thinking we had a surplus.
Lot of maybe, but definitely this bill should not pass. Sure will we all get creamed in the market? Probably, but the alternative is worse.
In a very well crafted and documented piece on her blog, Michelle Malkin says it all:
“Why Henry Paulson must be “contained”
By Michelle Malkin • September 22, 2008 05:14 AM ”
“And now, Washington is on the verge of handing this man unchecked power to grab $700 billion-plus in taxpayer money to stabilize a market he said was “healthy” in order to fix a crisis he said had been “contained” more than a year ago?”
http://michellemalkin.com/
Henry Paulson must be contained.”
@63 and others, it’s not prudent to jump to conclusion. I sense the fear is that 700B is on the line, but the treasury need to take a loss, in fact they can cool profit – it really all depends on what price they buy. I’ll give you an example: say they buy a security worth $100 for $50 which has interest rate of 7.5%. If we look at a four year period, the security will generate conservatively $25 in interest. So, even ignoring all discounting, the treasury needs to get back only $25 on a security worth $100 (approximately to break even). The only way they might not be able to do that – if 100% of America defaults on their mortgages and those are auctioned off at less than 25% value during the four year period – if that happens, we got much bigger things to worry about. This was ver back of the envelope but hope I made a point that all really comes down to what prices these securities are bought. My two cents…
If anyone thinks Paulson knows what he is doing, just go back and read his public statements over the last six months. Giving him a check for $700 billion is like asking Tony Soprano to keep an eye on your jewelry store while you go on vacation.
Perhaps there is a sane person or two around: Take a look at Dodd’s plan
http://www.politico.com/static/PPM41_ayo08b28.html
It is a sttriking 44 pages long and even starts to make sense.
All I have to say is “fuk you”. I laugh at you Americans and your bitching all day about your “crisis”. You guys fuking deserve every pain you get. I mean, Fuk, you guys dug your own grave when you started buying luxury cars, Mansions on borrowed money. Don’t you think someone will come back and collect?? Go cry to your mommy, you lazy, arrogant Fucks.
@60,
Agree, worthless bitch in that New York magazine article.
Only question I have is why was that poor guy planning to marry that depreciating asset/glorified escort. The male with the bulge bracket income was supposed to be the smart one in this sort of relationship.
If it is greedy and literally useless other than certain services normally priced by hourly rate, and it isn’t a lawyer, it isn’t marriage material.
@34:
If you want to admit to being as dumb as a child, then that’s your problem. I know that I am smart enough that, were someone to hand me a gun, I could refrain from shooting myself. I guess the average caliber of the American Joe isn’t as high.
Where do you think this “tax payer money” is coming from? Wall Street has been subsidizing the general public for the past 5 years through excess taxes – they’re merely taking some of it back.
@70
Go stand in a row. You’re going to get ass-raped. Take it like a man.
@41 – You clearly don’t know how the business worked. Countrywide, which underwrote 20% of all residential mortgages in the country in 2006, would write the mortgage to Joe Schmoe (and take a point or two for their trouble), and then bundle together a whole bunch of Schmoe mortgages into a CDO (taking another point or two), and then selling the CDO to some other sap, like an investment banker or pension fund. This reduced Countrywide’s exposure to the magic number of “zero”. Rinse and repeat. They didn’t CARE A SH*T about the creditworthiness of Schmoe because they weren’t going to be exposed to it for more than a month.
I guess this is why all your bonuses should be returned, due to fraud.
@71… still waiting for my @ss-r*ping… where is it? Oh, wait… people realize that I’m right.
@71… still waiting for my @ss-r*ping… where is it? Oh, wait… people realize that I’m right.
np5VjH I think this is a real great blog post.Much thanks again. Keep writing.