It appears that enough people have spoken out against the initial proposal by Sec. of Treasury Henry Paulson that the hammer crew got together yesterday and very nearly came to an agreement on modifications. Those modifications, to my economically untrained mind, seem to have been good ones — give some oversight to the bailout, phase it in, put caps on executive pay in some way, and in some basic ways get something in return.

If you read my earlier posts on this subject you know I strongly objected to it in the original form. I felt, as did many, that yes, the government was going to have to do something but that needed to have protections, oversight, and returns for taxpayer money. Essentially, they were going to throw our money at Wall Street and hope it solved the problem. Now it appears that intelligence has prevailed. Or perhaps it was just taxpayer outrage that prevailed.

The economic stimulus package ($167 Billion) gave many of us $300 or $600 checks earlier this year which we were instructed to immediately go spend. Now we were being told that $2,300 per person was going to go to this $700 Billion proposed bailout program. Granted, this was not money that came directly from our pockets, it was tax money we have already or will be paying, but nonetheless, when you put the two packages side by side and look at them very simply, that is depleting tax money by 867 Billion dollars. That is a mindboggling amount of money.

A package will be approved even though House Republicans felt empowered to balk due to John McCain’s arrival in his “straight talk express” to save the day. They, House and Senate Republicans, need to remember their role in dismantling regulations that prevented this kind of economic meltdown. McCain has been a long-time opponent of regulation, just this week changing his stated opinion. Deregulation combined with the war in Iraq (See Think Progress, Sept. 26) are major elements of our current but foreseen by many financial crisis.

Chan Lowe
Sep 19, 2008

It seems to me that Congress must pass something soon, if not today. It has been announced, everyone is expecting it and now many of the problems with the original are being worked out. It seems to be the best of a bad situation.


Just Say NO!

Momentum is growing against the proposed Wall Street bailout as many Americans apparently don’t want to buy into “Paulson’s Plunder,” even after George W. Bush tried to sweet talk the nation last night into accepting his Treasury Secretary’s plan.

Congress is working on the “plan,” trying to figure out how best to modify and implement the proposal, but it is still a $700 Billion Bailout! We — you, me, your spouse, your children, your grandchildren — are going to end up paying over $2,300 for every man, woman, child (U.S. population estimate according to the CIA World Factbook).

How would you spend $2,300 if you had it free and available to do anything you want? What would you do with that much money if you were restricted to do something relating to the financial sector–banks or stocks? Would you put it in savings? Certificates? Stocks? Something that would be an “investment” and would perhaps give you a return of some kind?

We are being asked to donate that much of our tax money to a bailout that, as written, gives no return to the investor, the taxpayer. Proponents of the plan say that our return will be a stable financial system. Economists nationwide are finding flaw after flaw with the plan the more they study and analyze it. There are no financial returns and few regulations on the use of the funds. The initial proposal included no oversight from anyone outside the Executive Branch of the government — the Administration. It was an attitude of “just hand over the money and trust us.”

Trust. What an amazing betrayal of trust. After what this president and his pack of pals have done to the American people and imposed on the world the last eight years we are supposed to trust them?

We’ve lost civil rights, been wiretapped, experienced continued deflation of our dollars, died and killed in a misbegotten war and now we’re being asked to just “hand over the cash.” The only thing missing in this scenario is a thief’s mask.

Alternative economic plans are emerging as economists continue to work through all the layers of the current situation. Most say timing is an issue, but they have been saying that for two or three years! There were warnings of the upcoming crisis in 2006 and even earlier! This MSNBC clip is dated 8/28/06 and shows the two opposing economic views and I’ll bet you can pick up the position supported by the Bush Administration! It is also obvious that at least half of this duo knew what was coming and now we’re in it.

I would be interested in what others, anyone, think are possible solutions? Everyone has ideas, whether they have been trained in economics or not. Most of us have and use money. Don’t we regulate ourselves? What kinds of regulations do you have on your personal finances? Do you think those same basic principles apply to our communal finances, taxes? How do you feel about all of this?

If you want to speak out, here’s one way. I just received the following in an email:

Today (Thursday) there will be emergency afternoon street protests across the country. Please find the nearest protest and bring a sign and a friend:

You can surely call, write or email (it’s gotta be fast though!) your congressmen and give them your opinion, even if it is simply, “NO! No, to Paulson’s plan.” You don’t have to be an economist or give them an expansive explanation of your alternative, you “JUST SAY NO!”

Let Them Eat Cake

I interrupt the film postings from TIFF to bring you my thoughts on the current economic crisis and proposed bailout.

We are all hearing about the financial meltdown of the big investment banks: Lehman Brothers, Goldman Sachs, Morgan Stanley. We are also hearing about the proposed bailout of this system by the government.

I am not an economist nor a financial scholar, sometimes wish someone would bail me out financially, but there are things going on here that interest and concern me. I also think the majority of the American people are suffering from personal economic exhaustion or they would be much more vocal regarding what is being proposed.

One important thing to be aware of is that the proposed bailout ($700 BILLION!) of the investment banks with taxpayer money was written by Henry Paulson Jr. (Bush’s Treasury Secretary) and has the stamp of approval from Ben Bernanke, head of Federal Reserve. Now, lest you think that because of their positions and that they obviously know more about it than you do, here are a couple of interesting quotes from Mr. Paulson (from The Progress Report, Sept. 23, 2008):

“Our institutions, our banks and investment banks, are strong.”
— Treasury Secretary Henry Paulson, 3/08


“The events leading us here began many years ago, starting with bad lending practices by banks and financial institutions, and by borrowers taking out mortgages they couldn’t afford.”
— Paulson, 9/23/08

The track of these quotes leading to the current proposal goes: Bad mortgages, bad lending practices, banks are in great shape, banks are now failing and need us to foot the bill for their greed. In other words, he wants us, the average American taxpayer to eat it financially while paying for their (investment banks and their CEOs) cake.

Do you think there will come a time when Americans say “Enough?” “We’ve paid enough.”

We’ve had “free market” bullhorned at us, telling us to buck up, deal with it, if you work hard enough you’ll get what you want, blah, blah, blah and now those “free market” folks don’t want to play by their own free market rules. Economists all over the country are saying that there are alternatives; we don’t have to give handouts to investment banks, there are other, more rational and practical ways to deal with this.

“But leading economists and financial analysts argue that there are a host of alternatives that would reduce taxpayers’ liabilities and perhaps more effectively address the urgent crisis in financial markets. Although these experts concede that the clock is ticking, they say other approaches have been dismissed too quickly. . . .

“One approach seeks to reduce taxpayers’ liability by offering collateral-backed loans to troubled banks, leaving them to work out their own solutions. Another idea is to have the government set up a profit-driven investment fund with the aim of infusing the financial system with cash without taking on bad debt. Still others suggest radically different tactics of directly helping homeowners by reducing mortgage principal or bolstering banks by suspending capital gains taxes. . . .

“‘They presented this as a comprehensive, decisive solution, but it’s clearly not comprehensive and probably not decisive,’ said Simon Johnson, a former chief economist at the International Monetary Fund and a professor at Massachusetts Institute of Technology. (Anthony Faiola and David Cho, The Washington Post)”

Write/call your Congressman and tell them that you want them to take their time on this! We should be as skeptical as we can possibly be about anything the Bush Administration is proposing — remember Iraq and WMD? Remember National Security and wiretapping? Remember Patriot Act and the erosion of your civil rights? Don’t do something fast, do something RIGHT!