Above My Pay Grade

Author’s Note: This article was begun before I heard about the latest argument between mantis and my colleague, DJ Drummond. I put too much into this article to scrap it — or even revise it extensively — because of that, and I am mildly miffed at both of them for their rotten timing.

It should come as no surprise that one of my favorite commenters here at Wizbang is “mantis.” Yes, he’s a liberal/progressive who almost never agrees with me. But he does it in a way that doesn’t infuriate me, but makes me wince — because he challenges me (well, us — I’m not his only target) to be on the top of my game.

Hell, if I had my druthers, I’d have mantis as a regular author here — or, if he’d prefer, in charge of Wizbang Blue. Unfortunately for all concerned, he’s too smart to agree to either.

Recently, in the course of another exchange in e-mails, mantis posed the following question to me:

On another note, I have to ask something. I don’t usually take it upon myself to tell you guys what to write about, but it seems rather odd that no one at Wizbang has put anything up about the economic meltdown we are now in the middle (beginning?) of. What gives? I spent a bit of time this morning calling my congressmen to urge them not to capitulate to the sham of a bailout proposal offered by the White House. We’ve essentially almost nationalized our banking industry (France, anyone?) and now the administration wants Congress to give a giant blank check to the executive with no oversight or review, possibly even to bail out foreign banks. I’m seeing people from all over the political spectrum come together in opposition to this obscene proposal, but not a peep from any Wizbang authors.

It’s a fair question. I won’t speak for my colleagues, but I know why I haven’t written about the bailout proposal: because it would violate some of the most fundamental rules I live by for writing at Wizbang.

In general, there are no “forbidden” topics here at Wizbang. We authors are free to write about whatever we want, whenever we want, however we want. The only hard and fast rules are “no profanities in titles” (which I’ve broken a few times) and “don’t put Kevin in any legal jeopardy” (which I’m far more careful about).

Personally, I have a few more rules. For me to discuss a topic, it has to be something that 1) I know a bit about; B) I find interesting enough to write about; III) I think I can make interesting for at least a good chunk of the readers; and d) I can find something original to say on the matter.

For me, discussing the bailout package fails on all four counts. I am no expert on macroeconomics, I find the matter too convoluted to get a good grasp on, I don’t think I can get past that enough to keep folks interested, and I don’t know enough to offer anything original or insightful on the matter.

(Yes, I know, there are about a dozen or so folks lined up to say “that’s never stopped you before!” There, I said it, so you don’t have to.)

When it comes to matters like this, I have a fairly simple rule: I look at folks who have a proven record for being right on the matter, and tend to defer to their judgment.

In this case, it’s fairly easy. John McCain and a few other Republican senators (including my own senator, John E. Sununu) called the collapse of Fannie Mae and Freddie Mac several years ago, and tried like hell to bring about some reforms. President Bush also tried to enact some changes, warning that what just happened might come to pass. They were stymied by Congressional Democrats, led by folks like Chris Dodd and Barney Frank, who managed to block the measures and insisted that there was no danger to those two institutions.

So, how do I feel about the bailout package? My gut says no.

I have never liked the idea of the government intervening to protect people from the consequences of their own bad decisions — the right to fail is one of the most underestimated rights we have. If we do not run the risk of failure, we can never truly appreciate our successes. Further, if we do not allow people to fail, then we run the risk of ever allowing them to learn from their mistakes and avoid similar failures in the future.

I don’t think there are very many real “victims” in this crisis. Most folks, I think, either knew they were taking chances or should have known, and were more than willing to play along and collect the potential benefits. I don’t believe in “privatizing profits and socializing risks,” as the phrase goes.

I also find the argument that certain institutions are “too big to fail.” From my spam-fighting days, I remembered the saying that “if you’re too big to act responsibly, you’re too big.” That lesson seems to apply here, too.

On the other hand… could things get as bad as some folks predict? I dunno.

I think I’m going to wait and see what folks like President Bush and Senator McCain and Senator Sununu have to say, as well as their critics — giving extra weight to the former, who have already proven their accuracy pretty well.

I know, it’s a bit of a wimp-out to pass the buck this way. But as the saying goes, “a little knowledge is a dangerous thing.” I simply don’t know enough to offer a more informed opinion, and — at least some times — I’m not willing to try to BS my way through things. This is one matter where I’m more than willing to defer to those who’ve proven they know more than I do.

Palin, Biden and the Importance of a Firm Base
Bad Career Move
  • GarandFan

    Right on JT! Having a BA in BusAdmin I had to sit through enough accounting classes to learn to watch those bean counters like a hawk. Liars figure and figures can lie.

    I’m in no rush to bail out those bozos. Far as I’m concerned they can all declare bankruptcy and start devaluing assets. Then they can face their shareholders and hope their not taken outside any lynched.

    Then those assholes in Congress who allowed this to happen should be kicked out on their fat asses. Don’t see that happening what with all the kool aid drinkers in the Democratic party.

  • Larry

    Jay:

    I am still waiting for mantis to answer my rebuttal on free speech. So far, he continues to dodge the issue.

    That said, I have posted several diatribes on the economy in a couple of places, boiling it down to simple and understandable things that all of us can understand.

    It is all about liquidity. Almost no business can operate without some level of credit. GM can’t, McDonalds can’t, heck, even Microsoft just borrowed money.

    Without liquidity, you can’t buy a car unless you have cash. You can’t get a mortgage, which freezes the real estate market. You cannot operate a business and even credit cards will possibly be frozen.

    The reasons we will have a problem with liquidity is simple and complex. It has taken me three days to get even a fingernail under the problem. Leave us just say that when banks quit lending to each other, there is a problem, and they have. Banks are required to have reserves, they don’t have enough so they are hoarding cash.

    The real cash world wide is tied up in reserves and revolving instruments of varous types, and most of our global wealth is tied up with investments. To cash out an investment, there has to be someone with the cash to buy us. Right now, the US is bankrupt and has been for years. The only thing keeping us afloat is that certain sovereign wealth funds continue to buy our paper. They don’t so because they love us, they do so because there are only so many places they can park their excess money, and by lending it to us, we keep buying their stuff, whether oil or Barbi Dolls or Toyotas.

    Real money is drying up.

    Without real money, our world economy grinds to a halt. So we have to have a bailout plan of some sort. You can argue the details, but you cannot argue the outcome; restore liquidity.

    Any other argument leads to a depression.

  • mantis raises a very interesting point about this obscene bail out proposal because it appears that the bailout is bringing together obscenely disparate groups, that is to say liberals and conservatives.

    In this case, and this case only, I find myself squarely on the side of obscenity for the reasons below, but bear with me for a moment. This bail out is ridiculous, grossly political and will probably result in no serious consequences for the folks most responsible for it. Widely read publications such as The Wall Street Journal and Barron’s Magazine have been predicting this outcome for years.

    However, this is no time to be pointing fingers. Yes, I want to see some heads on a pike after this is over. I want prosecutors to put this debacle under the microscope and prosecute with an ENRON type zeal any wrong doing.

    But more than anything else, I want to Congress to make sure this never happens again because, among other reasons, $700 billion is just the starting point. That number will grow. And the tax payers will have to pay every dime of it. There will be no recovery if the present proposal is passed because Treasury is asking for authority to pay the banks their original cost (euphemisms for what they sunk and will otherwise never get back) and legal authority to by pass US law to collect the loans that went bad. A note on the latter point: if you are a lender and you want to be repaid, you must follow the law to show proof of your claim to repayment. The US Treasury is asking Congress to give them a free pass on this “proof of claim” because Treasury knows that many of the boneheaded bankers who bought these loans didn’t bother to confirm the PROOF OF CLAIM.

    So, we are being asked to bail out not only the boneheaded bankers but their boneheaded lawyers also. Just so readers know, this kind of crap (I’m being polite) would never get past a Federal Bankruptcy Judge. Said Court would tell the lenders and their stupid attorneys to stuff it.

    But I digress….I said above I was in favor of this obscene bail out. Here is why:

    Without it, short term liquidity in our economy will disappear entirely (it is hard to find now, but it will be inexistent on Friday night if the proposal does not pass). What does this mean for you, one might ask. As a wise person once phrased it to me, here is the Banquet of Consequences.

    A) Credit card limits frozen at their current level…forget about accessing any “available” draws.

    B) Home equity lines of credit (see A above)

    C) No student loans anywhere, everywhere….period. banks will not be able to sell them.

    D) Forget SBA loans….banks will not originate them.

    E) Borrowings against common stock holdings in brokerage accounts frozen…and any outstanding balances are called for immediate repayment. If not repaid, stock is sold to cover loan…that’s a lot of selling folks.

    F) Bank issued revolving lines of credit to business will be frozen (banks will have no funds to advance)

    G) Money market funds (which many naively believe are as safe as bank accounts) will not be redeemed at $1.

    H) The stock market will not just go down…it simply won’t open.

    I could go on with the disaster scenario but why bother? Americans can get pissed and wish whatever calamity they desire on the perpetrators of this disaster but that will not change the fact that the US financial system can not be brought to a halt.

    Congress needs to authorize this plan. The consequences of not doing so are worse than most can imagine.

  • jp2

    “Personally, I have a few more rules. For me to discuss a topic, it has to be something that 1) I know a bit about”

    Boy, what are your specialties then? You write about the war often – which I don’t need to remind you on how wrong you have been, often.

    Seriously – what training or education have you had that makes you qualified to write on anything? Maybe there is a biography page that links to your CV?

  • Brian

    I look at folks who have a proven record for being right on the matter, and tend to defer to their judgment.

    President Bush also tried to enact some changes, warning that what just happened might come to pass.

    Is that so?

    Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.

    Also…

    The crash of the housing market will not be pretty. It is virtually certain to lead to a second dip to the recession. Even worse, millions of families will see the bulk of their savings disappear as homes in some of the bubble areas lose 30 percent, or more, of their value. Foreclosures, which are already at near record highs, will almost certainly soar to new peaks.

    In this context, it’s especially disturbing that the Bush administration has announced that it is cutting back Section 8 housing vouchers, which provide rental assistance to low income families, while easing restrictions on mortgage loans. Low-income families will now be able to get subsidized mortgage loans through the Federal Housing Administration that are equal to 103 percent of the purchase price of a home. Home ownership can sometimes be a ticket to the middle class, but buying homes at bubble-inflated prices may saddle hundreds of thousands of poor families with an unmanageable debt burden.

    Is this the “judgment” and “proven record for being right” to which you’re deferring?

  • Larry

    Oh stuff it JP2, while you are nattering away over inconsequential stuff like whether Jay is good at what he does, he addressed a serious and potentially devastating situation that involves all of us, including you no matter where you live. Your comment was pointless and retarded. Get a life. Better yet, grow a brain. Sheesh, what an idiot.

  • Brian

    But more than anything else, I want to Congress to make sure this never happens again

    Congress needs to authorize this plan.

    What about this plan makes sure this never happens again?

    Bailout or not, one of the main flaws with this plan is that it is being crammed through with little attempt to ensure that the plan has any oversight or is going to be effective. It seems that the only thing the administration will ensure is that the effects of not passing the plan will be dire.

  • LaMedusa

    Seriously – what training or education have you had that makes you qualified to write on anything? Maybe there is a biography page that links to your CV?

    And the point of your question? I’ll bet you have a whole slew of diplomas telling everyone what an expert you are at “something”, as well as a phenomenal writer. Evidently, your ghost writer has a lot of people fooled.

  • LaMedusa

    Larry~

    jp2 likes to waltz in here and act like he owns the place. Maybe someone pays him to “act” stupid, as well.

  • jp2, if EVER I had pulled the “appeal to authority” ploy, stating “believe me, because I’m an expert,” then your comments might be marginally relevant.

    Instead, it’s just another attempt by you to change the subject to denigrating me — which I always take as an admission that you can’t refute what I say. And this one is even lamer than usual.

    In brief: thanks for the reminder that you’re a worthless, brainless idiot. We are always getting new readers, and they could use the primer.

    J.

  • Talk to me about oversight, Brian.

    You mean this guy?

    http://news.bostonherald.com/news/opinion/op_ed/view/2008_09_23_Better_not_bank_on_Barney_Frank:_He_brought_the_(fiscal)_house_down/srvc=home&position=recent

    Let’s talk about oversight. Start with Raines, Gorelick and Johnson.

    This is a bi partisan problem but if you want to point fingers then have at it. Dems are knee deep in this. And The Nation has never offered a solution to anything.But since you use them as a source I’ll consider every opinion page that agrees with me as authoritative.

  • Larry

    Brian:

    Here is a test.

    Try your best to give ALL of a quote, not just selected parts. Yes, home builders and the National Association of Realtors (left that out) joined – here is the test – with WHO, to block not only s191 but Bush’s proposals and Dole’s and a host of other elected and unelected folks who were screaming and predicting and trying to get a fix.

    Home builders and Realtors have enormous clout in Washington. Who else had that level of clout to kill ANY reform? I know the answer, do you?

    Brian, I am tired of being nice to guys like you and Lee Ward, who cherry pick facts to make your dubious point. Yea, and I don’t like it much when the Republicans do the same thing. And I am going to stop being nice to them either.

    Knowingly telling a half truth is the same as lying. Are you part of the mainsteam media? Do you think that lying to help Obama is a good idea?

  • Larry, I’ll take a whack at that. Is it ACORN?

  • Son Of The Godfather

    jp2,

    Jay has bravely admitted that, like many of us, there are things that are beyond his scope of knowledge.

    Along with being a lifelong Democrat who will vote McCain/Palin this election, I am also an expert in military affairs and political science.

    Jay has been spot on with his war and political analysis.

    You have not. In fact, the freshman-level “debate” style you use shows your ignorance and grasp of simple topics. Its tantamount of holding up a tanning reflector when you’re getting shot with lasers from all sides.

  • Larry

    One other point and I will shut up for a while until maybe mantis or brian responds.

    It bothers me that I get scored higher for calling someone an idiot (who deserved it) than for opining on how we got into this mess and what outcome we need to get out of it. To rank higher in the esteem of those who read and comment, should I stop being thoughtful and just start calling people bad names?

    For me, I believe that Jay leads a great crew who do some great writing that deserves a reply that either adds content or applauds the effort that I know goes into what they do.

    Now for the final, final; It looks like Obama is going to Washington, not as Mr. Smith, but instead, to lend his voice to a deal that is pretty much done. Frankly, we have a lot of people to thank for this, including John McCain, who went out on a very fragile limb to muscle the Republicans into forgetting ideology and blame shifting and concentrating on how to do business.

  • Larry

    Oyster, no, not Acorn. Most of those guy’s political power comes from getting out the ghetto vote. This is how they get funding so relatives can steal from the cookie jar. Past the funding and the ghetto vote, they have no further interest I can see.

  • Larry, they go far beyond getting out the so-called ghetto vote. And they’ve been at it http://www.city-journal.org/html/10_1_the_trillion_dollar.htmlfor a long time.

    But I’m still interested in who you’re talking about.

  • But for now, I’m off to bed. I’ll check in in the morning.

  • Just John

    What concerns me is the lack of concern about how the bailout will be paid for.
    Increasing the debt ceiling from 10T to 10.1T?
    That’ll keep driving the value of the dollar down. Which means oil will be getting more expensive. (Imagine the price in euros or CAD.)
    That increased debt will also be inflationary.

    Liquidity problem? Try raising interest rates, see if that frees up some capital.
    When steering the ship of state, gentle turns are better than sharp ones.

  • On the way home from work, I started by listening to Michael Savage. I know, I know. He mostly infuriates me too, but it keeps me up. Interestingly, he was against the bailout. Mostly because he thinks it rewards the rich guys.

    Then I went the other way and started listening to Pacifica. I know, I know, they mostly infuriate me too, but it keeps me up. Interestingly, they were also against the bailout. Mostly because they think it rewards the rich guys.

    Whaddaya know, bipartisan agreement.

  • Brian

    Try your best to give ALL of a quote, not just selected parts.

    What the hell are you talking about? I quoted entire, complete paragraphs (with unnecessary background info from the second quote replaced by ellipses for brevity), and I provided links to my sources. How you can interpret that to be “not all of a quote, just selected parts” requires explanation.

    Yes, home builders and the National Association of Realtors (left that out)

    No, it wasn’t in the whole, complete paragraph I quoted, but it was in the link I provided. What, do you need me to copy and paste the entire article for you?

    Regardless, it’s no matter. It doesn’t matter who was against it. The point is that it was a proposal coming from Bush.

    Brian, I am tired of being nice to guys

    This is you being nice?

    who cherry pick facts

    Please, if you have some missing facts in the links I provided that turn my excerpts upside down, please share them, oh Font of All True Knowledge.

  • Brian

    Talk to me about oversight, Brian.

    OK.

    Sec. 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

  • This situation is difficult for those of us who are conservative and those of who are responsible. Any fiscal conservative is inherently opposed to the idea of bailouts. Responsible people are angered at the idea of the irresponsible being let off the hook of consequences for their actions/decisions.

    However, despite those concerns I’m tepidly leaning towards supporting the Paulson plan. Hugh explained the ramifications and they are the problem. Do we do the “right” thing and bailout no body with seemingly catastrophic results? Or do we take action that seemingly rewards bad/stupid behavior but mitigates the dangers?

    We are missing moral hazard here. Someone needs to feel pain. CEO’s, CFO’s, VP, etc of these companies past and present need to be prosecuted and forfeit all bonuses. People who attempted to steal homes need some action. Possibly a permanent credit unworthiness warning on their credit report. Some people need to just stay renters because they are not trustworthy enough for major credit.

  • Larry

    Brian, I was a bit, uh hmmmm, (sounding like Obama); I baited you.

    Anyway, for Oyster and Brian, here is the deal:

    Federal Housing Enterprise Regulatory Reform Act of 2005 – Jan 26, 2005

    http://www.govtrack.us/congress/bill.xpd?bill=s109-190

    Hagel was sponsor and co-sponsors were Dole, Sununu and McCain, who apparently decided to co-sponsor several months after the bill was first proposed. Hat tip to dailykos (yes, it was really them). It is not uncommon for a Senator to co-sponsor well after a bill has been introduced if they want to help get it passed.

    Action by the committee: Jul 28, 2005: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably. This means it can be voted on by the full Senate. Why wasn’t it?

    Go read the summary at govtrack to see what it would have done.

    Who killed it?

    The answer is simple. Two forces killed it, lobbyist and the Democratic minority in the Senate. I haven’t researched the exact path of the similar bill in the House except that Frank didn’t like it.

    First of all, there was a straight party line vote to get it out of committee. The Republicans all voted YES and the Democrats all voted NO.

    This is always a signal in the Senate that a bill has no chance at all of getting past the 60 vote barrier. Because of Senate rules, it really takes 60 votes to kill debate, which means the minority has more power in the Senate than they do in the House.

    Secondly, the Home Builders and Realtors pitched a wall eyed hissy fit all over the bill. Both of those self serving groups have a ton of power in LOCAL politics, where is where the rubber meets the road for getting elected and staying that way.

    And of course Fannie and Freddie lobbyists went bonkers.

    Now who orchestrated the kill besides the usual lobbyist suspects and the straight line party vote? I have seen all sorts of speculations, but the most credible says Chris Dodd, Clair McCaskill in the Senate and good old Barney Frank for the House version.

    At the time, Frank thought this was an attack on loans for those who deserved to have affordable housing at decent interest rates. This has been a common theme for Frank over the years. He means well, no doubt.

    Here is the point. If you study the way the Senate works, if even ONE Democrat Senator had voted aye, the Republicans would have put more effort into getting it passed.

    Not one single Democrat voted aye, not a single one.

    For oyster and brian, there is the truth, the whole truth and nothing but the truth with nothing left out so far as I know and even a hat tip to dailykos for facts.

    See brian, sorry, it isn’t enough to go read some article in a biased paper or magazine or online blog. The level of half truths and non-truths is incredible in what passes for media these days sucks. I was picking on you because you swallowed a half truth whole that fit your version of reality. And I will admit that I have made the same mistake and probably will again.

    Again, two, count ’em, TWO forces killed this bill; A straight party line Democratic vote in committee of NO, and a hail storm of lobbyists beating everyone up.

    And one further detail. Without passage of that bill, the Bush administration had their hands tied in terms of regulating the garbage, IN MY OPINION.

  • Larry

    Brian:

    Good point, you are learning;

    “Sec. 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

    This is called “Bait.”

    That sorta is like “Chum,” which means things like tee-shirts, cuff links and all with some Presidents particular variant of the logo on them. I have some from Clinton years. I used to wear them when I went to China on business. Every single Chinese noticed them but said nothing. The level of polite increased, which is why I wore them. It is all about appearances.

    Anyway, I digress.

    That clause had zero chance of passing, none, nada, not in this lifetime. It was placed there to give the Democrats, the Majority Party in Congress, something to posture about and change. I would bet dinner at Ruth Chris that the clause will never fly and that it was never intended to get off the ground.

    Got it?

    Suggestion, get cynical about BOTH parties and BOTH candidates, it helps in understanding the political process.

  • Larry

    largebill:

    Good one. It is the aftermath that is going to get interesting. If the Dems win, the investigation will focus on wall street. If the Repubs win, it will be a free for all on everyone, in my opinion. McCain doesn’t love any of them with a very few exceptions and Palin likes to beat up the good old boys. And frankly (oops, FRANKly), there are some very deserving targets sitting on their fundaments in Congress.

    That is reason enough to vote for McCain/Palin, imho.

  • Brian

    Anyway, for Oyster and Brian, here is the deal:
    Federal Housing Enterprise Regulatory Reform Act of 2005 – Jan 26, 2005
    Hagel was sponsor and co-sponsors were Dole, Sununu and McCain


    Again, two, count ’em, TWO forces killed this bill;

    OOOOOK, then. Gee, thanks for the lengthy treatise on something that no one mentioned. You must really impress people at parties with your knowledge of that act. Of course, it fails as a response to evidence that Bush was responsible for HUD policies that contributed to the later housing crisis. And it fails as support for the original assertion that “Bush also tried to enact some changes, warning that what just happened might come to pass”. But I guess it succeeds at feeding your ego.

    Here’s your final grade.

  • Brian

    That clause had zero chance of passing, none, nada, not in this lifetime. It was placed there to give the Democrats, the Majority Party in Congress, something to posture about and change. I would bet dinner at Ruth Chris that the clause will never fly and that it was never intended to get off the ground.

    Oh yeah. Take, for example, other “fake” attempts by the Bush administration to cloak things in secrecy. Those nutty guys! Why, they never act like they were serious about them, right? I mean, those warrantless wiretaps were reviewed by the courts, challengable, and they were held totally accountable! If there’s one thing the Bush presidency is known for, it’s being easy pushovers for accountability and court reviews. Why, I bet that Sec. 8 drops out on its very own before anyone even notices it’s there!

  • Larry

    Brian:

    “Of course, it fails as a response to evidence that Bush was responsible for HUD policies that contributed to the later housing crisis.”

    Prove it. As I have said over and over and over, if you paid attention, there is lots of blame to pass around for both Republicans and Democrats. You posturing as if it is all the Republican’s fault demonstrates an impoverished critical thinking facility.

    “And it fails as support for the original assertion that “Bush also tried to enact some changes, warning that what just happened might come to pass”.

    Awww gezzzz Brian, do I have to make you look like a fool AGAIN? Go do your research and quit quoting talking points.

    I baited you with the simple truth. The Dems killed a bill that would have helped avert the current crisis. Lobbyists were also opposed.

    And your reposte was based on feeding my ego. Thanks, but no thanks, I don’t need the bridge.

  • Yeesh. Does NOBODY here read BigLizards?

    The bailout is NOT A BAILOUT. It is a plan to buy up the illiquid Residential Mortgage Backed Securities that have been “infected” with subprime mortgages. Once they’re bought up, the govt will dissect them, remove the subprime parts, then auction off the rest, repackaged as good RMBS. They’ll at the least make back the debt they added.

    It’s amazing to see everybody say “This is terrible! It’s the next Depression!” But as soon as a plan shows up, everyone says, “Oh, it’s not so bad. It’ll be good for that greedy ol’ market.”

    Go read the September 22 post at BigLizards, the blog written by conservative and SF author Daffyd ab Hugh. It’s the most jaw-droppingly clear explanation of the crisis you’ll ever read.

  • Brian

    if you paid attention, there is lots of blame to pass around for both Republicans and Democrats.

    I didn’t say there wasn’t.

    You posturing as if it is all the Republican’s fault

    I am? Where did I say that?

    The Dems killed a bill that would have helped avert the current crisis.

    Let’s go with your view. It’s relevant how?

    Ahh, I think I see the problem. You apparently read something somewhere else that has nothing to do with me, nor anything I’ve said, and in your ego-driven fervor you thought that choosing a random unrelated comment of mine to unload in was the right place for you to dump your baggage.

    Here’s a reminder. Jay said “Bush also tried to enact some changes, warning that what just happened might come to pass.” I showed where Bush did the opposite. If you want to rebut me on something I actually said, you’re welcome to. Otherwise, I hope your lengthy manifestos provide your fingers with good exercise.

  • Brian

    OK, clearly I missed a “close italic” tag up there.

  • Why does Brian’s argument seem to reduce to “it’s the Republicans’ fault for not trying hard enough to fix it, but we can’t blame the Democrats for stopping them?”

    J.

  • jpm100

    Yeesh. Does NOBODY here read BigLizards?

    The bailout is NOT A BAILOUT. It is a plan to buy up the illiquid Residential Mortgage Backed Securities that have been “infected” with subprime mortgages. Once they’re bought up, the govt will dissect them, remove the subprime parts, then auction off the rest, repackaged as good RMBS. They’ll at the least make back the debt they added.

    Yeah, when backlash against the blank check started to form, the meme this bailout is not a bailout started to form. The term was fine for over a week until people started to question it.

    As for us making our money back, even if we can sell off the good parts it assumes that they will gain value in the near future. Specifically that housing starts climbing again. The bad parts, go where? Into the ether?

    Those mortgage back securities required that the housing market never downturn. That was just stupid. Just think of it. An investment backed by an IOU. An IOU that people often walk away from when times get tough. Brilliant. At a minimum, consumers could have been judicious about which mortgages went into these securities they bought. But there was more money to be made by taking them all. If that option was regulated away, then caveat emptor and the market should never gotten as big as it did.

    If we need these mortgage backed securities, including the bad mortgages, in order to keep the economy running, we have deeper problems with our economy than this fiasco.

  • I’ll admit that I’m one of those who doesn’t have a complete grasp of the economics of this, but I do have a question/issue. We STILL have Democrats, while they too seem to finally show concern for the issue, regardless of who caused it, that are pushing mightily hard for part of the solution to be keeping these people in their homes. How in the hell can that be part of the solution when it is part of the problem?

    We all want those responsible to be held accountable, but for me, that includes getting rid of the many people who were irresponsible in their home purchases who WON’T suddenly become responsible. I’m concerned that Democrats (they are the ones pushing to add such legislation to it) will only dilute the solution.

    Am I wrong in assuming that keeping these people in these homes will only perpetuate the problem? Unless someone was a victim of out and out fraud, it is my contention that they should just become renters again.

  • And Larry, the reason I put forth ACORN as a name in this is because they worked, in low profile form, on the sidelines using the CRA as a cudgel to beat over the heads of banks and lenders to keep them from expanding business into certain areas unless they guaranteed large amounts in loans to low-income people AND contributed sums to their group.

    So no, they apparently weren’t instrumental in killing S.191 but they had a vested interest in it dying on the vine. It doesn’t take a rocket scientist to figure they bent the ear of many a politician with their own influence. In fact part of the Fannie/Freddie bill was to prohibit giving federal housing grants to any group that participated in voter drives. Namely ACORN.

  • WildWilliew

    This mess is in the democratic leaderships resume. They did NOTHING of any consequence that would benefit this country. Conservatives and independents know this. ww

  • Churt

    Jay,

    Where is the mantis vs DJ argument posted?

  • Mac Lorry

    The economy is not one of McCain’s strong points and with the economy in the headlines daily, McCain has taken a dive in most polls. McCain is trying to show leadership in getting corrective action passed by Congress, but the Democrats don’t what to hand McCain a win in an issue were Obama is ahead and gaining.

    McCain has accused Obama of being willing to lose a war to win this election. True or not, that raises a similar question. Are the democrats willing to lose the chance to save us from a depression in order to win this election?

    The confounding factor is that there’s overwhelming grassroots support to let the system collapse. Maybe these people really believe it’s not going to hurt them or that Congress can somehow put the system back together after the crash.

    The only good I see coming out of a collapse is that the Democrats will get their own Herbert Hoover and in 2012 Republicans can run on a new deal platform.

  • Larry

    Dafydd does as good a job as anyone can to put the mess into understandable terms.

    http://biglizards.net/blog/archives/2008/09/democrats_try_t_1.html

    Dafydd is a writer and as an SF writer, he is pretty good at explaining stuff in easy language. I wish S.M. Stirling would in on this as he is a good historian and could add even more, in my opinion.

    Adding one thing: The Community Reinvestment Act of 1977 (Jimmuh Carter) forced investment grade on the less worthy (as investments) loans, with help from Clinton. Members of Congress have worked hard to keep it that way and even expand the program. Most, but not all, of those Congressional critters, are Democrat.

    And they know it.

    This is why the Republicans want the Democrats to stew in their juices; drag their heels and hope the public gets the knowledge base to understand that the Democrats are the ones who REALLY screwed the pooch. The Democrats want a bailout at any cost to cover their tracks.

    Paulson is the one who got in touch with McCain through another Senator and asked him for help IN WASHINGTON and McCain dropped everything to go help. McCain can’t help it. It is who he is and why, in spite of (oh never mind), I am going to vote for him.

    So I get this picture of McCain riding to the rescue of Democrats and Obama and all the gratitude those jerks are showing. The headlines should read, “Bush and McCain Bail Out the Democrats,” but I won’t hold my breath until I see it.

  • Larry

    Oh, and MacLorry, it is the Repubs that stand in the way, not Democrats. That bunch, especially Barney Frank and Chris Dodd, wants the bail out with face saving admendments, to cover their dirty tracks all over why we are in this situation.

  • Mac Lorry

    Larry,

    Maybe, but the Democrats could also be looking kill the legislation with poison pill amendments in order to keep the issue alive. The way to tell in this case is to watch and see if after Republicans agree to the initial round of amendments the Democrats add on even more. If we see that then we know the Democrats are willing to lose the chance to save us from a depression in order to win this election.

  • Larry

    True Mac, true. . . And sad. But what do you expect from ideologs who don’t get it?

  • Brian

    Why does Brian’s argument seem to reduce to “it’s the Republicans’ fault for not trying hard enough to fix it, but we can’t blame the Democrats for stopping them?”

    Umm, because you can’t read?

    Your argument: Bush warned us and tried to stop it.
    My argument: No he didn’t, he contributed to the problem.
    Your/Larry’s rebuttal: Well, the Democrats contributed too.

  • mantis

    The big question for me right now (I wrote that email to Jay on Monday), since it seems a foregone conclusion that the taxpayers are getting stuck with the bill here, is the same as Peter Orszag’s: “What are we buying and what are we paying for it?”

    Seems a reasonable question to me, and while the answer seems obvious on its face (we’re buying bad mortgage securities, silly!), the fact is we have no idea the actual value, or price, of what this money is going towards. All we know is we’re giving a big check, now thankfully with a few strings attached, but strings attached to shit are, well, worthless.

    I am still waiting for mantis to answer my rebuttal on free speech. So far, he continues to dodge the issue.

    Sorry Larry, I probably shouldn’t have responded at all to your original comment about WGN, as I had no desire to get into a long debate about it. It was more of a one-off response amidst a different conversation, and while I kept meaning to get back to it, controversies over people calling in to radio stations is not exactly at the top my list of important things to care about. Maybe I’ll look into it this weekend or something.

  • Mac, speaking of poison pills; Harry “Poison Pill” Reid is on it while all eyes are focused on another problem.

  • twolaneflash

    This financial disaster is the consequence of a series of Marxist laws that started with redistribution of wealth, metastasized into a massive criminal fraud against decent Americans, enriched the robber barons along the way, bought the best Congress money could buy, and brought Barack Obama within a breath of the Presidency. The Soviets could not have laid a more elegant plan to Communize America. Good work, Supreme Soviet of America. What Kruschev could not, you can. Yes you can. This “bailout” is feeding bullets to the enemy.