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OK, I'm For The Bailout

Well, I've finally found a way to have a semi-informed opinion on the bailout package, and I'm for it -- reluctantly. And it was the Democrats who have convinced me.

From the outset, the Democrats have failed what I like to call the "Reynolds test" -- "I'll believe that there's a crisis when the people who say it's a crisis start acting like it's a crisis." If you listen to the Democrats, then you might think we're on the verge of another Great Depression. But if you look at what they do, not what they say, then the hysteria fades a bit.

When the bailout package was first being kicked around, Senate Majority Leader Harry Reid tried to sneak into law an extension of the ban on developing shale oil. He was hoping that no one would be paying attention to a very innocuously-worded amendment to the Homeland Security Appropriations Act.

Then, when the bill itself was being crafted, Democrats tried to write in a subsidy to groups like ACORN and help even more people who probably shouldn't buy houses buy houses. Paying off one's allies is a time-honored partisan tradition, the kind of thing that really ought to be set aside when there is a real crisis.

Also, the House Democrats pretty much pissed all over the Republican minority at every opportunity. They set up a meeting to work out details for the bailout package, but pointedly excluded the Republicans from the meeting. Then they denounced them for not showing up to a meeting where they were not invited.

That was the kind of thing that led to John McCain getting personally involved. He inserted himself into the negotiations process and demanded that the House Republicans be given a seat at the table. That led to a lot of compromises (including the ACORN provision that had me -- and a lot of others -- infuriated), and everyone thought would pass.

And then, just before the vote, Nancy Pelosi couldn't control herself. She gave a speech on the House floor and laid the whole blame for the current financial problems on the Republicans, lock, stock, and barrel.

At that point, apparently, enough Republicans said "screw this, we ain't going along if we're gonna keep getting pissed all over" and chose to vote against it.

So, to me, it seems abundantly clear that the Democrats don't see the current situation as a crisis, and are acting like everything is business as usual. To me, that says -- far more clearly than their words -- that they don't think things are anywhere as bad as they say they are.

And that is what convinces me that things are far worse than they think.

Because the Democrats have been consistently wrong on the whole situation, and have been for years. There is no end of videos of leading Democrats praising Fannie Mae and Freddie Mac's stability, of their performance, defending the leaders (most notably Franklin Raines and Jim Johnson), and thoroughly denouncing and scuttling numerous attempts to head off the problems that have started to come to a head in the past month or so.

It's a kind of negative evidence, but it's persuasive to me: the Democrats have a solidly established record of being utterly and completely wrong on the whole mess. They are now acting as if the situation isn't so bad, and are still far more interested in playing their run-of-the-mill political games with the whole process. If they are still wrong (and the odds are highly in favor of that conclusion), then we are in real trouble and the bailout that they don't seem to care about whether or not it passes is probably a necessary evil.

Thanks, Democrats. You've saved me at least a couple years of thorough study of macroeconomics and high finance and the nuances of our financial system (which I find incredibly tedious -- serious MEGO territory for me, almost as bad as polling) before I could render a truly informed and educated opinion.


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Comments (44)

The Dems have been p... (Below threshold)


The Dems have been playing political games with this problem from the beginning. As Jay pointed out, what does a ban on offshore drilling or creating a sinecure for ACORN have to do with the immediate "crisis"?

Voters need to understand something that occurred today that is getting little play in the news....The Fed came to the rescue today. Did you know that? Did Paulson tell you? Bush? Pelosi? Frank? Didn't think so.

While the House rejected the $700 billion dollar plan, the Federal Reserve injected $670 billion into the banking system. That's a record that makes Ruth's homerun record look small. The way the Fed historically performs this task is to purchase government securities held by banks. That was in the old days. Banks don't have that much in the way of government securities left on their balance sheet. So what were the banks exchanging for this historic load of cash from the Fed? Maybe the same thing Paulson was proposing to buy if he got approval from Congress?

This is the story of the day.


My head just exploded.... (Below threshold)

My head just exploded.

Still not buying this pig, ... (Below threshold)
Paul Duffau:

Still not buying this pig, Jay. When I see some evidence that: A) The fiscal control needed will be present to prevent Pelosi, Rangel and company from feeding at the trough; and, B) the focus stays narrowed to the crisis point - not to ACORN, bailing out small governments who have over promised benefits for years or any other diversion from addressing the problem that Congress created.

It doesn't work like a negative endorsement. With the endorsement, you have data points that are consistent. Here we have the same people that created the problem saying they have the fix for it.

It's not if they are wrong, it's what are they wrong about? Wrong about playing politics or wrong on the bill? I go with the latter.

Not funny. These assholes p... (Below threshold)
Mark:

Not funny. These assholes play this game with our soldiers lives... there is no end to what they will do, in fact have done, with the money.....

You forget that they will also be implementing this "plan."

I think a taxpayer revolt is in order.

Gotta ask...Are yo... (Below threshold)
Clint:

Gotta ask...

Are you sure they really think it's not that bad? Or do they just think they can lay all the blame at the feet of the Republican Party if they blow the country up?

JTYou think it is a ... (Below threshold)
Wayne:

JT
You think it is a crisis because the Dems are acting like everything is business as usual. I agree that the Dems have a long history of being wrong on many things. However their "acting like everything is business as usual" while claiming a crisis are more often non-crisis situations as true crisis situation.

Jay,As I (uselessly)... (Below threshold)
Codekeyguy Author Profile Page:

Jay,
As I (uselessly) pointed out to Lee Ward, the bill needed 218 votes to pass, and the Democrats had 140 yeas and 95 nays. Last time I looked, that was 235 dems there. He's still blaming the Republicans. He's like a broken record.
Rant off/

There's got to be a better ... (Below threshold)
GarandFan:

There's got to be a better way. Paulson is in Wall St Panic Mode and Nancy's off her rocker.
I would not vote yes on anything Barney Frank and Chris Dodd have their hands on.

Conservatives have good rea... (Below threshold)

Conservatives have good reason to worry. The 'end game' for so-called "respectable" liberals is much worse than any bailout. They caused the crisis, and now they use it to advance their quite radical Leftist agenda.

http://conaffredux.blogspot.com/2008/09/jeff-jacoby-is-true-conservative.html

(Please pardon the disgraceful self-promotion - I'd link to someone more respectable, but I just don't see anyone else paying attention to this.)

I would not vote y... (Below threshold)
LaMedusa:
I would not vote yes on anything Barney Frank and Chris Dodd have their hands on.

One of the smartest things I have read today.

Well, as long as you are a ... (Below threshold)
ptg:

Well, as long as you are a reluctant Marxist dupe...

This is the absolute DUMBES... (Below threshold)
stevo:

This is the absolute DUMBEST DAY in American politics in my lifetime...(54)

I listened a few days ago t... (Below threshold)
Shirley:

I listened a few days ago to Warren Buffet's newscast interview about this very subject. I did not buy into Bush's appearance on television. His last comments were encircled with a grin -- I found it wanting. But Warren Buffet I believe. He is hard working and honest and smart when it comes to business. He said we absolutely need this to avoid going over "a precipice". I have no doubt that's exactly what will happen should this bailout not occur. Put something MORE in it for the mortgagors and then it will pass. But pass it must.

Stevo, similarly 54, and yo... (Below threshold)
David:

Stevo, similarly 54, and you are right.

I think you need a little m... (Below threshold)
Anon Y. Mous:

I think you need a little more time to convalesce. :)

Strip out the opening paragraph as well as your conclusion, and you look like you might be on the right track.

I like the point Steve Schippert makes in the post just prior to yours:

For instance, there has been no discussion on addressing the irresponsible Congressional mandates on the financial industry which caused this problem in the first place. This means that a primary impetus to the current crisis remains.

Even if Congress did correct the root of the problem, I'm unconvinced that a bailout is going to do more good than harm.

ShirleyI listened to... (Below threshold)

Shirley
I listened too to Warren Buffet's interview. I, too, am a fan of Mr. Buffet.

He's not just hard working and honest and smart; he's shrewd and always on the lookout for a very good investment.

Shirley, Warren Buffet is not running for office. He's not a public official. He is a private investor in every capitalistic sense of the word. So, while he's a great guy, he's not responsible for looking out for your best interests. He looks out for the interests of Berkshire Hathaway, which, if you are not a stockholder, means he is looking out for himself and not you.

Bailout? Who in the heck i... (Below threshold)
bob randolph:

Bailout? Who in the heck is going to buy me out. I am doing the right thing and paying my large mortgage on a fixed note. But why should I be penalized by doing the right thing. If they pass this bailout, why should I keep paying on a mortgage that has a net worth of over -$190,000. They want to give bankruptcy judges the right to renegotiate mortgages? Why shouldn't I give my house back to the bank. Althought I was not a direct victim of predatory lending, but it sure overinflated my mortgage. It is a tough call for me. I can buy another house in two years? Hell, that sounds better than being over $200K in the hole and seeing the same house in my neighborhood selling for half what I paid. Pass it, and I will give it back.

Good for Congrass. Let the ... (Below threshold)
H. Lee:

Good for Congrass. Let the elitists eat that mud sandwich. When you practice false economics this is what happens. May be some of those on wall street might think about jumpint out of the window.

President Bush needs to FIR... (Below threshold)
Sharon Fletcher:

President Bush needs to FIRE Secretary Paulson He still thinks he's on Wall Street and the fact that he worked for Goldman Sachs is a serious conflict of interest for this nation and if this bailout goes forward as is it will only cause further destruction of our ecomony. FIRE PAULSON NOW!!!

Something very weird here o... (Below threshold)
MunDane:

Something very weird here on the roll call.

Most of the more liberal Democrats voted "No"..Abercrombie, Shelia Jackson-Lee, Barbara Lee, Kucinich, the Sanchez sisters...along with the Republicans. Something is very, very stinky with those bedfellows.

Personally, I've got very m... (Below threshold)
_Mike_:

Personally, I've got very mixed feelings regarding the bailout. It pisses me off to no end to see the Pelosi pushing this 'didn't even show' bullshit.

I'd be much more apt to get on board if the DC political hacks first acknowledged that the CRA (yes, that's legistlation - which means Congress) was the foundation for this crisis.

The solution to government f'ups is NOT more government.

Most of the more libera... (Below threshold)

Most of the more liberal Democrats voted "No"..Abercrombie, Shelia Jackson-Lee, Barbara Lee, Kucinich, the Sanchez sisters...along with the Republicans. Something is very, very stinky with those bedfellows.

Jeff G. suggests that the loss was part of Pelosi's plan. I don't know about that, but there's no doubt that she is using the "defeat" to her advantage, and that the next bill will be much more palatable to the "Honorable" Reps Kucinich, Lee, and the rest of the People's Soviet.

When you consider that the bailout is needed *because of* the failure of the Democrats' own socialist program, it makes you wonder if they haven't been planning this for quite some time. I don't think they are smart enough for that, but they are cunning at twisting these "defeats" to their own advantage, and the country's peril.

This bill is pure hogwash (... (Below threshold)
Alan:

This bill is pure hogwash (not even fit to be called pork). It was pretty well written for what it was. But its like putting a band-aid on gangrene. It's even a huge band-aid, with lots of smiley faces on it and lots of ointment on it. But it won't do squat for gangrene.

What must pass is legislation that first of all addresses the root causes of the mess, and the democrats will never stand for it because it might show that they were complicit in it to begin with.

Nancy Pelosi has played right into the House GOP by giving them a good excuse to reject this band-aid and then come up with something that addresses the root and branch of this: Primarily, add some sanity and common-sense to the Community Reinvestment Act, secondly, do something about getting rid of the Mark to Market rule (Financial Accounting Standard 157). The banks have lots of valuable assets, they've just been marked down to nothing by this foolish rule.

Get over the BS, they have ... (Below threshold)
DC:

Get over the BS, they have bailed out 4 other institutions since March and it hasn't slowed down the meltdown...it is September. Those bail outs with this one will total over 1 trillion dollars. If you have money in the market expect a loss or a gain.

I'm young but I have talked to many old timers from from the depression era before they've passed. You know what the majority of people did back then, was to work hard and save money and not put it into the market or banks until things leveled off. And they were still able to retire?????

Plus if you want to save the economy give the 700 billion right back to the people FU wal-street and big business. Ever heard of saving for a rainy day!!!! It's raining pretty hard, still not that bad.

Don't mean to sound bitter or mean, but I've never had a ton of money, nor have I cared to want it, just like to have the things I need and that's good enough for me and family.

Another thing, if you trust right or left wing politics and you think they care, where have they been the last 4 years, they all knew this was coming. They have and will always play the american people as the fools that they are for trusting them.

Bush says that the bailout ... (Below threshold)
Big Al:

Bush says that the bailout will provide Americans with the CREDIT they need. How about providing Americans with the WAGES they need. If you think Federal taxes are high now wait until it's time to pay back this bailout (as a rough estimate I figure each person will be liable for about $3000 to $5000 tax per year). Let the businesses that did bad business BURN.

Talk about a pig in lipstic... (Below threshold)
Paul:

Talk about a pig in lipstick!! This bailout bill was a dog -- and no amount of makeup and dressing it up could change this. You simply don't reward people who make bad decisions. If we're going to help any one, then let's make money available to the well managed banks to ensure that they stay afloat. Let the crooks and idiots fail and fall by the wayside.

Tonight I stand in awe of t... (Below threshold)
Live@9:

Tonight I stand in awe of the peoples house, the House of Representatives. What the far left and far right were able to accomplish today is nothing less than amazing.

My theory is the far right and far left are a lot more connected to their base and thus more empowered by us to kill this bail out pig.

Who knows what tomorrow brings, I'll just savor this victory tonight.

I'm mixed all up.....except... (Below threshold)

I'm mixed all up.....except i been thinking a little crooked line leads to and from the White House, littered with Green.
Omaba talks about the Middlin' Class, what about the Farmers back when they were goin' Belly Up. Was there a meeting of the Mimes then? I live in East Tennessee and I used to see Acres & Acres of tobacco and Corn in this area...But no more. What little bit I've seen wouldn't be worth pig fodder.
I tell you this to satisfy my point- A lot of Farmers lost their homes then. Let the CEO's & Wall Street Type lose theirs too. And see if Willie Nelson would come sing for them. Doubtful, but he is a humble, giving soul.

I've been for the "no strin... (Below threshold)

I've been for the "no strings attached" $700 billion from the first time I heard it explained (on BigLizards). I mean c'mon, like this money isn't going to be watched every minute of every day by the media until the crisis is 100% over?

The extra stuff is absolutely disgraceful. Unfortunately, most people will watch the nightly news and hear this: "2/3 of House Republicans voted against the bill today." No mention of the 1/3 Dems who voted it down; they have a majority and could pass it if they wanted, but they didn't want to so clearly "own" this version of the bill.

As to government "intervention", as far as I'm concerned We The People bought those houses as soon as President Clinton signed the new CRA. We simply have yet to take possession of Our The People's property. This is not intervention, it is a consolidation of existing meddling.

Does it work the other way?... (Below threshold)
Richard:

Does it work the other way? I mean, if the Democrats were acting like it really IS an emergency (like they did for a few weeks after 9/11) would you be against it?

Families are not being left... (Below threshold)
JMKC:

Families are not being left out!!!
ACORN, used the bulk of its funding (millions) to buy homes for Democrats and to fund voter fraud.
Obama was their lead defense attorney, in defending their voter fraud practices.

In the state of Kansas, they were convicted and admitted that they put tens of thousands of fake voters on the voter rolls so they could steal an election. I know, I got three of those fraudulent voter registration cards at my address!
ACORN is being prosecuted in many states and investigated in many others for the same thing.

NO WONDER, Obama and the Dems want ACORN to get multiple millions in the $700 billion dollar bailout bill! The Dems thought for sure that, with all the pressure NOT to let the Stock Market crash, their $700 billion bill would be voted in and they could use YOUR tax dollars to give houses away to Dem voters and illegal aliens, and put hundreds of thousands non-existant voters on the voter registration rolls to "Win" the next election.

ACORN has been one of Obama's major campaign contributors, with YOUR tax dollars!

This brilliantly-written an... (Below threshold)

This brilliantly-written and researched article should explain what we are up against, from the big picture POV:

http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html

Do not fall for the MSM frames on this issue. Educate yourselves and each other. If conservatives won't stand up for conservative values, nobody will.

Jay's logic is akin to the ... (Below threshold)
Dodo David:

Jay's logic is akin to the logic displayed in an episode of the old TV show "Hogan's Heros".
In the episode, Hogan and Klink are trying to diffuse a bomb. They have to decide which wire to cut, a red one or a blue one. Hogan has Klink pick which wire to cut. Klink picks the red one and then shuts his eyes. Hogan cuts the blue one and diffuses the bomb.
When Klink opens his eyes and sees that Hogan has cut the blue wire instead of the red one, Klink tells Hogan, "You knew which wire was the correct wire all along." Hogan replies, "No, I didn't, but I knew for sure that you'd pick the wrong one."

TO: Jay Tea, et al.R... (Below threshold)
Chuck Pelto:

TO: Jay Tea, et al.
RE: The Bailout....

....may be a 'necessary evil'. HOWEVER, I see it, like the Chrysler bailout of decades ago, as setting a precedent that we are going to allow shoddy--even possibly criminal--activities to go unsupervised/oversighted and even REWARDED by the government...NO....NOT THE GOVERNMENT BY MYSELF AND EVERY OTHER TAXPAYER IN THE COUNTRY!

This will encourage other fiascoes down the pike. We'll turn Wall Street or Enron or whatever into speculative ventures instead of into wise investments. And, at some future date, we'll have a collapse that we cannot afford.

On the other hand, if we let these 'speculative' ventures fail, others will move in and buy them up and continue operations with necessary modifications. It'll hurt, but in the long run look upon it as a necessary 'correction'.

Regards,

Chuck(le)
P.S. As for 'blame', there's plenty for everyone. Just like in the fiasco of American Medical Association based medical care....

....since when should a liter of pure water with a pinch of salt in it cost $250+?

two words -- "manufacturere... (Below threshold)
bill-tb:

two words -- "manufacturered hysteria"

It's in the Alynsky playbook.

If Wall Street needs a bail... (Below threshold)
WildWillie:

If Wall Street needs a bail out, then just focus on them. When the dems start adding all other kinds of pork, then I know the hysteria is false. ww

It's possible to be right f... (Below threshold)
John Davies:

It's possible to be right for the wrong reasons.

I must disagree that since ... (Below threshold)
Bill:

I must disagree that since Democrats aren't acting like it's a crisis, they don't think it's a crisis. As long as Democrats think they won't be blamed for the problem, misery is actually good for their "philosophy". In 1932, FRD was elected during a depression. Four years later, during a depression, he and his party were given the greatest control of government in our history. Four years later, during the same depression, FRD was reelected. When people are desperate, the crumbs government can dole out buy lots of votes.

The Dems think it's a crisi... (Below threshold)
Jack Tanner Author Profile Page:

The Dems think it's a crisis - for the GOP and John McCain - if they pass the bill and bailout the debtholders and the gov't assumes the assets - more big gov't and more CRIA. If the economy tanks then Dem margins go up and zerObama wins. It's a win-win babay!! Oh the taxpayers get screwed?!?!? They're GOP anyhow. zer0bama has shown exactly what Pelosi and Reid needed to see in this - that he's a spineless, useless zero. Exactly what they want for POTUS.

Hmmm. Where do Dem voters c... (Below threshold)
Jim,MtnViewCA,USA:

Hmmm. Where do Dem voters come from? People with gov't jobs, people supported by gov't subsidies and gullible people who believe politicians who say "I'm for the little guy!"
I'd guess that Nancy would like to wreck the American economy: reduces greenhouse emissions, creates more voters for her side AND, with the help of the MSM, she gets to blame it all on Repubs.
The Dems get that the wheels are coming off, they just approve of that situation (as long as they are not blamed for it).

Ok.MV=PQM... (Below threshold)
Joe:

Ok.

MV=PQ

M = the money supply
V = the velocity of money or how often that money changes hands
P = the price of all goods and services
Q = the quantity of all goods and services

As the pension funds, municipalities, and banks pull their money out of the Money Market Funds and put that money into treasury bonds, V is going toward Zero. Now think.

The Paulson proposal is to ... (Below threshold)
Joe:

The Paulson proposal is to use 700 billion dollars to buy 5% of the subprime mortgage backed bonds.

The goal is 1) take some debt off the banks; 2) establish a price at which the other 95% of the mortgage backed bonds will sell and stabilize.

If stabilization occurs, V should stop its descent toward Zero.

Jay,If your servers ... (Below threshold)
Son Of The Godfather:

Jay,
If your servers are humming and sparking, it's cuz Glenn linked you from Instapundit.

Instalanche!

Did you know many of the fa... (Below threshold)

Did you know many of the fat cats who circulate from board to board and from job to job throughout the financial industry, are also members of the Bilderberg Group and or the Trilateral Commission (founded respectively in 1954, and in 1973)? When someone takes your money and steals your car, it makes an impression. When they belong to such a secret political clique, it leaves an indelible impression. Many elected officials even belong to these cabals, hence the secrecy. When Bill Clinton eased banking restrictions, he dished out $8-billion dollars for community reinvestment loans. When the financing schemes fell through, as is their wont whenever 30-million Mexican nationals buy inflated properties and default, it left banks in the lurch. Hillary Clinton counted on the loan giveaways to buy votes. Interestingly enough, had Hillary secured the nomination; she, instead of Barack Obama would preside over the bailout. So, where's that $8-bilion plus dollars? Where's Hillary? Why the caveat in Section 8 of the bailout: "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." The Global Initiative people (code speak for car thieves) took my money; they stole my car. If you or I did half the things these people have done, we'd be serving consecutive life sentences. Wise up, get angry, and let the bubble burst. Besides, Ben Stein says we're going to be just fine. You have my word on it too. Gentlemen, I want my money back: http://theseedsof9-11.com




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