Kill the bailout: Will the real fiscal conservatives please stand up?
The battle over the Mother of All Bailouts is a battle for the soul of the Republican Party. A few fiscal conservatives like GOP Rep. Mike Pence are daring to stand up against this disaster. And where is GOP Minority Leader John Boehner? Chastising the Right not to oppose it because “This is not a time for ideological purity.”
What?! When is there a better time for conservative ideological purity than now — now that we face the most massive taxpayer rescue in American history spearheaded by a phenomenally wrong-headed, ChiCom-promoting, liberal Democrat-installing, Gore global warming alarmist?
Hell, yes, this is a time for “ideological purity.”
Ideological principle.
Ideological courage.
Here is GOP Rep. Mike Pence’s full statement opposing the bailout sent out over the weekend:
PENCE OPPOSES BUSH ADMINISTRATION BAILOUT PLAN
“There are no easy answers but there are alternatives to massive government spending”
WASHINGTON, DC—U.S. Congressman Mike Pence released the following statement in response to the Bush Administration’s plan to bail out the financial market:
“Our financial markets are in turmoil and the Administration was right to call for decisive action to prevent further harm to our economy but nationalizing every bad mortgage in America is not the answer.
“The Administration’s request amounts to the largest corporate bailout in American history. Congress should act, but should act in a way that protects the integrity of our free market and protects the American taxpayer from more debt and higher taxes.
“To have the freedom to succeed, we must preserve the freedom to fail. Any solution to our present crisis must preserve our essential economic freedom.
“Congress should delay consideration of any legislation until the facts and competing solutions can be fully debated, consider alternatives to massive government spending and figure out how to pay for the solution through budget cuts and reform instead of more debt or taxes.
“Congress must not hastily embrace a cure that may do more harm to our economy than the disease of bad debt
“Before any bailout is enacted, Congress must set itself on an unalterable path to truly overhaul these Government Sponsored Enterprises from the top down and hold those accountable, in and out of government, who drove them, and our financial sector, to the brink of bankruptcy. Some important work is already underway, but additional reforms are needed. Even now, we read that the Treasury Department is using Fannie Mae and Freddie Mac to purchase many of these bad mortgages while it seeks the authority to purchase them all. Congress should also ensure that these GSEs can no longer pose a systemic risk to the entire economy while placing them on a brisk schedule to be fully private companies with no guarantee of taxpayer support in times of trouble. And Congress should immediately repeal the Affordable Housing Fund, which will actually siphon off capital from these under-capitalized entities, in order to fund left-wing, third party organizations.
“Next, Congress must consider all available options to put our nation’s economy back on its feet. There are no easy answers but there are alternatives to massive government spending.
“Indexing the Capital Gains tax to inflation (which the Treasury Department can do without any help from Congress), or suspending it for one year, would release an enormous amount of capitol into our economy. Passing an energy bill that lessens the price of gasoline at the pump through more domestic drilling, wind, solar, nuclear and conservation would bring relief to family budgets and create American jobs. Establishing an entitlement reform commission to develop bipartisan solutions to the crushing weight of entitlements would strengthen the American dollar.
“These and other alternatives to a massive federal bailout must be fully considered and debated before Congress acts.
“Finally, any new expenditure of taxpayer dollars should be paid for with fiscal discipline and reform. If Congress decides to spend nearly 1 trillion dollars on a corporate bailout, it must find budget savings to prevent that cost from being passed along to the American people.
“We must address this crisis with forethought, creativity and fiscal discipline. Protecting the American taxpayer from higher debt and taxes and renewing our belief in the power of the free market must be our guide.”
Where’s your GOP representative?
Call ‘em: 202-224-3121.
Kill the bailout.
See what others have said
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I wish BUT: Rep. Pence. If you think this is going to happen, you need to put down the crack pipe. Democrats would have to make painfull deep cuts in medicare, medicaid, welfare, etc etc etc. NOT going to happen. Sorry. New taxes are coming. Trust me.
Meanwhile, McCain is preaching “give them a path to citizenship” for illegals. I quote, “That’s what America is all about.” “They’ve enriched our nation.”
Congressman Pense makes too much sense. There is no stopping the bailout/giveaway. The GOP is doomed.
Fixed it for ya.
“Government is not a solution to the problem. Government is the problem.”
Words to live by from Ronald Wilson Reagan…
I e-mailed my congressman, not bothering with my senators as one is McCain who does whatever he wants and Kyl who is about as dense as a brick.
Where is my bail out?
There aren’t any. Phil Gramm retired long ago.
Amen….
Pence sees through the fog. How about he start his own Gang of 10 Conservatives. Go for it Rep. Pence!
My GOP Rep? Unfortunately, all of mine are Dems. They seem to ignore this constituent’s requests.
I have a lot of money in Mutual Funds, etc. handled by one of the big firms in the news. (I guess they are all in the news now)
I want my money safe and to grow, Grow, GROW….
Therefore, will the bailout help me or hurt me? If it will help me, then I want them to bail, Bail, BAIL!
We have reached a level beyond my “I can balance my checkbook” mathmatical skills.
As much as it will pain us, this bailout must not be allowed to go through. We will be strong for not having passed it. Yes, it will sting for awhile, but in the end it will be shown to have been the right choice for America.
Yeah, with the blood of our citizens.
ILLEGAL IMMIGRANTS, GO HOME !!!!!
Sorry, ot but needed to come out.
Maybe if we refinanced the bad loans so people could pay them, they would have fewer foreclosures and fewer bad debts to buy. Just a thought.
Folks – we’re not going to avoid some sort of remedy. We can stand on Republican fiscal principles all day long – the boogie man isn’t going to go away on it’s own.
I agree with Pence that a bit of planning and forethought are in order.
Any way you slice it, you can’t pay off a 500 billion or a trillion dollar debt without drastic cuts in spending and or one big hefty pay raise. Try it in your own home when you owe way more than you make – bankrupcy doesn’t count. Something has to give.
If Congress wants earmarks, they need to make one, big gigantic earmark each fiscal year all directed toward the debt – no pork barrel projects for either party.
No…the trend is for senate/house republicans and of course democrats to agree to whatever Bush does. If he cannot get full support, then just play the old fear mongering trick!
Now we are told that principles don’t matter? If you hold to principle, I thought the best and most telling time to do it is when it really counts? As was said of a particulary pusillanimous politician, “He has no principles that he cannot rise above.”
If we bail them all out we leave the taxpayers holding the bag, and there is no penalty for failure – so there is absolutely NO incentive to try to run a company, a bank, a system on sound principles. After all no matter what you lose the government will pick the pockets of the people to bail you out.
Hey, here’s an idea – instead of rewarding greedy and imprudent people and companies, why don’t we reward those that have been prudent instead?
Sometimes the knife must go deep, and it will hurt, to cut out the rotten parts. And better to do it now rather than let the rot grow until it infects the whole body.
NO BAILOUTS!
I hope more people are realizing the two party system is broken. I believe the election of John McCain will do far more harm to the party than good.
I’ve given up on both parties. Neither is any longer for the citizens they claim to represent.
Borders
Language
Culture
Sovereignty
The Rule of Law
The Constitution.
You have to ask yourself in the election booth: Does John McCain or Obama really believe in defending the above? Do they really take their oath of office seriously? Am I really throwing away my vote by voting for a lesser know candidate who DOES believe in the above?
If we don’t take a stand against these people NOW, when do we?
I personally will be voting for the only man who takes this seriously: Chuck Baldwin. I’m 45, and have voted the “R” Jersey my whole life. I no longer can. Bush changed me, I think, for the better. My beliefs trump Jersey’s.
This republic can’t take more of these people, and survive.
My representative is Tancredo. I heard him on a radio interview last night and he actually had the spine to say that Fannie and Freddie should be abolished. I guess it’s ok to speak the truth when you are retiring from Congress. Hopefully, he’ll run for governor.
And people wonder why I’m not voting for either McCain or Obama? Oh, but that’s different, right?
Reportedly, some Democrats are already trying to add earmarks to the bailout proposal. This information WILL NOT DO! Who, EXACTLY, are these Democrats? I don’t know about the rest of you, but I’m sick and tired of “blanket” accusations!
Name names! You really want to stop the corruption? When will some of the supposedly “conservative” Republicans stop covering up for their Democrat, and yes, other Republican RATS, and tell us who they are? I don’t want to assume….I want to know!
On September 22nd, 2008 at 11:05 am, ACHefty said:
“Government is not a solution to the problem. Government is the problem.”
Words to live by from Ronald Wilson Reagan…
A MEN!
VOTE THEM OUT!!!
McCain should take a stand against Obama’s tax proposals. Obama is a Hoover!
I like McCain’s plans. Open up something like the S&L bailout plan. Force all companies who opt in to cut all salaries, but I say it should be no more than $200,000. No CEO is allowed to resign without a good replacement already picked to take over. Any comapny taking part will have some portion of their stock transfered to a new Social Security fund (perferably the kind that gives the highest Dividend value). Depending on how much of their portfolio needs to be culled, will depend on the % of stock. When congress can finally get around to opening the Social Security Savings Accounts, each person who pays into Social Security will get an equal amount of the Dividends payed into their Personal Savings Account.
I’d recommend tuning into Michael Savage. He seems to be the only one talking about the important things this election year. He has been spot on on all this, while Limbaugh, Hannity, etc. just want to argue why we should all now vote for someone they all hate. They have put JERSEY’s over Principles.
I can’t take them any longer.
I KNOW!!! IKNOW!!! but the winner then will be an EXTREME SOCIALIST. Please be patient, we have a new younger more ideologic group of Republicans come up through the ranks.
Rob @ 11:09 AM said:
If you have a mutual fund managed by Lehman, you still own shares in the mutual fund. They only manage it. Your equity is intact.
If you own shares in Lehman, my condolences. Your equity is toast.
Tancredo is a good man. We need more like him. Duncan Hunter as well.
“There is nothing which I dread so much as a division of the republic into two great parties… This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution.” ~ John Adams
Following on the thoughts of right_on (#18) and others…
Interestingly, while getting ready to go out and ‘do the job Americans just don’t want, or,”won’t” do’… I turned on CSpan and managed to catch a glimpse of a US Rep. from my state (OR) – Pete DeFazio.
He gave a SCATHING critique of the bailout on the floor of the US House. He even dared the use the abbreviated form of bovine scatology, “BS”, to characterize the whole thing. He’s a Dem BTW too.
I will vote for McCain/Palin. At the beginning of the summer, I was convinced on staying home. Now, the more I hear from Obama the more frightened I become. I may not agree with McCain on a lot of things, but I can still oppose those things after he is in office. I think it’s incredibly important that the dems do not get into office and certainly that Obama does not!
Look folks. Some of us are old enough to remember bad business cycles and we have read the history of similar downturns. This is not the time to panic. Please we must stay together.
There already is a path to citizenship. Go home to your native country and apply, just like I had to. If you want to discuss changing the application process, I am all ears, but GO HOME AND APPLY.
Well, at least you aren’t pretending to prefer capitalism to socialism.
I would say, would the real capitalist please stand up.
.
I am 60, and don’t remember anything that compares to this. My mother at 89 remembers the depression quite well however.
But how one panics may differ. My panic would put Patreas in charge and the politicians who got us here in jail.
This is the REAL crises. The two party system, a figment of the imagination of both Republicans and Democrats have put embiciles in office, who have done nothing that guarentee a monopoly of embiciles.
Kill the bailout? Do that and any politician voting for it would be lynched. We are being sold to the ChiComs by our own government and their crony Wall Street buds. Remember that.
oh yeah, don’t forget to demand all gold, including teeth fillings, any jewelry or art these execs may own.
It gets worse.
House Dems Put “No Drill Energy Plan” in Continuing Resolution…
http://www.humanevents.com/article.php?id=28646
On September 22nd, 2008 at 11:22 am, Goldwater Knight said:
Worse – he’s a huckster!
That 95% get a tax break/pay no new taxes is a prevarication and a job killer! No one can double the taxes on capital gains and not have it negatively reverberate throughout the employment sectors. What’s more, there’s no way that merely doubling the tax on capital gains can pay for all the spending he is proposing; there will be other taxes. Obama is snowing us and the MSM is helping him at every turn. It’s unbelievable that there may be Americans who accept being lied to about something so essential to their family’s everyday lives as the economy.
It’s time for these Americans to wake up and support President McCain’s plan for the economy! Other than running off to Hollywood or Hawaii when the economy experiences a 3AM moment, can anyone TRUST Obama to do what’s right with our finances?
Remember; Those of you who are thinking of jumping ship, McCain will probably appoint 2 constructionist to the Supreme Court. The judiciary is one third of the government. Keep your long term focus please.
yea…but the problem is he can only talk not act…like a barking dog. No wonder he did not even bother to introduce his own OVERDUE act into house after advertising it with much fanfare against CIR.
Incumbents need not apply!!!
If we want to talk about conservative ideological purity then watch this video. It also shows Paulson straight up lying.
Now, to put things into perspective, here is our presidential candidate bumbling through a basic question on the President’s Working Group on Financial Markets.
Dear Congressman Hensarling,
Please join Congressman Mike Pence in fighting the disaster of bailout for the irresponsible finance barons who have found themselves in a train wreck of their own making. My children and grandchildren cannot afford nor should they be saddled with the debt of these idiots and their greedy, wrongheaded decisions.
TexasEngineer
The above is also going out to both of our Texas senators.
What kind of bizarro alternate universe are we stuck in??? We have a Republican president pushing for this to go out as fast as possible. Meanwhile, Dem Senator Dodd is saying that a legislative relief package should be done in a measured, careful manner and should be tailored to protect taxpayers in the best way possible.
What has this world come to when the Republican President is wanting to hand cash out as fast as he can, and the Democrats are telling him to slow down and be careful????
Good Grief!!!
The GOP should be talking about slashing spending at all levels of government, regardless of the bailout. How about starting with social services to illegals? How about that Woodstock museum in NY? It’s insane in DC and the taxpayer might as well bend over..again!!!
PLEASE SLOW THIS DOWN!!! We have a doctor, DR. PAULSON, who says the patient has TB… We have some other doctors who say, it sounds more like PNEUMONIA… Please slow down and let’s get a second opinion… This is a tremendous amount of money here, and the ramifications could be long and far reaching for the AMERICAN PUBLIC…
robbi101: If this continues, the country will be bankrupt.
FamilyMan, the Democrats will just block McCain’s judicial appointees from ever getting a vote, or they will vote them down. And what makes you think given his track record that McCain would appoint justices in the mold of Roberts, Scalia, Alito and Thomas?
Nevertheless with Palin on the ticket I can vote “R”. But that could change and I can see myself writing in my choices.
l
Good man!
we need to elminate fannie/freddie as tancredo said, as well as sarbannes oxley. then elminate capital gains tax, and the tax on businesses. also elminate the community redevelopment act that started this mess.
but none of that will happen. this is another big step towards a socialist government…to protect us
its for our own good…..
Ok, in the “Paulson must be contained” thread I asked for another solution. It appears we have one. Good to know someone is thinking things thru instead of simply reacting with the first “good idea” that comes to mind.
Bailour or no bailout, Main Street will pay for the mess caused by the swindlers on Wall Street and their complicit politicians in DC. Where are the investigations of Fannie, Freddy, AIG, etc? Where are the criminal charges and civil suits of the CEOs that knowingly sank their shareholders’ companies while lining their pockets?
Back in the 80s, I purchased my first home with ten percent down. The banks checked my credit rating, made me prove my income, and pay a higher interest rate and sign up for private mortgage insurance since I was only risking or could afford ten percent down. Even now, in the middle of this crisis, they are still selling houses to people who have no credit, no proof of income and get set up with the same flim-flam zero interest loans that got us into this mess. Heck, you don’t even have to prove that you’re a citizen!
This bailout is a band-aid on a severed artery.
If, and only *if*, this ‘thing’ should ever pass, one of the first and foremost requirements, would be to require every CEO and manager within receiving entity, to repay all salaries, bonuses and other fringe benefits received withing the last 5 years or so. The fact that these fools have been receiving a paycheck while running these institutions into the ground… IS the problem.
Only THEN will the corrupt idiots who run those firms begin to get the message that they will be held accountable for their lack of responsibility.
As a humble, responsible, working and taxpaying American citizen, I get really, really tired of being patronized to help keep afloat failed institutional investors or gambling MBAs – almost all of which, probably have a much higher net worth than I.
…If you gamble recklessly with your money and lose it, don’t come crying to me.
This country already is bankrupt. We are just really good at convincing other productive countries to buy our treasuries, or (more nefariously), simply print the money we need and destroy the dollar in the process.
Hey John Ansell, long time no see. Notice how after we have screamed ourselves hoarse for months, people are starting to associate Obama with Chicago Politics. Good thing.
Hello Swmbo, Ayers is just the start of it. Wait until they get into the people that put Durbin back in office every term. We might be able to wipe out 2 senate seats in Illinois.
Anybody surprised that in this “crises”, neither McCain or Obama are doing the job they are paid to do.
My best guess is due to the elections.
Obama benefits if this lingers. Apparently, voters think Obama is strong in the area of handling our economy… go figure.
Be still my beating heart. Durbin out too. That would be sweeeeeeeeeeeet.
Check out Joseph Farah’s book, “None of the Above: Why 2008 is the Year to Cast the Ultimate Protest Vote”. I think you’ll appreciate what he has to say.
http://www.moveondickdurbin.org
http://www.sauerberg2008.com/index.aspx
Like Ginsburg and Breyer, right? I also seem to recall the great amounts of praise he gave to Sandra Day O’Connor as well. All the more reason to focus on the Congressional races, to ensure folks like this don’t get confirmed.
Ron Paul has nothing good to say about the bailout and calls out the phony fiscal conservatives: http://latimesblogs.latimes.com/washington/2008/09/ron-paul-bailou.html
I really hope that he is made the Secretary of the Treasury.
He would most likely get assassinated if he was given Paulson job.
Kill the bailout;Let the market crash so that it will wash out the trash;Members of both parties have their fingerprints all over this mess and most are only interested in CYA now;McCain/Palin have only a whisper of a chance to pull us out of this disaster, and that is only because of Palin;Obama/Biden have zero chance;If the conservative Republicans take up the mantle of the Fair Tax plan, they have a chance at salvation, otherwise it’s 3rd party time in 2012.
Time to return to Austrian economics.
The “fair tax scheme” punishes those of us who have saved all these years. It is a double taxation and a scheme to once again victimized those who have actually done the right thing.
I bet many of you would feel differently if your ATM cards and credit cards stopped working next month. What if your paycheck bounced?
You’re all crazy if you think this is limited to a few institutions. Fear was ruining the financial systems that all of us utilize (unless you stuff your money in a mattress).
Something that’s not being reported in all this is that the bad debt will be purchased at a discount.
Did any of you stop to think that the taxpayer might actually make money from this “bailout?”
Minority Leader Boehner,
On the off chance you actually bother to care what your conservative supporters are thinking, and have people monitoring this blog, let me put this in terms even you can understand.
You are asking your base to overlook yet another monstrous blunder on your part after eight years of virtual liberal governance. On top of that, you’re also asking that base to vote for the most useless, unacceptable presidential candidate your party has fielded in my lifetime, and you’re doing it all a month and a half out of an election.
You are in no position to ask any more of us, and since we already know bailouts are nothing more than expensive failures, don’t bother. Either that, or consider getting yourselves re-elected in November, because at the rate you’re going, we won’t be bothered with doing it for you.
So the free market couldn’t find any value in this toxic waste, and you believe that the government will somehow, magically, pull a profit out of this? That could quite possibly be the dumbest piece of propaganda coming out of the government-controlled talking heads. When you believe government can solve the problems of the economy with more debt, inflation, regulation and nationalization, then you might as well start calling yourself a liberal (or worse).
If you read the 2 Fair Tax books and the actual bill as I have done, you would see that it is not a scheme, but a way to minimize power in Washington, eliminate underhanded lobbyist activities, and absolutely bring more jobs bask in to the USA;It is by far the best path to undertake so as to avoid an actual tax revolt.
I have emailed these guys with my concern and I never received a reply.
You didn’t say anything about my concerns either. Are you going to admit that it will kill the retirements of most of us who have been paying taxes for over 40 years? Are you going to say that it is a monstrous Sales Tax, that will run from 22 to 30 percent? Are you going to say that states will have to pile on this Sales Tax for about 20 percent, making this a 50 percent sales tax.
Great perhaps for those who are young as they once again get the baby boomers to fund the government excess (which is the real problem). Not even Ron Paul buys into the Fair Tax scheme. It just shifts the tax burden over to the consumers and violates all the principals of economics.
:cough-hack-gag—-puke
Ron Paul does not believe terrorists attacked us. How can anybody even look at him with a straight face and call him an American? I suppose if we can elect a traitor like Jon Cary, Ron Paul has a place in our government.
As for this bailout, how can something that will cost every man, woman and child $2,300 be called a bailout? Sounds like a death blow to me.
Hastily crafted legislation turns out to be bad legislation 99% of the time. I’m betting this time is not the exception.
As I asked in another thread – I’m still trying to figure out what “economic collapse” means.
If there is a bailout my suggestion for Rule #1:
Rule #1: Any person approving a subprime loan will be summarily shot.
I kinda like that one.
Ahh a Lion!, maybe you don’t have anything original to contribute, but my comment about the taxpayer possibly making money on this deal (not losing) was my own.
Let me ask you this – since you boldly claim to know so much about this.
What have you heard about the discounts that the government plans to pay for this debt? I don’t think it’s been decided – much less disclosed. How do you know that the government is going to overpay?
What is the value of the debt that the government would be purchasing? In other words, if the government purchases discounted debt for $500B, are you so sure that it’s worth less than that? Are you sure the government will lose money on this????? If so, then please provide me with your model and analysis.
One more thing. What makes you so sure that Paulson will use all the dry-powder that the plan might provide????
Did you know that after Sept 11, NONE of the airlines took the debt deal that the government offered? That’s right. The “airline bailout” after Sept 11 cost the taxpayer NOTHING, however, the government’s offer provided them with significant stability. This could prove to be the same situation.
Many private investment firms might step in and buy this debt at or above the price the government sets (since they’ll know the floor price).
I agree – the patriot act, the military commissions act, Sarbanes-Oxley, have all been disasters and were all rammed through congress on the back of fear. This bill could dwarf them all in terms of cost to the citizens of America.
My definition of economic collapse is hyper-inflation. When China, Russia, Saudi Arabia and Japan realize that our debt they hold is never going to be paid back, they are going to dump their dollars for real things. When they start buying up actual stuff here in America all those dollars will come back and flush our system with increased money supply. On top of that add on the Federal Reserve pumping trillions of instantly monetized treasuries into the system and you have a recipe for hyper-inflation.
I’m sorry, economic traitors, but this bailout smells to high heaven. We cannot solve this “economic crisis” with hasty pronouncements or rescues. These businesses need to fail. Capitalism means that you can profit from risk but you can’t socialize it when it doesn’t go your way.
Lion – I’d agree hyper inflation is a very real threat. I’d argue though that this bail-out takes us closer to that threat than letting market forces work.
Corkie: You seem to have a very high confidence that our government will do what is rational. If history is any guide, I’d bet against that. Our government is not filled with the best and brightest. Congress can’t even run their own restaurant – what makes you think they have a clue about macro-economics? What makes you think the hallways of the FED or Treasury or SEC are filled with people who honestly understand economics? As far as I can tell – it’s those people who got us into the mess – why would I trust them to get us out?
Here in Hawaii we have dopey (literally) people like Abercrombie…
its meaningless….the government shouldn’t be purchasing any of these bad debts, it shouldn’t force companies to loan to people that are unable to repay the debt. the ‘fix’ won’t fix the underlying problem, just take the economy in a much more socialist direction, than its already in.
How much knowledge of economics is required to administer the FDIC system? I don’t think I’ve ever heard anyone claim that the federal government shouldn’t have oversight of that program. How much knowledge of economics was required to offer a back-stop for airline loans? That seemed to work out ok for the taxpayer.
I’m not sure why you think this program involves rocket science. It might not be perfectly managed, but I’m not sure why you are so convinced that the government will overpay for this debt. Please explain.
Are you sure that the plan forces “companies to loan to people that are unable to repay the debt?”
That sounds very strange.
Also, even if you’re right – that the government shouldn’t be purchasing any of these bad debts – that doesn’t necessarily mean that doing so will cost the taxpayer any money. I’m not implying that you don’t understand that. I just want to make sure that everyone else does.
Re: corkie
The thought that the government will pull a profit out of this assumes a few things right off the bat. First, that the treasury will buy this toxic waste with full knowledge of the potential value. Secondly that the Treasury will be working independently of lobbying efforts by Financial institutions to get overpaid for these “assets”. Thirdly that other financial institutions will out-bid the government (who has unlimited money) for some of the toxic waste.
Now one of the biggest problems is that these debt instruments are so convoluted, and so poorly collateralized to currently qualify for GSE or FHA absorption. Nobody understands the losses banked into these mortgage products, as Warren Buffet so famously talked about during the inflating of the bubble. What we can expect is that the government has no idea what to bid on the toxic waste and will rely on financial institutions to set the price. We can expect financial institutions to try and milk every dollar they can out of the generous federal government. Now some financial institutions will probably outbid the government for some of the better assets, which means the government will get stuck with the worst of the worst.
The biggest assumption you’re making Corky is that the government, who has unlimited funds, will be able to put an actual market values on these loans. Now with socialism’s past performance, and government inability to effectively run private enterprise and the extreme moral hazard that occurs with nationalization and fiat money, the burden of proof is on you to prove the government will act with even a modicum of responsibility.
Now even though, after 5 years the airline bailout program didn’t net a loss, we only have to look at the health of the airline industry today to see the effects of non-market government socialism. What airlines had to do was consolidate, and drastically reduce capacity, but with government subsidizing them, bad business practices continued. Now you get to pay $50 for your second checked bag, $5 for a gingerale, etc. Plus, we’ll probably have to bail them out again.
I haven’t made up my mind who I am voting for but I am also voting third party. The GOP has done *nothing* to deserve my vote.
Obama will self destruct.
Then maybe some real conservatives will rise from the ashes again.
He’s certainly had this crisis pegged, for several years, but he doesn’t seem to be much of a leader in Washington. I am all for his fiscal policies, but he seems to be standing alone.
I agree wholeheartedly with Michelle and commenters here who have pointed out that this bailout will, for all intents and purposes, nationalize our financial system, forever making it impossible for free market principles to govern our economy.
For if they nationalize Wall Street, it won’t be long until banks will be governed from Washington and not by good, conservative principles. And after banks? It doesn’t take much imagination to see the free market system dead in a generation if we allow this kind of massive intrusion into the ideals of American capitalism.
I am not one to fly off the handle and take the position that catastrophe is around the corner. But if this bailout goes through, we may as well move to North Korea or Cuba where at least they are honest and up front about their socialism. This is socialism by stealth in the guise of solving a crisis that no one is sure the solution won’t be worse than what we have now.
I don’t think anyone is saying that we should do nothing. But I would sure like to see some other options before we give in to the fear being stoked by this administration that if we don’t pass this bailout right now, we will have a depression. That smells of panic and hyperbole. And when we’re talking about at least $700 billion – almost certainly more than that eventually – then the least we deserve is straight talk and some kind of debate on whether we want to remain a capitalist country.
If companies are too big to fail then perhaps capitalism is dead already. But I don’t believe that for one second. It is powerful businessmen seeking advantage and favor from powerful politicians. There may be a way for these companies to go under that wouldn’t drag the rest of us with them. But I don’t believe for a second that if they gambled with their investors money, then the rest of us should have to pay for their losses.
And if they did it because they expected to be bailed out – if they believed they could use the taxpayers as a cushion in case something went wrong – they they and every other Wall Street player should be made to understand that the gamblers were hugely mistaken.
If we were to do that, I’ll bet it would be a cold day in hell before such risk on investments was accepted again.
#1: Absolutely untrue!!!!! In fact, it’s a ridiculous claim. One doesn’t need full knowledge of potential value in order to “pull a profit.”
thats what the community redevelopment act did in the first place…
Andrew Cuomo and Fannie and Freddie
How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis
link
but there is a point to if the government forced them to make those loans then they should cover the losses…I’m afraid though this doesn’t fix the underlying problems…they need to get rid of sarbannes/oxley, community redevelopment act, and cut corporate and capital gains taxes to restart this economy.
That was the worst part about the Paul candidacy – he was just a horrible politician. It’s almost impossible to get your ideas out to the public without the ability to be a showman. Although Paul had little charisma, his ideas put him on the map. He still has a very large following, and has been showing up in numerous news networks talking about this market crisis with clarity, vision, and zero charisma.
On September 22nd, 2008 at 2:30 pm, Ahh a Lion! said:
Secondly that the Treasury will be working independently of lobbying efforts by Financial institutions to get overpaid for these “assets”.
#2: Also untrue. First, the government doesn’t need to get “overpaid” for these assets. If the market value for these assets increases, the government can merely sell them.
The government did this with our strategic crude reserves. It often traded crude purchases profitably.
Corkie – The fundamental reason these mortgages are going to be “snapped up” by the government is that by definition, the private sector doesn’t think they can/will make money on them. If there was money to be made, I (or any other capitalist) would quite eagerly invest.
Secondly – and more importantly – where in the Constitution does it say a role of government is to buy up loans? I missed that part when I’ve read the document. In fact, my reading that this very act is unconstitutional. It specifically says (paraphrasing) – things not enumerated in the constitution are reserved for the states. Since buying debt isn’t specifically enumerated, it’s unconstitutional.
#3: Not at all. In fact, the government would first have to out-bid the private institutions in order to buy the assets. Then, if the market sentiment about some of this debt improves, then the government would simply have to sell at market prices.
I’m not sure why you are calling this debt “toxic waste.” It’s sophomoric and shows that you don’t understand anything about the distressed investment business. Given this lack of understanding, you might not want to be making such bold claims.
OK – I’ll argue that the program shouldn’t even exist.
Secondly – I’d argue administering and setting rules are two entirely different things. If the program has been deemed that it should in fact exist, then the rules/guidelines should be set by the best and brightest. Administer – you can have less qualified. There is a reason corporations generally are not run by illiterates.