Patterico's Pontifications

9/28/2008

Bailout Vote Predictions

Filed under: Economics,Government — DRJ @ 6:43 pm



[Guest post by DRJ]

Nancy Pelosi says the bailout bill is “frozen” in its current form so that’s what Congress will be voting on. A summary, section-by-section analysis, and the text of the bill known as the “Economic Stabilization Act of 2008” can be found here.

If my neighbors and family are any indication, I predict a bunch of Republicans will vote against it.

EDIT – The Crypt reports the Senate also voted to send $25B to Detroit for the automaker bailout.

— DRJ

64 Responses to “Bailout Vote Predictions”

  1. Here’s a few bugs, not features, from a quick glance:

    1. The government would have the authority to buy troubled assets from foreign banks and governments.
    2. The government, in certain circumstances, is authorized to pay more for the troubled asset than its current owner paid.
    3. A substantial bureaucracy to administer and inspect these programs is authorized.
    4. While the government is urged to mitigate foreclosures by interest rate changes and / or the forgiveness of principal, foreclosure is not ruled out.
    5. The government is authorized to begin buys before creating any policies, procedures or regulations concerning such activities.

    Fire Congress!

    Chuck Simmins (e7938e)

  2. The CRA isn’t repealed in this bill. It appears to be increased.

    Al (b624ac)

  3. We’ll have a chance to fire Congress soon. We won’t.

    But I think this vote will be one of those where the people’s gut reaction is wrong. Were they to vote this stuff down and let Wall Street fall apart, 6 months from now the same people — looking at unemployment of 11% — would want the heads of the Congress-critters who voted it down.

    There’s a reason we have a Republic and not a Democracy.

    Kevin Murphy (0b2493)

  4. Of course, if the vote FOR this and, six months from now unemployment is 11% all bets are off.

    Kevin Murphy (0b2493)

  5. I’ve asked this before, but am I alone in questioning why it is that Congress can conduct negotiations on what the body itself regards as an emergency measure of extreme significance to the taxpayers, all without a transcript of the deliberations? If one exists, it would be nice to see it.

    Perhaps there would be no reason to fire all of Congress if there was more transparency in the process. It seems to me that the cover provided by saying one thing in committee and another at the microphone unnecessarily protects a lot of careers.

    If you can’t stand behind your actions, perhaps you shouldn’t be leading?

    Apogee (366e8b)

  6. Dodd and Frank grinning like morons: be afraid, be very afraid.

    Patricia (ee5c9d)

  7. We have a vote in this… change your withholding to the max at your office in the morning and put that amount into your local/regional bank to spur economic activity. $$ is the problem… CUT OFF THE SPIGOT NOW.

    If enough taxpayers refused to pay, they would be in a world of hurt. We can’t do anything about the FICA/Medicare portion, but we can sure as hell vote with our pocketbooks with the rest.

    They count on us to continue funding their criminal enterprise. I say enough…

    Isn’t this the modern day equivalent of the Boston Tea Party?

    Starve the crown and it dies….

    bmeuppls (7664db)

  8. No pay cuts for the Congressional fools and their staffs who engineered this disaster?

    Perfect Sense (9d1b08)

  9. I never get this.

    We get a $700 billion dollar bailout for these mortgage related failures. And quite frankly no one can tell me someone didn’t know long before 1-2 weeks ago. A portion of that is the blank check that was originally asked for.

    But everyone says we just gotta.

    Then everyone acts like $25 billion in loans for an auto industry is just crazy talk. A situation where the government just saddled them with massive CAFE mandate during huge downturn for that industry.

    It strikes me as odd, because the business like the automakers is why wallstreet exists. Its an enabler or facilitator for businesses like the auto companies. In fact, if there was a few more of business like them, maybe we wouldn’t have to rely on a government underwritten housing bubble to fuel the economy.

    I think economic perspectives are out of whack.

    jpm100 (b48b29)

  10. The CRA isn’t repealed in this bill. It appears to be increased.

    How so?

    Patricia (ee5c9d)

  11. Oh, Michelle Malkin has a breakdown.

    It’s very bad news. More pork than ever.

    Patricia (ee5c9d)

  12. House Leader John Boehner’s email address for anyone who wants speak up.

    http://republicanleader.house.gov/Contact/

    Dana (4d3ea0)

  13. Gag – I’m watching the rerun of the Pelosi news conference this afternoon. Blech. What a steaming pile of bullshit.

    We have now nationalized 90% of the mortgage business in the United States.

    rockmom (e42807)

  14. WTF – Chris Dodd to have hearings on “what happened”? I can do that in 5 seconds – hand Chris Dodd a mirror.

    rockmom (e42807)

  15. Dodd better hold hearings, it’s his only opportunity to not have to answer questions at one.

    Apogee (366e8b)

  16. Breaking Story, 9/28:

    “Mussolini-Style Corporatism in Action: Treasury Conference Call on Bailout Bill to Investors.”

    Excerpts from the story:

    “. . .the Treasury Department held a conference call this evening [9/28]for investors on the bailout bill. . .

    “In other words, this was most assuredly not intended to be a call open to the public at large If anyone from the media or other member of the great unwashed was listening in, it was by accident.

    This is simply scandalous. To have a group of interested parties get a privileged briefing by government officials on a matter of keen public interest flies in the face of what a democracy is supposed to be about.”

    Link to story:

    http://www.nakedcapitalism.com/2008/09/mussolini-style-corporatism-in-action.html

    Official Internet Data Office (71f158)

  17. The bottom line is, frannie/freddie exploded and killed a bunch of banks in the process. Naturally congress is running away from their mess as they always do but the fact remains many people in the Clinton & Bush administrations tried to rein in fran/fred only to be rebuffed by congress.Lets see, robert rubin,larry summers, alan greenspan, john snow, etc. all tried and failed.

    The good news is, underneath all that paper congress is buying there are real assets, houses, so it is possible the govt could actually make money on this deal.

    james conrad (6bb6e6)

  18. And if you really want to get depressed: read this, or not, as you see fit …

    Adriane (b8ecd8)

  19. WTF – Chris Dodd to have hearings on “what happened”? I can do that in 5 seconds – hand Chris Dodd a mirror.

    Yeah, Dodd’s little act this past week reminds me of the scene in Schindler’s List in which the concentration camp commander looks into a mirror, forgives himself…and then shoots a Jewish inmate with his sniper rifle.

    FIRE.THEM.ALL.

    MarkJ (7fa185)

  20. I tried to download the .pdf of the bill, and sha-zamm! I got the error message “This file is damaged and cannot be repaired.” 🙂

    It’s a good thing that these people are going to repair our economy for us. I most certainly trust them to do so, as skillful as they’ve proven in the past.

    The Dana with the Southern accent (3e4784)

  21. Really, I’m not sure why anyone should bother to pay his mortgage now. If you don’t, and claim that you can’t, why Uncle Sugar will take care of it for you!

    I especially love the part in Section 109 — according to the summary, since I can’t download the bill itself! — that allows the Treasury to make adjustments to mortgage principle. So, if someone got a $500,000 mortgage, and now the house is worth only $300,000, the government is just going to write off $200,000 for the borrower.

    This is just great! The people who sold the house for $500,000 already have their money, so the taxpayers get stuck for the $200,000. I absolutely loathe our welfare system, but could, at least, console myself with the thought that we were spending our welfare dollars to help people who were actually poor. With this bill, it’ll be welfare for the wealthy, helping people stay in their McMansions, while those of us who did something responsible, like buy a house we could actually afford and pay our mortgages on time, will have the privilege of paying more in taxes to help people wealthier than we are.

    Ain’t America great?

    The pissed off Dana (3e4784)

  22. “The CRA isn’t repealed in this bill. It appears to be increased.”

    Did CRA institutions perform better than non-CRA institutions? Can we still blame minorities if they do?

    imdw (cd4b7a)

  23. It sounds like Citigroup was assured as part of their rescue of Wachovia, that Citigroup would be allowed to sell off bad loans from Wachovia into this program.

    So we are seeing some immediate benefits.

    SPQR (26be8b)

  24. on comment #16- call a spade a spade its FACISM

    Bill Murphy (d00ee9)

  25. I am worried about the corporate state aspect of this. This will do nothing to avoid future problems. The Democratic Party used to be the party of freedom and the little guy. It has become the party of Marxism and now fascism. The Republican Party used to be the party of big business but they have all become Democrats as the prospect of government money and a thumb on the scale of competition became more attractive.

    Today, no surprise, the LA Times puts out an Obama press release as its explanation of the negotiations. Obama has spent his career taking credit for other people’s work. What will he do as president ?

    I fear the news media is going to put him in.

    Mike K (2cf494)

  26. The Democrats have enough votes to pass this on their own, they don’t need Republicans, they just want them for cover.

    I say the Repubs should just vote ‘present.’

    ThomasD (211bbb)

  27. Thomad D suggested:

    I say the Repubs should just vote ‘present.’

    And we all know that they’d then be able to take credit for it if it works, and avoid the blame for it if it does not. 🙂

    The amused Dana (3e4784)

  28. 24. I denounce you. You are mocking the anointed one’s own practice of voting present. That makes you racist. Just took the Obama test and disagreed with the hatless spawn of satan’s bowels 100% of time or 51 out of 51 questions.

    22.calling a spade a spade is racist. To prove you and OIDO are not racists you need to vote for Obama early and often.

    madmax333 (0c6cfc)

  29. Kill this bill now!! It’s not going to help that much anyway. Nothing is ever enough for the stock guys. They will just throw another temper tantrum. Kill it now.

    bio mom (a1e126)

  30. There will be no ‘taking credit’ for this bailout even if it works.

    At best this thing just gets us out of our current crisis, but does nothing about the fundamentals that created it.

    The Dems are going to hold sham hearings about this mess, and nothing positive will come of it. All the little tidbits they wanted that got removed are coming back in the next session.

    ThomasD (211bbb)

  31. Until Barney Frank recuses himself from the proceedings (and Chris Dodd), its all a disgraceful sham. His mere presence undermines any integrity in the entire matter.

    And with that, I hope the House R’s discover a new backbone!

    Most Annoyed Dana (b4a26c)

  32. There goes the election. McCain is DOA if he doesn’t lead a GOP revolt against this bailout.

    Don’t bother trying to call the Republican National Committee, (202) 863-8500. I get the automated menu OK, but all the mail boxes are full. They want my money and my vote, but can’t be bothered to listen to my opinions. The hell with that.

    Not one dime, and no votes for the GOP. Pass this bailout bill and say goodbye to this very angry Conservative. The GOP hasn’t got the guts to stand up and say no to the very crooks who caused this problem in the first place. I’ve had enough, I will not vote for cowards or crooks, any Republican in Congress or the White House who supports this outrage is an enemy of the people. May they burn in hell.

    Ropelight (1be620)

  33. Same story at the White House comment line:(202) 456-1111. Busy, busy, busy. You can call the WH operator, (202) 456-1414, but they immediately transfer you to the comment line too. After you wait, and wait, you get the “mail box full” message. Same crap.

    The GOP does not want to hear from voters, they already know what we think, and they’re going to give Democrats cover anyway.

    The GOP is the stupid party. They should have learned something after the Harriot Meyers and Comprehensive Immigration Reform debacles, but no, they’ve closed ranks and are making common cause with Democrats. Face the facts, Republicans are going full speed ahead into the abyss, eyes closed, ears covered, heads down, and very soon, belly up.

    Ropelight (1be620)

  34. If the phone lines are busy, fill up their inboxes.

    Most Annoyed Dana (b4a26c)

  35. Dana, the inboxes are full. see above. Best Regards.

    Ropelight (1be620)

  36. There goes the election. McCain is DOA if he doesn’t lead a GOP revolt against this bailout.

    Exactly. When will he say “Kill the CRA”?

    Obama is carrying the discussion forward on the bailout and McCain is silent. He should tell his handlers to go to hell. Look at what they did to Bush.

    Patricia (ee5c9d)

  37. OK, folks, let’s say this bill fails. What are YOU going to do to help your GOP rep weather the political (and likely economic) storms that result from his NO vote?

    And DON’T say “NOT MY PROBLEM,” as his NO vote will be in YOUR name.

    Brad S (9f6740)

  38. Brad S,

    I’d rather send my GOP congress critters political donations for standing up to this shameful bailout than have them gleefully steal it from my wallet.

    It is NOT MY PROBLEM that congress insisted banks loan be given to credit-poor assholes. It is congress’ problem and I suggest they do the right thing and stop trying to regulate lending practices instead of attempting to throw money at the problem.

    This ridiculous bailout is a stupid solution to a real problem and the best proof of that is NOT A SOUL in the media is talking about alternatives. To them and Washington it’s either Bailout or Burn. That. Is. Fucking. Stupid.

    Pardon my language, but this damn bailout is going to screw me over further down the road and I don’t want to see that happen.

    h2u (81b7bd)

  39. And another a-hole is birthed. Can you provide even one example of someone saying that the vote of his/her elected representative is not their problem?

    Icy Truth (ab2f41)

  40. Icy Truth,

    Your GOP representative, whomever that may be, will need a LOT OF HELP if his NO vote ends up killing this bill. That person, in concert with about 100 others, is going to be BLAMED for every little problem with the economy, and probably a few made-up problems as well.

    This person will need your support, especially since his NO vote will be, again, in YOUR NAME. Will you go all-out in helping him?

    Brad S (9f6740)

  41. Comment by Brad S — 9/29/2008 @ 10:34 am

    And what if the bill passes, the GOP representative votes Yes, and the economy drops into the shitter? What then, Brad S?

    Everyone talks about this like the bailout is our only solution and not another problem. This. Is. Insanity. You’re treating this like a one-sided issue and that’s absolutely ridiculous.

    h2u (81b7bd)

  42. h2u,

    You are aware that there have been previous bailouts of Wall Street that predate the Great Depression, right? You are aware that the agreement one John Pierpont Morgan dragooned his competitors into signing led directly to the creation of the Federal Reserve in 1913, correct?

    Look, I’m no big fan of bailouts, either. However, I’m acutely aware that the last time Republicans “stood firm on principle” on the economy, they ended up out of power for 20 years.

    Support the rescue. Your country needs it.

    Brad S (9f6740)

  43. Brad S. Democrats didn’t vote in lockstep for the bill. Right now it failed, but arm twisting is going on post vote to get people to switch as the vote is being held open.

    daleyrocks (d9ec17)

  44. Stocks tanking.

    jeff (8c850e)

  45. 1/3 of Democrats voted no
    2/3 of Republicans voted no

    This was a bipartisan no, if a dozen of the more than 90 dems who voted no voted yes it would have passed.

    Amphipolis (fdbc48)

  46. Another slam dunk goes down in flames, just like shamnesty.

    When will they ever learn?

    Patricia (ee5c9d)

  47. Here’s the vote according to The Moderate Voice:

    “In a major upset, the US House of Representatives has voted against passage of the $700 billion bailout bill. The vote was 228-205 against. Democrats voted 141-94 in favor of the measure while Republicans voted 131-67 in opposition to the proposal. There are now discussions as to whether or not a new vote sometime later today.”

    Interesting that more Democrats voted against it than Republicans yet Nancy is out there blaming the Republicans for its failure. She is without a doubt the worst Speaker in the history of the House.

    daleyrocks (d9ec17)

  48. Sorry, I got those totals reversed. I misread the post. 94 Democrats opposed and 131 Republicans opposed according to the above.

    daleyrocks (d9ec17)

  49. Support the rescue. Your country needs it.

    No. It. Doesn’t.

    Our country doesn’t need Central Planner Paulson pulling economic strings like some twisted puppet master. For heavens sake, this bill is a joke! It is simply throwing money at a problem that can only be fixed with sensible legislation.

    h2u (81b7bd)

  50. The sad truth is if there is not some kind of bailout passed:
    The stock market will tank
    Your 401K will be worthless
    Your house value will go down another 50%
    There will be massive unemployment as more and more companies fail because they are unable to borrow money
    If you have enough cash in your mattress to weather the storm for 10 years you should be OK. Maybe this bill is not the answer but they better do something to unfreeze the banking system soon before the entire system collapses. It won’t just be the the folks with all the money that suffer when that happens. The middle clsss will pay one way or another.

    Reality check (e2ed40)

  51. Reality check – The middle clsss will pay one way or another.

    And that’s what’s worrying the markets.

    Taxpayers don’t want an open-ended bailout.

    An infusion of cash is necessary, but they want the problems fixed, and there’s been precious little discussion identifying those problems. Without addressing that, the cash infusion will not strengthen markets in the long term.

    Apogee (366e8b)

  52. #22

    The statistics in the pro CRA study that are being tossed around seem tortured and need deeper investigation.

    SteveG (71dc6f)

  53. We had stagflation under Carter and rates around 20% for mortgages at one point.
    What will be the verdict this time? An inflationary world depression? How will the government fudge inflation figures to lessen the impact of what the treasury forks out in COLAS for Social Security? I fear Obama’s plethora of new and increased taxation will be the straw that broke the camel’s back.

    There’s always Treasury TIPs to invest in. I was looking at home sales in my area today. Seems to be quite a few foreclosure sales. A buying opportunity for someone. Even the stock market drop- how many Joe Kennedy clones are shorting the hell out of the market and making oodles of dough? Note oil prices have been plunging too.

    madmax333 (0c6cfc)

  54. Here’s a reasonable Bailout Plan that may actually work. It addresses the issue of this not being a bailout, but rather an investment, and it pushes $ back to the US Citizens, and saves Social Security. That’s what I’m talking about!!
    http://sinatraco.com/blog/2008/09/27/the-sinatra-bailout-plan/

    Jeff S (05a73e)

  55. Off topic. So many predictions right now, kindof makes your head burst. I just found my favorite election poll and no one gets offended with the results.

    Baskin-Robbins. They’re repping the National Flavor Debate ’08.

    “Can an ice cream flavor run-off predict America’s 2008 political candidate of choice? The only way to know is to vote!

    Cast your vote to boost your favorite flavor to the top of the polls. We’ll tally the votes before November’s election to see if America’s Ice Cream tastes match up with their political preferences.

    Just like the Presidential election, you can only vote once!”

    Yummmmmmy…..
    STRAIGHT TALK CRUNCH: Caramel ribbon, chocolate pieces, candy red states and crunchy mixed nuts swirled into White Chocolate ice cream.

    WHIRL OF CHANGE: Peanut-Nougat ice cream whirled with chunks of chocolate-covered peanut brittle and a caramel ribbon.

    I admit to voting. The free samples sound pretty good, too.

    Vermont Neighbor (a066ed)

  56. Well, I think its obvious that Pelosi intentionally killed the bailout with her stunts over the weekend and in the debate leading up to the vote.

    She thinks that a financial panic will benefit Democrats politically.

    I think its time to question her patriotism.

    SPQR (26be8b)

  57. She thinks that a financial panic will benefit Democrats politically.

    The vast majority of the American people opposed the bailout.

    Michael Ejercito (a757fd)

  58. An infusion of cash is necessary, but they want the problems fixed, and there’s been precious little discussion identifying those problems. Without addressing that, the cash infusion will not strengthen markets in the long term.

    What exactly is the problem, other than banks losing money on bad loans?

    Your house value will go down another 50%

    Cheaper housing is a bad thing?

    Interesting that more Democrats voted against it than Republicans yet Nancy is out there blaming the Republicans for its failure.

    Her constituents (wealthy San Francisco bankers) would turn against her.

    Michael Ejercito (a757fd)

  59. Cheaper housing is a bad thing?

    For a renter, it might not seem so. For someone who owns a house outright, it’s a problem but not a gynormous one. For someone who owns a house and owes money on it, it could be a disaster.

    And even those who don’t owe money will feel less wealthy and restrict their spending, which is a bad thing in a demand-driven economy.

    aphrael (54a8f2)

  60. Michael, you don’t seem to understand that the problem is not that the banks are losing money on bad loans. The problem is that with large amount of money tied up in securities based on loans which the market does not know how to price, the banks can’t sell the loans to obtain liquid cash when they need it.

    That’s the purpose of the plan that Pelosi failed to pass. To provide a market for the securitized mortgages.

    SPQR (26be8b)

  61. That’s the purpose of the plan that Pelosi failed to pass. To provide a market for the securitized mortgages.

    Of course, purpose does not equal results.

    Could such a plan be made without having to spend seven hundred billion dollars?

    Michael Ejercito (a757fd)

  62. Michael, the point is that you are misrepresenting the plan in the first place.

    SPQR (26be8b)

  63. Michael, the point is that you are misrepresenting the plan in the first place.

    Okay.

    You claim that we need to provide a market for securitized mortgages because so much money is tied up in those securities.

    Can this goal be accomplished for less than seven hundred billion dollars?

    Michael Ejercito (a757fd)

  64. Michael, no one knows if it can be accomplished with $700 billion in purchasing authority or not. The bill Pelosi failed to pass only gave the Treasury $350 billion in authority to start.

    Note that to pick up Wachovia’s banking operations, JP Morgan Chase had to pick up about that much in bad loans by itself.

    SPQR (26be8b)


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