Patterico's Pontifications


I’m No Economics Expert . . .

Filed under: Economics,General — Patterico @ 11:36 pm

. . . but I’m a little surprised to see the joy in the comments here over the defeat of the bailout.

This one is splitting conservatives. Michelle Malkin is 100% against the bailout. But there are some dissenters, including Allahpundit:

Explain to me why the risk of letting this thing go off and start a global economic meltdown is better than at least trying to defuse it.


We are in trouble. There is a chance that a crisis will not lead to a vicious-circle deleveraging and halt to a lot of economic activity, but the odds that it will seem much greater.

I’m a free market guy. And I’m a believer that government involvement generally has unintended consequences.

At the same time, without government action, this could be really, really ugly.

Again, I feel essentially unqualified to have a firm opinion. But I’m surprised at how many people in the comments here seem to be utterly confident in their opinion that the bailout is definitely the wrong thing. You might be right. But you also might be horribly, horribly wrong.

144 Responses to “I’m No Economics Expert . . .”

  1. I’m pretty sure that lots of well-off folks thought that the Fed’s policy was right in 1929, too. It’s not that the pieces don’t get put back together, but the meltdown leads to political instability. Germany got Hitler. France got Germany. We’re lucky all we got was FDR.

    It’s not the odds of a meltdown, it’s “what would you care to bet?” Another World War won’t fix it this time.

    The real pisser is that it was never EVER going to be $700 billion. The problem is a market breakdown, not the value of the mortgages. WIth no market the paper is valued at a fictional zero rather than they 75% it is probably worth. Fix the markets, fix the problem.

    Don’t fix the markets and it will be your house soon.

    Kevin Murphy (0b2493)

  2. FWIW, the essential problem is that the bill will make the taxpayer responsible for the bad loans of an industry that intentiaonally and corruptly profited off the backs of investors using “features” of regulations such as mark-to market valuation which values a total liability at X times the marginal rate of the first bit to be sold/bought. Well, this doesn’t work well when you have liabilities the size that some of these companies have. The worth of the liability is not X times the marginal, it is something else since the proportion of the liability to the total market is significant. In a rising speculative market, this valuation has the effect of boosting the apparent value of an asset well beyond what it is really worth. In a declining market, it is disaster.

    That’s what happened. We are nowhere unless we reform mark-to-market first. The idea that the market would crash (a real crash, not just a correction) was put on us to try to force the taxpayer to accept this unwise risk. It is absolutely an abuse of the taxpayer to foist this on us.

    In the short term, there would be a credit crunch. So what? This is simply the correction is loans to assets that was long overdue. It will work its way out in several months to a year. If, on the other hand, the taxpayer was to “bail” wall street out, we would only proling the problem.

    This is a liquidity crisis, not a market meltdown as it was threatened. The actual values of goods bought and sold remains the same. The inflated prices of some sectors of the real-estate market will depreciate. But, that is not a bad thing. Why should people be priced out of the market from speculators in areas such as Boston and Denver? Speculation does not help our working class. They cannot afford to “play” the housing market–just ask any gambler about the power of the house’s bank.

    The GOP in the House did the wise thing. They put the taxpayer first and they deserve credit.

    This bill was a shake down. We need real regulation, not to be lied to by the same people who caused it in the first place. We are not that stupid with our money.

    PashaG (3de24f)

  3. In my view its really this simple:

    If you understand the power of “leverage” as a wealth multiplier, then you understand how it is that the US economy is several magnitudes of order larger than the amount of “cash” floating around in it.

    Leverage depends on the ready availability of credit.

    Credit is largely a function of trust – do I trust you enough to repay the money that I loan to you, plus a small amount of interest for having done so, such that I am willing to give you my money to use?

    Once an economy loses “trust” in the credit-worthiness of the other actors, the power of leverage is lost.

    With it will go the tremendous driver of economic prosperity.

    Regaining “trust” is easier said than done.

    WLS (c1b09d)

  4. Patterico – Don’t worry about your qualifications – that’s what opinions are for – some are educated and some are not. Not all educated opinions turn out to be correct, and vice versa.

    I think there needs to be a bailout, but I am concerned that we’re simply applying makeup to an injured patient. Eventually, the patient dies, as what was described as treatment turns out to be simply cosmetic.

    #1 – Fix the markets, fix the problem.

    Agreed. I just want to be sure that the markets will actually be fixed. When I see pork attached to an emergency bailout for groups such as ACORN, I am reasonably concerned that the ‘fix’ is simply a money grab by socialists.

    There is still quite a shortfall of information on where there needs to be emergency funding, and exactly how it will be distributed.

    I do not understand why there is no portion of this bailout that specifically calls for funding reversal for projects that turn out to be wasteful and unnecessary.

    Apogee (186a12)

  5. It’s not so much the Bill, although there was plenty wrong with it til things like ACORN got cleaned out, it is the filthy swamp from which it came. We are suspicious. The web is (finally) alive with the story of how former Goldman CEO, Paulson let Lehman, a 130 year old company, die but rescued AIG while the current Goldman CEO was in the same room for the “discussions” and further Goldman had a 40 billion dollar stake in AIG so the truth of this deal is it is a GOLDMAN bailout where our tax money is given to Goldman. Paulson has been wrong on sub-prime and the mortgage situation for nine months and now we’re supposed to trust him and his “judgement.” I could go on but I just don’t trust Frank, Dodd, Paulson, anyone from Fannie (Raines), or anyone from Goldman which seems to have infiltrated Washington like the old time Communists did in the forties. BTW we have such an emergency that we can’t work on a JEWISH holiday? Bullshit, we’d work on Christmas, Easter, and the Fourth of July but we risk the entire country for a Jewish Holiday? Can you blame us dopes for being suspicious.

    howard432 (cc8b85)

  6. Patterico writes,

    “You might be right. But you also might be horribly, horribly wrong.”

    Yikes! That’s the argument my global warmist friends use against me when I say that there is insufficient evidence that man is the cause of global warming to justify government regulation of CO2 emissions.

    Ira (28a423)

  7. I believe there is no avoiding a significant credit squeeze, nor the failure of a multitude of institutions.

    Given the behavior thus far of the institutions that have availed themselves of the Fed’s lending window offering of tens (hundreds?) of billions of dollars, I have zero faith that the recipients of this new bailout will behave well, either. To date, everyone is just hoarding cash and NOT to facilitate commerce as was intended.

    I am willing to accept a plan that guarantees certain assets, a la the FDIC, and to have sensible regulatory reform that fosters liquidity. But to just throw cash at the big boys in the hopes they will not just piss it away or hoard it? No way.

    No to mention the travesty of having so much money in control of one man, with practically no restrictions as to its outlay.

    Ed (385e88)

  8. This entire deal reminds me of Michael Jackson’s sister, La Toya Jackson (stay with me, folks, it’s going somewhere).

    Many years ago, when Jacko’s worldwide megahit Thriller LP led the other Jackson siblings to ride the wave of his superstardom, La Toya — who proved to be the least talented and most gullible of the clan — wanted to branch off on her own out of the control of their martinet father Joe (Michael had broken off with his father years earlier, and eventually so would sister Janet). To make a long story short, Joe found a Vegas sleazebag named Jack Gordon to manage her.

    Eventually, Gordon and father Joe had a falling out of some sort, and as La Toya told the story in her autobiography, after a concert appearance, a panicked Gordon told her that father Joe had sent hired thugs to stalk her with the intention of kidnapping her and taking her back to California. Despite the fact that she was no longer a minor, Gordon said, the only legal defense against this eventuality was for La Toya to marry him immediately.

    And she fell for it. She married Gordon that night in Reno, thus beginning a strange relationship in which she turned against her family (accusing Joe of abuse), “wrote” her ghostwritten memoir, and agreed to a Playboy pictorial as a career boost (which, most smart women know and dumb women found out, has never worked) and as a middle finger to Dear Old Dad.

    About four years into the marriage and with La Toya’s reputation and career in ruins, Gordon was arrested for domestic abuse. La Toya eventually left for good sometime later, said she, when cash-starved Gordon demanded she go into hardcore porn.

    What’s the point? I may not be an “expert,” but I’m not going to trust someone just because they say I have to make a decision right now or else everything will be damaged beyond repair if they can’t explain why.

    I lived through the crash in 1987, which sank a quarter of the market as opposed to 7% today, but the thing I heard the most was “biggest single-day drop in history” and comparisons to the Great Depression. I don’t want someone to say to me years down the road, “Hey, remember when I told you that you had to tether yourself to this massive bailout that gave Washington overarching power that the Democratic majority exploited when President Obama was elected and he replaced Treasury Secretary Hank Paulson with a George Soros protege? Remember that?”

    Kidding! Ha ha ha!”

    L.N. Smithee (6cf460)

  9. What I said on 9/25:

    On a short layover in Japan, and I must say I am torn on this issue. What if my investments crater? They have in the past and have come back stronger. However, I only have 15-20 years to retirement.

    On the other hand, do I really want the federal government pumping a lot of cash into the private sector? Not really – this is the main problem with the so-called privatization of Social Security. It could potentially make the US government the largest shareholder of what used to be “private” enterprise. Look at what the California retirement system can do to companies that refuse to do its bidding. They want a bone-headed shareholder proposal to pass, they may just have the power. And so the free-enterprise system will devolve into a number of state-owned enterprises. A real happy thought.

    I guess I am saying that if they do not do the plan, it might not be a bad thing. Remember- sin in haste, repent at leisure. Decisions made in haste often are bad ones. Regardless of whether or not the “taxpayers may make money”. That should not be the deciding factor.

    The Republicans should hammer the Democrats and Senator Doolittle on this – it was the Dems who prevented action over the past 15 years that may have prevented (or minimized) this.

    OK, well, the actions of yesterday makes one wonder if the Democrats were really serious about this serious issue. It certainly looks as if they were playing this for maximum political advantage (with the typical “wink, wink, nudge, nudge” from their press enablers). Where was the Democrat leadership on this?

    Oops, the last sentence should probably be in the “Joke” thread.

    Regular people who have a lot to lose in their retirement accounts did not like this one little bit. Since most taxpayers are investors of some sort (and they know it), they were well aware of the consequences of acting in haste. Even at their own expense.

    Screw all the rhetoric about “Main Street vs. Wall Street”. That is populist crap and anyone who doesn’t see how the two are linked is just too stupid to be allowed to breed.

    Without functioning capital markets based on the TRUST of the investing class, Main St. ceases to function. The people in charge of the large investment banks have lost the trust of the individual investor because of their willingness to lend to anyone with a pulse.

    Hell, one bank just handed me a $50K unsecured loan at a decent rate because I pay my bills on time. Not because I have a real use for the money, it’s just that I want a little buffer for when the shit really hits the fan.

    I take no joy in the defeat of the “bailout”, but I can honestly say I am not unhappy that it did not pass. There were some serious excesses in the market, and with all excesses, it HAD to be washed out.

    This is not simply a US crisis as the Asian and European markets are telling us – This is GLOBAL. When large European banks are failing, just wait for the what happens when China craters.

    Believe it or not (and I am no fan of the Chinese system – a Hugo Boss golf shirt was going fo $90, on sale from $300), China right now is probably the best hope for stopping the insanity. This is because of their absolutely huge cash reseves, and they are very worried about their rate of inflation. Sure private property is a foreign concept to them, but they do not want to put their people through a severe depression, because it would spell the end of their regime.

    Dr. K (15994c)

  10. This worries me a lot. I’m not an economics expert either but I have read enough to see what the likely sequence will be in this one if not “bailed out”.
    Right now we are seeing the large banks fall. The really painful part will be the point at which the small to medium sized businesses start to wobble and fail as available credit dries up.
    Credit card limits are being reduced/capped which is going to impact a lot or people who (rightly or wrongly) use the cards for living expenses.
    This causes job loss and more foreclosures and causes the market to decline further.

    I think the glee/joy of some is related to the idea that people who shouldn’t have gotten loans will get their “comeuppance” along with those who have not lived as much within their means as some feel they should. They truly don’t understand how this will impact themselves.

    David Brooks at the NYT has a good
    op-ed on the current situation. The insistence on doing nothing has a price no matter how principled it may sound.

    voiceofreason2 (9ee102)

  11. I’m no economics expert, either, Patterico, but you are wise to be concerned. But it is important to remember that this is NOT government fixing a free market problem – it is government “fixing” a problem which Democrats in government caused by interfering with the free market:

    The way the MSM has spun this into being the fault of “deregulation” is amazing, and I’m not easily amazed at their perfidy anymore. I’m afraid that the failed bailout bill might have been the best deal we were going to get. James Simpson’s analysis is essential to understanding this:

    Willmoore Kendall (476a8b)

  12. Seems like stuffing the mattress might really be the best investment, savings, retirement plan eh?

    TC (f398ed)

  13. I believe a big difference between 1929 and now is that bank deposits are insured by FDIC, so savers should be secure in that their money should be there.

    Commercial credit is the lifeblood of this economy. When that dries up, plants do not expand and jobs are lost.

    Some people will lose their homes. That is a sad fact and I take no joy in it. What ever possessed some bankers who knew better to float loans to people who knew they would not be able to make the payments when the bills came due?

    It was NOT “predatory lending”. No one held a gun to the haed of the prospective homeowner to make the deal. The dumbasses had the ultimate rallying cry:

    What do we want? IT ALL!
    When do we want it? NOW!

    So yes, the bankers made bad loans because they were greedy. Just as greedy the defaulting homeowners, who rode the wave up.

    All waves crash on the beach.

    Dr. K (15994c)

  14. Well, looky here. As of 5:15 AM, Futures are up:

    DJIA +1.9%
    NASDAQ +2.0%
    S&P 500 +2.7%

    Not to say this proves it is a short term effect, but people moves into cash, and are now looking for bargains.

    Dr. K (15994c)


    mobileBump (fbb1a3)

  16. Who ordered the large heaping helping of crazy?

    Dr. K (15994c)

  17. Dr. K,
    The people who have money and live within their means will make out fine on this and perhaps even benefit in the long term. I know that I will increase my 401K contributions from 5% of my gross to 8or9% and max out my IRA contribution beginning next month.
    But let’s be honest. The number of people living outside of their means is far greater than those who are. Heck, we might even be related to some.

    Willmoore, The GOP was in control of congress for 12 years and could have bullied a bill through that would have fixed some of the inherent problems with the CRA. They did fail when they had an opportunity — now they are complaining that they are being unfairly blamed for the mess.
    A pox on all their houses!

    voiceofreason2 (9ee102)

  18. Go do some research..just because the money trickled down to homes n companies..It all started somewhere n has been going that way for some time not a heap of crazy mere facts of actual research.Example.How do u make money off wars?well fund both sides with arms bonds so on so forth.Once u exhaust them time for you to step in an restore order..Your a DR do some research.I simply vented an opinion of someone young an stuck in this pile of well u know what.That these war makers now known as ur big bankers (whom they’ve choosen to hide themselves behind) have left for people like you an me crazy go ahead without research your words hold no water.You know so much sir?Please tell me why starting tomorrow us military will be deploying on us soil?training in methods of non leathal force against civil uprise domestic unrest.Please tell me why?Oh did that movement slip under your nose also?”THIS WOULD BE A LOT EASIER IF THIS WAS A DICTATORSHIP” “AS LONG AS I’M THE DICTATOR”
    Who said this?GO an get your glasses an research your history over your cup of joe 20 minutes of research just might be eye opening.

    mobileBump (fbb1a3)

  19. I was originally for it initially when Bush wanted an emergency fund to manage it

    Now I’m totally against it for several reasons

    1. These people on Wall Street are the experts in risk management – they screwed up – this was not war related, disaster related – this was stupid related

    2. Since our allies and fellow banking partners didn’t lift a finger when the towers went down and thousands of Americans Died – it’s time they learned what pain really and truely is

    3. Bashing America – Eurobanks speculating wildly on the dollar against the Euro – drove up Petro pricing increased the velocity (not the cause) of the banking defaults – and they should embrace the pain

    4. All banking is risky – all banking is risky – if a bank removes the down payment requirement there is no risk on the behalf of the no money down homeowner – the buyer still has not embraced homeownership cause they didn’t risk anything

    5. 30% unemployment is good for the country – overemployment – which is what we have now – ruins salaries and careers – is 30% unemployment good for the country in the long term – no – in the very short term say 2 or 3 years – absolutely –

    the great depression created the greatist country on the earth the late 60’s and 70’s and the Democrats ruined that (despite a delay By Reagan)

    Time to refresh the tree of liberty

    EricPWJohnson (c00a5d)

  20. not trying to be mean towards u that was uncalled for.Its just ive sat back an researched some things with this world followed the paper seen the evil things the people on this trail have done an it hurts me hurts me even more that things arent explored or exploited simply out of fear.Sorry how I come across but so many of us are lead blind things need to be explored insted of pushed under the rug.So I appoligize first an for most if I came across offensive see where I’m coming from.See the things I dont want to see us a people go through.

    mobileBump (fbb1a3)

  21. VoR2:

    Just because Republicans had majorities in the House and Senate meant, yes, they could do something. However, they did not have a fillibuster-proof majority in the Senate, and that would have killed anything the Republicans proposed.

    Check the record, and that is what you’ll find – the Democrats blocked any chance of reform.

    Dr. K (15994c)

  22. mobileBump:

    You should not post when you are (a) drinking, (b) indulging in illegal substances, or (c) both.

    You are young and stupid, so I forgive you.

    Dr. K (15994c)

  23. They lifted a finger silly man dont u know they were watching it from their recentlly purchased high rise appartment with two terraces giving a front row seat.Sad to think I know.But yes one major family you know the 2nd richest an most powerfull family in the world as fate would have it had just bought the appartment this was of course after a honeymoon in the whitehouse.
    (my research hasn’t concluded if they were actually there when such event took place but I have no reason not to dig deeper)I you want to speculate on what can or will happen with this current situation then you should be able to speculate on histories past events an research those with hands involved.

    mobileBump (fbb1a3)

  24. Dr. K,

    My point is that they didn’t even attempt to do so and we will never know for sure if it would have been killed or not.

    voiceofreason2 (9ee102)

  25. EricPWJohnson:

    1: Totally agree.

    2: A nice ethical trade off. “You did little to nothing to help (ed. – wrong because our NATO allies certainly helped in Afghanistan) when we were attacked, so now you must suffer because it is right.”

    3: Read the headlines – the Eurobanks are feeling the pain.

    4: Banks removed the downpayment requirements because they could. I do not believe they were forced to, and BTW, what is a better investment than Real Estate? This goes back to point #1 – stupid is as stupid does.

    5: If 30% unemployment is so frigging great, when are you quitting your job?

    Dr. K (15994c)

  26. You mistake my anger of truth for acts of intoxication lol.
    people talk about driving up the costs of petro fuel these evil euro banks.sillyman.The same people who make money off setting the price of gold each day are the same people with hands in major oil companies to making money off the falls an rises.Some of the banks here buying up folding companies/banks their ties lead back across to those same euro banks that were bashed moments ago.

    mobileBump (fbb1a3)

  27. VoR2:

    There are plenty of videos of the usual suspects who are saying: “Move along, nothing to see here.”

    Dr. K (15994c)


    Dr. K (15994c)

  29. Cohen has some food for thought on the current economic crisis contrasted with the Great Depression.

    Dr. K,
    Both parties share blame and that is the real problem — leadership of neither is willing to acknowledge that and address the issue at hand.

    voiceofreason2 (9ee102)

  30. VoR2:

    Follw the money, and see who profited most from doing nothing. Then tell me who is more culpable.

    Dr. K (15994c)


    Comment by Dr. K — 9/30/2008 @ 2:49 am

    No one to hear you scream. It is 2 am on the west coast and Patterico is asleep with visions of OC192 bandwidth and bigger servers dancing in his head.. 😉

    voiceofreason2 (9ee102)

  32. Dr K

    No initially they did not – in Fact the Euro is really 3 countries France Germany and the Netherlands – not only did they not want to stop Saddam they actually send weapons and experts to him outside of the embargo.

    Your comment about the 30% is exactly my point – I’mm an employer – but I’m told who to pay and what to pay – guess what baby – I’ve paid people more than their fatherss, their fathers father and their fathers of all fathers and guess what they buy too much car, refinance their house and want me to bail them out

    Sorry being unemployed for a while will teach people to save, not vote for people who never had a job, not vote for people who say “raise taxes”

    Yes 30% unemployment is a good thing – short term pain for a lifetime lesson in self sucficency and happiness

    EricPWJohnson (c00a5d)

  33. LMFAO must of hit a nerve with you huh?
    Well I’ll leave you with this.In your free time when your done hating on someone elses opinion which is selfish n selfless in it’s self go check out THE MOST IMPORTANT VIDEO EVER!MUST WATCH!
    you’ll find it on youtube(earthlasthope is the poster) then you will have your answers an before you comment back some more hatred n useless bs leave your home an go to your local library an go look up what brought the money here rather who.Thats the good thing about leaving a paper trail one can research it.I dont exactlly wanna tell u which name to start with.You will find your info quickly if you watch what the video I stated.(or if you are so smart you may all ready know) Its a series so if you have the time I suggest you view through them all(hence why I gave you the posters name).Again DR K I appoligize if I offended you.Was not my intentions.Was directed towards the media for failing to shed light on these subjects.I’ve taken what you said with respect I would expect you to do the same.Nothing wrong with exploring your history further unless of course you have fear.which is scary in its self I would rather have knowledge on all sides explored,then be one sided an blind.It’s your right to know.

    mobileBump (fbb1a3)

  34. EricPWJohnson:

    Sorry, sir, you are wrong on the facts. Afghanistan was joined by all NATO countries, and the gave support to the US. 9/11 was adided and abetted by Afghanistan, and had nothing to do with Saddam.

    And friend, I hope for your sake you never see 30% unemployment. I doubt your business could survive.

    Dr. K (15994c)

  35. C’mon, guys. This here plat of crazy is getting cold, and I’m going to have to bring it back to the kitchen.

    And the chef don’t like it when stuff gets sent back.

    Dr. K (15994c)

  36. There are some bills that were passed going back to Carter that did in effect put guns to the bankers heads. Each one made it easier for the poor and minorities to get loans they could not pay back. Many bankers took advantage of the policies and got rich on the taxpayers dime. Those banks that did not want to go along with the the government were pressured to go along or be sued ( Obama was involved in one of these suits ). Threatened with IRS and many other possibilities ( basically blackmailed ) Do it or you will go out of business, go along and we will smooth the way ( Fanny & Freddy ). The warning call was made many times. No one listened or worse those getting the gravy lied and blocked efforts to fix the corruption BEFORE it became a crisis. The same persons that are saying we MUST fix it now, are the ones who caused this “crises”. Follow the money trail. Who and what party profited the most since 1977 from this policy and the two ESA’s. If Freddy & Fanny go under they fear ALL will be revealed. They did not want to take the hit alone in this election year for this cover-up. Democrates could have pasted the bill WITHOUT Republicans. We need those bills thrown out ASAP. Why give money to the same people and policies that got us where we are? We must stop the madness before we dare help them in any way. If this is the crisis they claim it is, they will give up their failed social experiment to get the help. Loans are the only way to go if taxpayer money is used. Otherwise we nationalise the home morgage business ( socialism ). There are many ways to fix this WITHOUT taxpayer money. Try those first! It was not deregulation that caused this. It was the regulation brought on by these socialist bills and policies.

    Iowawoman (395e36)

  37. Thank you.It goes far more depper an bloodier then she put it.I respect your comments guys/gals
    I am just mad/upset/fearfull An if your kids looked into things they would be too.I’m sorry if I was offensive Im merely stating what should all ready be known!

    “In politics, nothing happens by accident. If it happens, you can bet it was planned that way.”
    -Franklin D. Roosevelt

    mobileBump (fbb1a3)

  38. Dr K.


    Nato is fighting in Afghanistan because Al Qaed set off bombs in their country as well – remember?
    Then they sent troops, then.

    My business will do just fime with 50% unemployment – just fine – I’m an exporter

    Look – I’m not wishing bad things on good people – just if you overspend – and think you are ENTITLED TO A JOB – then this isn’t the country for you

    Really its not – I know its hard to imagine with all the socialistic clutter by Obamabcnnbc et al –

    But the constitution doesn’t guarentee you a rose garden or a do over in business

    EricPWJohnson (c00a5d)

  39. “Give me control of a nation’s money and I care not who makes it’s laws” Mayer Amschel Bauer Rothschild
    Believe that to be about england In USA, however, the situation was different. The importance of sound money was well understood after a series of high profile bank failures in the late 19th century. Control of the United States’ money system was the subject not only of heated debate, but of intrigue and assassinations.

    mobileBump (fbb1a3)

  40. Iowawoman

    No one forces a bank to make a bad loan – sure they needed a minority loan program buyt all they had to do was to let them apply and evaluate them fairly.

    Banks are using this for cover – they could have raised interest rates to slow down the number of bad loans

    They didn’t

    EricPWJohnson (c00a5d)

  41. I hope for your sake you never see 30% unemployment. I doubt your business could survive.

    Thirty percent unemployment, today, would be substantially worse than the same ‘rate’ as seen during the great depression.

    Business survival would seem a minor problem compared to basic survival. Or does everyone suppose that the health care sector would somehow be unaffected?

    ThomasD (211bbb)

  42. In my oppinion it’s better to have had the bailout fail only if we disallow the Federal Reserve (which by the way is independent from the government) to sieze and do what they want at will. : Time qoute

    “Also, the fact that every big FDIC deal so far in this crisis has been different – IndyMac was allowed to fail, with only insured deposits safe; WaMu was seized, but all depositors were protected; and Wachovia was sold in a deal that protected both depositors and owners of the company’s bonds but left shareholders with very little – has left investors guessing about the fate of the rest of the banking world. Hardest hit in today’s market sell-off were regional banks like Sovereign Bancorp and National City, perhaps because they seem too small to get special FDIC treatment. “

    As you see this is the biggest crime of the century. There should be a set policy as to what is done in every case. Also no one should bail out crooked companies to appease the rich which also includes government officials who have padded their pockets with american tax dollars. Next, if you remember analyst stated that if the government would have left things alone back during the first depression it would have worked it self out in as little as three years. Instead in an attempt to allow the rich and government officials to pull some of their money back out by temporarily making the market better they caused the crises to last ten years.

    M. Glann (137773)

  43. Who said I was that kind of doctor?

    And to Eric:

    With 30% unemployment, you’d have nothing to export, and no one else in the world would have the money to buy it. Good luck with that.

    I am not entitled to a job. The idea never ocurred to me. I get paid well because I deliver results. And if an employer chooses to not use my services, I simply get a better job. Because I deliver results.

    Dr. K (f196bc)

  44. I’m not an economic wizard either, but I’m going to agree with you Patterico. We can’t just sit by why this explodes in our faces.

    I also want to take this opportunity to express respect to the conservatives who are concerned that we would reward irresponsibility with the bail-out. It’s literally paying for bad business.

    But to blame Pelosi for the bill not passing, like Scarborough is this morning on MSNBC is pitiful. Aw, did the puggy wuggy republicans get their poor wittle feelings hurt by that meany ol’ woman? Awwww.

    So these big bad statesmen are going to bring down the country just because they got disciplined a little for being a bad boy? Please.

    Psyberian (37b2ae)

  45. Very good article for those of you who are not seeing the big picture.

    M. Glann (137773)

  46. For those of you who are missing the big picture

    M. Glann (137773)

  47. ..while this explodes in our faces. (OK, more coffee for me.)

    Psyberian (37b2ae)

  48. I love how it was commented that these FED Banks are seperate from the government.Yes people need to be brought up charges decades/century old charges.What will happen though?People who seek information an answers an justifications for these crimes will find them selves silenced,or worse wake up in a cell with no help no way no how.While the true guilty ones continue to get rich an tighten their grasp on the economy n these stock markets.Would we finally look deeper if we had a global economic crash?Its happened before.What do I know though Im just some younger american just another number with no say quick to be silenced an Im sure my “Permanent silence is all ready planned”At least I spoke up n looked into the cause n effect of these evil peoples actions.

    mobileBump (fbb1a3)

  49. It’s true M. Glann that the Federal Reserve are indepent banks setup by regions across the nation. Credit was the institute of this new system many years ago when paper money was introduced which in a sense allowed people to invest in paper instead of gold.

    T. L. Sikes (137773)

  50. The problem with the FED plan to inject $700,000,000,000.00 unleveraged dollars into the market is that when it gets leveraged, especially by the bad players in this, it injects $7,000,000,000,000.00 to $35,000,000,000,000.00 money, and this will cause inflation. The only people in this that will make out are going to be the people that already have massive amounts of cash on hand and the benifactors of this plan, everyone else will be left behind with a bad economy and high inflation. It is basically the 1970 stagflation part duex.

    A Stoner (efe02f)

  51. Thats why these banksters thrive from Intrest an the ability to INFLATE.

    mobileBump (fbb1a3)

  52. This morning we hear that Obama wants to raise the FDIC level from $100,000 to $250,000 to “restore confidence”. One easy question ..

    exactly how many of those “middle class Americans” that have been living from paycheck to paycheck have $100,000 in their bank accounts, let along $250,000 ?

    I know I don’t. All it does is create a safe alternate to the mattress for those who bail out of the market. Some confidence building measure.

    Neo (cba5df)

  53. This mobilebump is commercial-grade krazy.

    JD (5f0e11)

  54. Well it seems we all get to live in interesting times to quote the old chinese proverb.

    Mr. Pink (eae12c)

  55. My major issue with it is how our friends the democrats have decided to redirect a portion (20% ? ) of the profit of each INDIVIDUAL security that the government manages to sell into their pet programs. I’d be against this if it were 20% of the NET after all were sold off, but they will take the money from each individual security that shows a profit, and since many will not, this ‘bailout’ will suffer huge losses to the taxpayer.
    Simply, the gov’t has 5 seurities, and finds a buyer for all 5, but 2 of them are at a loss. The other 3 show enough profit to break even for all 5, if taken together. BUT, 20% off the top of the three that show a profit goes to “community development” slush funds, meaning the taxpayers lose out, again, and the democrats can funnel money to their cronies through the back door, yet again.

    THATGUY (2bda65)

  56. more like i’ve choosen to educate myself since the truth is right before u an been there for years.Please do the research before u feel the need to comment with such words.You see everything you see now in your eyes everything is perfect? no one could ever be evil.or speculation could never have any fact behind it.its okay i dont expect anyone to seek any information just keep going the way u are.afterall what i say won’t change anything or effect anything.Thanks.

    mobileBump (fbb1a3)

  57. Is mobilebump some play of words on doing a bump of cocaine? You sound like you are on some commercial grade crazy.

    Mr. Pink (eae12c)

  58. Oh yeah! I forgot about ACORN and the PETE or whatever that’s called… Go Obama!!!! Down LOL

    Actually I would be for doing away with a two party system and going to a regional vote and then a final vote with governors. We already elected them to run the state and at least we would have a chance to see how things would go for a while and we would have 52 to choose from. We could use the public broadcast system to televise a weekly debate on issues and since we already pay taxes they dont need to raise money for thier campaign because everything will be done by debate on public television. More so we dont have to spend tax money because like I said before we already know thier track record and the only campaigning they have to do is on public television. We would also make a law to prohibit lobbiest for special interest groups.

    M. Glann (137773)

  59. nope try again.Why dont u get back to the issue at thats WTF is happening to your money.U all speculate on what could happen.But bash the speculator that tells u what has taken place before an that makes me wrong?when all you ever learned was history repeats it’s self.How funny.

    mobileBump (fbb1a3)

  60. This bailout is funny. Malkin is 100% opposed, and McCain takes credit for it before it passes, and then blames Obama for it failing, and then says we shouldn’t play the blame game. The GOP dont tout its 12 wishy washy reps that changed their minds and killed it. Instead they blame pelosi for her better political manouvers. So who are us bailout opponents to thank?

    imdw (23c2b4)

  61. lol your lovely banksters.

    mobileBump (fbb1a3)

  62. I don’t doubt that there is a serious problem with the economy. I suspect it is being exaggerated a bit. Still, I accept that something must be done.

    But the idea of giving one man (a former private sector financial CEO) unchecked discretion over $700 billion is a non-starter. Imagine the power — and the back room deals — he would have at his disposal. He chooses whose MBS he would buy, and whose he would not. He chooses the price (which would certainly be above market price). He would have the power to help is friends and punish his enemies.

    Adding an oversight group wouldn’t do much good. There is plenty of money in the pot to corrupt everyone involved.

    And by saving the banks from the consequences of their risky decisions, we would encourage even riskier behavior in the future. The banks get the upside, and the taxpayers take the downside risk. What a deal!

    There has to be a way to do this that leaves the financial institutions on the hook in the long run. They’ve got to pay their own bail. And they’ve got to work off the cost of saving them from their folly.

    Alan (e60fdf)

  63. Like John McCain and Patterico, I am no economic expert. But consider this.
    Can we afford the consequence of inaction?

    love2008 (0c8c2c)

  64. >Again, I feel essentially unqualified to have a firm opinion. But I’m surprised at how many people in the comments here seem to be utterly confident….

    Exactly! I feel I have a good understanding of the economy for a layman, but still unqualified to assess this. It boggles my mind how many folks on both sides of this issue seem so cocksure.

    BNJ (e1defa)

  65. First the oversight group was made up of everyone that was supposed to be watching for all of this in the first place. So what good would that do? Second, love2008 that article is correct but we are for sure to pay for it one way or another so lets punish them.

    M. Glann (137773)

  66. I get nervous anytime Barney Franks on T.V. I don’t know, just nervous.

    Frank Drackman (af2a6b)

  67. I don’t know how one can discount the defeat of this bill as good for the country. I guess I’ll borrow the NY Times reporting mantra.

    How do you know that passing this bill would do anything to stop the bleeding?

    I do think it is rather remarkable that Americans are being urged by leaders of foreign governments to call their members of Congress and lobby them to support this bill.

    Gabriel Sutherland (90b3a1)

  68. I do think it is rather remarkable that Americans are being urged by leaders of foreign governments to call their members of Congress and lobby them to support this bill.

    Ahmen brother! It’s because we have for far to long repeatedly allowed career politicians to fill thier own pockets. Our government is no longer for the people but for themselves and big banking money. It will never change until we take our government back and that means cleaning house and installing people who believe in our country… true patriots….and stop paying them a life long check and allowing them to vote on their own pay raises.

    M. Glann (137773)

  69. Also, I still don’t know how Goldman Sachs has come away from this debacle with merely flesh wound. Investment banks are toppling all around them and they appear immune. With Buffet’s surprise 5 billion dollar investment in Goldman Sachs, it only make matters worse.

    Gabriel Sutherland (90b3a1)

  70. Can anyone say “Unconstitutional Act of Congress”?

    peedoffamerican (38365d)

  71. Patterico,

    I don’t think it’s necessarily joyful that this bill’s defeat happened. However, there was going to be a point where the “Big Shiny Thing is the Only Thing” promoters were going to get their bluffs called. This is exactly what transpired yesterday, and Nancy Pelosi’s partisan rant prior to the vote confirmed for a lot of people that nobody was acting like it was a crisis that they portrayed.

    You can only hit the panic button for so long.

    At the same time, though, those that were against the Bailout have a MORAL DUTY to help out their Republican reps who voted according to their wishes. Those Republicans are facing one heck of a crap storm right now, and they need LOTS of ACTIVE support. When you have folks like DRJ make equivocating statements like “either way, Brad S, I’m covered,” it shows me that some folks will not help out no matter what.

    Brad S (9f6740)

  72. Tell me if this sounds crazy.

    How long can I mask risk when I’m holding 2 cents on the dollar to support 50 trillion dollars in assets? How long after that until you learn I’m Fannie Mae and Freddie Mac and I employ an army of mercenaries in suits carrying guns loaded with cash, gifts, and endorsements in search of a member of Congress to flip, defeat, or defend?

    And my activities are backed by the full faith and credit OF YOU.

    Gabriel Sutherland (90b3a1)

  73. At the same time, without government action, this could be really, really ugly.

    How did they used to say it about the Iraq war? They have still not made the case for it, or something like that. Roosevelt took action that may have made things worse. Franny and Freddy need to be scrapped, not rescued. Anything less than a total break in federal involvement with the mortgage industry, explicitly stated by congress, shows me that our leaders are not serious about turning things around, probably because they are in too deep themselves.

    Panic does not facilitate sound decision making. But joy at the defeat is inappropriate. None of us know the future. But the apparent political manipulation of the world economy scares me far more than the Wall Street crash.

    Amphipolis (fdbc48)

  74. The email I’m trying to send to my rep Joe Pitts:

    Thank you for your vote against the bailout. While I don’t know the future, it seems to me that any agreement that falls short of a total break in federal involvement with the mortgage industry would lead us back to worse economic problems and political corruption.

    We may need some form of bailout. But a bailout without a halt to past congressional abuses would be counterproductive. Making or forcing others to make risky loans backed by tax money is not a power given to congress.

    Cleaning up the mess must not set us up for a bigger spill.

    Amphipolis (fdbc48)

  75. September 30, 1999

    Fannie Mae Eases Credit To Aid Mortgage Lending

    No more to be said as far as who’s fault was it.
    In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
    The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

    Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

    In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

    ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”
    Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

    Sorry, just thought this was of value.

    M. Glann (137773)

  76. mobileBump is just one of those crazy One World Order Warriors For Truth who was late for his last Brotherhood meeting. It’s interesting to see a brief snapshot of that version of teh crazy.

    daleyrocks (d9ec17)

  77. Even Ace at one point estimated maybe a 50% chance that the bailout would help. Bet $700B+ on a coin flip? Not me. I remain opposed to any bailout because I think it is quite unlikely to help; it will be followed by more, costlier bailout requests; it will simply encourage more debt stupidity. We have to send a clear message to all: don’t wait for a bailout. The global economy needs to deleverage, and there is no magic bullet that kills risk.

    gp (19ad5d)

  78. According to Newt on Greta V’s show last night (I didn’t hear it but heard of it) he says Goldman SAchs had a 20% interest in AIG and that’s why Paulson bailed AIG out.

    The global economy needs to deleverage, and there is no magic bullet that kills risk.

    Comment by gp — 9/30/2008 @ 7:46 am

    I think so too. And this bailout doesn’t stop the bleeding–5 million more mortgages are set to default in the coming year. What then? When does the bailout end if the CRA is still forcing bad loans onto banks?

    Patricia (ee5c9d)

  79. But to blame Pelosi for the bill not passing, like Scarborough is this morning on MSNBC is pitiful.

    There were sixty-five Republicans who went along with her.

    Why couldn’t she appease the concerns of the ninety-five Democrats who voted against it?

    Michael Ejercito (a757fd)

  80. I hear about a credit crunch and I can see real estates prices around me plummeting. The other side of the coin is that someone is getting a better deal on housing. What’s wrong with people having to put up a down payment, having actual income and living within their means?

    I’m getting credit card offers now that I just pass on even though they promise 0% interest for a year. You read the fine print and they can easily enough change the terms plus you still have to pay it back even if you’re tempted to buy that luxury item(s) you don’t really need. My neighbors are still buying aircraft carrier sized SUVs, but now some also add the Japanese motocycles for “economy”.

    My own city is holding the line on taxes and the tax rate. My own mortgage and property taxes total $470 a month. I drive a small car. Many people in this upscale community have to own flashy cars and huge homes though, some on canals with a big boat docked alongside. Many wealthy people don’t even have mortgages and pay cash for most things.

    madmax333 (0c6cfc)

  81. They are creating a panic to pass this bill and then they point at the results of the panic they created, like stocks down, as proof that we need the bill.

    Now they are trying to claim that this bill is for “main street” instead of Wall Street. There will always be residents of main street whose portfolio isn’t doing so great and why shouldn’t they demand a bailout? The politicians will be calling for bailouts every election year from now till the death of the US. They will always remark “not acting is not an option” during each and every one of these perpetual bailouts.

    j curtis (3c4f3b)

  82. Now they are trying to claim that this bill is for “main street” instead of Wall Street.

    They did not convince the electorate of this claim the last time around.

    Michael Ejercito (a757fd)

  83. They did not convince the electorate of this claim the last time around.

    If they could convince the electorate to cheer for bailouts for mainstreet, then that’s all she wrote. There would be no end to bailouts for mainstreet. No retired granny’s portfolio would ever be allowed to lose money.

    j curtis (3c4f3b)

  84. Hey, i know I skipped to the bottom, but did anyone mention the unanimity between the left and right on this. Laura Ingraham and James Clyburn together? The commenters of Daily Kos and Patterico agree on the defeat of the bill. My rep a member of the Congressional Black Caucus and Mike Pence, a member of the Republican Study Committee, both voted against it. Heck, they can’t even agree if the sun is shining.

    Wow, all it takes it Wall Street greed, an incompetent Executive branch, a feckless Congress, a whining media elite, and a solution proposed by one of causes by the problem (and negotiated by other causes) to bring Ace and Greenwald together!

    Strage times

    timb (a83d56)

  85. No bailouts let all the banks fail – if you have all your savings in cash – you’re the same as those enron employees who sat on millions of dollars in soon to be worthless stock

    We who saved, invested in our own companies literally we have our life savings in working assets, business, real estate and safe stocks like the boring classics like steel, oil, food, textiles

    We are not giving a free ride to those who were not prudent

    EricPWJohnson (c00a5d)

  86. A bailout might be necessary, I don’t know for sure, but my problem with the current back and forth is that I’m not persuaded anyone else does either.

    The guys out front yelling “Wolf!” don’t have sufficient credibility to be taken at their word. I don’t care what Bush, Paulson, McCain, Obama, Dodd, Frank, Pilosi, or any of the so-called GOP leaders in Congress say. Their individual and collective reputations for truth and accuracy are woefully inadequate to make the case.

    I have to see plenty of real evidence, and so far it’s not on the table. No cock and bull stories, hot air, or smoke and mirrors, it’s got to be lots and lots of the real McCoy. Scare stories, or solemn pronouncements by well-meaning but gullible talking heads just ain’t good enough, not by a long shot. Where’s the beef?

    Ropelight (1be620)

  87. Ropelight

    How actually is this bailout going to work – what it is is taking a huge hit in taxes so some people can have a free house – because the only lesson an over spender learns is when they either lose their credit card or their house


    5 years later what do we do?

    Oh so its just another 150 billion?

    3 more years another 180 billion?

    You see a precedent was and is set – the government will give you a free house – there will be a whole cottage industry of groups sourcing buyers who will qualify for the government bailouts

    Lets not be the biggest saps on the planet


    Europe has been riding high on their horse about their currency manipulation – which has accelerated the loss of American Jobs

    Now parity is being established.

    Time to take your lumps – I would highly advise you keep just 8 to 12 weeks salary in the bank and start looking at bonds, T-bills or just pay off your house, cars credit cards, hell buy oil stock, the markets down buy 100 shares of different companies from food, oil, mining, steel, textiles (the bulk manufacturers not apparel)

    EricPWJohnson (c00a5d)

  88. Yep, eric, everyone can do just that. I would advise you, if you are correct, to contact some Blackwater guys, because when the peasants start roaming the countryside like they did in the 30’s, they’re gonna be approaching all those assets you invested in. Telling them they were stupid should be a fine start on the negotiations! Good luck in your bunker. A fine sense of moral certainty will serve be our only friend in the upcoming decade.

    timb (a83d56)

  89. The way to keep the Gov’t from mucking-up the economy, is to keep the Gov’t out of the economy.

    Why is TVA still a Gov’t program?
    Why is the Congress re-authorizing AMTRAK?
    Why hasn’t the ATC system been privatized?

    As long as Gov’t is so intimately involved in the “private” economy, “public” political issues will override economic requirements.

    AOracle (7b9099)

  90. Please don’t get your panties in a bunch, Patterico. We are still working vigorously on unwadding Ace’s, and have no spare workers to fix yours.

    If you want to be worried because, “without government action, this could be really, really ugly”, then you should think a little harder and worry that, “even with government action, this could be really, really ugly.”

    You know, if you are into worrying. Otherwise, don’t worry about it. The invisible hand is putting in overtime, as you see in the market today.

    I find it amazing how few people actually believe in free-markets when push comes to shove. THAT is what should be worrying you.

    Kevin (5ac156)

  91. I agree take our government back at let be what it was intended for, to work FOR the people not against them.

    M. Glann (137773)

  92. I find it amazing how few people actually believe in free-markets when push comes to shove.

    We do need government regulation ofm some extent. If nothing else, governments are needed to settle civil disputes and enforce contracts. No one would lend money to someone who wants to buy a house if there was no legal process for foreclosures.

    Michael Ejercito (a757fd)

  93. This is another analysis of why the markets are tanking.
    I’d recommend people check with the credit card companies and see if their charge limit has been reduced. Then think about the various emergencies you use your card for and whether the change could impact it. It is not about whether you could pay it back and are responsible – it is about whether you could get the credit in the first place.

    voiceofreason2 (10af7e)

  94. We the people of the United States, in order to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

    It is well past time to return to these ideals, within the limitations set by the founders.

    AOracle (7b9099)

  95. In another “the fix is in” moment, TV stations in Pennsylvania and Michigan report receiving a Republican TV ad attacking the Wall Street bail-out before the bill failed.

    Oops, while appearing to negotiate in good faith, the House Republicans and the RNC were in reality creating just the situation Mrs. Pelolsi feared (lack of Republican support for an idea floated by Republicans would be used to bash Democrats).


    *Except when we can tell the country to f*ck off while trying to win an election.!

    timb (a83d56)

  96. “We do need government regulation ofm some extent. If nothing else, governments are needed to settle civil disputes and enforce contracts. No one would lend money to someone who wants to buy a house if there was no legal process for foreclosures.”

    That has nothing to do with free markets. You are only suggesting that we can’t have anarchy. I certainly agree with you. It’s only when the government tries to play a part in stopping foreclosures that we might disagree.

    Kevin (5ac156)

  97. Listen, until the majority of citizens realize that it’s republicans and democrats alike that are hurting our country we will always remain here as we are now. People must be more agressive toward our reps to make sure that they no we say “No More!”

    M. Glann (137773)

  98. #92, I used to love that song! Another good one: “I’m just a bill, yes, I’m just a bill. And I’m sitting here on capital hill.”

    (hehe, yes, I know what you meant :)

    Kevin (5ac156)

  99. It’s only when the government tries to play a part in stopping foreclosures that we might disagree.

    If a foreclosure are the result of the lender engaging in fraud, the government should do a lot more than stopping the foreclosure.

    Michael Ejercito (a757fd)

  100. This whole thing is nothing more than an attempt to have the government take over the economy. Obama voted for FISA because he plans on using it and his power over the newly acquired economy to turn the US into a socialist state. We’ll be lucky to see daylight for years. My vote is NO bailout at all, let the chips fall where they may. It’s only money. I’d rather have my freedom. I heard it is not free – and now it’s time to pay up for those who have been enjoying it for free. I’ve just contributed my 401 K.

    Genny (a7a9b9)

  101. Comment by Michael Ejercito — 9/30/2008 @ 10:17 am

    …and what if the fraud was committed in the name of Fannie and Freddie?

    Who goes to jail at the GSE’s?

    AOracle (7b9099)

  102. timb – Was there something not factual about that ad prepared for release after the bailout vote?

    What is your complaint?

    daleyrocks (d9ec17)

  103. Just food for thought. If we vote yes, how much money are the memebers of the government, including bush, obama and mccain stand to save? I am sure they’ve pushed millions into these government backed companies too. Not to mention just losing on the stock market in general.

    M. Glann (137773)

  104. …and what if the fraud was committed in the name of Fannie and Freddie?

    Who goes to jail at the GSE’s?

    Those who were responsible, of course.

    Michael Ejercito (a757fd)

  105. Was there something not factual about that ad prepared for release after the bailout vote?


    The bailout passed.

    Michael Ejercito (a757fd)

  106. Tell me is thier a similarity between what Freddie and Fannie have done and what loan sharks do which we do have laws against?

    M. Glann (137773)

  107. there

    M. Glann (137773)

  108. Michael @104 – The ad says $1 trillion after the bailout, but is not specific about what bailout proposal is passed. We’ve already bailed out the GSE’s and AIG so I think you can call the ad true if you want. Otherwise, it’s just assuming some form of additional bailout will get passed.

    daleyrocks (d9ec17)

  109. Comment by M. Glann — 9/30/2008 @ 10:45 am

    This presents a question for the criminal-law atty’s in our midst…

    Fannie and Freddie are financiers who have encouraged, if not coerced, lending institutions to engage in actions that if done on the street, could be considered loan-sharking.
    Does that make them subject to RICO statutes?

    AOracle (7b9099)

  110. timb

    describe yourself

    Are you a maker or a taker

    do you have a credit card balance some months of the year?


    Its funny that Obama wants my money while I’m employing people and you say the peasants are coming for me?

    It interesting that I am threatened with the people who would lose their house are going to take what doesnt belong to them if I don’t support giving them money in the first place that doesnt belong to them?

    Fortunately there is not an IQ test to blog

    Another entitled to a job guy?

    EricPWJohnson (c00a5d)

  111. I have to admit, I’m with Glenn Greenwald on this: the bill sucked.
    The looney left and the looney right are in agreement against the “responsible” Republicrats.

    And in this case most economists -those not employed by political parties or by banks- agree with the political fringe.

    Readnek (105b91)

  112. I’m against giving out 700 billion with no strings. Either the free market always rules and these companies are free to meet their demise, or we bail them out and regulate. Otherwise, what is stopping companies from acquiring the same bad debt in the future?

    Norm (3d65f9)

  113. daley, if you’d follow the link to Ben “in the tank” Smith, you’d discover what the ad means.

    But, as an “independent,” I’m sure you wouldn’t be offended by dishonesty and double-dealing with the economy at stake.

    Country First and all

    timb (b1f48e)

  114. Hey, Eric, if you don’t know the history of the Great Depression that’s not my fault. Ask the rich white folks in Zaire what happens when the government cannot or will not protect rich folks from the mass of people, who stupidly think they have a right to exist and live.

    Economic instability causes political radicalization.

    Maybe you don’t have books on the mountaintop of your superiority?

    Right and wrong (and I don’t mean to sound like I’m on the side of the putative mob here) don’t matter to looters. Right and a gun tend to trump your 700 FICO score (congrats on that by the way).

    Lastly, far from me to argue anything about your duty to your fellow citizens. You have none in your coming Hobbesian world. Let them eat cake, indeed, Eric

    timb (b1f48e)

  115. What a fool to stay im a one world warrior?an late for my meeting.Aren’t we all ready one world?I dont remember the planet splitting an making two.Secondly I had no meeting or brotherhood to get to for that matter.I simply felt just like aspects of what needs to be done or who can we follow or speak to.As we look for answers.Then why not explore the idea of what took place throughout history.All I said was do some research
    far beyond what happened an what is digesting an trying to correct its self today.I expected the bashing it’s easier to do then take 30 mins to an hour an actually look beyond your u bash researchers for cures to ur man made diseases to?Ahh at least some of you are looking at the picture n looking beyond what they are putting front of u.ignorance is bliss.

    mobileBump (fbb1a3)

  116. Timb

    So th American way is to force those who worked hard and prospered to make sure those who don’t have as much as they have

    We call it communism but you call it duty

    EricPWJohnson (c00a5d)

  117. timb @112 – Thanks, but I don’t need any help interpreting a simple ad.

    daleyrocks (d9ec17)

  118. Wow, and I thought we were mostly on the same page. LOL

    M. Glann (137773)

  119. daleyrocks – You should know better.

    JD (5f0e11)

  120. #113, dimbulb said, “Economic instability causes political radicalization.”

    Commie crap! It’s dead bang backwards. Political radicalization is the cause of Economic instability. The current so-called “economic crisis” is a good example.

    Democrat political interference in the traditional mortgage markets, especially at the secondary market level, produced the demise of standards for loan qualification, the saftey of required down payments, and the absolute insistence on financial responsibility in the form of good credit history.

    Radical politiics produces economic instability. It’s clear as a bell, and as undeniable as a heart attack.

    Ropelight (1be620)

  121. Ropelight

    No one put a gun to the HEAD of these supposed experts at Fannie Mae, EIEIO Smith and Blarney, Leechman Bros et al

    they decided it was easy money

    EricPWJohnson (c00a5d)

  122. Really, ropey. Want to tell me how Weimar Germany fell? Want to tell me how Lenin came to power, knocking over the nice democrats who pushed the Czar out? Want to tell how Putin came to power? What caused the French Revolution.

    Hell, what caused the New Deal.

    Even the modest recessions this country has had in 1992 led to the incumbent party twice losing to a groundswell of disdain.

    Economic instability causes people to turn to demagogues who promised to make them whole. And, nice people like Eric call reality “communism” and repudiate Jesus in the process. Nice work, Eric.

    Eric, since you disdain community, could you go ahead an take your house off the public utility grid and build your own road….oh, and Eric, get off the internet, it’s funded by the “community.”

    timb (307aee)

  123. During the Great Depression, if I remember my history correctly, there were no mobs rampaging through the USA burning down the mansions of the rich, or the factories that were closed.
    If anything, there were gatherings of workers pleading with factory owners to reopen and allow them to work again, work that they had lost due to the severe contraction of the credit/banking system.

    To compare what happens in the USA to Zaire is the mark of an imbecile.
    The USA is a Constitutional, Democratic-Republic –
    Zaire is a mobocracy, and those mobs are the direct representatives of Mugabe et al.

    AOracle (7b9099)

  124. “…Economic instability causes people to turn to demagogues…”

    You mean, like Obama?

    AOracle (7b9099)

  125. #120, Eric, I don’t believe you’ve given the matter adequate examination. There may not have been a physical gun, but federal quotas are just as compelling over the long haul, and not as likely to provoke the attention of law enforcement. They also reach a wider audience and are ultimately a more effective means to blackmail an entire industry, as the current economic debate proves.

    Heck, quotas even allow the perps, Community Organizers and their political allies, to go on TV, and say it was all done so deserving and hard working, but under represented folks, (tongue firmly in cheek) could have a real home, and all they have to do is vote a straight Democrat ticket, 4 or 5 times on election day.

    Ropelight (1be620)

  126. #121, timebomb, I’ll have to get back to you, I’ve got a few jobs to do before I start drinking.

    Ropelight (1be620)

  127. Ropelight

    Umm the mortgage companies sell the mortgages – except for WaMu

    They sold them to idiot investment banks – those idiot investment banks are not in the home mortgage business they are in the – gee where can I make money this week – business

    Thats called wall street

    EricPWJohnson (c00a5d)

  128. Heh.

    Yesterday, Democrats compared McCain’s first response to the financial crisis to Bush and New Orleans, and today McCain spokesman Tucker Bounds returns the favor:

    “We welcome Barack Obama’s new-found interest in passing this critical economic rescue of our economy, but the American people needed leadership last week, and our next President can’t wait until after the levees break to start making phone calls.”

    Dana (b4a26c)

  129. Timb

    My delusional if not somewhat erratic fellow blogger

    first Jesus had a special method of handling people offering crappy investments – you could say he “cracked” the whip

    Second didane community I pay directly 6 figures in taxes an he jobs I provide pay even more

    But thats lost on someone looking for a handout

    EricPWJohnson (c00a5d)

  130. Late to this thread, but Pat:

    Why is it that you’re phrasing this as if the bailout opponents could be horribly wrong? Why not ALSO take the position that the bailout itself could be an economic disaster?

    The gov’t can’t even successfully manage Social Security and yet so many were drooling at the thought of delivering cash hand-over-fist to the Fed. Unbelievable.

    I just posted this thought over at Ace’s blog, but it’s relevant here too: the federal gov’t is far more incompetent than free market forces ever could be.

    h2u (4a7c7f)

  131. #128, Eric, as I said, you haven’t given the matter enough study. Do your homework, otherwise you’ll keep demonstrating a fundamental lack of understanding of how the financial markets function, especially the secondary mortgage market. There’s quite a bit more to it than you now imagine.

    BTW, that’s true for most folks, including those who work in the mortgage industry, me included.

    Ropelight (1be620)

  132. I readily admit to being way over my head in regards to the economics of this situation (I always intended to take some economics courses…), so I too have wondered about the accuracy of the doom & gloom scenario that has been painted. Yesterday did provide some glimpse of the dangers, but stock market volitility always seems to get painted differently depending on who is holding the brush. But I have been doing a lot of reading of economists as well as business section writers in major newspapers since last week, and there does seem to be general agreement that the dangers are real (unhelpfully they don’t all agree as to solutions of course).

    It is today when I see other countries around the world (Germany, Iceland, UK) jumping into buy outs, bail outs and what-have-you’s of their own that I find I have to accept that something major has to be done, and done fairly quickly. I accept that we will likely get some of the details wrong, but inaction does not seem to be a realistic course of action in this case. I do trust experts, I just always hope we are listening to the right ones.

    Bob Loblaw (6d485c)

  133. Economists are a peculiar lot, if you ask 4 Economists the same question, you’ll get at least 5 answers.

    Ropelight (1be620)

  134. My best argument in favor of the bailout: Lou Dobs opposes the bailout. Of course, Lou’s a compleatist as he also would favor Smoot-Hawley.

    Tight money and tariffs being what killed us last time.

    Kevin Murphy (805c5b)

  135. Dear President Bush,

    This is an open email being sent to you, and everyone else in the U.S.

    I guess our good Senators, and the rest of our ELECTED government
    officials JUST DON’T GET THE MESSAGE – the one that was sent by the
    House vote.

    Not in any form.
    Not under any circumstances.
    Not by any name Whatsoever.
    Not NOW, and not EVER!

    Not just “NO”, but “HELL NO!”

    And certainly not until after Paulson, ex Wall-Street CEO, who has a 700
    million dollar conflict of interest, and brings in AIG cronies to work
    on bailing out AIG, steps down or is FIRED. HE IS TAINTED, right along
    with all the other criminals that run the U.S. House of Representatives.

    If you want any bill to pass, IF THIS IS TRULY SUCH A CRISIS, the first
    step is to FIRE PAULSON, or have him to STEP DOWN. The next step would
    be to put McCain and Palin on the stage, together, explaining why.
    You, Paulson, Pelosi, Dodd, Frank, Reid and every other House Democrat
    our Constitution.

    WE THE PEOPLE do NOT support this bailout.

    If John McCain votes to support either the Dodd amendment to HR 1424, or
    HR 1424 itself I will not vote for him, and I will NEVER VOTE
    Republican again.

    Everyone needs to get this through their heads – 80% of the people in
    the United States ACTIVELY OPPOSE this bill in ANY FORM. And, yes, we
    are quite aware of the consequences, and prepared to pay the price to
    avoid having our Constitution shredded. If ANYONE IN WASHINGTON
    actually works for “We the People” people, they will oppose this
    shredding of our Constitution.

    Will you people in Washington get this through your heads:

    understand the consequences, and are willing to accept them to save this
    country and our Constitution. And if you are really so interested in
    destroying the Republican Party – keep making those 9:00 a.m. TV
    appearances and trying to scare the market. You are making us ABSOLUTELY
    FURIOUS. You are MANUFACTURING this crisis.

    PAULSON. You have ZERO credibility. If you want this bailout to pass,
    you’d better get McCain and Palin together on TV, explaining why, after
    FIRING Mr. Paulson – the Wall Street CEO with so much at stake, so many
    irons in the fire, so desperate to “fix” this “crisis”. WE DO NOT

    WE do not buy the “credit and liquidity” nonsense. WE can see that is
    blatantly and patently FALSE.
    We don’t care that people “won’t be able to buy new cars unless they
    have good credit”.
    We don’t care that people “won’t be able to buy washers and driers
    without good credit”.
    We don’t care that “people won’t be able to get student loans without
    having good credit”.
    We DON’T BELIEVE that businesses will close down, only BAD ONES.

    SOUND banks and credit Unions don’t seem to have a problem lending money
    to GOOD credit risks. The American Dollar is strong and is literally
    crushing the Euro. The price of oil is dropping. And you appear to

    Honestly, we don’t care about ANY OTHER of the absurd and utterly
    ridiculous explanations and cautions that have been put forth. You’re
    making this all sound like “Can I get me a huntin license, yuck, yuck.”
    DOWN TO US IN THIS FASHION. You need to let Freddie and Fannie go
    bankrupt, and prosecute EVERY crooked politician that took EVER TOOK
    money from them – which covers just about every Democrat there is,
    doesn’t it?

    End of story. Period.

    I am an American, Taxpaying, Republican voter
    and I approve this message.

    JinnyB (43ad11)

  136. Kevin’s argument is still the most irrefutable. No one is as consistency wrong on economics as Lou Dobbs.

    SPQR (26be8b)

  137. I think JinnyB needs a little more fiber in his/her diet.

    JD (f7900a)

  138. I like how the comments for this post show up in the sidebar …

    timb – I’m No Economics Expert …

    Patterico should do a post called “…buggers goats”

    JD (f7900a)

  139. During the Great Depression, if I remember my history correctly, there were no mobs rampaging through the USA burning down the mansions of the rich, or the factories that were closed.

    Jesus, your apparent remembrance of history doesn’t include the US Army firing on World War One Army veterans who marched on Washington to demand their pensions?

    It doesn’t involve the Wichita riot of 1934

    It doesn’t involve farmers blocking highways to prevent food from getting to market.

    It doesn’t involve numerous incidents in the country where poor farmers used violence to intimidate legal authorities, despite these stories: In September of 1931 farmers in Wilton Junction Iowa fought deputies attempting to enforce TB testing on livestock. In May of ’33 Wisconsin farmers fought several battles with the National Guard. In April of ’33, 600 farmers armed with clubs fought with police over a bank sale

    It doesn’t feature the race riots in Sherman, Texas or the Communist-agitated renters’ riots in Harlem.

    It just features a hagiography of scamps begging the nice, generous rich people for jobs? Sad to say, your remembering of history is incomplete.

    Extreme economic dislocation made people angry and, prior to the New Deal, they wanted money or work. If they couldn’t get it, they went to take it.

    So, given how stilted your “remember[ance] of history is, I’ll just reserve my opinion of who the imbecile is

    (hint: it’s the guy who wasn’t party to the discussion making moronic comments from the peanut gallery)

    timb (a83d56)

  140. Timb

    Krogers having a sale on tinfoil 2 for 4 bucks

    EricPWJohnson (c00a5d)

  141. says the consultant who thinks Americans are stupid if they have credit card balances or lack 12 weeks’ salary.

    I’ll be fine, business genius, but when the Third world that is the poor of Texas come to Houston’s gliierati for help, let’s hope you remember these discussion and don’t call them stupid before you call them lazy commies.

    When I feed the poor, they call me a saint. When I ask why the poor are poor, they call me a communist”

    Bishop Oscar Romero

    timb (a83d56)

  142. timb

    Sooo youre broke, living paycheck to paycheck with no saving, a mortgage you cannot pay and you want me and those who saved and invested wisely to bail you out

    Is that what it is?

    EricPWJohnson (c00a5d)

  143. Look, I know reading isn’t your thing, but read my last comment and try to concentrate the on the line “I’ll be fine.”

    Try this link for a taste of what America holds for non-oligarch Texan.

    Most of us are familiar with these statistics…

    Out of 100 people who starts working at the age of 25, by the age 65:

    * 1% are wealthy
    * 4% have adequate capital stowed away for retirement
    * 3% are still working
    * 63% are dependant on Social Security, friends, relatives or charity.
    * 29% are dead.

    You are telling 63% of Americans to suck it. Check out what I posted above.

    Verily, I say unto thee, it is easier for a camel to walk through the eye of the needle than it is for anti-gay business consultant to enter the Kingdom of Heaven.

    timb (8f04c0)

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