Politics, open government, and safe streets. And the constant incursion of cycling.

Wait, Am I Cheering House Republicans?

By all accounts, it’s the House Republicans who stand in the way of a bailout deal.  And you know what?  I think I’m glad they’re doing it.  Now, I don’t give them an ounce of credit for their intentions, but I’m quite happy to let them drag this thing out while we figure out what it is we really need to do.

And just what is it we need to do?  I still feel like I don’t know.  This has been a rather difficult issue to wrap my head around.  That difficulty doesn’t come from an inability to understand what the various parties are saying – it’s just that I don’t know who to believe about the extent of the problem.  And of that group that I should believe, how do I account for their motivations in the proposed fix?  There are things that are easy to dismiss – Paulson’s opaque “trust me”, House Republicans’ reflexive “tax cuts!”, and Democrats’ populist compensation caps.  But after those broad brush issues, the important questions are still unanswered.  Buy what?  At what cost?  For how long?  What if?  *Why?* There *are* answers to these questions, but until we get them, I’m not interested in a deal going forward.

And what are the consequences of not acting-right-now-this-very-moment?  That’s another unanswered question, as far as I’m concerned.  And while it may well have grave consequence, people much smarter than me think we ought to stop and ask that question, too:

A funny thing happened in the drafting of the largest-ever U.S. government intervention in the financial system. Lawmakers of all stripes mostly fell in line, but many of the nation’s brightest economic minds are warning that the Wall Street bailout’s a dangerous rush job.

President Bush and his Treasury secretary, former Goldman Sachs chief executive Henry Paulson, have warned of imminent economic collapse and another Great Depression if their rescue plan isn’t passed immediately.

Is that true?

“It’s more hype than real risk,” said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. “A nasty recession is possible, but the bailout will not cure that. So it’s mainly relevant to the financial industry.”

[ . . . ]

Coming out of the White House on Thursday, the ranking Republican on the Senate Banking Committee, Alabama’s Richard Shelby, held up what he said was a five-page list of economists opposing the rescue plan.

“This is not me. This is economists at Harvard, Yale, MIT, University of Chicago, our leading universities,” an exasperated Shelby told reporters. He called the administration plan “flawed from the beginning.”

So what do to?  Answer the questions before any bailout gets passed.  To the extent that the House Republicans are playing a part in creating the circumstances for that to happen, I’ll be cheering them on.


Expanding the Ground War to Pakistan?


Friday Notes: Surprise Edition


  1. J. Tyler Ballance

    Bush is a liar.

    Most of the country, including House Republicans know that Bush is a liar.

    The fact that some of the Republican Representatives have suddenly grown a pair, and are standing-up for the citizens should be applauded and supported by Republicans and Democratic citizens, alike.

    The same goes for the few Democrats who have refused to go along with this scam.

    The citizens should learn a lesson from this bailout scam, that we, THE People, regardless of prior political affiliation MUST re-engage the political process and ensure that we install Representatives who will fight for US and not be the puppets of multinational corporations like Bush, McCain, and even Obama, are.

    We are all left with a pretty lousy choice for 2008 with regard to the Presidential race, though Obama may be slightly less of a corporate lackey, the place where citizens can really begin to revolutionize, is in the local and district races.

    Vote out the incumbents and install new Representatives who will restore government FOR the People, instead of what we have now; government ON the People!


  2. MB

    I don’t think that House Republicans are standing up for citizens in the least, Tyler. They are concerned – first and foremost – with the politics of the issue. But hey, I’ll take what I can get, at the moment.


    As to your call to re-engagement, well, good luck with that. Watching the wagons circle around Palin/McCain is truly disheartening. I do believe that the GOP could nominate a rock, and it could draw at least a solid 40% support. If the Dems ever tried to foist something like Palin on me, I’d walk away. Loudly.

  3. Teddy Goodson

    This mess is a classic example of a Friedman Free Market crisis which is used by Free Marketers to cram absolute free market dogma down our throats. This is exactly what was done at the behest of World Bank and IMF to many vulnerable 3rd world countries, which inevitably resulted in the destruction of the local society and the plundering of the country by multi-nationals. Now it is our turn. Bush is trying to panic us into surrendering to this assault, as are the House Republicans, whose plan (with McCain’s “help”) is to solve the “crisis” by applying hair of dog, i.e., more of the same deregulation and corporate tax breaks that created the problem— a free market nostrum. It is time to kill this Free Market religion which has never, ever produced the free market heavenly results promised; all it does is ruin the middle and lower classes and endlessly enrich the upper 0.00001 percent of the population. We certainly should not give a blank check to an unelected official with ties to Wall Street without any oversight. However, it is true that we cannot NOT “do something” if no other reason than we cannot afford to let the world financial system go down— how would we ever persuade all those foreigners to buy our Treasuries and paper in the future, in order to finance our deficits?

  4. EJ


    “more of the same deregulation and corporate tax breaks that created the problem”

    Explain to me exactly what the act of deregulation you referring to is that caused this problem please. Furthermore, please explain how it did so.

    Also, what corporate tax cut are your referring to? Last time i checked, we haven’t cut any corporate tax since 1986, and even if we had, explain how cutting corporate taxes caused this mess as well. Banks for sure haven’t gotten any “breaks” recently.

    I believe you are doing exactly what im sure your blame so many Americans for doing that past 8 years, jumping on board what ever brainless political rhetoric is spewed without actually knowing anything.

  5. calling our current system a Free Market one is an absolute absurdity. Unfortunately modern day Republicans have given Free Markets a bad name when in reality what they have promoted is Corporatism. The Free Market would not have incentivized bad debt as did the Community Reinvestment Act of 1995 which artificially encouraged low income families to purchase homes they could not afford. Also, we are already seeing some corrections due to common sense free market principles. JP Morgan bought out Washington Mutual for $1.9B and Warren Buffett is investing $5-10B of his money to buy up decent investments at firesale prices. No bailout is needed! Let this crisis run its course. Essential services and truly valuable assets will survive because there will be a demand for them.
    I view recessions as forest fires. It kills off the weak business practices and bad debts and helps with the long term vitality of the forest and is what is we needed here. In addition, US car manufacturers and airlines need to wake up and realize the public will not stand for more bailouts and they better get their act together to compete in a global market by producing better more fuel efficient cars and better customer service. Bottom line, the govt is the problem not the solution.
    Here is some good info:

    (circa 1999)


  6. EJ


    Don’t forget that these private buyouts you refer to, Buffet via Berkshire, JP Morgan buying WaMu and and Bear Sterns, Bank of American buying Merrill and Countrywide… all of this would not have been legal pre- Graham-Leach-Blighly, and the deregulation of the early 90’s after the S&L crisis.

    Without these deregulations (that most who visit this site seem to think are the cause of all our problems) allowing for different kinds of financial institutions to buy other kinds, either many more firms would have failed harming the economy, or the government would have had to bail out more with taxpayers money.

    Over 1000 S&L’s failed in the late 80’s and early 90’s precisely because they were forced by law to overly concentrate in residential mortgages and therefore were not able to weather the interest rate shocks of the late 70’s and early 80s. Commercial and investment banks were not allowed to buy them or invest in them. Likewise, the ban on interstate banking in the depression exacerbated the amount of bank failures by denying banks the ability to diversify their portfolios or look for potential merger partners. In comparison, unlike in the US where 50% of banks failed over this period, there was not one failure in Canada, where there were only 10 larger banks that were diversified throughout the country. As a consequence, the financial shock in Canada was much less then the one experienced in the US at the time.

    Once again i ask anyone who blames “deregulation” for out current mess to please point to exactly what you are referring to and explain how it led to our situation.

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