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$700 billion bailout

You do realize that it's our money that's bailing out these f'ed-up Wall Street companies (rather than the homeowners who'll be losing their homes)? And that this means we will be the ones holding the keys to the banks?

Hm.

1) Let's examine this proposal. It's our money, after all, so we if we're buying into an almost-incomprehensively expensive deal, I have to object to a few things. Let's start here:
Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Really? No review by anyone, eh? So the people who brought us The War on Terror, The Iraq War, and, oh, The Most Massive Budget Deficit and Economic Fuckups Ever should have "non-reviewable" control of $700 billion of our money?

Um, how about NO.

2) Another of my favorites: Wacky-finances bank Lehman Brothers has gone bankrupt, tons of its employees have lost their jobs, we American taxpayers are going to shoulder their bills... but some of its top execs will get a bonus totaling $2.5 billion.

How about FRACK NO.

3) Doesn't this smell like socialism to you? The folks proposing this deal are from the Republican party, once known as socially conservative and anti-big-government. Hahahahahaahahaha! I laugh! Except that the laugh is angry and frustrated rather than humored.

4) Finally, if you and I are buying up a lot of "bad loans," why help the damn fools who made these loans? Mind you, "bad" mortgages belong to people who were often talked into taking loans they shouldn't have at indecent rates. Why not instead spend the same amount of money to ensure that these homeowners can keep their homes? That would help, y'know, people instead of the assholes who brought us this mess. And infusing security into the housing sector would save the economy in every single way, providing a foundation to the market that collapsed with the housing market. That's no more "socialist" than what the Bushies are suggesting right now, but would help people rather than once again dumping money into corporations and the executives who messed up in the first place.

PS: Wouldn't this be a handy time to have that $500 billion we've wasted on the Iraq War?

I'm disgruntled. How can we stop this horrible, horrible thing from happening the way the administration thinks they should do it?

Chris

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Comments

( 28 comments — Leave a comment )
clevermanka
Sep. 22nd, 2008 07:00 pm (UTC)
That's no more "socialist" than what the Bushies are suggesting right now, but would help people rather than once again dumping money into corporations and the executives who messed up in the first place.

You're missing a critical factor. The current administration doesn't care about 90% of the people in this country. They aren't interested in helping people who can't buy an election.

Oh, and to answer your question, there...um. I'm not sure we can.

Edited at 2008-09-22 07:02 pm (UTC)
geekmom
Sep. 22nd, 2008 07:01 pm (UTC)
The problem is that the credit default swap market is bigger than the entire world's GDP. 500 billion is peanuts compared to a 60 trillion dollar market. That Phil (Americans are whiners) Gramm thought it would be just awesome to deregulate. And nobody thought it might be a good idea to have cash on hand to pay for failed mortgages, because insurance companies don't ever actually have to pay, do they?

I think the buyout is too hasty and the terms have me nervous, but we can't just let them collapse because they'll literally take the entire world economy with them.
fortyozspartan
Sep. 22nd, 2008 08:06 pm (UTC)
I just want to watch the world burn. Maybe it's time for a re-ordering.
shellyinseattle
Sep. 22nd, 2008 07:10 pm (UTC)
You've contacted your senators and rep about this, yes?
minnehaha
Sep. 22nd, 2008 08:43 pm (UTC)
Yes. Have you?

K.
shellyinseattle
Sep. 22nd, 2008 09:53 pm (UTC)
Yes. Actually, I just posted on this in a bit earlier than mckitterick.
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fortyozspartan
Sep. 22nd, 2008 08:09 pm (UTC)
because civilization is also aided by people having that food and shelter stuff

They could always rent or buy smaller houses.
(Deleted comment)
fortyozspartan
Sep. 22nd, 2008 08:45 pm (UTC)
I suppose I meant that in a sort of past tense. Such as, if they were concerned about food and shelter so much then maybe they should've bought within their means. Millions of Americans, myself included, have managed to do so. If we're going to privatize our successes, then we need to privatize our failures. If we intend to socialize our failures, then we should consider socializing our successes.

It's extremely difficult for me to feel sorry for people who live in mansions that they cannot pay off.
(Deleted comment)
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fortyozspartan
Sep. 22nd, 2008 09:14 pm (UTC)
I wouldn't condone leaving these people on the street by any means. It's just that I don't feel sorry for people who lose their McMansions or the ex-millionaire investment bankers who enabled them. I'm inclined to argue that teaching these people a lesson, so to speak, is better for the economy in the long run. Handing them [in particular the bankers] $700 billion in taxpayer money only seems to reinforce this behavior: "Hey, there are fantastic rewards if you do this, and even if you screw up, the same taxpayers you screwed over will bail you out."

For that matter, no one has explained to me exactly how or why the collapse of these investment banks will lead to a systemic failure that could matter to me. Why should I care? It's simply painted by both the media and the politicians as, "We have to pass this bailout NOW or the Ringwraiths will chop off your head." This is the same panic-induced decision making that led us right into Iraq. There's a lot of smoke and mirrors and sleight-of-hand without real discussion about what our options are. It's presented as this is the option and you better do it now or we are all doomed, no time to ask questions.

Keep in mind these are the same jackasses who have been pissing our moeny away for the past eight years, and they're saying, "Just trust us!. Where is the democracy in that?
geekmom
Sep. 22nd, 2008 09:38 pm (UTC)
It will matter to me. My retirement is probably somehow invested in that shit, as are a lot of other people's. Those were supposed to be good, strong banks, and I made what I thought were intelligent decisions about mutual investments.
fortyozspartan
Sep. 22nd, 2008 10:05 pm (UTC)
In some cases this is already hurting people. For money market accounts which were heavily invested in Lehman brothers - well those money markets are taking the percentage they had invested in Lehman out of people deposits [due to the bankruptcy]. A lot of people were fooled by this, in particular the credit rating organizations. They rated many of those loans as AA and AAA quality and they have been proven dead wrong. I know people who have lost $35,000 or more on their investments in the 8 months. There were a lot of smart people who were "wrong" about this (Not pointing at individuals such as yourself, rather those who manage individual investment, like funds managers).

I'm not talking about these losses though. These are not quite what I would view as "systemic" failure. The actions they are talking about taking are based in this idea of "systemic failure." Is that really what would happen? Either way the American taxpayers are going to be $700 billion poorer. Talk about hurting the economy; that will be my generation footing the bill! Along with social security we will never see.
geekmom
Sep. 22nd, 2008 10:14 pm (UTC)
I think a lot of investors are screwed either way. I'm pissed beyond belief at the deregulation that got us in this mess.
fortyozspartan
Sep. 22nd, 2008 09:21 pm (UTC)
I can actually spell money but I didn't bother to spell check or edit. Bummer! I was cross-eyed from trying to get the HTML correct and still managed to mess it up!
mckitterick
Sep. 22nd, 2008 08:57 pm (UTC)
I hear what you're saying about individuals, and I agree - to a point. Just think how much of the current crisis could have been avoided if the money-grubbin' bastards hadn't invented things like AIMs and "balloon payments." Sure, people bought above their heads, but if it weren't for those "bank products" (and FRACK I hate that term), they couldn't have done so.

Where was the responsibility on both sides of the ledger? Geez.
fortyozspartan
Sep. 22nd, 2008 09:19 pm (UTC)
Yeah I agree entirely. I was somewhat focused on the ignorant being led into it in my comment, but I'm equally, perhaps slightly more, angry at the banking things. I think there is a certain amount of trust in your banker when you go to a loan. The person you are talking to should be giving you sound advice because in theory they know more about all of this then you do. They specialize in banking and you probably specialize in something else, so in order for this whole exchange of superior goods through specialization deal to work, both sides need to hold up the ends of the bargain.

Unfortunately, capitalism is often presented to us in a format where the specialized take advantage [and have the right??? WTF?] of those who are not.
mckitterick
Sep. 22nd, 2008 09:32 pm (UTC)
Unfortunately, capitalism is often presented to us in a format where the specialized take advantage [and have the right??? WTF?] of those who are not

Absolutely. This is why we have regulation in the first place, and why true anarchy can't work in the real world: Some people are more greedy than others and are willing to hurt others in order to get richer.
geekmom
Sep. 22nd, 2008 09:42 pm (UTC)
When banks actually bore the responsibility for your failure as well as reaping the profit from your success? This actually worked. Once they started in on credit default swaps, it was all out the window.
siro_gravity
Sep. 23rd, 2008 04:25 pm (UTC)
but chris, people know how much they make and what their debt is. and anyone can look at the NUMBERS and calculate themselves into the future on things like ARMS.

in 2001, i went to buy a house and a realtor was recommended to me. that realtor came with a broker. and the broker looked at my tax forms and calculated that i could afford a monthly payment that I KNEW i could not afford. i told him what i could do. and he said, "ok." i chose a house i could afford. and when i went to sign the papers, i saw that the numbers were not what he had promised. SO I FIRED HIM.

i took a free class offered by the city of portland so that i could learn about what was possible at my income level, and so that i could learn about different financing options. and i chose a banker who did not try to rip me off.

what i'm saying, is that i took responsibility for my own situation. and i have it hard feeling sorry for people who purchased homes that were clearly beyond their means. and "adjustable rate mortgages???" how can anyone not see, that in x number of years, they will no longer be able to afford their home??? it's common sense.

i think we make choices and we suffer the consequences in both the good and the bad. i do not think people should be bailed out. not the ding dongs who couldn't afford their mansions, and not the evil bankers/brokers who are so greedy, they would shake the last dime out of their own daughter's piggy bank.

i am not not well versed in economics, and i know there are consequences i cannot foresee, and things i don't understand -that there are certainly innocent bystanders who will be damaged if everything is allowed to crash and burn. but why can't we help the innocent bystanders? and let the rest just fall of its own accord?

i heard about the "bonuses" at lehman brothers on the radio. i am shocked and appalled.

tax dollars should be used before any of this crap happens to build a world that is safe and user friendly, instead we squander our money overseas on the iraq war, and now use it to put out fires caused by greed and corruption. fracking ridiculous.
mckitterick
Sep. 23rd, 2008 04:40 pm (UTC)
Yeah, the realtor tried to get me to buy a house that cost twice as much as the one I bought, and really talked me out of buying a sub-$100k house (I was earning a lot more then, and could pay a huge amount of that down so my payments would be tiny). I didn't want a huge house; I wanted a charming house near the University.

Sure, I got a good interest rate, but if I'd bought the house he pushed me to buy, I'd not be able to have so much fun with vehicles and travel and such ;-)

I like the idea of helping the innocent bystanders. Hm. That would be interesting: Give the rest of us - who were careful with our loans - that money to buy up the foreclosed houses in our neighborhoods at pennies on the dollar.

Chris
geekmom
Sep. 22nd, 2008 08:12 pm (UTC)
I saw an interesting point elsewhere that if they hadn't "reformed" bankruptcy law, this may not have happened. It used to be that when things got over your head, you discharged your credit cards, kept your house, and started from scratch. Now it's harder to discharge the credit cards, so you end up giving up your only asset - your house.
skyflame
Sep. 22nd, 2008 08:18 pm (UTC)
rowyn has a couple of recent detailed posts about Fannie/Freddie and Lehman Bros. She's been following this for several years.
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kansas_dave
Sep. 23rd, 2008 02:30 am (UTC)
The question is whether the government plan will merely rescue a few fat cats, or whether it will also prevent a second great depression?

The American economy is built on debt, which isn't necessarily a bad thing. However, it is vulnerable to certain things, and one of those is an inability or unwillingness to lend money.
( 28 comments — Leave a comment )

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