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Congress Scrambles to Save the American Economy
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by Emilio Lizardo | September 22, 2008 at 07:12 am
515 views | 43 Recommendations | 25 comments
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The US congress scrambles to save face, satisfy special interests, and rescue the crumbling American economy all in one fell swoop. Legislation is now being put together which will not only protect the finance industry from bad mortgages, but other kinds of defective credit as well.
There is even now some discussion of protecting the taxpayer as well, but this may not come to very much if past legislative practice is any indication.
We should see something approaching a vote by the House nearing the end of the week.
Congress scrambles on rescue bill
Debate takes shape: Democrats want help for homeowners. Industry wants plan to cover other kinds of consumer debt.
September 22, 2008: 10:55 AM EDTNEW YORK (CNNMoney.com) -- The Bush administration's proposed $700 billion financial rescue took fuller shape on Monday as lawmakers debated whether to add provisions to protect taxpayers while banks and other companies called for expanding its scope beyond mortgages.
Democrats want the measure to include independent oversight, homeowner protections and limits on executive compensation.
"We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome," House Speaker Nancy Pelosi, D-Calif., said Sunday.
Meanwhile, Treasury Secretary Henry Paulson called on Congress to move swiftly. "We need this to be clean and quick," Paulson said.
President Bush reiterated that sentiment on Monday.
"[T]here will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process," Bush said in a statement. "[T]he whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts."
On Sunday, the Financial Services Roundtable - a lobbying group representing the nation's banks - called on Congress to make the plan "broad enough to include different types of assets."
And the Treasury Department has amended its original request to give it authority to buy up not just troubled mortgage assets, but troubled assets period.
"Removing troubled assets will begin to restore the strength of our financial system so it can again finance economic growth," according to a statement on the Treasury Web site.
The legislative proposal is the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression.
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Most RecentMost Recommended Comments (25)
at 07:19 on September 22nd, 2008
Seems like some people are in too big a hurry to ramrod this 'rescue' through. Taxpayers? Humph! Everybody's dollar is going to be worth less. It's called inflation. When the Fed manufactures this 'money', the effects take a couple years to trickle down. The ones who benefit the most are the ones who get their greedy hands on it first.
at 07:25 on September 22nd, 2008
Thanks for the comment, René.
Anybody old enough to have seen this crew in action for a while probably is reaching for their favorite headache balm by this point.
The part that maybe hurts the most, IMHO, is we elected the bums ...
Well, perhaps by the end of the week we'll see who's in the lifeboats and who isn't ...
at 07:38 on September 22nd, 2008
Voters do have a recourse for their state's representatives and senators. It's called RECALL. It does take some dedicated and concerened citizens, radio talk show hosts and the internet to be effective. We did it for one outrageous bill from Louisiana's state legislature when they tried to give themselves a huge payraise, but they also included Gov. Bobby Jindal in the recall petitions. and he finally vetoed it.
at 07:59 on September 22nd, 2008
Not all voters have that recourse, actually. Check your local listings; restrictions may apply.
at 07:32 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff.
at 07:45 on September 22nd, 2008
The American economy? Looks more like the world economy. The Supreme Washington Soviet will save all of us.
at 07:56 on September 22nd, 2008
I hope the Democrats are not alone in trying to put some brakes on this railroad.
Source: nytimes.com
Hear that? Some help for folks on the ground floor and some control over those at the top of the food chain.
Everybody talks about the executive salaries, "golden parachutes" and bonuses paid out as faied executives leave in disgrave with a pot of gold.
What does the Bush plan do about the problem?
Nothing!
Source: nytimes.com
While everyone from the janitor to top managers are praying that they can keep their jobs, Bush is giving job security to the executives who caused the problems. They should live in fear of losing their job, home(s), pension and livelihood just like everyone else.
Way to go, Paulson, give the guys with the money all they want now and we will talk about reform later.
Oh, and remember how now disgraced Bushie Paul Wolfowitz (himself a beneficiary of a golden parachute for screwing up his job - in more ways than one) told us the Iraqi oil would pay for the war? Apparently, that line worked so well, the Bush Administration is hoping we will buy it again.
Source: nytimes.com
Heckuva job, Bush!
at 02:02 on September 23rd, 2008
Gigantic cash grab for sure, Dunk!
Thanks a lot for extra details, comments and the flag !!
at 08:10 on September 22nd, 2008
WOW! We can have socialized Wallstreet but not universal healthcare? Oh, yeah, the Wallstreet bailout saves the butts of bazillionaires, but universal healthcare only helps regular people. Clear as day.
When are you conservatives going to wake up and realize that there is nothing conservative about the Bush Administration.
at 09:13 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff.
at 09:58 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff. The Arab world told me just in a comment our economy is smoke and dead ?
at 10:25 on September 22nd, 2008
Scary times.
at 10:46 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff.
at 10:49 on September 22nd, 2008
Is this just lip service and the Fed and Congress plan to try to squeeze this up our collective a#@es.
I say no need to experiment with communism, socialism, fascism or any ism. Let the free-enterprise system work. If you have a small business, grossing $100 million per year, and you make bad decisions and had bad luck; too, bad. It will be a cold day in hell when the government call to ask if you need help.
U.S. government should bail out of bailouts
http://www.wnd.com/index.php?fa=PAGE.view&pageId=75637
Morgan-Stanely, Goldman Sachs, Bear Sterns, Lehman Brothers,AGI and ??? -- did they choreograph or orchestrate this? All in the same few weeks. And, then there's the threat of no loan money if the public does not acquiesce. This sound like a Mexican kidnapping and hostage take on steroids.
Reject it. Let Free-Enterprise work its magic. Remember AMC motors or how about Gulf+Western. The names died but business lives on. We don't need government in the gambling business -- or any business at all.
at 01:54 on September 23rd, 2008
Amen and Halleluia !!
at 11:48 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff. Interesting discussion and info. Thanks. And thanks to moonwolf for the link to vote no bailout. I just did and sent the link to some of my people.
at 13:09 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff.
at 13:48 on September 22nd, 2008
Great article. I think we have to do something quick to save the economy. I have similiar articles about this sector in my financial news blog
at 14:04 on September 22nd, 2008
Any economy that runs on excesses is bound to get into trouble. Government is running trillions of dollars of deficit and consumers are spending more than they earn. this is a recipe for disaster. We need to come together as a nation and focus on our domestic issues rather than telling the world how to run their affairs.
Debra
<a href="http://www.getaustinonline.com">Austin</a>
at 14:05 on September 22nd, 2008
Any economy that runs on excesses is bound to get into trouble. Government is running trillions of dollars of deficit and consumers are spending more than they earn. this is a recipe for disaster. We need to come together as a nation and focus on our domestic issues rather than telling the world how to run their affairs.
Debra
http://www.getaustinonline.com
at 15:21 on September 22nd, 2008
Emilio Lizardo, I like this story. It's good stuff.
On the one hand, i understand the reason to prop the shaky financial sector. But this $700 billion bailout plan, not to mention the hundreds of billions already promised to bail out Fannie & Freddie Mac and Bear Stearns and AIG is incredibly costly. On top of that, the war in Iraq and Afghanistan is already taking a huge toll on the American economy, costing the American taxpayers at least $500 billion for the wars.
How in the world if the U.S going to pay for all that??? There is also no guarantee that the US government can get a return from the securities guaranteed even if they managed to sell those securities to third parties.
I can imagine Prez Bush saying to the American people, "you have to be patriotic and spend more money on consumer goods in order to make our economy good again and to to fight against terror because the financial sector meltdown is what the terrorists wanted. 9/11! 9/11! " Which of course is the worst thing to do because, A: nobody have money now to spend on goods, especially those employed by Lehman Brothers, Bear Stearns e.t.c, B: it is precisely the manufacturing and consuming of consumer goods that is making the environment less sustainable
at 01:58 on September 23rd, 2008
Thanks for comments and flags All !!
Much appreciated, and a very interesting discussion!
at 17:04 on September 23rd, 2008
Emilio Lizardo, I like this story. It's good stuff.
at 05:05 on September 25th, 2008
Moonwolf...they are blocking Vote No Bailout on me...so I can't vote. I am sure this is happening elsewhere...
Also my question is who will bail-out the government? When is the tipping point of no return when the US Government reaches its limit on debt? To me they have made the Banks the new 4th branch of governement with this bailout. They are the ones who made the banks fail ....and it was not some mistake.......It was outright fraud committed...So why is everyone calling it mistakes? They are crooks, caught selling bad notes....and when they couldn't off load the crap anymore there it sits.........in Wall Street...the new trash deposit for Naples Italy.
at 07:47 on September 28th, 2008
Emilio Lizardo, I like this story. It's good stuff.Since I have been in the remote interior for two weeks with no news or internet, it is nice to catch up with US news,. THanks