STOP the Bailout. STOP the rape of US Taxpayers. STOP the slide toward Socialism.

quesney | quesney

[quesney]

Rush Limbaugh
9/22/08

There's a great idea at stake here, too, and the idea is that the free market measures itself and handles itself better than the government. The great idea that we're about to throw away with this bailout is that the government can run things better. The government can take care of you, the government can insure you, the government can protect you, the government can provide for you. This is an idea which has been shown to fail around the world.

This emergency bailout friends can go either way. It can fix the underlying problem or merely represent another opportunity for another leftist hijacking. Whenever this kind of money is going to be spent by the government on something, Democrats are going to get their hands in it, and they're going to reward people like ACORN. They're going to try to. They're going to try to build on their social programming and networking here with this kind of money outstanding that is supposedly aimed at shoring up the US economy.

How many times in the last six months have we read stories about the Fed adding to liquidity here or helping this institution there? We've already had a bunch of bailouts. We've already had a government stimulus package to help the US economy, and now Obama's talking about wanting another one. These things have a history of not working. They may show short-term relief, but over the long haul, world history is replete with example after example after example that centralized economic planning does not work. The left sees this as their opportunity to change the nature and identity of this economy.

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Rep. Ron Paul
9/22/08

The worst thing we can do is perpetuate the bad policies that gave us this trouble in the first place. We borrow and spend and consume and now it's caught up to us. When the war started in Iraq, they said we'd need $50 billion...this $700 billion is just the beginning. This is Wall Street in big trouble and sucking in Main Street and dumping all the bills on Main Street. You can't solve the problem of creating money and credit out of thin air by creating more money and credit out of thin air and not changing basic economic policy. Yes, it would be painful, but it wouldn't last as long. What they're doing now is propping up a failed system so that the agony lasts even longer. Yes, they're going to be losses. But we have to live within our means. What the government is doing now is trying to prop up prices. We need a market economy and to believe in ourselves. It would be a bad year. But with this bailout, it would be a bad decade. More government. More spending. More relations. Trying to prop up a bad system. THe bubble has been blown up. It needs to deflate. This isn't saving Main Street. This is sticking it to Main Street.

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NYT
William Kristol
9/21/08

It’s not that I don’t believe the situation is dire. It’s not that I want to insist on some sort of ideological purity or free-market fastidiousness. I will stipulate that this is an emergency, and is a time for pragmatic problem-solving, perhaps even for violating some cherished economic or political principles. (What are cherished principles for but to be violated in emergencies?)

But is the administration’s proposal the right way to do this? It would enable the Treasury, without Congressionally approved guidelines as to pricing or procedure, to purchase hundreds of billions of dollars of financial assets, and hire private firms to manage and sell them, presumably at their discretion There are no provisions for — or even promises of — disclosure, accountability or transparency. Surely Congress can at least ask some hard questions about such an open-ended commitment.

And I’ve been shocked by the number of (mostly conservative) experts I’ve spoken with who aren’t at all confident that the Bush administration has even the basics right — or who think that the plan, though it looks simple on paper, will prove to be a nightmare in practice.

McCain — more of a gambler than Obama — could take a big risk. While assuring the public and the financial markets that his administration will act forcefully and swiftly to deal with the crisis, he could decide that he must oppose the bailout as the panicked product of a discredited administration, an irresponsible Congress, and a feckless financial establishment, all of which got us into this fine mess. Critics would charge that in opposing the bailout, in standing against an apparent bipartisan consensus, McCain was being irresponsible.

Or would this be an act of responsibility and courage?

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Washington Post
Sebastian Mallaby
9/23/08

With truly extraordinary speed, opinion has swung behind the radical idea that the government should commit hundreds of billions in taxpayer money to purchasing dud loans from banks that aren't actually insolvent. As recently as a week ago, no public official had even mentioned this option. Now the Treasury, the Fed and congressional leaders are promising its enactment within days. The scheme has gone from invisibility to inevitability in the blink of an eye. This is extremely dangerous.

The plan is being marketed under false pretenses. Supporters have invoked the shining success of the Resolution Trust Corporation as justification and precedent. But the RTC, which was created in 1989 to clean up the wreckage of the savings-and-loan crisis, bears little resemblance to what is being contemplated now. The RTC collected and eventually sold off loans made by thrifts that had gone bust. The administration proposes to buy up bad loans before the lenders go bust. This difference raises several questions.

Congress and the administration may not like the sound of these ideas. Taking bad loans off the shoulders of the banks seems like a merciful rescue; ordering banks to raise capital or buying equity stakes in them sounds like big-government meddling. But we are in the midst of a crisis, and it shouldn't matter how things sound. The Treasury plan outlined on Friday involves vast risks to taxpayers, huge complexity and no guarantee of success. There are better ways forward.

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Newt Gingrich
9/21/08

We are being reassured that we can trust Secretary Paulson "because he knows what he is doing". Congress had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy.

Imagine that the political balance of power in Washington were different. If this were a Democratic administration the Republicans in the House and Senate would be demanding answers and would be organizing for a “no” vote. If a Democratic administration were proposing this plan, Republicans would realize that having Connecticut Democratic senator Chris Dodd (the largest recipient of political funds from Fannie Mae and Freddie Mac) as chairman of the Banking Committee guarantees that the Obama-Reid-Pelosi-Paulson plan that will emerge will be much worse as legislation than it started out as the Paulson proposal. If this were a Democratic proposal, Republicans would remember that the Democrats wrote a grotesque housing bailout bill this summer that paid off their left-wing allies with taxpayer money, which despite its price tag of $300 billion has apparently failed as of last week, and could expect even more damage in this bill.

But because this gigantic power shift to Washington and this avalanche of taxpayer money is being proposed by a Republican administration, the normal conservative voices have been silent or confused. It’s time to end the silence and clear up the confusion. Congress has an obligation to protect the taxpayer. Congress has an obligation to limit the executive branch to the rule of law. Congress has an obligation to perform oversight. Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess.

Question One: Is the current financial crisis the only crisis affecting the economy? Answer: There are actually multiple crises hurting the economy. There is an immediate crisis of liquidity on Wall Street. There is a longer time crisis of a bad energy policy transferring $700 billion a year to foreign countries (so foreign sovereign capital funds are now using our energy payments to buy our companies). There is a long term crisis of a high corporate tax rate driving business out of the United States. No solution to the immediate liquidity crisis should further cripple the American economy for the long run. Instead, the liquidity solution should be designed to strengthen the economy for competition in the world market...match our competitors in China and Singapore by going to a zero capital gains tax. Private capital will flood into Wall Street with zero capital gains and it will come at no cost to the taxpayer...immediately pass an “all of the above” energy plan designed to bring home $500 billion of the $700 billion a year we are sending overseas. With that much energy income the American economy would boom.

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George Will
ABC's This Week
9/21/08

When the British Labour Party was socialist, it defined socialism as government control of the commanding heights of the economy. And in Britain, at that time, it was coal, steel, and railroads. The commanding heights of the American economy are financial services, and they are now controlled by the government.

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Rep. Mike Pence (R-Ind)
9/22/08

Nationalizing every bad mortgage in America is not the answer. The Administration's request amounts to the largest corporate bailout in American history. Congress should act, but should act in a way that protects the integrity of our free market and protects the American taxpayer from more debt and higher taxes. Congress must not hastily embrace a cure that may do more harm to our economy than the disease of bad debt. And the stakes for our free market could not be higher.

Alternatives to a massive federal bailout must be fully considered and debated before Congress acts. Finally, any new expenditure of taxpayer dollars should be paid for with fiscal discipline and reform. If Congress decides to spend nearly 1 trillion dollars on a corporate bailout, it must find budget savings to prevent that cost from being passed along to the American people...We should demand consideration of free market alternatives to massive government spending and we should fight to pay for the solution through budget cuts and reform instead of more debt or taxes.

Now's the time for us to be dealing with the root causes of this economic downturn and not simply opening the cash window at the federal reserve and writing one bailout check after another.

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USNWR
9/22/08

House Democrat Peter DeFazio of Oregon had harsh words for the rescue plan...DeFazio took a shot at Treasury Secretary Henry Paulson, the former chairman and CEO of Goldman Sachs. "He is of, by, for, and about Wall Street," the lawmaker said. DeFazio said in a single year, Wall Street bonuses exceeded $60 billion and added: "These people are out of control. They don't understand the real world. For them to talk about Main Street, and that they care about Main Street and student loans and homeowners' equity, is a bunch of B.S."

"We are the last bulwark here, the House of Representatives and the Senate," he concluded. "If this bill were to pass as proposed, we'll do an incredible disservice to the American people."

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Scoop
9/23/08

Constituents have been blowing up the phone lines on Capitol Hill, calling House of Representatives members, Republicans and Democrats, objecting to the no-strings-attached bailout, and the representatives have responded.

Representative Dennis Kucinich (D-Ohio), spoke out against a bailout, calling the current proposal "cash for trash." [never thought I'd quote that man]

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9/17/08
Reuters
Gov. Sarah Palin

Earlier Wednesday in Cleveland, Palin said she was disappointed that the government needed to bail out another financial institution.

"Disappointed that taxpayers are called upon to bail out another one...it's understandable but very, very disappointing that taxpayers are called upon for another one," she said.

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Reuters
9/23/08

"In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted and may actually cause the government to revert to an inadequate strategy of ad hoc bailouts," Shelby said. Lawmakers on both extremes of the political spectrum assailed the plan as a massive, poorly conceived bailout.

In an expansion of its original proposal, the Bush administration is asking for broad power to buy up virtually any kind of bad asset — including credit card debt or car loans — from any financial institution in the U.S. or abroad in order to stabilize markets..There still were divisions on which tottering financial firms would be helped and what kind of assets the government could buy as part of the bailout.

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MSNBC
9/22/08

Steve Ebels, who owns a heating business, said he already lost much of his life savings when a general contractor he was doing work for went belly up, leaving Ebels with a pile of bills for materials and labor he had already invested in the project...And that is perhaps the biggest reason why Ebels, 51, would like to see the failed Wall Street titans pay for the actions that have led to this crisis. If he has to start over because of a soured business deal, he figures, so should they.

“I would just like to see some way that these people are held personally accountable,” he said. “We’ve got to do more of that in this country: personal responsibility and accountability...All (the bailout) does is transfer all the indiscretions of all these people onto the shoulders of the taxpayers,” he said.

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Michele Malkin
9/22/08

Both parties in Washington are about to screw us over on an unprecedented scale. They are threatening us with fiscal apocalypse if we don’t fork over $700 billion to Treasury Secretary Henry Paulson and allow him to dole it out to whomever he chooses in whatever amount he chooses — without public input or recourse. They are rushing like mad to cram this Mother of All Bailouts down our throats in the next 72-96 hours. And right there in the text of the proposal is this naked power grab: “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.”

Stop.

[detective]

You are right in that we need to have a third party vet these swaps and financial instruments and that we need to make sure taxpayers are not on the hook for worthless securities. I agree that we should not add provisions that would provide additional benefits to people who took out loans they could not afford. You make some very good points.

[detective]

‘If that were true, they could sell on the free market without the bailout.”

The problem is primarily a liquidity problem, not a total lack of value. That is why AIG which is a financially sound company was forced to go to the government for a loan that will be very profitable for the government.

[nicola_tesla]

Bull. That’s just what the money-grabbers want you to think.

Who’s insolvent here ?

-People who bought too much house for their incomes - there’s no saving them. Add in folks who piled on with big car loans and lots of CC debt.

-the banks - who gleefully lent to all these people who couldn’t repay them, which the banks should have known if they’d done traditional 20% down, 36% dti ratio mortgages.

-the Fed - yes, the Fed - who has been busily trying to bail out all their banking buddies, Friends of Bennie and Hanky, at the expense of the taxpayers and the holders of treasuries, and everyone who consumes commodities like oil.

The banks encouraged a mountain of debt to be created, which they had to know was a problem because the payback of a loan requires income. You can’t get debt service if corporations are busy outsourcing well-paying jobs.

The Fed encourages it all with easy money, and the federal government stood back and enforced nothing.

This entire bailout is about recapitalizing the Fed, so they can choose which of their buddies gets to live to lend another day.

The big problem is that we the taxpayers are going to foot the bill, but we received none of the profits, and there are going to be no profits with the crap the banks will be loading onto the .govs balance sheet. This bailout will cost in the trillions of dollars.

You want to know the real deal ? You can forget ever retiring, and so can your kids and grandkids and their children, because there is no paying all this back.

Do the math, go look at the Fed’s current balance sheet, and understand that they are just looting the taxpayers.

What would happen if the markets seized up today ? Nothing much. If you are even a bit prepared with some cash at home, some food in the pantry and gas in the car, you could easily survive until the banks that are adequately capitalized would be left standing.

No matter if this bailout gets passed, there will be no trust and confidence in the markets, credit or equity, until 1) banks and corporations are truthful on their balance sheets and mark their assets to market and 2) the gov stops changing market rules in the middle of the night so that no one can trade with any confidence and 3) they stop printing oney and blowing up spreads and yields.

[Mojave]

The problem is primarily a liquidity problem

That's the mantra.

[VideoDoctor]

The Bailout Needs to be Quashed - Say NO to this Crazy Bailout Scheme.

 

The question to ask:

 

Where exactly in the Constitution was the Fed and Congress given the authority to 'bail out' failing companies with taxpayer dollars?

 

CALL THEM NOW!

Senate Switchboard: 1-202 224-3121

Find your individual senators’ phone numbers: http://www.senate.gov/general/contact_information/senators_cfm.cfm

House Phone List: http://clerk.house.gov/member_info/mcapdir.html

MAKE THE CALLS!

Call Capitol Hill Switchboard TOLL FREE:

1-877 851-6437

1-800 828-0498

1-800 614-2803

1-866 340-9281

1-866 338-1015

1-866 220-0044

The White House comment line 1-202-456-1111 -  9:00 AM to 5:00 PM EDT

[nicola_tesla]

Bull.

If you think Fannie and Freddie were the cause of all this you are sadly mistaken. It’s a lot deeper and involves the banks and investment banks as willing and eager co-conspirators.

And if you think that the 85Bil bailout of AIG will ever return money to the taxpayer, tell me - what did the RTC in the 80s ever return to the taxpayer ? Right, that would about 40 bil in net cost, not profit. AIG wrote 441 bil of CDS for which they were totally undercapitalized to handle. They can’t cover just what they wrote on Lehman, let alone any other company. That money ain’t coming back, ever.

[nicola_tesla]

EXACTLY !

nice summation

[Hawthorn]

> You want to know the real deal ? You can forget ever retiring, and so can your kids and grandkids and their children, because there is no paying all this back. <

Sorry, but you have it exactly backwards.

[Hawthorn]

> The panic spreading socialist mantra du jour. <

No, it’s a realistic forecast made by people who have in-depth knowledge of monetary history and our financial system.

[Mojave]

No, it’s a realistic forecast made by people who have in-depth knowledge of monetary history and our financial system.

It's blatant propaganda by people who have been proven wrong every step of the way.

[detective]

The cause of this problem was the mortgages that were given to people who had no ability to repay them. The Federal government encouraged lenders to provide mortgages to these people. Freddie and Fannie bought these mortgages and repackaged them for sale to financial institutions.

The government loan to AIG allows the government to own AIG if it is not repaid. The Resolution Trust Corporation was not established to make a profit but rather to clean up the mess created by the looting of SandL’s.

[Kinzua]

If it is likely a profitable venture, why isn’t there any private liquidity available?

[murphE]

I think that loosely translates to "Let them eat cake".

If I wasn't so...rrrrr...at this stupid plan that line would make me LOL.

Yes, let us reward irresponsible behavior by taking away all of the negative consequences for that irresponsible behavior, while making the responsible people take on the negative consequences. I'm sure this will lead to more responsible behavior in the future./s

[quesney]

alert

[Tolik]

Great Post!

This ping list is not author-specific for articles I'd like to share. Some for the perfect moral clarity, some for provocative thoughts; or simply interesting articles I'd hate to miss myself. (I don't have to agree with the author all 100% to feel the need to share an article.) I will try not to abuse the ping list and not to annoy you too much, but on some days there is more of the good stuff that is worthy of attention. You can see the list of articles I pinged to lately  on  my page.
You are welcome in or out, just freepmail me (and note which PING list you are talking about). Besides this one, I keep 2 separate PING lists for my favorite authors Victor Davis Hanson and Orson Scott Card.  

[nicola_tesla]

Jeez - ever debate ? You deny, but provide absolutely no facts to support your position.

I’m sayin’ you can’t do simple math.

700 billion cannot bail out 62 trillion, plain and simple. It’s the derivatives that are the biggest problem of all, and there is no answer to it other than reset.

Look at Japan. Banks there are still undercapitalized and despite ZIRP their economy has been mired in a depression for over 10 years.

Explain, with facts, how Hanky & Bennie’s plan will deal with the trillions necessary to really make a difference, and how that won’t destroy the creit and dollar value of the US.

I’ll be waiting. For facts and reasoned opinion, please, not offhand unsubstantiated statements like your last post.

[nicola_tesla]

Welcome to the USSA, Comrade.

Let’s get one thing straight - Fanny and Freddy were not the only entities securetizing debt - the IBs were in it up to their necks. They made hundreds of billions and possibly a few trillion dollars in fees for doing so, yet you think they should be recpitalized - for what ? That business model is not coming back, as there are no buyers for the trash. Why do you think the 2 remaining IBs became bank holding companies ? So they could suck off the taxpayer teat after the bailout is passed.

Frankly, people like you make me laugh in despair. You frequent a conservative website but you approve of socializing losses of private institutions with no penalties to those who made the gains. People like you don’t understand moral hazard. Over and over banks have geared their leverage higher than is safe, and each time they are bailed out they simply do it again.

They need to fail, period.

[GOPJ]

Newt Gingrich 9/21/08 We are being reassured that we can trust Secretary Paulson "because he knows what he is doing". Congress had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy.

Newt's right. Paulson comes from the "OH SO SMART" Wall Street Crooks who got us into this mess. Well, it wasn't just the Wall Street Crooks, it was also HUD and Freddie and Fannie and the congressmen who get big donations to tweak banking regulations for the crooks and liberal victim groups.

I don't want to bail out any of the groups listed above. None of them.

Here's my solution - let the Wall Street boys, HUD, Frannie and Freddie and the congressmen lose. They've ruined our economy and if I have to go down, I'd just as soon see the crooks who did this go down with me.

I'll have to pay for the mess anyhow - well, me and the rest of middle America.

[slowry]

Great post

The below link I suppose is getting old, maybe there’s a newer example available.

http://www.rasmussenreports.com/public_content/business/general_business/just_7_favor_fed_bailout_for_financial_firms

[Hawthorn]

> For facts and reasoned opinion, please, not offhand unsubstantiated statements like your last post. <

The phenomena of monetary panics and bank runs, plus their associated monetary contractions, have long been well understood by the genuine experts like Milton Friedman and Irving Fisher.

We are faced now with a classic "run" that well might turn into an extremely serious panic -- the very sort of happening that the Federal Reserve system was meant originally to prevent but which it spectacularly failed to do in the aftermath of the 1929 crash.

I don't claim to be an expert. But as an informed student, I do claim to have a reasoned opinion that rests on facts -- an opinion that has been shaped by exposure to monetary history and formal economic analysis over the past 40+ years.

The matter is much too detailed for adequate discussion on an FR thread. But for starters, in order to bring yourself up to speed in this complex area, you might wish to become acquainted with the premier work in this field, the Monetary History of the United States by Milton Friedman and Anna Schwartz.

Reasonable people can disagree as to the best long-run course for restoring financial health. But we have before us the prospect of a "run" that could bring the entire system crashing down -- something that would impoverish you and me and everybody else for decades to come.

In this environment, clear and decisive action of the sort propsed by Paulson and Bernanke is absolutely essential. Moreover I can have no respect for the uninformed opinions of those who call for delay, nor can I respect the calumnious political name-calling I've seen today on more than one FR thread.