Posted on 10/02/2008 4:13:15 AM PDT by RightFighter
Like most of you, I am appalled at the sheer size and scope of this bailout plan, and even moreso with the additions that the Senate has placed in it now. It goes against my very core to think of the federal government getting this involved in the economny and placing this many tax dollars at risk. I want to be upset with those who voted for the bailout and vow that none of them will ever get my vote again.
However, the rational side of me also thinks that I need to examine this situation free of emotion and think about WHY so many Republicans - good, conservative Republicans - voted for this pig of a bill. Republicans like Saxby Chambliss, Tom Coburn, Kay Bailey Hutchison, and Mitch McConnell. Maybe even these four are not the ultra-conservatives we all want to run things, but they are all typically conservative on most issues. I believe that most Republicans who voted for this bill normally believe that they should always vote against tax increases and against large increases in government spending - whether that belief is based on conviction or convenience (the desire to be re-elected) is a question that others can answer.
So, back to the question - why would people who are, if not reliably conservative, at least TYPICALLY conservative, vote for this? Is it possible that the information they've been presented is so bad, so awful, that the consequences of not acting scare them more than the political fallout they will surely suffer for voting for the bill? Consider Harry Reid's "slip of the tongue" when he mentioned that there's a large, well known insurance company that is on the verge of failure. What if that's not the only company that the politicians know of that's about to fail? What if they know that there are dozens of large, well known companies employing hundreds of thousands of people, all of them tied together by the mesh of the American economy, that are teetering on the brink of failure? What if the government knows which companies they are and that the failure of one of these large companies will start a domino effect that brings down the rest very quickly?
I know that most would say that they want to know these details - if these companies (banks, insurance companies, others) are so close to failure that it's necessary to spend this kind of money, then tell us who they are so that we can decide for ourselves. But, what if the very act of naming the companies would cause the dominoes to start falling? If people began to hear the full depth of the problem, it's very possible that millions of people would immediately begin to pull their money out of banks, and the banks that have so far weathered the storm would begin to fail.
I believe that's why there seems to be so much secrecy about what's going on here - they are afraid to tell us the whole story because in telling us how bad things really are, they could make things worse.
Why would John McCain - who is so close to winning this election - vote for a bill that so many conservatives dislike so much and that appears to go against the very principles that he's outlined in his campaign? I would submit that it is possible he may actually be putting his country first, as much as we all want to think that he's just betraying us with this vote.
I don't want to believe that things are that bad - but I can't say that I know for a fact they're not. There may be information that we don't have to make that determination.
Ok, you issued a statement with absolutely no attribution or facts. So i will challenge you to prove me wrong. Please do so.
There are WMDs in Iraq and we must protect America and fight this WOT. Shock and awe begins in 15 minutes. (See the similarities?)
“The trial of the century,” culminated on October 3, 1995 in a black jury verdict of not guilty for the two murders of Nicole Simpson and Ron Goldman.
Think the MSM will dwell on this anniversary tomorrow in their usual hysterical quest for ratings? Not likely. To do so could possibly re-enrage the white population, which could dredge up nasty feelings and result in a “payback” vote against “The One”. Let’s see what the media do tomorrow on the anniversary.
What the democrats have done with the banking system, and the mandating of these loans, is engineered precisely to destroy the fundamentals of the free market. They may not have counted on these exact consequences, but they have most certainly been intent on bringing down our system and moving us ever closer towards abject socialism and marxism.
Now they are intent on engineering a "fix" that does more of the same and poressuring others to go along with it.
I stand by that sentiment. Their own actions and words indict them in this.
......I believe.....
Rush likes to say liberals “feel”
The other side of the coin is Conservatives “believe”
In the case at hand, we see here that many believe the country is being transformed into a socialist hell by the banking/financial moguls.
You have asked believers to accept a rational argument....ain’t going to happen.
If I owned an investment bank that was suicidally overleveraged, I might sell my bags'o'crap to Paulson and find that instead of being 32 to 1, I was now 27 to 1.
Finding that still too high, I might decide to sit on the cash and not lend anything that would push the ratio back up again.
Unrelated question...if you know your company's financials, do you know how many days' cash you have on hand? I work for a firm with $700 million on annual sales and we've never had less than 50 days in cash since I started there in 1998.
” Is it possible that the information they’ve been presented is so bad, so awful, that the consequences of not acting scare them more than the political fallout they will surely suffer for voting for the bill?”
I think you’ve hit the nail on the head.
They may be caught in a Catch 22.
They haven’t done a good job of selling this bill to the public. Why?
Because they haven’t given us all the information they are privy to. Why?
Because if they do give us all that info. it will worsen the situation with panic and bank runs.
So - if they tell us everything we need to know - they would actively be hurting the country even worse.
I think this is why Bush looks obviously strained, and even a bit afraid.
I think this is why Bernanke - a very intelligent man (and and expert on the Great Depression) is choosing his words very carefully.
A fair point. But can you argue the case for Henry Paulson being both astute and incorruptible?
I'm in favor of a plan that starts unwinding the credit mess, and I recognize that there will need to be government involvement in that. I'm not one of the let-it-all-burn, John Galt wannabees.
However, we need to have people who saw the problem early, and had the guts to call it, in the driver's seat (Robert Shiller, Nouriel Roubini, Ivy Zelman are three names that come to mind), instead of the Bernankes and Paulsons who were cheerleading the credit bubble up till a year ago.
On the left they oppose this corporate socialism because they want socialism for the masses instead. On the right there is opposition because, as Mises stated correctly, we either let the insolvent banks die the way they should, or we let it get worse by postponing and ultimately destroy our currency.
In the middle there was pressure to pass this pig, mostly just simple blackmail like Reid's threat.
As much as I hate this situation, the people who blithely caused it and the horrid solution, I was in process of reallocation of investment funds when this hit and so, had over the $100k limit sitting in MM funds. The $250k insurance limit helped me sleep easier. I also am a vendor to several very large distributors. One of them is notorious in our industry for their mismanaged cash flow and I know they rely on a credit line. At this moment, they owe me a few thousand dollars, due in 2 weeks. So, anything that helps a credit crunch does help me and, by extension, my suppliers.
I do wonder how far down the food chain this will progress. Our local bank was in process of a merger with another small local bank. Right before this happened, they informed their depositors that the merger is not taking place. Of course, we all wondered why the merger was happening in the first place and now we are wondering which of the small banks was in trouble.
I did think a lot about whether or not this was an engineered crises, but it is worldwide and the US$ appears to be coming out of it stronger, even if it is by comparison. I admit to not being that knowledgeable about macroeconomics, but I can see where that stronger dollar makes oil imports cheaper for us. Looking at the futures, it seems anyone shorting the US$ didn't make money.
I think very few Americans and perhaps very few people in the world really understand this level of economics. The Congress and administration got the message, however, that most Americans hate the solutions while being scared enough to grudgingly go along with it.
I grew up in Peoria, IL, home of Cat. If they can't get credit, it must be nonexistent, not just tight.
I’ve wondered the same, for many of the reasons you state, although the ability to keep such info under wraps seems unlikely.
“No one born during the past three or so decades has felt the pain of that event, but a lot of us did. I, for one, don’t want to see this country go through that again.”
I was born in 1968.
But I had a grandma who not only was traumatized by the Great Depression - but also by some sort of economic hardship in the early 1900’s (her parents put her and her sister on the Orphan Train).
She drilled that trauma into my head.
She never got over it even when she had a substantial pile of cash as she got older.
She hoarded everything (cool whip containers stacked in the cupboard right by the piles of empty bread bags). She only bought clothes at the Salvation Army.
She always lectured us about the money we spent on frivolous things.
As kids, my sisters and I thought this was a real drag.
Now, of course, we can look back at this with a different perspective.
I hope this is hype. I hope we don’t have to experience the type of hardship that traumatized those people.
If this all had not happened less than 2 months before the election I would be more agreeable to your statements....but we have been suckered so many times by the press and Liberals that I just don’t believe anything that is labeled a “crisis” especially when the Democrats think they might loose.
Red herring depiction. The insolvent banks must be eliminated. Spending trillions to make them solvent is a recipe for fraud and inflation. The best way for government to get involved is like they did with WaMu, make sure the deposits are bought and covered and disposition the rest in an orderly manner. That was the largest bank failure in history. Cost to the govt: zero. Deposits lost: zero. Bondholders took some losses, shareholders lost all (both speculators and long term investors). The markey may look disorderly at that point, but it isn't.
However I will observe that I have spoken personally to Senator Hutchison (but not to the others you mentioned) and while I'm sure she's a very, very nice person to put it simply she's just not very smart.
I don't say that to be mean or unkind, it's simply a fact and part of it may be her background; how much time has she actually spent "working" for a living?
Yeah, she was in the "private sector" for a while but only after she was defeated and my take is that she had to be hired for her political connections because when it comes to business she doesn't have a clue. Certainly her pre-political job as a reporter didn't do anything for her experience level.
For the most part what we have in DC are backbenchers that just couldn't cut it in the business world. And I don't mean the business of being a lawyer.
So when the chairman of the Fed and the Secretary of the Treasury tells you the world is coming to an end who do you believe? What experience do you fall back on? Were you involved in business in previous downturns in the business cycle (which anybody with any sense can tell you has been in the cards for well over a year)?
But lets say that my take is totally wrong. Is the solution of the government taking an equity position in private companies something that should be tolerated? Does the Consitution allow it? Can we learn anything at all about other situations where the government has stepped in that prevented companies that should have failed from failing? Is Japan a comparable model and if it is how has it worked out for them?
Are there other way to inject liquidity that might be preferable? What is the normal liquidity contraction that occurs in a business cycle downturn and how does this compare?
Did you hear any Senator raise these questions or did most of them spend their time talking about how much they disliked this but it had to be done and how hard their staff worked (the latter drove me nuts, those folks should try working on an oil rig for a day).
I dislike being as alarmist like Paulson but in my view this situation is the last line in the sand. We cross that line and the flame on the boiling pot goes to 11.
And this frog is tired of being boiled.
Besides... maybe I'm burnt out. I've seen every type of ludicrous conspiratorial nonsense on FR in the past few weeks and I'm starting to get numb to it all. Someone could show me home movies of Oswald and Ruby partying in a N.O. whorehouse with Lady Bird Johnson and I'd be totally tuned out.
I completely agree with you. This has been my feeling on the issue as well.
I certainly was not a proponent of this bill, and I certainly haven’t always agreed with John McCain, but I do think he knows a lot more than we do, and I think, as you said, he wouldn’t have voted for this thing unless the stakes really are so high.
It bothers me that so many on here are so quick to abandon all support for the man over this. McCain is still infinitely better than Der Furor, Obama.
The problem is the loss of trust. No one trusts DC to do the right thing or even know what the right thing is.
Sadly, the loss of trust has been well earned by DC.
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