by Damozel | Meanwhile, what I want to know is: WHY HASN'T ANYONE ANSWERED CHUCK SCHUMER'S $550 BILLION QUESTION???? Anyone? Anyone? Why $700 billion? Why? WHY? Via Brad at Sadly, No!
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.” (forbes)
Reasoning much along the same lines as Schumer and our own Deb Cupples, Brad says: "Couldn’t we work a try-out deal to buy, say, $100 billion over the next three months to see how things go?"
You'll be glad to know that our elected officials are "resigned" to having to work over the weekend. Sucks to be them, I know. (The Hill).
In the meantime, Dems like us are worried. We have cause to be.
Barney Frank submitted a bill that undercuts Dodd's. Will it be FISA all over again, Ian Welch asked earlier tonight.
There's a summary copy of Frank's bailout bill up at TPM. It's essentially a Wall Street giveaway plan, with only some fig leaves to try and pretend that it isn't.
Why? Because the language about taking warrants in exchange for buying up toxic assets is only for direct purchases and not for reverse auction puchases, which will be the majority of the purchases. As Soros points out, in any reverse auction, the government will get stuck with the most toxic of toxic waste because of information asymetries. In exchange they should at least get stock, equal not to what they paid, but to the face of the crap they are buying.
There is quite a bit of language about helping mortgage holders, but it is almost all qualified with words like encourage and request, rather than require. Since the Treasury is bailing mortgage holders out, the idea that the Secretary must "encourage" and "request" is just BS. The correct response is to make help for mortgage holders a requirement of participating in the program at all. If financial institutions don't like that they don't need to participate. Good way to make sure that companies that don't really need help don't swill at the trough. (FDL)
Welch asks why Frank hasn't posted the full bill. "Dodd was straight up with us. Frank is hiding his legislative language. Why?"
Now Frank is talking as if it were a done deal. (Reuters) No, no, no. NO.
"We now have between House and Senate Democrats an agreement on what we think should be in the bill, and we have a meeting scheduled at 10 a.m. tomorrow to meet with the Republicans," said Frank, chairman of the House of Representatives Financial Services Committee.
Still, he said some things that evoked a teeth-gritted rictus grin:
The Massachusetts senator said a limited number of details still had to be resolved, but thought it could be done quickly. These matters involved bankruptcy protections for families on the verge of losing their homes and giving the government a return on its money if the company being helped prospers....
The issue of government controls on compensation for executives of corporations that participate in the bailout had ignited a firestorm, with Americans complaining to their representatives in Congress that these corporate chiefs shouldn't be rewarded for failure.
"On the executive compensation thing, it went to the core of their (the Bush administration's) being," said Frank. "It was like asking the chief rabbi of Jerusalem to eat bacon on Yom Kippur. It was the most unthinkable thing they could think of." (Reuters)
He also took a few swipes at McCain's suspension of his campaign so that he can go back and give Congress the benefit of his profound economic insights as they work on the bailout.
"All of sudden, now that we are on the verge of making a deal, John McCain here drops himself in to help us make a deal, Frank said.
He expressed fear that McCain, a U.S. senator from Arizona who has spent much of the year away from the Capitol campaigning, could end up slowing down work on the bill....
"We're trying to rescue the economy, not the McCain campaign," Frank said. (Reuters)
Commenting on the alleged or impending "compromise" between the Dems and Paulson, Welch said with a despair I well understand:
I suppose expecting most Democrats to actually stand up to more than breeze's worth of pressure and alarmism was too much to ask. According to The Hill, a "compromise" has been reached. Details are vague, there's to be something to "protect taxpayers" but what it is isn't clear. What is known is that changes to bankruptcy laws, which were in both the Dodd and Frank bills are out because Paulson wouldn't agree. Of course, I'm sure it didn't help that Obama on CNN today said that neither stimulus nor bankruptcy changes should be in the bill. When the leader of the party says it, it sort of undercuts your bargaining position.
This is the most unutterable bullshit I've seen in 5 years of blogging, and that's saying something. A five year old child would understand that if someone is about to be completely destroyed unless you help them, they aren't in any position to bargain. Yet somehow Democrats keep caving to Paulson. That means either it isn't that much of a crisis, since Paulson seems to feel free to draw lines in the sand "ordinary people get no help if they go bankrupt, but we have to make sure banks don't go bankrupt"; or if there is a crisis, then Democrats are the world's worst negotiators. (FDL)
Speaking of rictus grins.....::sigh.::
Ian Welch concludes:
At this point there appears to be little possibility of a good bill. The only thing to do now is to make House Representatives so scared of having to justify this bill to their constituents that there is a House revolt (FDL)
RECENT POSTINGS.
Trainwreck: Katie Couric Interviews Sarah Palin
Schumer Asks the $550 Billion Question: Why so Much Right Now?
Bush Admin. Hatched Wall Street Bailout Weeks (or Months) Ago
A "conservative" blogger posted a topic with a heading like this: "Republicans sought X; Democrats opposed it", where X was something he could assume his readers would think a good thing. The Republicans had even held the majority at that time. I pointed out that in a divided majority, or when in the minority, any senator can propose anything, knowing it won't pass, and then trumpet his "position" to his constituents. This is child's play; it happens all the time. I opined that one could choose to believe this politician, to give him credit for really wanting the thing he knew he couldn't get, but only if he hadn't already betrayed you repeatedly in that and other areas. I then argued that his headline was unhelpfully misleading, because it implied the granting of this benefit of the doubt to the Republicans who I argued *had* stabbed us ("conservatives") in the back more often than not.
Here you have done the same thing.
Implicit in your headline is the assumption that the Democrats oppose Paulsen, and you express incredulity when they don't. Noone that I'm aware of, and noone likely to be more credible to you I hope, has railed at greater length about the extent to which the Democrats have cooperated with the Bush administration on grave, fundamental matters (the fed/wall street, the war, secret interrogations, etc), than Glenn Greenwald, who I see you've linked to. Have you read him lately? So, I'll let him be the authority, that the Democrats are doing to you what the Republicans did to me. I urge you to escape from the incredulity, which is unproductive, by rethinking your premises.
This is a one-party government.
I wish the best thinkers on all sides would escape from the R vs D misdirection, and cut straight to the reasonable conclusion, that it is our common enemy, it is destroying us in the name of whatever its internationalist goals are, and we in this realm of ideas, the blogosphere, had better start saying so explicitly.
One small step, and most of us would be allies.
Posted by: Ralph Carter | September 25, 2008 at 11:45 AM
People forget this: These political parties are not branches of government. Together, they are one of our biggest business interests, and they have a death-grip on the Electoral Show. They are in effect a branch of the entertainment industry, like the media, like our professional sports, and are as corrupted and manipulated and fake as they are. It is a show, people; we've fallen into an Orwellian nightmare.
Posted by: Ralph Carter | September 25, 2008 at 06:17 PM
One guy says "gimme a trillion, now", and almost everybody jumps, bends over, and asks "where do I sign?". Which one is the boss? The unelected one. (I wonder who *his* real boss is.)
One more step, and Paulsen's bosses won't have to go through this charade of asking for permission. I'll explain. Paulsen's initial demand was for dictatorial immunity (see clause 8, which would have precluded all oversight by any governmental body or court). What he is likely to get is even better- a new policy or mechanism or department via which his bosses will be able to achieve the same goals a little slower, but without this embarassment of begging hat in hand to congress. Once this is institutionalized, you know we'll never be rid of it. They'll get what they want one way or another because they are, in effect, an unelected government. That is the government we must cast off. We're serfs again people! Stop being mystified when your favorite politicians betray you! What will it take, a million humiliations? a *trillion*?
Posted by: Ralph Carter | September 25, 2008 at 06:49 PM
I'm not posting any more, because Glenn Greenwald is saying the same things, infinitely better. See his post and updates:
Tuesday Sept. 23, 2008 08:03 EDT
David Brooks thinks he sees a "new establishment" to run economic policy
Posted by: Ralph Carter | September 25, 2008 at 07:25 PM