Confused about the 2008 financial meltdown? Conor Friedersdorf of Culture 11 has a run down on the bailout legislation, why so many members of Congress were against it, and what the big plunge in the stock market meant. For example:
2) Why did its Congressional critics -- especially House Republicans -- vote against it?
Daniel Larison dissents from the conventional wisdom:
"The failure of politics that culminated in the defeat of the bill was the failure of the proponents of the legislation to make an argument that did not rely very heavily on prophecies of disaster.
There was no real attempt at persuasion, and the haste in which everything was done generated far more intense opposition than was necessary. The supporters of the bill wanted to ram it through with as little deliberation and scrutiny as possible. On any other issue, on any other bill, this would be seen as outrageous and you would hear about the wisdom of having a lower chamber that was more responsive to the people.
Now opposition to this hasty adoption of a bad plan is derided as irresponsible? Let me break it down for you: if things are indeed as bad as the proponents say, and if they are the responsible, sober voices of wisdom that they pretend to be, the truly irresponsible thing was to wait up until the last weeks before the recess, rush out a terrible plan, demand immediate adoption of this terrible plan (which they were happy to admit in public was a terrible plan) and then not even correctly gauge the level of support for the legislation before bringing it to a vote."
http://www.culture11.com/node/32500?from=feature
"Why the Stock Market Drop Doesn't Prove that Congress was Wrong to Reject the Bailout:
The stock market's record 778 point drop today will no doubt lead many people to conclude that the House of Representatives was wrong to vote down the bailout plan backed by both the Bush Administration and the Democratic leadership. Indeed, Senate Majority Leader Harry Reid has already made that argument. Here's why I think such claims are wrong. "
if we do the right thing by stripping the wealthy of their powers and give the money to the people to restart the country properly and responsibly - so that the wealthy who have usurped this country, the land, the resources, and its people to do their dirty work can feel what it's like to have to do their own cleaning and pick up after themselves, to do their own repairs and maintenances and to put back into the economy the money they have stolen from it for the last century.
Let me see if I understand your thinking here: "we" (as in the vast majority of not-wealthy citizens) should simply outright steal all the money from the "wealthy" (as in the vast minority of wealth citizens) and simply give it back to "the people"?
Oh, well why stop there? Heck, since "we" outnumber "them" millions to one, let's just go down the list of the top 100 wealthiest people in the U.S. and just take everything they own for ourselves!
In fact, while we're at it, let's just forget about the whole "rule of law" silliness. After all, that's what lets "them" keep "our" money, right?
You are a socialist, running full-tilt towards communism.
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Now, just some quick notes for everyone here:
The Democrats have a majority in both the House and the Senate. If Pelosi'n'co's bill was so great, why won't the Democrats simply pass it themselves? Then they could proclaim how they alone saved the U.S. financial sector.
But they are not about to pass it themselves people.
Here's the dirty little secret...
The bill is actually horrible. (Go read it.) Pelosi'n'co know it's horrible. They want "cover". They want the Republicans to vote along with them so that if it actually gets put into law, and we find out just how horrible it really is, they can point fingers at the Republicans and say "Hey now! They voted for it too!" (And no, the Democrats aren't trying to be all "bi-partisan" and friendly with the Republicans. Don't fall for that lovey-dovey stuff.)
Oh, and I'm curious: Where are all the ENRON investigators and prosecutors? Why isn't Pelosi'n'co screaming their heads off demanding 1000 investigators to find out who's to blame? Are we suppose to just accept the notion that everyone was innocently doing their jobs when all-of-the-sudden -POP- Oh! We need $700 BILLION before everything collapses! Riiight.
Here's another dirty little secret...
The people truly responsible for this mess (morally, and very likely criminally too) are all Democrats. Believe me, if there was even one Republican that the Democrats could pin this on, that Republican's political career would be completely destroyed by now, and they'd probably be in handcuffs too. This is the primary reason why the Democrats want to sweep this mess under the rug as fast as they can.
pelosi showed her total lack of judgement with her stupid finger-pointing anti-Bush speech right beforehand. What a disgrace she is to the office.
And the dems, in general, by refusing to acknowledge that their very own political manoeuvers have played a huge role in this disaster...they are just pathetic.
http://www.ibdeditorials.com/IBDArticles.aspx?id=306632135350949
http://townhall.com/columnists/NealBoortz/2008/09/19/the_rest_of_the_meltdown_story
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:
Common Sense Plan.
I. INSURANCE
A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
B. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
working with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
C. This backstop will cost less than $50 billion—a small fraction of the current proposal.
II. MARK TO MARKET
A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
stand up, speak out, and fix this mess.
That was great, do you have a sourcelink? I especially love the bit about capital gains.
You're wrong.
It's just another Revolution, be it in the fashion of the French, or the Russian one.
No, we wouldn't go into full-tilt communism = that's your typical American fear, isn't it, that you're expressing?
Nothing wrong with a soft-socialism, by the way.
In fact, look at France!
What we need in this country is a PARILIAMENTARY system, and abolish the one we have with one leader. We need to adopt the true democratic system of France and other countries who are also adopting that system.
The timing is perfect. The time is now to do this, and yet the American "people"'s own government, which is supposed to be by the people, has been running without the people for a very long time. It's such a hoax, where the people's powers have been stripped - yet the people are happy enough with their homes and their dogs and other belongings that they're willing to let this whole thing swirl around them as long as it doesn't affect them too much. The American people have been subdued, put into submission by the fear, the fear that they would lose their lives and their "stuff" = listen to George Carlin, he knew what he was talking about - that people are satisfied with just a "march" onto Washington without taking it over.
Time is so good for the people to take it back and re-establish a Parliamentary system, one that offers social medicine along with it, to help more people than it has ever helped, without having to PRINT MORE MONEY.
Here here! I agree with you 100%!
I would add to 2) "...and eliminate all bonuses..." along with the elimination of the "golden parachutes".
Personally I think the elimination of the capital gains tax would be enough to rally the market back, but everything else you've outlined would be excellent too.
@SD
"Nothing wrong with a soft-socialism, by the way."
Any form of socialism weakens a society who's cornerstones are freedom and liberty. The very foundation of socialism is 100% opposite to that of capitalism: "The people" own everything as opposed to individuals owning everything.
And there is no such thing as "soft-socialism". Either you believe that "the people" should own everything and individuals should own nothing, or you don't.
"In fact, look at France!"
Yes, please do. If the society in France better than the U.S.A.:
1. Why aren't millions of people trying to get in, legally and illegally? (Did you know in France it's _illegal_ to help an illegal immigrant?)
2. Why is unemployment at ~7.5% compared to the U.S.A. ~4-5%?
3. Why is it that out of the top 100 richest people in the world, only 5 of them are French? (See http://en.wikipedia.org/wiki/List_of_billionaires)
No. France is not a shining example of successful socialism - soft or otherwise. And if you want to start a revolution, go move to France. America's revolution is already built-in: We call it "elections".
@ SoftwareSamurai
I think you should be careful with what you say, your ignorance is showing.
"Any form of socialism weakens a society who’s cornerstones are freedom and liberty", really? It seems you have fallen into the either/or, with/against mindset that so often hampers progress in this nation. Obviously pure socialism or a form of government close to pure socialism would be a threat to it's people and liberty. But the same can be said about Capitalism. To much deregulation of the market is asking for trouble, and thus the situation that faces us now (thank you, bush administration). Look at all the "leaders" in capitol hill. They're all somehow connected to big business, some of which (not so coincidentaly) are military contractors. Bush and his failed administration is a treason to this country, having sold the freedom of the American people to business.
I too, believe that in order to achieve a better form of government, we need to apply strict rules to Economic practice. If you call this socialization, then so be it. As a matter of fact, what does it matter what a government is called so long that it works for its people and the promotion of liberty (for the people, not business)
As far as the bail out is concerned, i say give the money directly to the poor and middle class, not big banks and other companies that caused it all.
In the wise words of Marx "Capitalism plants the seeds to it's own destruction"...
It's amazing how brain-washed you are about this amazingly fake American society!
Election, you say?
That's how you put W into office, isn't it, that perfect election system of America? HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
Pathetic, brain-washed, weak, subdued litter of a creature that you are. Your trash along with the rest of America who are happy to sit there and do nothing cos they're scared.