Rachel Maddow: Union-Bashing v. Facts

Rachel Maddow looked at union-bashing versus the real facts last night on MSNBC:


LibertyAir Blog

What Does Paul Krugman Think?

I have to admit that when it comes to the economy, the person I trust the most is Paul Krugman. I do read other economists, but the one I follow the most is Professor Krugman. It has been his take on the financial crisis and the bail out that I trust the most. Today he has an interesting post (Bailout questions answered) on his Blog: Conscience of a Liberal about the need for some type of government intervention in today's financial crisis.

Bailout Questions Answered

I’m being asked two big questions about this thing: (1) Was it really necessary? (2) Shouldn’t Dems have tossed the whole Paulson approach out the window and done something completely different?

On (1), the answer is yes. It’s true that some parts of the real economy are doing OK even in the face of financial disruption; big companies can still sell bonds (and have lots of cash on hand), qualifying home buyers can still get Fannie-Freddie mortgages, and so on. But commercial paper, which is important to a lot of businesses, is in trouble, and I’m hearing anecdotes about reduced credit lines causing smaller businesses to pull back. Plus there’s a serious chance of a run on the hedge funds, which could make things a lot worse.

With the economy already looking like it’s headed into a serious recession by
any definition, the risks of doing nothing look too high.

It’s true that we might be able to stagger through with more case-by-case rescues — I think of this as the “two, three, many AIGs” strategy; in fact, we might not be at this point if Paulson hadn’t decided to make an example of Lehman. But right now it’s not even clear who to rescue, and the credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)

On (2), the call is tougher. But putting myself in Barney Frank or Nancy Pelosi’s shoes, I’d look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms — basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary.

That’s what the plan should have looked like.

Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.

But such a plan would have had next to no Republican votes — and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.

So that, I think, is why it had to be done this way. I don’t like it, and I don’t like the plan, but I see the constraints under which Dodd, Frank, Pelosi, and Reid were operating.

This Was Helpful??? Part Four

John McCain and his surrogates has been trying to claim credit for a bail out deal, which was always a joke, but now just looks pathetic. Republican Party leader John McCain returned to Washington claiming he was going to get a deal done. McCain and his surrogates boldly claimed that he would get House Republicans on board.

Over the weekend a deal was hammered out, even though John McCain stayed home and did not go to the Hill. The claim was he worked the phones (though he did not talk to a single Democrat), and then went to dinner with Joe Lieberman instead of joining the actual negotiators on the Hill. The one honest thing that John McCain could claim was that he talked to House Republicans, yet when the vote came up today, the majority of Republicans voted against the bill and killed it.

A majority of Democrats voted for the bill. Had the majority of Republicans done the same, it would have passed. John McCain supported this bill, and he is the leader of the Republican party, so why was he unsuccessful in getting House Republicans to join?

Why?

Because John McCain is not some great Congressional leader. Many Republicans hate him. He has no real base on the Hill. The canard that he was going to somehow bring everyone together in a bipartisan manner was just a joke. And today is the perfect example of the extent of John McCain's great powers to bring people together.

A basic break down of the last five days is that John McCain faked ending his campaign, took 22 hours to make a 60 minute trip, crash landed into the negotiations in Washington, blew up the talks, claimed he would not debate unless there was a deal, then debated even though there was no deal. He then declared he would return to Washington DC and bring House Republicans into the talks, get their concerns assuaged, but then failed to deliver that which he promised when he couldn't get his party on board.

John McCain was just tested, and failed miserably.

Do Over?

The House has decided to try a do-over on the Bail Out vote later today. The House bill on the Bail Out failed, 228 to 205. I guess the House leadership want to see if the same lawmakers vote differently this time. Not sure what difference this will make. My guess is there is some serious arm twisting.

BREAKING: HOUSE FAILS TO PASS BAILOUT...

Associated Press:

By JULIE HIRSCHFELD DAVIS, Associated Press Writer

WASHINGTON - The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.

Stocks plummeted on Wall Street even before the 228-205 vote to reject the
bill was announced on the House floor.

When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.

Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home.

The vote had been preceded by unusually aggressive White House lobbying, and spokesman Tony Fratto said that Bush had used a "call list" of people he wanted to persuade to vote yes as late as just a short time before the vote.

Lawmakers shouted news of the plummeting Dow Jones average as lawmakers crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for roughly 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.

They found only two.

Bush and his economic advisers, as well as congressional leaders in both parties had argued the plan was vital to insulating ordinary Americans from the effects of Wall Street's bad bets. The version that was up for vote Monday was the product of marathon closed-door negotiations on Capitol Hill over the weekend.

"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it — not me.' "

With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of world markets on Congress, Ryan added. "We're in this moment, and if we fail to do the right thing, Heaven help us," he said.

Deal Reached On Bailout

It is being reported that a deal has been reached on the Wall Street bailout, this after a week of frenzied negotiations, and it looks like concessions were made to both Democratic and Republican critics. The bailout plan is designed to end a vicious downward spiral that has battered all levels of the US economy. Hundreds of billions of dollars in investments based on mortgages have soured and stopped many banks' willingness to lend.

As the largest government intervention in financial markets since the Great Depression, it casts Washington's long shadow over Wall Street not seen in a while. To some extent, key Democratic demands on Congressional oversight and consumer protection have all been met. This the biggest U.S. bailout in our country's history has the tentative support of both Barak Obama and John McCain.

The plan would give the administration broad power to use billions upon billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms. The Democratic leadership was able to ensure that Congress has a stronger hand in controlling the money than the White House had wanted. Still the basics of the plan still includes the idea that the Federal government will take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.

Currently Republicans and Democrats are huddled in private meetings to learn the details of the 110-page bill, and voice their concerns. Democrats did have to surrender their cherished goals of letting judges rewrite bankrupt homeowners' mortgages and steering any profits gained toward an affordable housing fund. However the plan will help struggling homeowners by requirering the government to renegotiating bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

The Democrats were able to get some of their biggest demands, such as Executive Compensation, where the rescue would only be open to companies who deny their executives "golden parachutes" and limit their pay packages. Also firms that got the most help through the program - $300 million or more - would face steep taxes on any compensation for their top people over $500,000. The plan also states that the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in recipients' future profits.

The House will Vote tomorrow, Monday morning, and the Senate will Vote Wednesday.

Read The Full Bailout Plan Here

Obama's full statement on the deal

“The breakthrough between Congress and the Administration is the culmination of a sorry period in our history, in which reckless speculation and greed on Wall Street and lax oversight from Washington led to a meltdown of our financial markets. But regardless of how we got here, a failure to deal with the current crisis would have devastating consequences for our economy, costing millions of Americans their jobs and retirement security.

“To understand how this tentative deal was reached, it's important to remember how this all began. The Bush Administration initially asked for a blank check to respond to this problem, which I strongly opposed. It would have been unconscionable to expect the American people to hand this Administration or any Administration a $700 billion check with no conditions and no oversight when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess. If the American people are being asked to pay for the solution to this crisis, their tax dollars must be protected.

Bailout Agreement Reached in Congress.

Reuters:
U.S. lawmakers on Sunday were set to sign off on a deal to create a $700 billion government fund to buy bad debt from ailing banks in a bid to stem a credit crisis threatening the global economy.After marathon talks into the wee hours of Sunday morning, congressional leaders from both parties emerged with an agreement that altered key parts of a Wall Street bailout program initially proposed by the Bush administration.

This Was Helpful??? Part Three

House Republican Whip Roy Blunt was just interviewed by Andrea Mitchell on MSNBC, and he told Mitchell that McCain killed the deal at the White House on purpose yesterday:

"I do think that John McCain was very helpful in what he did. I saw him this morning, we've been talking with his staff. Clearly, yesterday, his position in that discussion yesterday was one that stopped a deal from, uh, finalizing that no House Republican, in my view, would've been for. Which means it probably wouldn't have passed the House. Now, Democrats are in the majority, they can pass anything they want to without a single Republican vote. But they don't seem to be willing to do that. I'm pleased we can have negotiations now that get us back to things that we think can protect the taxpayers better, create more options, are, frankly, be better understood in the country than the plan, than the path that we were on just a couple of days ago."

I could not believe what I was hearing. Blunt was saying that John McCain was "helpful," because he killed the deal - not because he was looking to create compromise. John McCain was not there to help get a deal done, but to kill it.

That isn't a maverick bringing everyone together as a leader, it's the erratic, confused actions of someone who has no clue. Remember McCain was not going in opposed to the compromise plan. He had totally coopted Barak Obama's principles.

Is this what we can expect from a President McCain? When the choice is between making war or brokering peace, John McCain always goes for war. It's what hot-heads do. Especially when they're no longer at their prime.

This Was Helpful??? Part Two

Think Progress has more on what John McCain did at the White House yesterday.

House GOP Aides: McCain ‘Not Familiar With The Details’ Of The Financial Bailout

Bailout negotiations “dissolved into a verbal brawl” at the White House yesterday, as some House Republicans, led by Eric Cantor (R-VA), said they wouldn’t back a bipartisan negotiation on the package. The House GOP faction stunned the participants at the meeting yesterday by announcing their own plan which “advocates tax cuts and relaxed regulations.”

Treasury Secretary Henry Paulson has said the House GOP proposal would not work.

“Democratic leaders questioned McCain’s involvement in the House Republicans’ opposition to the plan.” McCain met with House GOP leaders before heading to the White House, but neither party seemed to know what they were talking about:

Boehner and McCain discussed the bailout plan, but Republican leadership aides described the conversation as somewhat surreal. Neither man was familiar with the details of the proposal being pressed by House conservatives, and up to the moment they departed for the White House yesterday afternoon, neither had seen any description beyond news reports.

At 1:25 p.m., McCain left Boehner’s office through a back door, walking across the Capitol’s rotunda to the applause of tourists. Graham conceded the group knew little about the plan the nominee had come to Washington to try to shape.

At the bipartisan White House meeting that McCain “didn’t speak until 43 minutes into the meeting.” He “sat silently for more than 40 minutes, more observer than leader, and then offered only a vague sense of where he stood, said people in the meeting.”

Sen. Chris Dodd said, “Instead of being a rescue plan for our economy it was a rescue plan for John McCain.” Sen. Chuck Schumer urged Bush to “respectfully tell Sen. McCain to get out of town. He’s not helping.” Senate Majority Leader Harry Reid added, “We had [Republican] Senator [Bob] Bennett, a high ranking official, who said these are the principles. And then, guess who came to town? And it all fell apart.”

McCain’s handling of the negotiations serves to underscore his comment in Dec. 2007 that he is “not an expert on Wall Street” and “not an expert of some of this stuff”.

This Was Helpful???

Democrats and some Republicans had made a lot of headway on the bailout plan. Then Republican John McCain came to town (having never read the bipartisan plan) and instead promoted "tax cuts for corporate America and less regulation". Again lets remember that for decades John McCain has been for deregulating the economy, and has up until the last two weeks run on an economic plan of tax cuts for corporate America and less regulation, so his grand idea was more of the same. Republican John McCain's radical injection of himself into the bailout negotiations is just more of the same and is exactly what led us into this economic failure.

For a week John McCain tried to cast himself as a populist, but then when a deal was about to be made he threw out an alternative plan that Henry Paulson and Ben Bernanke had already said would not work in Congressional testimony to the House (which McCain probably missed as he was meeting with U2's Bono) and came out against the plan.

Some highlights of the bailout plan that John McCain now doesn't want:

- Two oversight boards would be formed—one with congressional representation, another would have the power to undo decisions by the Treasury Secretary.

- The Treasury Secretary would be prohibited from acting in an arbitrary or capricious manner or any way inconsistent with existing law.- Regular, detailed reports would be made to Congress disclosing exercise of the Treasury Secretary's authority.

- An independent inspector general would be set up to monitor the use of the Treasury Secretary's authority.

- The Government Accountability Office would be required to perform audits to ensure proper use of funds, appropriate internal controls, and to prevent waste, fraud, and abuse.

- Maximize and coordinate efforts to modify mortgages for homeowners at risk of foreclosure.

- Loan modifications would be required for mortgages owned or controlled by the federal government.

- A percentage of future profits from the bailout fund would be made available to the Affordable Housing Fund and the Capital Magnet Fund to meet America's housing needs.

Breaking News: WaMu fails

This just in.

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual to JPMorgan Chase. The remainder of WaMu, the nation’s largest savings and loan, will be operated by the government. Shareholders and some bondholders will be wiped out. WaMu deposits are guaranteed by the Federal Deposit Insurance Corporation up to the $100,000 limit for each account. WaMu customers are unlikely to be affected.

McCain Bailout plan: More deregulation

Remember how McCain was going to come in and save the day? What he really did was try to ambsush the Democrats, and score some cheap points. McCain came into the White House where a deal was imminent and suddenly offered an alternative plan that would include fewer regulations and more corporate tax breaks for businesses. Got that? We are in a crisis because of deregulation and what is McCain's solution? More deregulation.


LibertyAir Blog

John McCain said this was a crisis that needed to be dealt with, and then politicized the deal that was almost done. The Politico has more.

John McCain: I haven't read the Paulson plan

John McCain made big news about "suspending" his campaign (he didn't) because he was going to ride into Washington and save the day, but it turns out that as of Tuesday he had not read the Paulson plan. Watch here:

LibertyAir Blog

$700 billion?

Ever wonder how they came up with the $700 billion number? Forbes is reporting that there was no secret formula or mathmatical construct that helped the Treasurey Department to reach that figure.

“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.”

So basically they threw a dart at a wall to get the number. That makes me feel so much better.

Doesn’t this seem like a very strong argument for a much smaller appropriation designed to last for another couple of months? There’s nothing to stop congress from appropriating more money in mid-November if the situation seems to warrant it.

Paul Krugman says "I'd blame Alan Greenspan and Phil Gramm"

Paul Krugman has really put himself out there against this bailout. He is really against Paulson's plan. Here he is on Race to the White House explaining why.

LibertyAir Blog

Paul Krugman on the arrogance of Henry Paulson

Paul Krugman on Countdown with Keith Olberman explains why Paulson's package is not something the American people should want.

LibertyAir Blog

Paulson Blames Congress His Non Oversight Suggestion

Henry Paulson Lied Yesterday. He bold faced lied. Paulson claims he didn’t ask for oversight on our 700 billion dollar bail out of Wall Street because it would have presumptuous of him. This is a crock. If this was the case he would have stated in his proposal that oversight would be negotiated with Congress, or would have suggested examples of oversight, or would have left no reference of oversight.

You can view his statement to the Senate here:


Paulson's claim is laugable. His indignation is a lie. He claims that he was actually looking for oversight, but this is not what Henry Paulson did. He instead put the infamous Section 8 into his proposal.

Section 8 reads:
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.

This is not a statement by someone who has not thought about oversight, or wanted Congress to come up with an oversight plan. This is what is put in by someone who wants complete control. This is a clause that is put in by someone who wants all decision-making power to be consolidated into the Executive Branch, unchallengeable by courts and ungovernable by Congress.

Why $700 billion? Why not $150 billion?

This was a great question by Senator Chuck Schumer. He asked Secretary Paulson at yesterday’s hearing how the 700 billion dollar figure was arrived at. He asked for an explanation as to why Congress shouldn’t give them only a fraction of that. While $150 billion is nothing to sneeze at, but it is a lot better than $700 billion. Would it not be better to give some for immediate needs and keep the rest contingent upon the situation.

Paulson doesn't think so. I made a mistake last Friday when I was complimentary of Henry Paulson.

LibertyAir Blog

Good ideas do not need lots of lies told about them in order to gain public acceptance.

Paul Krugman referenced this line from Daniel Davies today. It was a key line from one of the great blog posts of this era, and it laid down a key principle I have often thought about when it comes to today's Republican leadership, and many of the so called voices of conservatism.

Good ideas do not need lots of lies told about them in order to gain public acceptance; lies do.

Davies was talking about the selling of the Iraq war, but it applies pretty much to the entire Bush Administration. It was true about the Patriot Act, the Iraq War, Unauthorized surveillance of the American public, Katrina, the list goes on. It should be the rule that we keep in mind as we listen to the debate going on over the Treasurery Bailout.

Paul Krugman points out that this morning Hank Paulson told a whopper:

We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That’s the role of Congress, that’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight: I believe we need oversight. We need oversight.

This was a lie by Henry Paulson. If he was telling the truth, then there would have been no reference to oversight, or that it would be worked out with Congress. This is not what Paulson proposed, what his proposal actually did, of course, was explicitly rule out any oversight, plus grant immunity from future review:

Sec. 8. Review.

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.

Krugman then states that he is not playing gotcha here, buthis is telling: if Paulson can’t be honest about what he himself sent to Congress — if he not only made an incredible power grab, but is now engaged in black-is-white claims that he didn’t — there is no reason to trust him on anything related to his bailout plan.