Today the Paulson/Bush bailout bill failed by 13 votes. The final vote was 228 to 205 against. About 60% of Democrats and about 33% of Republicans voted for the measure.
It has been a surprising day in Washington and Wall Street.
Public Mark Up has the first two pieces of actual legislation floating around to fix our economic plight.
The Treasury Department (read Paulson) proposal is here. Senator Chris Dodd, Chairman of the Senate Banking, Housing, and Urban Affairs Committee has his proposal here.
Public Mark Up is taking comments, thoughts, and notes on each section of each proposal. Take a look, and please post first, second, third, and fourth thoughts here (and there).
Rick Noriega discusses his stance on Paulson bailout.
"I am outraged that taxpayers are having to foot the $700 billion bill to clean up the mess made by greedy Wall Street investors and mortgage lenders. This is what happens when John Cornyn takes nearly $1.5 million from the perpetrators of the crisis, spends six years championing an anything goes culture on Wall Street, and abdicates his duty to protect Texans from Wall Street greed. Cornyn's special interest record is something Texans have come to expect but can no longer afford.
I believe:
Any new bailout must contain provisions to help middle class Americans keep their homes and their retirement security. Americans need to hold Wall Street accountable for its failures, just as Americans need to hold their elected representatives accountable for their failures to address this before it became a $700 billion problem.
The need for oversight and accountability of any new bailout is more important than ever. These firms are should not get a blank check from the taxpayers.
We need to rein in the out of control pay and golden parachutes of the CEOs who got us into this mess."
The Democratic Party has a clear, concise video on what Obama has actually said about economic issues.
Very smart of the DNC and Obama campaign to release a video like this. Time and time again, McCain has told half truths and flat out lies about what Democrats and Obama stand for in this historic election. This "straight from the horses mouth" leaves any doubt on what Obama has proposed.
First, there must be no blank check when American taxpayers are on the hook for this much money.
Second, taxpayers shouldn't be spending a dime to reward CEOs on Wall Street.
Third, taxpayers should be protected and should be able to recoup this investment.
Fourth, this plan has to help homeowners stay in their homes.
Fifth, this is a global crisis, and the United States must insist that other nations join us in helping secure the financial markets.
Sixth, we need to start putting in place the rules of the road I've been calling for for years to prevent this from ever happening again.
And finally, this plan can't just be a plan for Wall Street, it has to be a plan for Main Street. We have to come together, as Democrats and Republicans, to pass a stimulus plan that will put money in the pockets of working families, save jobs, and prevent painful budget cuts and tax hikes in our states.
Some have called this a "line in the sand", I'm not sure about that yet. What is clear is Paulson's proposal doesn't address the root problems of our economy and Democrats are trying to negotiate something that helps average, hard working Americans.
The New York Times released the text of the proposed $700 billion bailout plan. It's already easy to see why wall street responded favorably and why main street needs to be concerned.
The first point of concern is two parts. One, the reason we are in this mess and why we can't trust anything John McCain says now.
That is why Mother Jones has aptly called the mastermind of the McCain economic policy, Foreclosure Phil. (If you are concerened about the market or want to know how we got here, this is a must read.)
Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.
The money is Paulson's to use for buying commercial and residential mortgages and mortgaged backed securities as he chooses. No one has any oversight over him, and he can pay any price he wants to, including face amount of the debt.
Courts cannot review his decisions, not can any regulators. He has to report to Congress once every six months.
He gets 700 Billion dollars to use as he sees fit, looking after the taxpayer is a "consideration" not a requirement.
Bet on that 700 Billion dollars being gone before January 20, 2009. Bet on Treasury asking for more.
That is $2,324 dollars per man, woman and child in America
There is no bailout for mortgage holders. Banks get bailed out, but not ordinary people.
Banks and brokerages made record profits these last eight years. Ordinary Americans barely broke even.
In 2007 Wall Street paid itself bonuses equal to the raises of 80 million Americans.
Banks bailed out by this plan need make no changes in how they do business.
Banks bailed out need not replace the management which drove them into insolvency.
Shareholders and bondholders of such banks do not lose a cent.
The securities which caused this crisis are still allowed.
U.S. Treasury Secretary Henry Paulson said on Sunday that foreign banks will be able to unload bad financial assets under a $700 billion U.S. proposal aimed at restoring order during a devastating financial crisis.
"Yes, and they should. Because ... if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," Paulson said on ABC television's "This Week with George Stephanopolous."
While Wall Street gets bailed out in this massive increase of federal bureaucracy, what do average American's get to help them in these troubled times? You guessed it, nothing.
USA Today is reporting that Paulsen, a former CEO of Goldman Sachs, has proclaimed "Don't add household to financial bailout".
He expressed little interest in efforts by Democrats to include further relief for homeowners facing mortgage foreclosures, a $50 billion stimulus effort and a cap on compensation of executives at the troubled firms that will be bailed out.
Such efforts, he said, would simply slow down attempts to get a rescue package in place soon.
"The biggest help we can give the American people is to stabilize our financial system right now and prevent the system from clogging up," Paulson said.
The size of this bailout is unprecedented. In one day we will spend almost as much money on bailing out irresponsible corporate giants as we did during the entire Iraq war. Estimates range from $700 billion to $1.3 trillion for the entire program. While we are spending this money, it will not ask for more oversight on what these companies are doing, it won't re-instituting any of the regulations that were in place after the Great Depression, it will not eliminate the golden parachute we had out to failed CEO's like John McCain economic advisory Carly Fiorina, and it refuses to help average people who are seeing their homes foreclosed.
This proposed bailout is bad. Bad. Bad. Bad. The only people this is good for, are the same people that were helped out by Phil Gramm's deregulation of the banking system. If you can honestly say you are doing better now than you were in 2000, then you should support this bailout. If not, you should ensure that there are at least some protections for average American's in this huge taxpayer funded corporate welfare package.
Many of the same economists and opinion-makers who'd provided a bipartisan sheen of consensus to Treasury Secretary Henry Paulson's previous moves have quickly begun casting doubts on the wisdom of a policy that would allow Treasury to purchase without oversight hundreds of billions of dollars of difficult-to-price assets from financial institutions.
Under the proposal, Paulson would not have to report to Congress until December, and the only safeguard for taxpayers was a provision that the "Secretary shall take into consideration means for - (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer."
