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The Next Step on the Bailout
THE NEXT STEP ON THE BAILOUT....It looks like the Senate will be taking up the bailout bill on Wednesday. How can they do this when revenue bills are required to originate from the House? Easy!
Apparently Harry Reid found some ancient mental health bill that the Senate had never acted on, dusted it off, and grafted the bailout legislation on top of it. Then he tossed in an increase in FDIC insurance limits to $250,000 (a bipartisan winner), loaded up a bunch of tax cuts that had already been approved by the Senate but hadn't yet passed in the House, and voilà. Instant bailout bill.
So will it pass? Maybe so. After Wall Street's reaction to the failure of Monday's bill, public sentiment seems to be shifting:
On the morning after the sell-off, Congressional offices reported a shift in angry calls from constituents, with some demanding that lawmakers take some corrective action — a distinct change from the outpouring of public opposition that contributed to the defeat of the plan.
"I started hearing from a lot of people who lost money on their investments thanks to the big drop on Wall Street yesterday," said Representative Steven C. LaTourette, Republican of Ohio, who voted against the plan.
This is not entirely unexpected. The original opposition, after all, probably didn't reflect widespread sentiment so much as it did a narrow slice of highly motivated talk radio and Lou Dobbs fans. Nor is it unjustified. It's true that the stock market isn't a good proxy for the economy as a whole, but a plunging market does have an effect on the real economy. First, since corporations finance their operations partly through share offerings, dropping stock prices make it harder for companies to raise money. Second, although lots of rich people own stock, two-thirds of all stock is held in mutual funds and pension funds, which means a stock market plunge hurts a lot of very ordinary people too. Third, even though the market may not be a great proxy for the entire economy, it's a pretty good proxy for the panic level among bankers.
And the current panic is hardly unwarranted. Our real problem is in the credit markets, and the credit markets are blinking fire engine red right now. Overnight bank lending rates have skyrocketed. Municipal bond markets have cratered. The two biggest providers of short-term credit to restaurant franchises, GE Capital and Bank of America, have exited the market. Rates on overnight commercial paper are up two points. This stuff doesn't hit you or me in the pocketbook immediately, but it does eventually as spending drops, companies can't get financing, and jobs get cut. You wouldn't ignore a speeding truck just because it was still a few hundred yards away, and you shouldn't ignore this either.
So sure: we should all hope that after the election we can pass legislation that attacks the roots of the financial crisis. This includes financial market regulatory reforms, macroeconomic stimulus, and broad relief measures. Maybe it even includes a better bailout program if this one isn't enough. But right now, we have what we have, and complaining about it is like refusing to turn a fire hose on a burning building because you're afraid the water is flouridated. It's time to pass the bill.
It's time to pass the bill.
That means the pitchforks-and-torches talk, the aristos a la lanterne fantasies, the dream of a purifying catastrophe, would all have to stop.
And that would be no fun...
The two biggest providers of short-term credit to restaurant franchises, GE Capital and Bank of America, have exited the market.
What? Our sausage McMuffins are at risk?!?
Get my congresswoman on the phone!
So, are you proud of participating in the hysteria and promise of a bailout, which are the actual cause of the short term indicators you're citing, that have created such a ridiculous whore-democracy measure to facilitate the obliteration of the dollar?
Paulson should hire you to promote the bill. And that's a compliment. The critics are of your post just too cute for words... sort of remind me of what's her name..the one that went to debate camp...
Kevin,
Can you please explain how we will be able to do something later to address the root causes of our situation? Do you really believe that there will be any willingness on the part of the banks to accept limits on derivatives, CEO compensation and so forth once the banks have been bailed out? Any interest on the part of Obama, Reed and Pelosi in revisiting this issue or in passing a bailout to keep people in their homes?
No, we will never have greater leverage over the political class and the banks than we have right now. Right now, these people will do anything and accept anything to get this huge bailout. Next year will be too late.
Rubbish Kevin.
The House has the "No BAILOUT Act" now introduced, with commonsense and tailored steps to deal with the financial crisis. It's an infinitely better bill than the Paulson/Bush plan, particularly so that Reid made the plan worse.
This is no longer a choice between "do nothing" and "pass a shitty plan." We have two plans, one sensible and logical, and the other just plain awful. How about you start advocating the sensible plan?
Bravo, Kevin. Just bravo.
I still don't know why propping up this obviously failed business model is the way to go. Apparently we have had plenty of warning that this is not a great idea with the Swedish and Japanese examples.
So instead of say, increasing the Small Business Administrations allowance for backing loans, or setting up a fund for the states to borrow directly from the Federal government we can go the much more expensive route of making billionaires of greedy Wall Streeters.
Last year these investment bankers gave themselves $30,000,000,000 in bonuses. Not salary, just 30B in atta boy bucks.
So 5% of the bailout will go to pay for that. And then there is the trillions of dollars in additional interest we will be paying the Chinese over the next few decades. I hope they can come up with $700,000,000,000.
And no one yet has explained the $700,000,000,000 price tag.
Kevin keeps mentioning panicky bankers. How does keeping the same system and same people in place help? They will just end up finding some new screwball way to make money because now they know that there is no risk too risky.
Mitch: The honest answer is that I don't know if we'll be able to pass reform after the election. I hope so, but that's going to depend a lot on how hard Obama pushes and what kind of Congress we'll have.
However, with only a few exceptions, most of this stuff is just too complex to pass right now. No one has legislation ready. So we don't really have much choice except to pass the bailout now, because we need it, and then work on the reform later. That sucks, but I think it's reality.
...and when we've spent $700 billion, and it doesn't slow the collapse of the international credit market, then what?
The Paulson plan is a waste of money that will fail at its stated goal. It is being being pushed with the same tactics that got us into Iraq. Sadly, many progressives are rushing to embrace the bailout just as they did with the the invasion of Iraq. Once again, they are swallowing the lies and bluster from Bush and his crew, even after spending the last five years documenting the administraton's lies and incompetence.
Opposition to this bill comes not just from House Republican ideologues and "Lou Dobbs fans", but from committed progressives like me who don't like it because IT WILL NOT WORK. Read Nouriel Roubini at RGE Monitor. He has been predicting this for years. He has an excellent alternative plan.
We all know how serious this is. But Paulson, Bernanke and Bush got this to crisis stage by consistently understating the size and seriousness of the problems while failing to adequately address them earlier. Do you really want to once again put your faith in Bush, and back a misguided policy that causes more harm than good? Have we learned nothing from the last eight years?
Kevin, the Bank of America story is apparently false. Here is the scoop (in bold) from realmoney.com (sub required):
"By now, you've all heard about how Bank of America (MCD) has supposedly denied credit to McDonald's franchisees, and how this is an example of the credit constriction starting to occur in our economy, and that the story that is circulating in the mainstream media is (reportedly) untrue.
We used the example in one of our notes to friends and clients Monday about how the financial crisis can start to impact the real economy, and we got a note back from someone that met with a MCD's employee in the last week, and the story (as it is being posited in the press) is inaccurate.
Apparently BAC is part of a lending syndicate to McDonald's franchisees and has a $750 million ceiling on the loans. That maximum was reached recently, and BAC is trying to get it to $1 billion, but can't do so without board approval, which they are waiting on. Apparently one of the regional managers forwarded an email to MCD's franchises saying BAC was not presently an option, (without detailing why), and it found its way into the mainstream media. "
Maybe if this was like the base closing commission scheme where congress gets to vote up or down on the plan. But the terms on this bailout are intolerable. If you read it the oversight is toothless. All of the decisions are make by the Secretary and he only has to report the boards and committees. So we all get to watch.
By the way, I'm the sole breadwinner in a family of four, so my "share" is about $9200.
So, on my behalf, Congress will give $9200 of my money to the Wall Street wizards who thought that shuffling risky loans in with higher quality loans so that all would qualify for a higher rate -- until the realization that doing so meant EVERY one of these "collateralized debt obligations" had a unknown risk and therefore no one wants to touch them.
MY MONEY.
Pure genius. It's like 'reverse-Robin Hooding', robbing the townspeople to pay the town's "Montgomery Burns" for poisoning the town's only drinking well. It's not poison, it's an innovative drinking industry product!
"... it is like refusing to turn a fire hose on a burning building because you're afraid the water is flouridated."
If you are worried about the water being fluoridated, fair enough. If you think someone has poured flour into the tanks, the hesitation may be sensible.
Kevin's hysterical the sky is falling act is just ludicrous. He either has some particlular investments he feels need immediate protection or (or possibly and) he's been driven insane by this crisis (sort of like 9/11 demonstably drove certain people insane, like former liberal Ron Silver). I'm far from a financial expert (nor, self-admittingly, is Kevin) and I accept per people I respect (like Krugman and DeLong) that some intervention is necessary. However they, and many other economists, seem to think that the current bill is a bad one, though it may be marginally better than nothing. Since it is obvious that the government will act in the near term, that should be sufficient to keep the world from ending and allow some reflection that may result in a better bill. Running around like a chicken with its head cut off screaming that somethin, anything must be passed TODAY is only buyging into the typical deceitful Bush strategy.
A better analogy, Kevin:
A house fire, no fire hose is visible, and some guy on the street says one will magically appear if you lend him your debit card and give him your PIN.
Kevin,
I don't think it's necessary that the legislation be already written. This bailout package was apparently put together over a weekend. So, it probably would require only a few days to draft a package containing the key points which others and I have been harping on and which Americans overwhelmingly prefer. For example, the DeFazio bill, which makes a series of technical changes in accounting rules, is ready to go right now. The DeFazio bill allows certain changes from mark to market pricing. The cost to the taxpayer of the DeFazio plan is zero. I believe it has a greater probability of success in unclogging the credit markets than does the Paulson-Pelosi-Reed bill.
Also, a point which others have raised and which you have never addressed, is why you think that handing the banks $700 billion will start the capital markets flowing again? Especially since it turns out that the money does not come with any strings like a commitment for the banks to stop producing more financial toxic waste.
Really, what are the incentives for Wall Street to change its ways? People said everything would change after LTCM. In fact, the use of leverage and crazy swaps and derivatives contracts got worse. So, really, you probably are not even buying much time for this $700 billion---maybe a few months or a year. Same people, same bonus culture that incentivizes the taking of astonishing risks with other people's money, same everything. What will you do in 2010 when Obama tells you they need another $700 billion right now today or we risk total collapse?
I don't see how just handing over this money with essentially no strings attached is going to help anything. And if you're wrong about this, we are really and truly screwed because the bankers aren't going to give back the money so you can try something else with it. That's the point of "moral hazard". When there's no downside, Wall Street's appetite for risk will be insatiable. They will produce more and more financial toxic waste, not less.
We have the leverage now. We may never have it again. Let's use it and do what's right.
So what's up here??? Even more lack of transparency???
"Tuesday, the SEC and Financial Accounting Standards Board issued "clarification" to accounting rules that require companies to value securities at the price for which they can be sold in the market, known as mark-to-market, or fair value, accounting. FASB said it is preparing additional guidance for later this week.
The clarifications allow executives to use their own financial models and judgment if no market exists or if assets are being sold only at fire-sale prices. They were welcomed by banking and financial-services groups that have lobbied the SEC and FASB to change the rules. Those efforts were ramped up in recent days as Congress was drafting a rescue bill.
...Congressional leaders are considering codifying the SEC's move in a new version of the legislation the Senate could vote on Wednesday.
The SEC and FASB, along with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, have objected to suspending fair-value accounting since it would make a company's position harder for investors to judge and would also likely postpone banks from taking their losses."
Regulators Ease Securities Values Rules
Oops. Sorry.
Let's take a look at a small part of the tally the Federal Reserve has spent since March:
* The Bear Stearns takeover by JP Morgan, which was mid-wifed by the federal government (cost to taxpayers: $29 billion)
* Special Fed liquidity programs including the Term Lending Facility and Term Auction Facility ($200 billion)
* The Economic Stimulus package ($168 billion)
* The Federal Housing Administration's scheme to refinance failing mortgages into new, reduced-principal loans with a federal guarantee ($300 billion)
* The bailout for Fannie & Freddie (up to $200 billion); will be $800 before its over
* The bailout for AIG ($85 billion); will be up to $400 billion plus before its over
* Last week's decision to block short-selling of financial stocks
* The insurance program for money market funds (potentially $50 billion from the Great Depression era Exchange Stabilization Fund)
* Direct Treasury purchases of mortgage-backed securities ($10 billion) $800 billion authorized
* Another $300 billion injected into global credit markets on Friday, September 26
What a crock, these people lost money on their investments even though this above was pumped into the market.
Mark to Market means Enron style accounting.
Meaning they will over value the junk no investor wants to buy and sell it to Paulsons 700 billion account.[If he gets it]
This guy is REALLY bright. He was on with Charlie Rose. I think what he says makes a lot of sense.
It is a different approach to a "bailout" that helps mainstreet as well as Wall Street. Here ya go. I think people could go for this version...
By Ilaina JonesNEW YORK (Reuters) - Mortimer Zuckerman, owner of the New York Daily News and U.S. News and World Report, and chairman of Boston Properties Inc BXP.N, one of the largest owners of first-class U.S. office buildings, on Monday said he does not endorse the proposed $700 billion bailout plan, but believes Congress must take action."I think everybody realized something has to be done," Zuckerman told Reuters, speaking after the U.S. House of Representatives rejected the bailout plan.But Zuckerman, who does not endorse the plan, said its not the right move."I think this was the wrong approach," he said. "I believe everybody should take a step back. I think basically they should invest in perpetual preferred (shares), and shareholders will accept the losses. They made money on the way up; they should have to accept the losses."Preferred shares are paid off before common shares and are less risky.Zuckerman said the federal plan should follow the same design the government took in its takeover of mortgage giants Freddie Mac and Fannie Mae, and that of billionaire-investor Warrant Buffett, when he invested $5 billion in Goldman Sachs. Both approaches allow the investor to be paid off first and have an opportunity for a profitable return."What I think Warren Buffett did with Goldman Sachs, and what the federal government did with Fannie and Freddie is the way to go," he said.Soon after Congress failed to pass the proposed legislation designed to help prop up the financial sector and ease credit markets, the Dow Jones Industrial Average tanked, closing down almost 778 points in the largest point decline in its history.(Editing by Bernard Orr)
© Thomson Reuters 2008 All rights reserved
It looks like the Senate will be taking up the bailout bill on Wednesday. How can they do this when revenue bills are required to originate from the House?
The Constitution requires that bills for raising revenue orginate in the House. People have said many things about the bailout plan, but no one has claimed that it's a plan for raising revnue.
I live in Japan, Kevin, and I'm very fearful that the U.S. government is about to make the same mistake the Japanese government did. In simple terms, Japan entered a permanent recession many years ago as its real estate bubble burst, and the country has never recovered. (The recession is getting worse now, actually.) The government accumulated massive debt trying to prop up failing financial institutions. Sound familiar?
The result was spiraling deflation, economic contraction, pay cuts (universal 10% per annum pay cuts were common for many years), increased unemployment, a moribund stock market, and continuing depression in the real estate market. Consumer spending collapsed also, as you might expect. (Why buy much of anything now when the price will be lower tomorrow?) And all of this is happening just as Japan is facing huge challenges with an aging population. Oh, and the world is running out of tuna.
Many economists are worried that the Paulson/Bush plan would repeat Japan's disaster, that it would do far more harm than good. Most experts agree Sweden is a much better model (i.e. nationalization), although politically that's a "pony plan" right now. (Maybe after the election.) However, DeFazio's No BAILOUT Act is also a much better policy choice than Paulson/Bush, and that plan happens to have the advantage of being ready to pass in Congress. It also could attract a lot of bipartisan support from both sides of the nay vote.
Concerning this "mark to market" issue (which is part of the No BAILOUT Act), I think a lot of people have got this one wrong. The SEC and FASB have a valid point, that asset values, at least for measuring capitalization, should not be set according to instant liquidity rates. The value of almost anything except cash (and cash equivalents) is much different within the next 90 days than it is within the next 60 seconds. Asset markets are not THAT efficient, even in 2008. But I also think the SEC is in very dangerous Enron territory if they give full discretion to corporate executives to value their own assets. I think a 90 day standard is reasonable. That is, what is the value of assets if you can dispose of them at any time within a 90 day period from now forward? Now, valuing assets properly is not necessarily easy, but the SEC and FASB should at least try to agree on a uniform standard (such as 90 days or 30 days), then come up with the mechanics for how accountants can properly apply the new standard. Now, it's possible what I'm saying is what everyone is thinking (more or less), but I wish the public got more details before SEC/FASB do something foolish. Because if we eliminate "mark to market" without setting a uniform alternative standard, we will lose precious transparency. And if we lose that, we will be much more likely to freeze credit markets. (Credit markets are still working, by the way. Concerns about that are vastly overblown right now. Sure, the TED rate is high, but that's partly if not largely because institutions don't want to lend to each other because they can get a much better deal from the government, sucker that it is.)
I have to disagree with you on public sentiment. I know people who have never been involved in the political process beyond occasionally voting. They were burning up the phones calling congressmen and senators early in the week. This was across the political spectrum - dems and repubs. There was satisfaction when the bill failed and while there was grumbling at the 700 point drop in the market - I didn't hear anybody say that they thought the bill should pass. The sentiment that I hear most often is that if we have to tighten our belts we will - but that is better than paying those SOB's $700 billion of our money.
Kevin,
This bailout isn't even aimed in the right direction. It would be like turning on the hydrant and blasting the water in the opposite direction away from the building.
Not much effect on the fire but does use up the water.
And remember this is a fire department with a proven track record for malfeasance beyond all calculation and belief.
Jessica
Kevin, it seems to me that you are not even acknowledging the large number of disinterested real experts who disagree with your arguments and opinion. It's not enough to dismiss everyone who disagrees with you as yahoos, or to compare them to flouridization crackpots. So far, you are just pounding the table, convincing no one.
Y'know what is flashing red? The inner cynic alarm screaming that the fix is already in to maneuver the Senate vote so that Cheney has to cast the decisive vote.
Yer "inner cynic" is ignorant: the vice president can't cast a vote when legislation requires 60 to pass.
My problem with the Senate plan is just that it will be crafted to get the vote of 51 Senators, including Republicans. And therefore lack the teeth that a real reform needs.
The Republicans should pay the price for their perfidy by being forced to accept a solid reform bill crafted and passed by the Democrats in the House. Not a giveaway to the failed Wizards of Wall Street but market reform, strict oversight and help for the middle class. Then let the Senate Republicans filibuster it if they dare.
It's time to stop rearranging the deck chairs on the Titanic and get something done to stop the ship from sinking.
As proud members of the NO BAILOUT group from the "start" of this debacle with Paulson's 3 and a half page insult to America...we have always understood that SOMETHING must be done...the appalling thing is that a piss poor job has been done of clearly and concisely INFORMING the people of the actual situation and the options for correction. Talk about "too many cooks"...you can barely find two economists with the same position on any aspect of this and where does that leave "ordinary" people who do not have this body of study as their background? We're ALL Scarah Palin now....
And the new bailout bill is already being festooned with tax cuts to get House Rethugs on board. While progressive Democratic proposals like homeowner protection and extended unemployment are DOA. What a surprise.
Banks/companies that are Regulated are not experiencing any econimic crisis, just the investment banks/companies which are not regulated or de-regulated and have no oversight! "One of the regulations meant to keep insiders from driving down the prices of their own company's stock so that they could sell short at will to make a quick million whenever they felt like it was called the "uptick rule". The "uptick rule" is another one of the FDR Era regulations which the Heritage Foundations was talking about when they said that they wanted to roll this country back to the days of Herbert Hoover. They succeeded. The Bush administration got rid of this safeguard last year---with predictable results.
The uptick rule is fairly simple. "
http://www.investopedia.com/terms/u/uptick...
It's time to pass the bill.
It's also time, if you are one of the swing votes, to get your most fervent wish included into the bill that has to pass. Any Congresscritter too dumb to see that and to act on it should find another job.
That's true on both the right and left.
I really don't get why Obama isn't taking a leadership position here. There's a huge opportunity to seal the election, if he would only grab it.
I think he should propose a recapitalization plan using treasuries and a toxic-asset-purchasing facility funded by a tax surcharge on the wealthy.
The House GOP would hate it, so where's the downside? Or am I nuts?
Kevin wrote: "No one has legislation ready. So we don't really have much choice except to pass the bailout now ..."
That's absolutely false.
An alternative proposal backed by Peter DeFazio, Marcy Kaptur and other progressive Congressional Democrats has already been introduced:
The "No BAILOUTS Act"
by John Nichols
October 1, 2008
The Nation
Excerpt:
Introduced Tuesday with co-sponsorship from some of the most outspoken critics of the Paulson machinations - including Ohio Democrat Marcy Kaptur, a leader of the anti-bailout movement in Congress - the measure would impose a securities tax equivalent to one quarter of one percent of profits and empower the Federal Deposit Insurance Corporation to deal more effectively with bank failures.
The plan is based on a proposal made last week by former FDIC chair William Isaac, who recalled that in the 1980s Congress enacted a "net worth certificate" program - which allowed the federal agency to shore up the capital of weak banks to give them more time to resolve their problems - and the FDIC resolved a $100 billion insolvency in savings banks for a total cost of less than $2 billion.
Kevin, why don't you analyze and critique this alternative proposal?
Or at least acknowledge its existence instead of falsely asserting that there are no alternatives and Congress "has no choice" but to pass the Patriot Act ... I mean the authorization to invade Iraq ... I mean the Cheney-Bush-Paulson bailout bill?
Right now, both the House and Senate Democratic leadership are ignoring progressive Democrats and working to make the Cheney-Bush-Paulson bailout worse in order to get more right-wing Republican votes. Business as usual for the Democratic leadership.
But why are the "sensible liberal" bloggers of the world -- like Kevin and Steve Benen -- also ignoring the proposals of progressive Democrats and cheering on the Bush administration's kleptocratic scheme?
Obama is afraid that if he tries anything heroic, he'll piss off some block of voters he needs to get elected. It's all about his getting elected first and foremost. Then he'll see what he might do. And as for Admiral John, we know how heroic he is. Feh!
Bailout Begins With Healthcare in America
In 1999, the 'Largest Bankruptcy case' in the history of Western Tennessee Bankruptcy Court in Memphis, Tennessee was filed. (Not Nashville, where HCA is located)
In 2000, in Dublin Ohio, FBI raided offices of the largest private financial lender to 'failing healthcare companies'.
NCFE, National Century Financial Enterprises, Inc., the 'LARGEST' private financial lender to 'failing healthcare companies'.
Federal Prosecutors state, "no one has heard of ". I wonder why?
Federal Prosecutors in Columbus, Ohio proclaim this case is "larger than Enron that no one has heard of ".
Currently, there are two people yet to go to trial in the NCFE larger than Enron case: the CEO, scheduled this coming week, and last, the ex-Executive> The ex-executive will go last?
This ex-executive was a prior employee of Richard Rainwater, the oil-man.
And we want to place the financial crisis to 'low-income housing'?
This isn't like refusing to use flouridated water on a fire- it's like refusing to throw brandy on a fire.
A lot of those 'risky mortgages' wouldn't have been risky if the borrowers had health insurance or a job. A lot of those 'risky loans' wouldn't have been made if the lenders had been regulated. Does this legislation change any of that?
And if you think Congress will come back next year and pass health insurance and tight regulation because, gosh darn it, that was one close call!, well, I have a nice bridge in Alaska to sell you. It goes to where we'll be after dumping another $500 billion into Wall Street.
Why should this economy do well? Bush dumped $4 trillion in deficit spending into the economy and employment was flat while prices doubled. No Bubble Here was the mantra while housing prices (and local taxes for people who owned homes) doubled.
Most of us here are just extras in this big show, and as far as I'm concerned, my role is Sullen Villager With Pitchfork.
Yes, a lot of people, who thought their investment in the War Empire of the US was safe, are now losing money. By Tuesday's closing bell, that loss was about 2%, not a very significant loss on such a massively wrong-headed investment.
So let the Responsible People figure out how they will make the Sullen Villagers pay for all this. I'm sure they'll find a way, and they have the military and the police to make their decision stick.
That's more than we can say.
Wake Up Drum!
"Overnight bank lending rates have skyrocketed."
From WaPo -
"Yesterday, the annualized rate for those overnight loans spiked by more than four percentage points, to 6.9 percent, its highest level ever."
It's highest level ever? Note, it's only been tracked since 2001!
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=09&year=...
I think a lot of comments here bring up legitmate issues about the underlying causes that are dragging down the U.S. economy.
But we have an immediate problem with a dysfunctional financial system that will drag down everything with it if it doesn't get support soon. The key is to get the toxic assets off their books now. The modified Paulson plan stinks, but it's the only real game in town.
After Paulson, there probably will be a recapitalization plan. Only until we have a properly functioning financial system can we engage in fiscal and structural stimulus. Otherwise, those efforts will be wasted.
Bush lied.
People died.
Bush clowned around.
The economy ground....
to a halt.
So, on top of the $700B ransom is $120B of pork?! Way to go Harry.
Let's be honest. We all know what's ahead--a tax increase for regular folks as well as the rich.
Article I says, "All bills for raising revenue shall originate in the House of Representatives".
How does this apply to the EESA? Or are you thinking of something other than Article I when you say "revenue bills are required to originate from the House"?
The fire hose is full of gasoline.
Congress can make laws setting the overnight rate, make laws guaranteeing the overnight loans (hopefully with limits)or give the Fed and Treasury the authority to manage the overnight lending. Instead Congress and the banks want the tax payers to borrow a huge amount of money and give it to the banks with little accountability or chance for a payback. There are plenty alternatives available to unfreezing the credit markets, but the most reckless and irresponsible solution is their first choice, especially when considering they have had two to three years to plan for this train wreck many saw coming.
That would be the mental health parity bill, which is not ancient; in fact is an important piece of legislation that has support in the House, Senate and White House (except for Blue Dogs who are troubled about paying for it.)