Bush remarks: Congress has to act

posted at 9:10 am on September 30, 2008 by Ed Morrissey

George Bush made a statement today about the failure of the House to pass the agreement that leaders of both parties hammered out over the weekend.  He acknowledged the difficulty of the vote, but underscored the difficulty of the situation and the need to address it quickly.  The drop in the stock market yesterday represented a less of $1 trillion dollars, and the cost to taxpayers would be much less — and perhaps nothing at all, if the assets can recover their value over time.

The consequences of delay will make this problem worse, and Bush said he will press Congress for action when they return.  “Our economy is depending on decisive action by the government,” Bush warned, and continued inaction will send a very bad message to global markets.

Interestingly, Bush didn’t announce any further actions today.  Some had expected Bush to announce a move by the FDIC to expand its protections for depositors as a means of injecting confidence into the banking industry.  That could still come today, and Darrell Issa mentioned that Republicans favor this approach over the Paulson plan as modified by Congress.

Meanwhile, the global collapse didn’t come immediately.  CNBC attributes this to continued breath-holding in the markets, but the Russian exchange had to halt trading after sliding more than 7 percent.  Global banks began hoarding dollars, which may help the currency but points to a fear of tighter credit.

Steve Forbes, who has served as a voice of free-market sanity over the decades, told CNBC that Congress should have passed the bill yesterday.  He blamed Nancy Pelosi and Henry Paulson for its failure, especially Paulson, who he accused of having diplomatic skills of a “drill sergeant to young recruits” with Republicans over the past week.  The Bush administration tried selling this as a bailout, when Forbes says that distorts what the bill rejected yesterday would actually do.

Options on the Dow look about 200 points higher this morning.  If the administration acts to expand FDIC funding as a means of assuring some liquidity, perhaps we may see some light at the end of the tunnel today.  And if Congress thinks this is an emergency, they would have been working on Rosh Hashana rather than taking a day off.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2

Yes, an underappreciated silver lining. Putin/Chavez/Ahmadinejad/Saudis etc. have seen their income fall drastically.

There is really no Russian threat without high energy prices. The main determinant of its economy is energy, as is also the case with Iran and Venezuela.

JiangxiDad on September 30, 2008 at 10:24 AM

Hmm this is good for the little man.

Building material cost are sure to come down.
Gas prices dropping.
Houses are more affordable. Back to realistic prices.

Stop the Bail Out now.

Rick007 on September 30, 2008 at 10:24 AM

Bad for our enemies, not so bad for everyday people like the much maligned “redneck rube” Sarah Palin?

Bad for the people in NYC and elsewhere that celebrated and created huge increases in stock prices every time an American company closed down its factories here and moved them to China.

I watched that happen time after time through the 1990s…company announces “cost saving measures” of moving all manufacturing overseas, and some ahole from Wall Street gets interviewed about how awesome it is for their stock price, and how Wall Street thinks the corporation’s management made a genius decision….

funky chicken on September 30, 2008 at 11:08 AM

NO BAILOUT till after thr trials!!!!!!!!!!!

Rick007 on September 30, 2008 at 11:08 AM

I heard Newt suggest having the SEC suspend the accounting rule called mark-to-market….

LINK

Marsh on September 30, 2008 at 11:15 AM

I called McCain’s office and they said he is going to work on the backchannels to get this thing passed; he’s not going to come out in front of it and be the leader.

So I guess that seals the deal for McCain. He’s done.

lorien1973 on September 30, 2008 at 10:21 AM

dude, really, take your pessimism and shove it where the sun doesn’t shine.

you can sit and wring your hands and cheer for an Obama victory, and depress people here thinking it’s a cute academic exercise. My husband and tens of thousands of other people are in Iraq right now in harms way.

You have been saying crap like this about every issue that’s come down the pike for 2 months now–McCain’s toast, McCain’s gonna lose, blah blah.

Thanks for doing your part to get Obama into the White House.

I only wish I could work so hard to pick a dangerous boss for you.

funky chicken on September 30, 2008 at 11:17 AM

Oh, and NOW you want McCain to criticize GW Bush?

Where were you when McCain bashed Bush and Rumsfeld in 2004 and 2005? Saying that was proof of what a horrible guy he was, for daring to criticize Bush?

How about a few months ago when McCain visited LA with Gov Jindal, and (correctly) said that the Bush administration civilian response to Katrina was incompetent?

How about when McCain criticized Chris Cox?

Were you one of the people calling McCain a traitor for those criticisms?

But you now expect him to take your advice and go on a full on crusade against Bush/Paulson/Pelosi?

Yeah, you want him to win.

funky chicken on September 30, 2008 at 11:20 AM

Steve Z on September 30, 2008 at 11:00 AM

Nice. Good link. Thanks.

a capella on September 30, 2008 at 11:24 AM

I’m glad they’re not acting today. Without meaning to, they are proving that the sky may just not fall. No sane person thinks that “things” don’t have to change in our financial system, but this clusterfark of a bill was not the answer.

Hey… can we FINALLY get some serious momentum behind a term limits revolution??? Huh????

Sugar Land on September 30, 2008 at 11:24 AM

Thacker,

Right back at you. Thank you for sharing your personal story. I suspect similar anecdotes could be multiplied manyfold. Put enough of them together and sooner or later induction forces the conclusion that freedom works, if only the government will let it.

Jeff

JDPerren on September 30, 2008 at 11:26 AM

Simple question. If demand for credit is so high, and we’re now out of credit, why aren’t interest rates rising?

Oh wait – it’s because they think we’ll hand them $700 billion dollars.

Buying property sight unseen is a stupid idea. Buying property that nobody else wants to buy is an even stupider idea. I live near Detriot – these houses are in horrible condition! The copper pipes and kitchen cabinets are stripped out, the roofs have holes in them….they’re not worth .70 on the dollar in any market, and certainly not this one.

Mike Rogers from Michigan has a much better plan! Darryl Issa seems closely aligned too! There are better options than handing Bush’s cronies another blank check.

angelat0763 on September 30, 2008 at 11:32 AM

Does anyone in Washington actually have a clue about economics?

The Rescue Package Will Delay Recovery


An Austrian Bailout Plan
<—If you don’t know what Austrian refers to, you have no business commenting in this thread about what should be done.

Tim Burton on September 30, 2008 at 11:35 AM

We’ve provided fact after fact for the last two weeks.

No, you haven’t. What is the estimated economic cost of the bailout over the next, oh, five years? And what is the estimated economic cost of no bailout?

Oh, you don’t know? Nobody’s even tried to calculate either?

Show me the numbers.

rightwingprof on September 30, 2008 at 11:35 AM

“Our economy is depending on decisive action by the government,”

Wow. We are so screwed…..

tom on September 30, 2008 at 11:39 AM

Does anyone in Washington actually have a clue about economics?

The Rescue Package Will Delay Recovery

An Austrian Bailout Plan <—If you don’t know what Austrian refers to, you have no business commenting in this thread about what should be done.

Tim Burton on September 30, 2008 at 11:35 AM

I would wager less than 20% of those in Congress have a clue what Austrian refers to. My Congressman can barely speak in complete sentences. Ron Paul has said many in the House still believe our money is backed by gold. Can you believe that? The average Congressman has no understanding whatsoever of even basic economics. Watch that video of that fat f&*k Barney Frank and the other libtards defending Fannie and Freddie. Instead of applauding the regulator for calling attention to the problem they grandstand and lecture him for wasting their time. What they’ve done to this country is treasonous.

With very few exceptions, Americans have elected fools!

flyfisher on September 30, 2008 at 11:47 AM

NO BAILOUT till after the trials!!!!!!!!!!!

Rick007 on September 30, 2008 at 11:08 AM

Agreed, start with Fannie Mae/Freddie Mac Execs and move to Wall Street. Follow the money and we may end up with several individuals (mostly democrat…but heck I don’t care get everyone who has any fair amount of cupability-sp?) being thrown under the bus by Wall Street, thrown out of their jobs by vigiliant citizens and thrown into jail by the Justice department..we might even get lucky and catch a few rogue Judges in the net!!!!

RedLizard64 on September 30, 2008 at 11:58 AM

rightwingprof on September 30, 2008 at 11:35 AM

We’ve tried to show that the costs of inaction are higher than those of action and told you why. As for precise figures 5 years out,

In the same spirit, therefore, should each type of statement be received; for it is the mark of an educated man to look for precision in each class of things just so far as the nature of the subject admits; it is evidently equally foolish to accept probable reasoning from a mathematician and to demand from a rhetorician scientific proofs.

phronesis on September 30, 2008 at 11:59 AM

phronesis on September 30, 2008 at 11:59 AM

where’s a link to your attempts to show the costs of inaction are higher than action? did they contain facts and figures? i keep hearing no one knows the exact value of the MBS’s. where did the 700billion come from? show at least how treasury came up w/ that figure. that would at least be a start.

chasdal on September 30, 2008 at 12:16 PM

Hey… can we FINALLY get some serious momentum behind a term limits revolution??? Huh????

Sugar Land on September 30, 2008 at 11:24 AM

INDEED why are those feckless bums (by and large) still there? Recall, Recall here, and Recall now!!! (This can be accomplished by acctively campaign AGAINST most incumbents. Admittedly, there are few on both sides of the aisle worth saving…but very few. Be responsible and work to get the worst offenders out then we’ll see it clean up on its own!

RedLizard64 on September 30, 2008 at 12:19 PM

chasdal on September 30, 2008 at 12:16 PM

Look through the threads. I’ve been at for two weeks. The crux of the argument is that market equlilbrium conditions have given yield to a deflationary spiral as a decline in asset (home prices) gave rise to a credit contraction by bankrupting credit providing firms which hold mortgage and other debt assets on their balance sheets. This credit contraction will not be arrested until asset prices stop declining. But as the asset (home) prices as themselves dependent on credit, (without sufficient credit there will not be buyers of the assets), asset price declines cannot cease until credit conditions improve. Hence the feedback loop and required intervention.

You know very well how the treasury got the figure. Paulson wanted a number that gave him a large amount of dry powder to buy and inflate the toxic debt knowing he might nothing compels him to use said dry powder.

phronesis on September 30, 2008 at 12:34 PM

Oh snap. there is a reason for the 700B. 14trillion in mortgages. estimated 5% are bad debts. .05*14 trillion is 700B. They are debating this on the senate floor now. fox has the feed.

phronesis on September 30, 2008 at 1:15 PM

The Russian stock exchange has been closing early for a couple of weeks but not every day.

Expanding FDIC corporation guaranties over deposits is a bad idea. The whole idea of federal insurance causes people to ignore the quality of the bank they deal with. Since most people don’t have a $100,000 deposit, they choose the bank which is most likely to be crooked or carefree with their money if it gives an extra tenth percent interest or is within walking distance. The limit is not on depositors it is on deposits in a bank. You can go across the street and deposit in a different bank and have a second $100,000 deposit insured. I don’t know whether this is true now, but some years ago financial pages used to print lists of banks with the highest interests. People would send their money across the country to banks most of whose depositors never set foot in the state from which they operated. I am against the whole socialist idea of government insurance, but a compromise which would introduce a measure of competition would be for the government to insure most but not all of a deposit say 80%. Depositors would be aware that they could lose. Financial pages would start advising readers about which banks might be risky.

burt on September 30, 2008 at 3:02 PM

phronesis on September 30, 2008 at 1:15 PM

5% of mortgages being bad is enough to trigger a “crisis” that the govt should move in and buy up “toxic paper”?? wow, what a low threshold. sorry, this is bad mojo, let the private sector buy these loans. there are buyers willing just the sellers want to hold out cause the feds will pay more.

chasdal on September 30, 2008 at 4:05 PM

Rick:

Even if there were trials, they could take years. In the meantime…..

Terrye on September 30, 2008 at 4:34 PM

chasdal:

How can the private sector buy these assets without a proper valuation and credit? If that is all there was to it, we would not be where we are watching banks all over the world fail.

Terrye on September 30, 2008 at 4:35 PM

Why not just send checks to Americans and let us all pay off our Mortgages and/or credit cards??

JellyToast on September 30, 2008 at 6:33 PM

Comment pages: 1 2