Paulson: Um, change of plans on the bailout money
posted at 2:26 pm on November 12, 2008 by Allahpundit
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The money bit (pun intended) comes at 1:15. It seems the Troubled Asset Relief Program will no longer involve, er, troubled assets, but rather injecting capital — which, per Slublog, sounds like a good idea to one of the very few bloggers able to comment on this mind-boggling subject beyond the level of ideological boilerplate. (Me not included.)
Notably, Paulson didn’t mention a bailout for the auto industry, which The One appears to favor. Next in line after them: American Express. The boss would disqualify people like me who supported Bailout v1.0 from leadership positions in the party going forward because of the perverse incentives we’ve created, but I’m with Megan McArdle (as usual): Why should bailing out the financial industry, whose failure would present a dire and systemic risk of failure to the whole economy, lead ineluctably to bailing out other industries, especially ones as rotten as U.S. automotive? It’s the financial equivalent of that story on pandemics that I linked in Headlines: When catastrophe strikes and resources are scarce, you think hard and choose the “essential” entities that must be saved to keep society running. The country’s credit industry qualifies; the auto industry doesn’t. Or so it seems to this ignoramus. Read McArdle to see why a bailout won’t help GM, even if it does go through.
Exit question: Paulson insisted today that Bailout v1.0 went a long way towards stabilizing markets. Is that true or not? Whoever lost the bailout debate in September was bound to claim that the other side accomplished nothing by their action/inaction; bailout opponents will doubtless point to the enduring credit crunch and the fact that the Dow is hovering at 8300 as I write this. What makes you think things wouldn’t now be much worse if you’d had your way, though? I’m asking earnestly because I’m not sure I’m right, whereas bailout opponents seem very, very sure they’re right, which strikes me as odd given what I said earlier about there being relatively few people who understand all this.
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This has all been so orchestrated and the plan has been implemented by GWB. This is the ushering in of the “new world order”.
stenwin77 on November 12, 2008 at 2:28 PM
What a bunch of crooks!!!
Did anyone have any doubt that once they got this money this was going to happen? I am going to have to start carrying around barf bags with me as it seems like every day something new happens with our government that just makes me want to toss my lunch!!!
ARGH!
HoosierCon on November 12, 2008 at 2:29 PM
Paulson’s crisis ended when Barry took the lead in the polls.
Vashta.Nerada on November 12, 2008 at 2:29 PM
So, we give the banks our money to loosen credit, and they bank the money? Orchestrated indeed.
marklmail on November 12, 2008 at 2:30 PM
This has been obvious for a while, now. I don’t know why anyone is surprised. But … I guess people are going to act surprised when BHO ends up being what many of us are saying he is going to be (and what he, himself, writes and talks about being).
progressoverpeace on November 12, 2008 at 2:30 PM
Paulson looks like Frankenstein’s monster.
hockey2k5 on November 12, 2008 at 2:31 PM
Thank God for conceal/carry.
Bishop on November 12, 2008 at 2:31 PM
These bailouts are cover for nationalizing industries.
Grafted on November 12, 2008 at 2:31 PM
what? … no Palin screencap?
joey24007 on November 12, 2008 at 2:32 PM
at least it’s not the NAU! *whew*
Don’t assign to malice, what is easily explained by incompetence.
Or something like that.
lorien1973 on November 12, 2008 at 2:32 PM
What credit crunch? My unemployed college students are still getting credit card offers hand over fist, and you can bet they’re signing up in droves.
DrMagnolias on November 12, 2008 at 2:32 PM
Paulson speaks, Market tanks.
Mike Honcho on November 12, 2008 at 2:32 PM
Anyone hear about AIG and the 300K conference on Taxpayers money via the bailout money.
It was on Newsroom on Fox this morning. And a (R) from Tennessee is mad and asking for that money back. I agree.
upinak on November 12, 2008 at 2:32 PM
I would not be surprized if the Dow was at 7500 in July of 2012 – it would only be history repeating itself. See the Dow charts for July 1976 through January 1981 for reference.
Vashta.Nerada on November 12, 2008 at 2:32 PM
This whole episode is getting like the Onion news stories. I can’t believe that one man went to Congress and said ‘give me 700 billion dollars’ and they said OK.
It is absurd for them to think that they can do something significant. Why not just legislate that the Dow goes up 10% if they are so powerful?
It is a bad dream. The stewards of our nation and our tax dollars are incompetent. . . and worse, negligent.
STOP SPENDING OUR MONEY! STOP WASTING OUR MONEY! STOP STEALING OUR MONEY FOR ANYTHING AND EVERYTHING!
ThackerAgency on November 12, 2008 at 2:33 PM
This is exactly what happened awhile back in Europe– the banks banked the money. The wizards of smart are never smart. Oy. It’s gonna take a long time to dig out of this socialist hole, and if the “yute” vote is any indication, we’re screwed for serveral generations.
Pasalubong on November 12, 2008 at 2:33 PM
I’m a ‘non-bank’ and I want my bail out. My stocks and IRA have gone in the toilet since this great help has come from big brother.
L
letget on November 12, 2008 at 2:34 PM
Here we go.
When the government begins taking ownership in private companies, those companies fail to be private. This country’s political future rests on principles that lie diametrically opposed to what the Treasury is now capable of doing.
http://unequal-time.blogspot.com/
bryanmyrick on November 12, 2008 at 2:34 PM
From what I hear from financial people in my industry, the credit markets haven’t improved very much at all.
Realist on November 12, 2008 at 2:35 PM
Dream on, Vashta.
Here’s the better example for you:
Nikkei Dec 1989 40,000
Nikkei Nov 2008 8,700
progressoverpeace on November 12, 2008 at 2:35 PM
I love Mankiw’s idea. Sharp as a tack. However, finding private capital, even just half, is going to require reasonable tax policies so that investors have the capital to begin with. Obama will see to the opposite of that.
MadisonConservative on November 12, 2008 at 2:35 PM
This is the best explanation of what’s going on and how it’s all the fault of GOVERNMENT
lodge on November 12, 2008 at 2:35 PM
Liar Liar Pants on Fire what do you bet he will be on Obama’s team.
We don’t make a lot of money. There are people who make much more than us in our family and everyone asks if we are in debt. I say no, why they tell me cause you have so much stuff. I tell them I save for it. If we can’t afford it we don’t get it until we can. We don’t own a house and really can’t afford it now. We have excellent credit and could get a loan if we wanted too.
Now why can’t the Government do this? Why can’t companies do this? Really you don’t have to be an economics major to know stuff like this. It’s basic common sense. I think that is what is missing in Washington.
We don’t need change, We need Common Sense.
Brat4life on November 12, 2008 at 2:36 PM
No sh*t. Why would you lend to people who may be out of a job seeing as we’re going into a massive recession.
lodge on November 12, 2008 at 2:36 PM
When will the GD meddlers in government responsible for this mess be keel hauled and thrown in jail? This is insanity! The same bunglers who caused this are now in charge of fixing it. And in spite of the troubles of US automakers it was government via stupid CAFE standards that helped screw them over.
DerKrieger on November 12, 2008 at 2:37 PM
Our advantage is that we are not parliamentary. We can turn politically much faster than Japan, and I suspect we will.
Vashta.Nerada on November 12, 2008 at 2:37 PM
I need some capital. Give my free cheese I want it now!
roux on November 12, 2008 at 2:37 PM
Oh yeah. Here it comes.
Badger40 on November 12, 2008 at 2:38 PM
This should be called the Paulson Panic from now on. This nincompoop should be run out of town, now.
I understand very well what just happened. Henry Paulson was an idiot.
He panicked in September because Lehman was broke and WaMu and Wachovia were about to fail and empty the FDIC fund. He feared a general bank run a la 1929 that he would not be able to stop. His staff came up with the idea of buying up all the mortgage assets to stop the writedowns and shore up the banks’ balance sheets. Even though there were other ways to skin the cat, includingan emergency injection of capital which he already had legal authority to do, he ran to Congress screaming that the asset buyout as the only way to avoid a total financial meltdown and he had to have new powers to do it.
In other words, Paulson has today announced that the entire Week of Panic in September was completely unnecessary. And all that week did was destroy John McCain’s candidacy, focre Republicans to vote No and then Yes, thus losing the confidence of the country in them, and tank the stock market and destroy my 401(k) as well as my job prospects.
So yeah, I’m a little pissed right now.
rockmom on November 12, 2008 at 2:39 PM
And damn you in the 48 states that have it.
MadisonConservative on November 12, 2008 at 2:39 PM
He couldn’t have done any of this without the support of Bush.
Maybe Bush is as dumb as the left says he is.
Valiant on November 12, 2008 at 2:41 PM
After 30 years, the US still can’t make an equal product in quality to the Japanese. I just bought a new Chevy HHR after selling my Toyota. The Chevy matched my needs better, and at 0% interest, it was the better buy. But already, the brakes are squeaking. The Toyota, in four years, never needed so much as a drop of grease anywhere and it was a cheaper car. I got better service at Chevrolet and OnStar is great, Toyota fell down in there. But in actual product quality, the Americans just can’t seem to match the quality of even the lowest priced Japanese product.
keep the change on November 12, 2008 at 2:41 PM
I need capital! My primary TV ist kaput. How will I ever go on with only two (smaller) TVs!?! It’s unjust. It’s not the American Way! $1,500 should cover it.
Do you think in the future, maybe, Czar Paulson can be persuaded to hold these little chat fests after the market has closed? Thanks.
tuffy on November 12, 2008 at 2:41 PM
Maybe a little. Mostly it was in allowing unions to extort them.
Count to 10 on November 12, 2008 at 2:41 PM
Well, Paulson is a Democrat.
DerKrieger on November 12, 2008 at 2:42 PM
It used to be. Don’t forget, the idiot dems occupying the House and Senate now are the same ones who showed such a love of “no-confidence” votes – that have absolutely no meaning in our system and only show how much they worship European parliaments. As one party control over Congress is now a reality, along with a socialist/Marxist Executive, we have, effectively, the same as the moronic parliamentary systems.
Fair elections in the future? You have more faith than I. We are now going to be a centrally planned economy, with the look and feel of a European parliamentary system populated by people who prefer Euro parliamentary systems. Add to that the global warming crap to come down the line and …
progressoverpeace on November 12, 2008 at 2:42 PM
Just an observation…
Two things that did not help the Auto Industry.
1. $75 an hour wage
2. People working on the line drunk and/or stoned.
(This has been confirmed by a retired worker for GM.)
kingsjester on November 12, 2008 at 2:42 PM
Bailout cost at $3.5 trillion
All Americans should contact their reps to get the FBI involved in this looting.
getalife on November 12, 2008 at 2:43 PM
That too of course but CAFE standards made the car makers build cars no one wanted just so they could continue to build cars people did want. They need to all go under so they can rid themselves of the UAW parasites.
DerKrieger on November 12, 2008 at 2:44 PM
This is as bad as my idiot sister-in-law. Pisses away her welfare check on weed and lotto tickets and then whines to us that she’s going to be evicted if she doesn’t get help with rent.
How much more will Hank ask for next time?
innominatus on November 12, 2008 at 2:44 PM
Can the Philadelphia Eagles get a bailout? Or something?
Akzed on November 12, 2008 at 2:44 PM
And damn you in the 48 states that have it.
MadisonConservative on November 12, 2008 at 2:39 PM
When the cheese hits the fan, you just hop across the border and join the resistance here; you will be welcomed regardless of the specious nature of your football team allegiances (though in full disclosure I’m a Steelers fan).
Or you can console yourself that CC will probably be outlawed everywhere pretty soon anyway.
http://armsandthelaw.com/archives/2008/11/david_keene_oba_1.php
Bishop on November 12, 2008 at 2:44 PM
Hey upinak, most of the time I agree with you’re posts, they’re vey spot on most of the time and you’re very articulate. However, let me share with you an e-mail I received from a very der frind that works for a subsidiary of AIG, emphasis mine.
Here it is:
I shared the above as I think it’s important to ensure we have perspective from both sides of the AIG “conference/retreat controversy” before we light the torches and start rounding up AIG employees and burning them at the stake.
Liberty or Death on November 12, 2008 at 2:44 PM
It’s still happening in Europe. The banks in England are refusing to pass along a Bank of England rate cut. They need to restore their balance sheets.
Europe’s bankers have always been smarter than ours. American bankers generally are dumb as rocks. How do you think we got into this mess in the first place? They don’t know how to grow a business steadily; they wait to see who is making piles of money and then they buy it, and proceed to run it into the ground. I can’t tell you how many great and thriving businesses have been bought by the big U.S. banks and ended up in ruins.
So now we hve to bail them out because of their stupidity.
rockmom on November 12, 2008 at 2:45 PM
This was designed to scare the heck out of the voter
just before the election!
Exhibit’A': Nancy Pelosi on the first bailout went to
the podium and pinned it on the Bush,and
the Republican Party!
Nancy,said in a slow voice,and said twice
r e a l s l o w like,”7 0 0 h u n d r e d
b i l l i o n d o l l a r s “!
——————————————————–
Republicans by the MSM,will be blamed,period!!!
No more bailouts,let it burn————let Hopey take
the credit for this disaster,a hem,if there really is
one that is!!
canopfor on November 12, 2008 at 2:46 PM
What? The government is not going to pay for my gas and mortgage. What? It can’t be….oh, okay, I have to wait for January 21, 2009. Alright.
Henry ‘Lurch’ Paulson is about 2 IQ points away from insane. He has more ticks than a Meth head. The fact that he is in control of the 700 MOAB makes my blood run cold.
And he is goose stepping to the NWO…blame America for the financial crisis and APOLOGIZE for it. Someone needs to put a net over this guy and put duct tape over his mouth before he kills my retirement account. Please.
I hate to say it…but, I think a lot of people here were lambasted for saying this was going to happen. We didn’t want this $700 MOAB, didn’t think we needed it. Evidently, we were right.
HornetSting on November 12, 2008 at 2:46 PM
Yea, but you’d have to change out most of the idiots who are there now to get it.
scalleywag on November 12, 2008 at 2:46 PM
Indeed. And given a sufficient number of ignoramus sheep – mindlessly bleating about the ‘need’ for a bailout, applying pressure to politicians to ‘do something’ to ‘fix’ the impending ‘collapse’ – we can conveniently sweep under the rug the whole unpleasant issue of the violently unconstitutional nature of such meddling.
People like you are the problem. Take may find some comfort in the knowledge that you are a massive herd.
LimeyGeek on November 12, 2008 at 2:46 PM
Hmmmm… lets see…
Bail out banks vs Bail out Car companies…
Banks do nothing but trade money around. Yes they are needed for Capitalism to work, but they do NOT PRODUCE WEALTH!!!
Auto Industry on the other hand, actualy CREATES somthing.
IMO the largest systemic problem we have in America is that a LOT of our economy is just based on moving money, instead of actual production. We are now in the process of pouring upwards of 2 TRILLION dollars into somthing which creates nothing… into the score keeping system.
Not smart IMO.
Romeo13 on November 12, 2008 at 2:47 PM
Logic and Liberty- the winning message for 2010
blatantblue on November 12, 2008 at 2:47 PM
Rationale, urbane, intelligent, people to Henry Paulson, “liar, liar, pants on fire”
Jdripper on November 12, 2008 at 2:47 PM
I said from day one. This man is a crook. Some of my friends don’t agree. He is a crook. He tried to stir panic. He did a great job at it. There are many in DC that need to pay for this robbery. Think of all the pork that was taken. They should pay it back! They need to prosecute a lot of crooks. But The One has them on his staff. WTF is wrong with this picture? While Americans were rapped up with who would win. They seemed to forget a issue that is more of importance. I will call my reps. I am very angry.
sheebe on November 12, 2008 at 2:48 PM
keep the change on November 12, 2008 at 2:41 PM
In cars at least, that’s the truth.
I drove a Honda Civic until it literally dissolved into dust underneath me; it would still be running today if I lived in a milder climate.
Bishop on November 12, 2008 at 2:48 PM
If capital is what the banks need, suspend the capital gains tax…permanently!
WashJeff on November 12, 2008 at 2:48 PM
The DEM plant to elect BO is exposed! What a sham.
Unfortunately this is now the MO for EVERY election…
gatorboy on November 12, 2008 at 2:48 PM
Closest border is Illinois, the other idiot. Figures. My best friend is planning on moving from Florida to Minnesota, and wants me to join him.
Wait…you mean move to a state where it’s even colder than it is here?
Liberty ain’t worth it.
MadisonConservative on November 12, 2008 at 2:49 PM
The reason no one wanted them was that they were still more expensive than the non-union competition. But the CAFE standards couldn’t have helped.
Count to 10 on November 12, 2008 at 2:50 PM
+10
I would add, there is much more bailout stupidity coming up soon, for the big 3 Automakers, for AmEx and probably also for CA and other nearly failed semi-socialist blue state governments. The GOP should Ignore Paulson, Ignore Bush, Ignore Obama and oppose ALL of these Panic-Gimme-Your-Dough plans, and Make Obomber OWN them. The GOP should also start demanding hearings and accountability for the first $350billion or so of the “revised Paulson plan” bailout, now that most of that dough has been spent and numbnuts will be looking soon for the other half.
Obomber almost has to say Yes to Auto and Michigan’s 20 EVs, so the GOP should say no and stand on principle. Make the Dems pass it on a party line vote.
That would set the GOP up beautifully to reclaim the mantle of responsible and limited government.
james23 on November 12, 2008 at 2:50 PM
I think the gun and ammo manufacturers deserve a bailout, or more correctly a few billion dollars to expand their facilities.
Federal and Winchester ammo is hard to find in military rifle calibers and DPMS has a six month backlog on their AR barrels and upper assemblies.
Bailout for the gun companies. NOW!
Bishop on November 12, 2008 at 2:52 PM
My bet is that heavily unionized industries will be overwhelmingly favored as “essential” and “needing recapitalization”.
cthulhu on November 12, 2008 at 2:52 PM
Rush was talking earlier about when they decide to start bailing out failing newspapers. Imagine our tax dollars going to save the New York Times.
carbon_footprint on November 12, 2008 at 2:52 PM
I welcome the angry responses and insults…but wasn’t this economic meltdown actually the work of terrorists?
Middle Eastern radicals want to scare us for sure, but what they really want is to destroy our economy.
If we think back to ‘01 we’ll remember that people were scared to death that the country was never going to be the same. They were frightened about the economic impact of 9/11.
9/11 is actually the impetus for lowering the interest rates and allowing the democrats to push through lower loan standards.
Investment bankers figured out that they could make a lot of money from subprime loans, and greed got the best of them.
People discovered they could make a lot of money investing in houses and greed got the best of them too.
Now here we are, the victims of terrorists and human nature.
Dorvillian on November 12, 2008 at 2:52 PM
Change we can hope for.
DerKrieger on November 12, 2008 at 2:53 PM
So we, the people, now get to bail out $85/hour union schlubs? Who’s next in the poor-me parade? And who’s gonna bail US out?
Paul_in_NJ on November 12, 2008 at 2:55 PM
Chew on this:
Hedge-Fund Billionaires to Testify at Waxman Hearing on Crisis
By Katherine Burton and Lorraine Woellert
Nov. 12 (Bloomberg) — U.S. Representative Henry Waxman plans to question the world’s richest hedge-fund managers tomorrow about their role in the global markets selloff and whether their industry is a risk to the financial system.
————————————–
$1 Billion Club
The witnesses, all longtime fund managers, earned more than $1 billion last year according to a list compiled by Institutional Investor’s Alpha Magazine.
Waxman asked the managers to provide documents, including e-mails, that discussed the likelihood that their own, or other, hedge funds would collapse and the risk to the financial system if they did.
He also asked for their levels of borrowing and their investments in mortgage-backed securities, collateralized debt obligations and credit-default swaps going back to the beginning of 2005. Some managers used these securities to wager on subprime mortgages and on the credit-worthiness of investment banks.
Waxman also ask for compensation data of the two highest- paid officers at each firm, the formula used to arrive at that amount and the tax treatment of their pay.
Soros, 78, is the chairman of $19 billion Soros Fund Management LLC in New York. He has called credit-default swaps the next crisis area because the market is unregulated, and he has recommended the creation of an exchange where these contracts could be traded.
Beating the Pack
Paulson, 52, runs New York-based Paulson & Co., which manages about $36 billion. His Credit Opportunities Fund soared almost sixfold in 2007, primarily on wagers that subprime mortgages would tumble. Paulson’s Advantage Plus fund has climbed 29 percent this year through October while many managers are enduring the worst year of their careers.
Hedge funds lost an average of 15.5 percent this year through Oct. 31, according to data compiled by Chicago-based Hedge Fund Research Inc.
Falcone, 46, also profited from a drop in subprime mortgages last year, when his Harbinger Capital Partners Fund, now about $20 billion, doubled. This year the fund was up 42 percent at the end of June and has since tumbled to a loss of about 13 percent.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDbT5U_aCCPM&refer=home
Heh, our Sec. Treas. making out like a bandit. Odd, isn’t it that Goldmans Sachs, Paulson’s alma mater, is still standing and naturally, Goldman is instrumental in handling the
bailout fundsslush fund.Sorry for the length of this post.
Cody1991 on November 12, 2008 at 2:55 PM
Wait…you mean move to a state where it’s even colder than it is here?
Liberty ain’t worth it.
MadisonConservative on November 12, 2008 at 2:49 PM
The lake country up north has many wonderful hiding spots from which you can ambush the ‘Obarfy Domestic Security Force’ patrols, and then disappear into the ether.
Not to mention that the world’s tastiest Walleye fillets are found in Ottertail county.
Bishop on November 12, 2008 at 2:55 PM
Classic error. The financial system is flat out the single most important thing responsible for economic growth. There wouldn’t be an auto industry without it.
That said, one needs to expect a crash here or there, and I am not so sure the benefits of propping it up justify the costs.
As for the auto industry: the patient needs to die so that the disease stops spreading.
Count to 10 on November 12, 2008 at 2:56 PM
Who’s next…Circuit City filed for bankruptcy yesterday and Best Buy came out crying today.
Ozark_sky on November 12, 2008 at 2:58 PM
Not to change the subject, but this is something coming down the line….
Day after Obama’s Coronation, the illegal alien amnesty agitators are going to march on Washington, demanding a bail-out for lawbreakers that are in our country illegally. I live way far away from Washington, but I think we conservatives need to start standing up for common sense.
Our first step should be to march on Washington and DEMAND that our country enforce our immigration laws.
If we allow amnesty, the MOAB is going to look like a joke.
Conservatives have been talking about standing up for our rights. Here is our first chance. We need an answer for lawlessness. Common sense.
HornetSting on November 12, 2008 at 2:58 PM
can’t we use the courts to say these bailouts are unconsitutional?
unseen on November 12, 2008 at 2:58 PM
This whole scenario is eerily similar to the rise of Italy’s fascism according to Jonah Goldberg’s book, Liberal Fascism.
In order for socialism/fascism to be accepted by a society, there needs to be crises conditions. According to a current Rassmuessen poll, a majority of Americans now believe government doesn’t do enough, as opposed to the same poll 6 months ago that had Americans at 60% saying it does too much. What has caused such a dramatic switch in the last 6 months?
The bigger picture here is that we are getting a “ripening” for some very unsavory “change” intentional or not.
beththebaker on November 12, 2008 at 2:58 PM
I’m starting to think this is a NWO conspiracy. No Goldman Sachs CEO can be this stupid.
lodge on November 12, 2008 at 2:59 PM
My bet is that heavily unionized industries will be overwhelmingly favored as “essential” and “needing recapitalization”.
cthulhu on November 12, 2008 at 2:52 PM
Of course, but before that happens, various organizations which don’t need unionizing will suddenly embrace the idea and thus gain access to a “bailout” cash cow:
MorOn.org? Union.
ACORN? Union.
The DFL? Union.
Retired racist black-theology church preachers? Union.
Bishop on November 12, 2008 at 3:00 PM
Heckuva job, federal government.
Once the auto industry gets it’s bailout. How long before the airlines queue up for one?
CP on November 12, 2008 at 3:00 PM
Yeah, the X Files was a good show
joey24007 on November 12, 2008 at 3:01 PM
Hook, line and sinker.
Screwed, blued and tatooed.
Sold down the river.
Take your pick.
hawkdriver on November 12, 2008 at 3:02 PM
I’m not saying bailouts are right or wrong, I believe some sectors are more crucial than others to the stability of our economy, however since I’m not an economist I’m really not qualified to give a definitive answer, but I would say it seems to me that if two major automakers go belly up that’s a lot of new people in the uneployment line that will no longer have money to spend in our slowing economy.
Also, I posted this earlier, but for those that are bashing AIG I have an e-mail from a dear and longtime friend I met in college that works for a subsidiary of AIG and she had this to say about the whole AIG controversy:
The most disturbing part of what she expressed was the idiot reporter telling people on national TV to harass AIG employees, very reckless, but then again I have come to expect this kind of idiocy from the MSM!
Liberty or Death on November 12, 2008 at 3:04 PM
We’re not sure we’re right either, but we’re skeptical that giving the government the authority to throw around $700 billion however they see fit was the only option.
The TARP program has always been sold on this unquantifiable “risk” that some awful thing will/would have happened if not for this massive expansion of government power. After a month of reading stories on how the feds are trying to force small banks to participate in TARP, combined with the auto makers trying to get a piece of the pie, combined with the lack of transparency on the assets of the firms that are trying to participate, combined with this story today that they’re just going to change the whole damn rationale for it anyway, I’m still not clear why our elected officials and their appointees went out of their way to scare the American public into accepting it.
Still, I don’t know for a fact that the TARP program is wrong. I do know for a fact that ramming it through with less than a week’s debate, with all sorts of fear-mongering about how important it was to expand government power even futher RIGHT NOW AND DON’T ASK QUESTIONS was wrong. There should have been a thorough deliberation of the risks and rewards, and it was simply unacceptable to cram this down the American taxpayer’s gullet without debate.
When in doubt, don’t trust the government to do the right thing. They haven’t earned that trust.
Enrique on November 12, 2008 at 3:04 PM
Should have bought a Ford. Not starting a Ford vs Chevy thing here, as that can wait ’til NASCAR Sunday, but rather, Consumer Reports recently stated that Ford quality is on par with the Japanese automakers.
I think the biggest problem is that their reputation preceeds them. Folks are used to buying foreign for the quality and price. Ford is now competitive from a pricing and quality standpoint.
Hopefully for those of us in Michigan, GM and Chrysler will someday follow their lead.
webproze on November 12, 2008 at 3:05 PM
hey rockmom, have you seen this, from the U. of Chicago?
“Paulson’s Gift” Conclusion:
http://www.chicagogsb.edu/email/chicago_on/PaulsonsGift.pdf
Think back about how this got rammed through Congress in a few short days. There wasn’t even a public hearing. Systemwide failure. Everybody bought into the panic.
james23 on November 12, 2008 at 3:05 PM
F them all. Let them all tank, no friggin bailout for anyone. Capitialism isn’t warm and fuzzy, it’s dirty and sometimes cruel. Suck it up and take what we got coming, it’s better than being a commie.
Alden Pyle on November 12, 2008 at 3:06 PM
Well, that’s one way to put it…
Count to 10 on November 12, 2008 at 3:09 PM
___I don’t know why everyone seems to think this is so complicated, or why borrowing against future taxation to give money to failing businesses is a good idea.
___Stop bailing out risk based failures, stop mandating poor lending practices, and get taxes and regulation out of the way of American businesses. Taxes and regulations are unproductive, overhead costs. In essence a recurring cost of admission to running a business in America. If we reduce or eliminate much of that cost, businesses will fair better in our economy. In turn, goods and services will cost less, and jobs will be more plentiful. Eliminate corporate taxation altogether, and companies will be fighting over American workers.
___But no, instead, let’s raise corporate taxes on all businesses, and give money to those favorite large companies that are deemed essential. Hurting the economy as a whole, but helping those few companies in the short term. Brilliant!
aelhues on November 12, 2008 at 3:09 PM
It’s not a government takeover it’s a bailout. Socialism or bust one way or another.
- The Cat
P.S. From each company according to their success, to each according to their failure.
MirCat on November 12, 2008 at 3:10 PM
Look, I supported the bill in its original form. The market for MBS was frozen and commercial paper nearly went under. That would have been beyond mad. Capitalism is a game of expectations and faith, sort of like our fiat currency. What that $700Bn did was restore an amount of faith.
To connect the dots between the stock market and the financial bailout is evidence of acute misunderstanding of the nature of the problems at hand. First of all, if you take out the capital injected into our economy from home equity loans, the US economy has been in recession for a few years. Tie in decreasing home values and the inability for consumers to tap into that supply of cash and voila, suddenly fit hits the shan.
No amount of legislation can iron out the wrinkles of the business cycle. However, inaction at a crucial cusp can lead to massive depression rather than a moderate recession. We’re going to be in this muddle through market for years, and we’re not at the bottom yet. The thing to ask yourself, though, is where would we be had commercial paper — another source of capital for businesses to use — failed. Without that $700Bn package, commercial paper would have dried up, and large companies would not have been able to conduct business. That, as they say, would have been bad.
k2aggie07 on November 12, 2008 at 3:10 PM
Lesson: If you’re going to be a failure, be a truly immense and spectacular failure. You’ll get bailed out first.
/
Christien on November 12, 2008 at 3:12 PM
Sorry, have to disagree.
The banking and investment industry has turned into a Vegas type betting pool. It has nothing to do with how strong a company is, just whether you bet correctly. We have created all these “vehicles” to allow further unregulated betting… and are now even allowing insurace on these bets (which is why AIG is in such trouble, they bet wrong).
Notice the crises developed when Banks stopped lending to other Banks… which forced the fractional reserve bank lending house of cards to fall down.
If we were actualy PRODUCING things, instead of making money off of moving money, we would not be in this crises.
Banks do NOT create wealth. They do nothing more than move it around, and some people get rich off of that movement… however, IMO those Hedgefund managers, and stock manipulators, are a DRAG on the system, as the Capital they use to play with, and money they make, do not actualy produce anything.
IMO if the US Gov had put 2 TRILLION into infrastructure and Investing in businesses that actualy PRODUCED somthing, we would be much better off… as OTHER countries banks would want to invest here to cash in.
Can you imagine how many oil wells you could drill for a TRILLION dollars?
Romeo13 on November 12, 2008 at 3:12 PM
Sorry AP. You can make the argument, in theory, that when crisis occurs you save what is necessary, but in practice that will never happen, because everyone (or every industry) will deem themselves “necessary”; and D.C. is more than willing to allow every major industry (automotive, airline, credit card, etc.) to define themselves as such. The key is not to let them have the money in the first place. They cried crisis, we panicked, and we allowed them to write a really really bad bill. Too late now. But let’s not fool ourselves into think that it didn’t have to be this way. This is the ONLY way it could have played out.
Weight of Glory on November 12, 2008 at 3:13 PM
More b.s.
Eggheads on one side of the economic spectrum can argue back and forth on whether all these handouts are socialism (they are) but if one cent of any government money is used to bailout the dead U.S. auto industry then everyone who votes for it needs to be removed from office. Period! Let them go bankrupt, let us all buy Toyotas and Hondas and let the union explain to theie membership what they did with their retirement.
grdred944 on November 12, 2008 at 3:14 PM
Aelhues, I’m right with you. However, support for the bailout is not a good ideological litmus test.
I think most here will agree that government intervention into the private market is rarely beneficial. However, once the government has intervened — and make no mistake, the credit freezing we saw a few months ago was deeply rooted in government actions — how can you solve the problem without further government intervention? At the least, the government must act to undo what they have done. That was what the bailout package was.
It seems to me that the majority of people who “know” said that something had to be done. The majority of people who don’t see the situation as government = bad, and say the bailout was a bad idea. Ignorance in all forms is our country’s most expensive commodity — even when it’s ignorance that causes folks to sway to the right.
k2aggie07 on November 12, 2008 at 3:14 PM
It’s the best one ever.
lodge on November 12, 2008 at 3:15 PM
If Americans had any backbone at all, they would refuse to fund the gubmint’s unconstitutional actions.
Stop giving them money.
LimeyGeek on November 12, 2008 at 3:15 PM
AP wants to know why opponents of Bailout v1.0 are so confident they were right? Here’s the answer:
We were told the bill HAD to pass immediately. There couldn’t be a delay, or catastrophic consequences would follow. There wasn’t time to debate, and the bill had to pass as is. Okay, well, the mere fact that they’re now able to change direction in mid-stream signifies that there’s a whole lot of walking in the dark going on. And I don’t like walking in the dark with over a trillion dollars of the taxpayer’s money.
watchmen on November 12, 2008 at 3:15 PM
Indeed. If a politician supported the bailout thenn they have failed their sworn duty to uphold the constitution and should be fired immediately.
If you individually supported the constitution then you are a failure as an American and a disgrace to the Founding Fathers.
LimeyGeek on November 12, 2008 at 3:18 PM
Romeo, how do would one go about investing $2T into infrastructure without some sort of socialistic or nationalistic favoritism?
Also, I think it’s worth pointing out that what the proposed bailout plan was and what’s (apparently) being done are two different things. I don’t like the idea of bailouts — I don’t mind (so much) the idea of buying securities with the aim to sell them back with added transparency.
k2aggie07 on November 12, 2008 at 3:18 PM
Yeah, baby! SUCK IT UP!
HornetSting on November 12, 2008 at 3:18 PM
What happened to the time when everybody feared these words?
“HI, I’M FROM THE GOVERNMENT AND I’M HERE TO HELP”.
I think having the Government help you is a lot like having the Mafia help you. Sooner or later, you pay the price.
But, as Dennis Miller says, “I could be wrong.”
kingsjester on November 12, 2008 at 3:19 PM
Push to repeal the bailout bill. That’s what representative gubmint is for.
You won’t do it, will you? Nobody will. Muppets.
LimeyGeek on November 12, 2008 at 3:19 PM
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