Still No Bailout - Lipstick on Pig Edition

  • Bob Fertik's picture
    Bob Fertik
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(1) Call your Representatives and Senators at 800-473-6711 or 202-224-3121 and say No Bailout!

(2) Email them too:  

After a week of high-drama negotiations, Congress and Hank Paulson issued Bailout version 1.1, which is just the original Paulson pig with a lot of lipstick.

Republicans say the deal will be profitable for taxpayers, but they are lying - just as they did about the invasion of Iraq producing lower gas prices. It's a lie because Paulson has full power to pay too much for the securities and he will because his real goal is a bailout of bank executives and shareholders with our money - a massive ($2,333 per person!) transfer of wealth from the poor and middle class to the rich.

Democrats say they got oversight, accountability, and limits on executive compensation but each of these provisions is so full of Republican-written loopholes (see details below) that they are meaningless - just like all other restrictions imposed on the Bush Administration, from Iraq to wiretapping. And that's before Bush simply negates any restrictions he doesn't like with one of his unconstitutional (and hence impeachable) signing statements.

So our answer remains ABSOLUTELY NOT - just like many in Congress, both progressive Democrats and fiscally-responsible Republicans. 

Do we risk a market meltdown? Politico says, "Treasury estimates that the program can’t be put in place for several weeks." That means the markets won't drop dead tomorrow if this bill fails, and Congress has "several weeks" to come up with a serious plan. Better yet, Congress can wait 6 weeks until after the election and listen to the voters in the meanwhile.

A serious plan would not buy mortgage-backed securities. Instead,

  1. The plan should work from the bottom up by restructuring all the fraudulent mortgages so homeowners can afford to stay in their homes. 
  2. If banks are still failing, the government should temporarily nationalize them as they did during Sweden's financial crisis in 1992.

Just for the record, here are some of the loopholes that make the Democratic restrictions meaningless, as described by Politico:

  1. Installments? Nope! They are automatic unless there is a 2/3 vote in both chambers (to override a Bush veto).
  2. Oversight? Nope! The GAO will have a "presence" in Treasury but no power, and an "independent" inspector general will "monitor" the secretary’s decisions, even though all of Bush's "independent" IG's have stopped none of Bush's criminal activities.
  3. Executive pay limits? Nope! Paulson got "discretion so that these reforms don’t cripple his ability to draw a wide selection of companies into the program."
  4. Bankruptcy reform? Nope!
  5. Financial industry taxes to pay for the deal? Nope!

If you need more reasons to oppose the bill, read:


New Bailout Cartoons Now Online

  • larryneilson's picture
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I feel as many working-poor and middle-class Americans did on being told we must assume the debts of the racketeer-gamblers of Wall St. I was inspired to draw a cartoon summarizing my feelings. I titled it "Sloppin' Down the Hog." It seems to have struck a chord. I have posted it online. Fellow democrats are welcome to download, distribute, and disseminate it. You'll find it at:

Also an overview of the campaign and who is behind the R's:

Watch for more if my time doorbelling for Obama permits in the next month.

Linking this item to the CLG website

  • Lori_Price_CLG's picture
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I am linking this post to the CLG website, and it will be in Monday's newsletter.
Lori R. Price
Citizens for Legitimate Government

The bailout plan opposition

  • gideonse's picture
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I've been a Democrat all my life, but your aggressive opposition to this much needed bailout, abhorrent as it is, is totally misguided and misplaced. If this bailout fails, we are all in the tank. My calls will be the opposite of what you propose.

This bailout cannot succeed

  • Bob Fertik's picture
    Bob Fertik
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even the Markets are saying so this morning.

That's because the amount of outstanding paper (what Atrios calls Big Shitpile) is far too big so even $700B is a drop in the bucket.

The cost of buying up ALL the paper is estimated at $4-5 Trillion.

But that's the ass-backwards way to fix the problem anyway.

The underlying mortgages need to be restructured so the paper they back regains some (not all) of its value.

Fiscal Year Oct. 1

  • hjemmet's picture
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I am preparing to head to my job (a retiree who has
to work) for inventory time... it makes me wonder why
the issue of the start of a new fiscal year for many
companies has not been discussed (where I have noticed at least) as one propellant to rush this bailout cash.

I know nothing about corporate bottom line issues, but it does make me suspicious when part of the picture is just left out. All the big rush does is allow less scrutiny.

I've already called my reps in opposition to this bill because I don't see the kind of commitment that will really bring jobs back to our country. Why have otherwise good people failed to keep up their mortgages? Probably because our economy has been shipped overseas, or sold to foreign companies who no longer see us as viable customers worth propping up. How on earth will rescuing the banks really alter the major black hole that our economic system has become? I don't know much, but sure don't believe
this president and congress works on my behalf.

9/30 is the end of the fiscal year

  • Bob Fertik's picture
    Bob Fertik
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for some companies but also the end of the quarter for many others.

In both cases the companies are required to produce a balance sheet which "values" their mortgage-backed securities based on the current market price ("mark-to-market").

Since no one is buying mortgage-backed securities except by selling off the entire company (i.e. Merrill Lynch), the market price is about 20% of the face value.

That's the real reason Congress was trying to pass this deal before 9/30, but that's not going to happen so either the companies will have to "mark to market" today or Congress will retroactively let them "value" their "assets" if the bill passes the Senate on Wednesday.

The first bailout was a mistake

  • Old Geecer's picture
    Old Geecer
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and this one is also a mistake, and the next and the next, once started they know no end to this crazy misguided fix! Now we have every type of Companies standing inline with their hands out for a handout. No Government can be a Government by paying for bad behavior!

jump down turn around pick a bail.........

  • scando's picture
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as opposed to emphasizing the problems with the proposed bailout, i would appreciate it if you would also suggest a concrete alternative to the current bailout on the which would address the concerns you legitimately raise, but would still effectively stave off what seems to be imminent economic collpase....
thank in advance.

Speaking only for myself...

  • Jim's picture
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...this seems the perfect time to FORCE a conversation about TAXATION.

The kind that refills treasuries:

The Federal Deficit.

Source: Congressional Budget Office

Lack of taxation on the Aristocracy (compared to when it was collected during the Clinton Administration) AND pulling our troops from killing those who attacked us on 911, to seeking oil dollars for the few in Iraq, have left the USA vulnerable.

Folks should pay for services rendered. Wars are fought to defend a Nations wealth. Folks should pay in proportion to the wealth they need defending. That is not happening.

My own thought for a zero sum game is:

-ZERO tax on necessary income -the first $65,000 made by every American.

-~35% tax on additional dollars (this relies, in part, on the econmic stimulis generated by getting capital to the vast majority).

Or one might try other specifics:

A Responsible Plan to Pay for Recovery: $900 Billion in New Revenue

Below is our 10-point program to pay for this broader bailout. This plan would generate $900 billion a year until the costs of the bailout and stimulus program are paid for.

1. A Securities Transaction Tax: $100 Billion

A fair plan to pay for the bailout should include a modest financial transaction tax on the buying and selling of stock and other financial products. A penny on every $4 invested would generate $100 billion a year. Other European countries already tax stock transactions, and these transaction taxes effectively discourage speculation.

2. A Wealth Tax Surcharge on Households with $10 Million: $300 billion

Congress should institute a modest wealth tax surcharge on households with a net worth of more than $10 million. These households currently own and control more than 20 percent of the nation's private wealth. They have realized huge gains from the manipulation of capital markets and the asset bubbles that created the current crisis. A modest surcharge -- no more than 3 percent -- could generate more than $300 billion.

3. A Corporate Minimum Income Tax: $60 Billion

In August, the Government Accountability Office reported that two-thirds of U.S. corporations paid no income taxes between 1998 and 2005. These corporations paid nothing toward our shared expenses of defense, environmental protection, public health and education. Ordinary taxpayers should not be left holding this bag. A minimum corporate income tax should contribute toward the bailout.

4. A "Disgorgement" Recovery From Profligate CEOs: $40 Billion

Until several weeks ago, top CEOs and managers were collecting massive salaries and fees while they told the rest of us that "everything is fine." These CEOs gorged themselves and have taken the money and run. The four biggest investment banks on Wall Street shelled out $30 billion in bonuses last year. One of them, Lehman Brothers, has just gone under. Another, Bear Stearns, was bailed out earlier this year. To help pay for recovery, the new Treasury authority should seek the payback of executive compensation inappropriately extracted in the years before the Wall Street meltdown.

5. An Income Tax Surcharge on Incomes Over $5 Million: $105 Billion

A portion of the bailout cost should be financed with an emergency income tax surcharge on incomes over $5 million. Wealthy investors have been the big winners in the unregulated bubble economy. They have watched their incomes skyrocket over the last 25 years. Meanwhile, President George W. Bush has cut their taxes for seven years. Instituting a 50 percent tax rate on income over $5 million and a 70 percent rate on income over $10 million would generate $105 billion a year until the bailout is paid for.

6. An End to Overseas Corporate Tax Havens: $100 Billion

Congress should close down corporate tax havens that allow corporations to game the system and cut their taxes, sometimes to zero. This step would generate $100 billion from profitable companies that have paid no taxes over the last decade.

7. The Elimination of Subsidies for Excessive CEO Pay: $20 Billion

As taxpayers, we subsidize excessive CEO pay, through a host of tax loopholes, to the tune of $20 billion a year. Congress should close these loopholes, including the accounting gimmicks that permit companies to report one set of earnings to shareholders and a different, lower number to Uncle Sam.

8. The Elimination of the Tax Preference for Capital Gains: $95 Billion

The mega-windfalls that Wall Street executives have pocketed over recent years will be generating additional income, in the form of dividends and capital games, for years to come. Under current tax law, dividend and capital gains income faces a mere 15 percent tax rate, while income from actual work can be taxed at rates up to 35 percent. Taxing wealth and work at the same rates would generate $95 billion a year in revenue.

9. A Progressive Inheritance Tax: $60 Billion

In the near future, the moguls of the past quarter-century will be passing off the scene and leaving behind dynastic-size fortunes. A portion of this wealth should be taxed. A progressive estate tax on estates over $2 million -- $4 million for a couple -- could generate $60 billion a year in the short term and much more in outlying decades.

10. The Elimination of the Mansion Subsidy: $20 Billion

Wealthy taxpayers can currently deduct their mansion mortgage interest off their taxes. The richest 2 percent of U.S. households do not need to be subsidized by American taxpayers. Capping the home mortgage interest deduction on that portion of mortgage payments that exceeds $200,000 per year would generate $20 billion a year.

Chuck Collins is a senior scholar at the Institute for Policy Studies, where he coordinates the Working Group on Extreme Inequality.

Dedrick Muhammad is a senior organizer and research associate at the Institute for Policy Studies and author of "40 Years Later: The Unrealized American Dream." Muhammad is also the "Racial Wealth Divide" coordinator at United for a Fair Economy and co-author of UFE's report "The State of the Dream: Enduring Disparities in Black and White."

© 2008 Independent Media Institute. All rights reserved.
View this story online at:

For me, I see no point with band aids while nonsensical Republican/Conservative ideology still lives. This is a time to FORCE fast conversation ;)


Ahh a republican nightmare.

  • Ole's picture
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Very good jim. i 100% agree. A great solution for the neocons economic mess.

thanks for the info.


  • suetiggers's picture
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I love the idea of the pig to portray these wasteful thieves with entitlement issues.... EXCEPT the GENDER.
I know that people more
often associate excess spending with females but let's give discredit to where it's
due. These were the guys, so let's keep it honest. They CONTROL MOST of
the dough (in spite of rich widows who STILL let men handle their
money like when daddy or hub was alive). Probably never read Gloria Steinams' great article on this topic. So come on progressives and independents and enlightened Repubs, let's show it like it is.

A pig in a Tuxedo?

  • Jim's picture
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Any better ;)



  • julies's picture
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I am a left leaning Democrat and believe the bailout is a necessary short term intervention. I count on the next president...Obama! initiate necessary reform. Let's tone down the rhetoric. julie

The necessary reforms are massive.

  • Jim's picture
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How does one ready a people for them WITHOUT forcing a conversation at a time of perceived crisis?

As soon as Obama is sworn in, the country will shift: The Left will "OWN" all the problems and attempting to calmly discuss matters at that time will only result in a relentless attack by the Right.

They will make use of the opening created between the Left "OWNING" all the problems and the Left's proposals NOT immediately solving those problems (8 years in the making).

I'm not sure what has to happen before Democrats en mass FORCE folks to sleep in the bed they made in order to usher in a new day. I see no other way.

For me, I'll keep daring folks to vote Republican.


If Democrats restore EVERYTHING...

  • Jim's picture
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...They will be voted out again in the next election cycle ----- just as they were after Clinton ;)

The change needed is deeper than a single election cycle.


the bailout/aka robbery

  • norma lacy's picture
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the biggest obstacles in the way of stopping this appalling handout to wall street criminals are Pelosi, Dodd and Franks. all democrats. please explain.


  • Jim's picture
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1) NOTHING changes without 51% agreement.

2) DEMOCRATS work toward that regardless if such work SUCKS.

3) Pelosi, Dodd, and Franks are NOT acting like Democrats.

If I entertained the luxury of simply demanding a world in which I was in full agreement, I would belong to no political party.

"Democrats" are not "out there". It is CONSENSUS for change using infrastructure and a label as an aid.


Report Card

  • Jim's picture
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In this round:

---Democrats vote both for and against bailout as written.

---Republicans vote both for and against bailout as written.

---Other Left had no vote nor voice.

I'm Other Left, that is why I'm a Democrat. I'll be damned if I'll let conservatives simply call themselves "Democrat" and thereby purge the party of Liberals.

You're allowed to DEFINE the party by throwing elbows ;)


NO! NO! NO! Enough is enough!!!

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Wall street, lobbyists and the political fat cats have made many billions by bending over the middle class. They can afford to bail themselves out of this mess. We will no longer tolerate this criminal administrations fear tactics. It is long overdue for this bunch to get their comeuppance and any senator or congressman voting to pass this bill in any form WILL be voted out of office next election!
Pelosi, Dodd and Franks are complicit in this attemped thievery.

Now that we defeated the bailout in the House...

  • Jersey Bob's picture
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The market is down another 800 points. I don't know which is worse -- having the bailout or not having the bailout. This is seriously starting to suck.

"A" bailout is fine.

  • Jim's picture
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We are only arguing about who pays ;)

In the meantime, yep, this is not fun.


Ask someone who has lived through the great depression

  • technophile55's picture
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Like my mom, 95 years old, lifelong liberal(even more than me) Democrat, still way sharper than McCain, before opposing this bailout.
She HATES the idea of bailing out Wall Street, but her response to 'so we shouldn't do this?' was -

"Oh God no. We cannot risk going through that kind of misery again, Never, never, never again."

We have lived in such bounty for so long, that we can't truly comprehend how bad it will get if we have a Greater Depression.

You got a mortgage? What's the longest you've lived in a tent? A year? A few months?
google "great depression" "tent cities" - 31,800 hits.

You got enough money to feed your family for a year when you lose your job?
Are you really prepared for "daddy, mommy, I'm hungry" when you haven't eaten for a day or two?
google "great depression" "bread lines" - 13,100 hits - check out the gaunt faces in the image results.

Yeah, the bailout really sucks, really, really sucks, but things could be worse.
We could end up fighting Global Warming and the Greater Depression at the same time. Google "food production" "global warming" - 517 thousand hits.

Be careful what you wish for.

Once again, "A" bailout is fine.

  • Jim's picture
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The argument is about who pays.

A quick bailout that the majority pays for BY living in Depression era like conditions, is no better than NO bailout.

We do have to watch what we wish for.

Uncollected taxes (ones which did NOT depress the economy before) have not been collected. The bailout discussion needs to be broadened.


No Choice

  • fix4all's picture
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The bailout is absurd, no doubt! However, having the Dem's "vote it out" could certainly cost the election. Unfortunately, this is the unavoidable consequence of political gaming. We really don't have a choice. The current state of the economy will play a pivotal role in this election. Our rep's have no choice, but to support this. This election is crucial, we can't afford any slip-ups even if it costs us 700B. If we lose this election that 700B will be insignificant compared to another 4-8 years of Republican mismanagement and giveaways.

Now maybe they can "get it right"

  • Old Geecer's picture
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there are a number of ways this crises can be handled, the one that the Bush administration set forth was sick to start with and Congress was just trying to butter it up. It was the poorest of the American people they where targeting for this bailout, thank god it didn't pass!
I do not like how both Parties are blaming one another of partisonship, children do this, but these people are adults, (maybe its time they grow-up)if they attack this problem as an "American", we will get something that All Americans can live with. A Democracy at work can not be plowed under by one Party!

The Bailout

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I wonder what all this squawking is about, considering it was the Republicans, not the Democrats, in the House of Representative, that STOPPED this giant ripoff Wall Street bailout. In fact, Nancy Pelosi, the idiot savant of the Democratic Party, publicly stated. on TV, that "this is not a bailout, this is a buy-in" And, to listen to Barney Frank, the US economy is doomed, because Congress doesn't just cave-in to Paulson's fraudulent scheme. I have always been a staunch Democrat, for all the years I have been able to vote - but, after observing the wimpy, groveling behavior of the senior members of the Democratic Party (Which also includes Reid), I must applaud the Republicans, for having the cojones to resist this latest Bush Administration rush to give away our money to the Fat Cats of Wall St. Huzzah, REPUBS! Ya done good. Pelosi - Resign, before you give the Country away.

Yeah i understand.

  • Ole's picture
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I do sometimes wonder about some of the democratic party leadership. Wishy washy wimpy. It does piss me off. That why i'm a green. though i still plan on voting for Barack.
I don't know if congrats are necessay for the gop. They were the one who engineered all this deregulation that led to this mess in the first place.
Pelosi she pissed me off when she took impeachment off the table.
I think if there is to be a bailout it should be for the homeowners not the banks. Maybe its time for a discussion on anti-trust laws.


  • jan89511's picture
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Look, I like McCain, but it worries us that he is just not sharp as a tack anymore..his Palin pick is horrible. We knew who she was long before he did..shes the non prolife for animals, ariel SLAUGHTER! Non prolife for the environment, DOES NOT BELIEVE? in Global warming? Cannot deal with foriegn affairs, nor teach her own children to use contrceptives, or the very least say I am in public office, do NOT embarrass me with unprotected sex? WE know her and petitioned for years to stop slaughtering our dogs ancestors! I have a white wolf I'd like to send her! We invite her to the wolf sanctuary and dare her to try and cut off their feet for money! SICKENING. After 2 years of millions in contributions, at the very end, this is a strong pick? Give me a break!!!! We have no choice now but to tell the truth about the real Palin and vote for the lessor of two evils. While you live in opulance and take our monies, we starved the last two years and you just now got it that economy is not strong? What a mess. We the people told you but you didn't listen!SHAME ON YOU PAULSON

An acceptable bailout plan must hold the guilty accountable.

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The Wall St. crisis has resulted in my retirement nest egg losing substantial value. The failure of the bailout plan only increased that loss, but I still sided with those of you who called for it's defeat because I just did'nt feel that it was fair to the taxpayers. Now let me tell all of you what else I don't feel is fair. I have heard and read about investors being portrayed as greedy. That is a grossly unfair mischaracterization. Many investors are themselves honest, hard working people of every class in society who sacrificed much and lived frugally to put away funds for their retirement and children's college education. We look for ways to eliminate some living costs in order to save for things that we feel will be important later in life. Take me for example. I am a disabled veteran who cannot work. Only a small part of my disability is considered service connected so my pension is meager. After military service I lived in abject poverty for many years. When I was finally awarded my pension it was paid retroactive to the date that I first applied for it. I received a lump sum check with modest subsequent monthly checks. I felt it was prudent to invest a substantial portion of the lump sum so that it would increase in value until later in life when I might need it more. If the Wall St. crisis would not have happened my investments would have likely tripled in value by the time I reach age 70. That's not likely to happen now thanks to the fat cats on Wall St. Do any of you think it's fair that people like me get ripped off by the likes of Henry Paulson? Not all investors are greedy. I am not greedy. Nor am I middle class. I never succeeded in becoming middle class. And I've never tried to get into your middle class wallet. A criminal by any other name is still a criminal. Let's hold them accountable.

I've got a question.

  • Northside's picture
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If the crisis is so dire and the markets need billions now like there's no tomorrow, can't the Bush Adm find the money in another bucket? Namely, the bucket they have to fund the ongoing occupation of Iraq.

IMF study shows bailouts FAIL

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The IMF has just published a study based on a “new database on the timing of systemic banking crises and policy responses to resolve them. The database covers the universe of systemic banking crises for the period 1970-2007, with detailed data on crisis containment and resolution policies for 42 crisis episodes, and also includes data on the timing of currency crises and sovereign debt crises. The database extends and builds on the Caprio, Klingebiel, Laeven, and Noguera (2005) banking crisis database, and is the most complete and detailed database on banking crises to date.”

The study is available at

Summarizing the studies findings (full link below), economist Nouriel Roubini writes:

"A recent IMF study of 42 systemic banking crises across the world provides evidence on how different crises were resolved. First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention. Of the 32 cases where the government recapitalized the banking system only seven included a program of purchase of bad assets/loans (like the one proposed by the US Treasury). In 25 other cases there was no government purchase of such toxic assets. In 6 cases the government purchased preferred shares; in 4 cases the government purchased common shares; in 11 cases the government purchased subordinated debt; in 12 cases the government injected cash in the banks; in 2 cases credit was extended to the banks; and in 3 cases the government assumed bank liabilities. Even in cases where bad assets were purchased – as in Chile – dividends were suspended and all profits and recoveries had to be used to repurchase the bad assets. Of course in most cases multiple forms of government recapitalization of banks were used.

"But government purchase of bad assets was the exception rather than the rule. It was used only in Mexico, Japan, Bolivia, Czech Republic, Jamaica, Malaysia, and Paraguay. Even in six of these seven cases where the recapitalization of banks occurred via the government purchase of bad assets such recapitalization was a combination of purchase of bad assets together with other forms of recapitalization (such as government purchase of preferred shares or subordinated debt).

"In the Scandinavian banking crises (Sweden, Norway, Finland) that are a model of how a banking crisis should be resolved there was not government purchase of bad assets; most of the recapitalization occurred through various injections of public capital in the banking system. Purchase of toxic assets instead – in most cases in which it was used – made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico).

"Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.

"So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.

"Indeed, the plan also does not address the need to recapitalize those financial institutions that are badly undercapitalized: this could have been achieved by using some of the $700 billion to inject public funds in ways other and more effective than a purchase of toxic assets: via public injections of preferred shares into these firms; via required matching injections of Tier 1 capital by current shareholders to make sure that such shareholders take first tier loss in the presence of public recapitalization; via suspension of dividends payments; via a conversion of some of the unsecured debt into equity (a debt for equity swap). All these actions would have implied a much lower fiscal costs for the government as they would have forced the shareholders and creditors of the banks to contribute to the recapitalization of the banks. So less than $700 billion of public money could have been spent if the private shareholders and creditors had been forced to contribute to the recapitalization; and whatever the size of the public contribution were to be its distribution between purchases of bad assets and more efficient and fair forms of recapitalization (preferred shares, common shares, sub debt) should have been different. For example if the private sector had done its fair matching share only $350 billion of public money could have been used; and of this $350 billion half could have taken the form of purchase of bad assets and the other half should have taken the form of injection of public capital in these financial institutions. So instead of purchasing – most likely at an excessive price - $700 billion of toxic assets the government could have achieved the same result – or a better result of recapitalizing the banks – by spending only $175 billion in the direct purchase of toxic assets. And even after the government will waste $700 billion buying toxic assets many banks that have not yet provisioned for such losses/writedowns will be even more undercapitalized than before. So this plan does not even achieve the basic objective of recapitalizing undercapitalized banks.

"The Treasury plan also does not explicitly include an HOLC-style program to reduce across the board the debt burden of the distressed household sector; without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession.

"Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners."

Read the whole article at

"RGE Monitor has been named one of the world's best economics websites by BusinessWeek, The Economist, Forbes and the Wall Street Journal" (according to their "About Us" page) so it's not like they're a bunch of leftists.

thank you

  • Bob Fertik's picture
    Bob Fertik
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for posting this!

i've started reading RGE (Nouri Roubini) and it's excellent.


  • JoanneG's picture
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Is ANYONE in Congress reading it?

Funny you should mention "lipstick on a pig"...

  • JoanneG's picture
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Last Thursday I called Senator Obama's office and later sent email using the pig metaphor to express my view that the bailout package is a potential disaster for the economy and for the Democrats who will be blamed when it fails and when the Obama presidency, should it come to pass, is crippled by the cost and the fallout. It seems likely that a recession might or might not occur, with or without the bailout. We do need action, but I totally agree with Bob that we need to take our time and do it right.

Right now, Rasmussen polling shows that only about 33% favor the plan, although "Just 49% understand that the government anticipates recovering a significant portion of the $700 billion when the assets purchased are resold. Twenty-six percent (26%) say that’s not part of the plan while the rest are not sure...Those who understand that taxpayers will eventually get much of the money back support the bailout by a 2-to-1 margin. Those who incorrectly believe the government will not be getting money back oppose the bailout by a 62% to 18% margin."

What I'm wondering is how we know that "taxpayers will eventually get much of the money back"?

we won't get a penny back

  • Bob Fertik's picture
    Bob Fertik
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they're just lying, like they did about Iraq.

if they were serious they would publish the details of what they plan to buy and for how much. but they won't publish those details because their plan is to bail out Paulson's Wall Street cronies by overpaying.

The Day After

  • Old Geecer's picture
    Old Geecer
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The day after the bailout failed and our Wall Street Government is sitting around and crying in their beer, but the stock market opened higher, and somebody ran out on TV at 7:30 am and said something, I expected him to say “Good morning”, but not this joker, he could not lower himself to talk with his Slaves. He did mumble something, but it made little or no sense, and he turns and walked away! Does anybody know who this joker was?
They want a $700B dollar Bailout, that will add to our national debt to 11 Trillion dollars, this will never be repaid and they have no intention of ever repaying it, if they would borrow the $700B they would have to pay it back, but with the Taxpayers all they have to do is raise our taxes. Just to feed this monster we will have to pay out in interest a Trillion Dollars a year, as this monster grows it will devour us, as it consumes us so goes our life style. We all know that the Government will do nothing to bring down this debt but will keep adding to it, and on and on. Take a look at the last 3 months, they have added millions to our National Debt, they always need money for something like the War, bailouts, CEO’s wages, earmarks, and any pork barrel spending they can think of. We have to come to a reality that this is our Country and that the people who are in charge haven’t the slight idea what in hell they are doing, but we have to clean up after them, and this weight we have on us is becoming too heavy to bear. They have kicked out any laws that would have govern this and de-regulated everything they can!
As they keep pushing Fear, knowing that most people don’t have the willpower to stand their ground on what they know is right, so by continually bombarding them with Fear we will buckle and give in.
OK, they get the money for the bailout and if doesn’t do as they say, we can add $700B more to the Depression and it will take a long time to heal from this bad dilemma. People are fed-up with liars and politicians, for once in my life the people are finally standing up for their Freedom and a fair Government.