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:
http://www.CityofArt.net/wall_st_wail.pdf

Also an overview of the campaign and who is behind the R's:
http://www.CityofArt.net/stromboli.pdf

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

I am linking this post to the CLG website, and it will be in Monday's newsletter.
Cheers,
Lori R. Price
Citizens for Legitimate Government
http://www.legitgov.org/

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.

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.

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!

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 table.....one which would address the concerns you legitimately raise, but would still effectively stave off what seems to be imminent economic collpase....
thank in advance.

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.

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

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

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.

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.

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.

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.

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!

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.

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

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.

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.

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 http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf

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 http://www.rgemonitor.com/roubini-monitor/253783/is_purchasing_700_billi...

"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.

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"?

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.