I'm not sure what we should do next (we, meaning, what should we as citizens urge Congress to do next).

We might as well help the middle class.

A homeowner centered solution make a lot of sense to me.

Agreed.

have the same bill with different oversight and provisions.
and not give total control over the people who made the mess to begin with.
as a matter of fact, stall it until Obama gets into office.

Look this is our chance to craft a real bail out bill. The one that Bush sent down is dead. His own party killed it. This is the chance for the Democrats to bring up their own proposal and shove it down their throats. One with teeth and oversight previsions, one that give the average citizen some bankruptcy protection and some stimulus, after all Christmas is coming up and wouldn't it look good if they could give out some money to the middle class, help sell those presents.

Myself I hope they get in their face with a bill now, they'll have to sign it or look like Scrooges.

Do nothing for 3 months???

Yeah I had the same reaction to that...

They're going to have to bail out some of the remaining banks. I'd rather not come out of this and have only two serious banking companies left. More power in the hands of the few isn't good in government or business.

Whatever they do they have to do it fast. Banks and markets all around the world are taking a dive because of this.

Let them die. These are the rules they wanted to play by. Nationalize what assets are left and then rebuild.

You're mental. Not even FDR did that. Not even the precious Swedes whom everyone keeps pointing at did that.

I think it is very important to let this disaster play out to its very bitter end. The lesson needs to be learned once and for all that the neo-con/neo-liberal approach to running an economy produces these results. Other countries had to learn it, we have to learn it in our bones. This Friedmanite shit ruined us. Never again must these ideologues of greed ever be allowed to raise their heads! If Americans don't learn now, the Friedmanites will be back to deceive them again in about 10 years. No bailout!

the only good this can cause is to further dwindle the number of pro-bush conservatives, when they see a worldwide recession.

as for a solution, may this massive failure work as a nail in the coffin of the idea that "trickle-down economics" works best with as little government regulation possible.

I assume you're not proposing we wait until everything's dead before we actually do something.

No Deal to the 700 billion. A more realistic figure is 150 billion. Combine that with strict oversight and the strongest equity position for American taxpayers.

No, just that we have now had a DOW loss greater than that of the Great Depression, and there are Republics suggesting we cut the Capital Gains Tax. Seriously, cut the tax on when the rich make money and pull it out of the market?

Choice C & D are pretty similar... Pay raise for everyone... Federalize the Federal Reserve... Buy up the bad mortgages and stablize them... Only bail out failing banks... A 0.25% on stock trading like Hartmann keeps suggesting... and let the fatcats fail... Invest in infrastructure, creating more jobs and more consumers with a budget to spend.

(I'm no economist... just the a compilation of what I thought were the good ideas I've heard lately.)

The DOW was only 5 years old then and was barely 400... the DOW may have dropped 700 points... but its hardly dropped 17%.

3% drop versus 17% drop... I think we're in better shape for the time being. We'll see what happens when the markets open tomorrow.

A Bailout We Don't Need

By James K. Galbraith
Thursday, September 25, 2008; Page A19

Now that all five big investment banks -- Bear Stearns, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley -- have disappeared or morphed into regular banks, a question arises.

Is this bailout still necessary?

The point of the bailout is to buy assets that are illiquid but not worthless. But regular banks hold assets like that all the time. They're called "loans."

With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn't, the FDIC has the bridge bank facility to take care of that.
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Next, put half a trillion dollars into the Federal Deposit Insurance Corp. fund -- a cosmetic gesture -- and as much money into that agency and the FBI as is needed for examiners, auditors and investigators. Keep $200 billion or more in reserve, so the Treasury can recapitalize banks by buying preferred shares if necessary -- as Warren Buffett did this week with Goldman Sachs. Review the situation in three months, when Congress comes back. Hedge funds should be left on their own. You can't save everyone, and those investors aren't poor.

With this solution, the systemic financial threat should go away. Does that mean the economy would quickly recover? No. Sadly, it does not. Two vast economic problems will confront the next president immediately. First, the underlying housing crisis: There are too many houses out there, too many vacant or unsold, too many homeowners underwater. Credit will not start to flow, as some suggest, simply because the crisis is contained. There have to be borrowers, and there has to be collateral. There won't be enough.

more..

http://www.washingtonpost.com/wp-dyn/conte...isrc=newsletter

Punt.














Wait...

Are we close enough to try a long field goal?

Or to restate that: The lesson needs to be learned once and for all that the Spoiled Brat BOOMER approach to running an economy produces these results.

How Did Things Get So Bad? Some Generation History

My vote is for Come up with a consumer-homeowner bailout plan.



Randi suggested this. I think they should come up with the consumer homeowner bill first. Lets make the private investment bankers get the their house in order and allow homeowners to get mortgage restructuring, needed assistance and foreclosure moratorium of 6 months. In addition if any billions are going to be paid out by the govt. it should be for these purposes. Imagine not having to pay your mortgage payment for 4-6 months. That's a lot of cash just in time for the holidays!

I remember how my credit union official suggested you should have at least six months of mortgage payments on hand.

Then the markets should settle. People would be spending cash, the bankers will come off the ether and we can move on to something better, never to return to the old Reaganomic, Greenspan, Straussian, Freidman, neo-con, quasi-dem, failed 20th century economic practices.

PS: Wages also need to be addressed. Proper wage earners, will be in the end supporting any type of package because lord know the private investment bankers are toiling in the shit right now.

Not just for homeowners, which is why I voted for seekers' "consumer-homeowners" option. We need to rethink this idea that what's good for "homeowners" is good for everybody. A lot of people rent.

A lot of people are homeless. We are ALL consumers.

We can't allow them to retool everything in favor of just homeowners.

I agree. Let the BANKS "pull themselves up by their BOOT STRAPS" as McCain quoted a few weeks ago!
They started from somewhere, let them start from scratch like the rest of us do.

After talking to my brother, the economist, I'm becoming sanguine on the "do nothing" option. It could leave a ticking time bomb for an Obama administration.

I know jkun17 is being the brave lone "waitaminute" voice on this - but I certainly agree with him on one thing - we may not have three months to wait. Congress shouldn't wait till January.

I think now that the Bush bill is dead - let the Democrats draft their own new bill and I mostly certainly agree the centerpiece of it should be mortgage/homeowner and other consumer relief. Plus all the other good ideas they attached as amendments to the Bush-Paulson bill.

More accountability. Investigations for fraud. Restore regulations. No more golden parachutes. Keep it FREE of Republican crap like a cut on the capital gains tax (please... sheesh), pass it over their objections if we have to.

Yep a consumer oriented home owner centered program would help out better.

Exactly.

This sounds like a good option, but what about those jobless out there? The people who signed mortgages, then lost their jobs.
I'm beginning to wonder if this problem is really about "bad loans" at all.
As a nation, we're still going poor just to pay for this war anyway. If we're poor, why should we be getting into debt anyway.
If our jobs are getting lost to over-seas operations, then why would we commit to mortgages?
I find this whole bail out legislation brought on by Bush himself to be another frying pan into the fire situation.

Okay, so what are the choices?

On one hand we have “Make me king or I’ll crash your economy”
On the other hand we have “Go ahead, it’s a make me king either way”

If we pay the ransom – “they” get unlimited power and grab a huge percent of the power and in the end “we” get screwed BIG TIME.

If we don’t pay the ransom – the stock market shifts power big time and “we” get screwed big time.

The way I see it – one way we fight and at least have a chance to vote no confidence to the whole scam. I ain’t one to walk quietly into the gas chamber.

If we see a complete crash then we might be able to run the bastards off and build our own damn country from the rubble. If we sit and take it – we have to pay for our own Vasaline and we get no chance to rebuild anything whatsoever.

The vote is for civilization or 300 million indentured servants.

Kinda came out wrong.

they get unlimited control to grab a huge percentage of the wealth (power)

As far as a solution recommendation:

Does anyone think that the only ones “smart” enough to figure the solution are Bush cronies?

There are many very competent economists in the private sector who seek solutions based on what is really and truly the best way to restore the economy, from an educated point of view.

My vote is for a group of them to oversee the fixing of this mess.

I am shouting at the top of my voice not to let Bush cronies intensify the Great Train Wreck Robbery. This is a rush to complete the job before Obama shuts down the whole scam.

If you're talking about forming a commission of economists to come up with a plan for the situation, I agree, and I would put James Galbraith, Paul Krugman, and Robert Reich on it, for sure.

This did not come out wrong. This is grabbing the matter by the short and curleezzz. roadrunner

I am not saying let the markets tank in entireity. My position is the market can not be maintained at it's currently fraudulent inflated level. There must be a market driven correction, not a government assisted market correction.

Bushco has been pumping hundreds billions of "liquidity" into the markets. So there has been a continuous bailout going on for months without any input from congress and the American people. That has to stop, and any more money that is doled out by the American Taxpayers should benefit the American Taxpayers.

Take a breath ...
This is all Mc Keating/Reagan/Bush problems ... that have gone on WAY to long.
Save America - F___ the greedi-lists.

700 points on a stock market around 11,000 is irrelevant and was only in the brokeage/banking sectors - and probably done intentionally by Banks and Brokers - who will profit from it !

If Bush says we need to do it now - WE DO NOT NEED, TO DO IT NOW !
He is only concerned about what will "be written" in history books .... way, way to late W. ..... ROFL
Bush has already bankrupted US [tax-cuts and Iraq] and ruined our opportunity to borrow any more !
And that has always been a stupid thing to do, effectively - a taxation on the future with compound interests ???

This has to be resolved internally. and responsibly - those that caused it HAVE to pay.
Most can not buy a home, but have to subsidize those that can ... and those that have manupulated US into this
.................................................. come on ! Beyong stupid !!!!!

Prudently [not inflationary], and compassionately [restructuring all loans] justly for the crooks and liars, and progressively - learning from the mistakes, finally correcting them and improving the future. This should have been addressed and corrected when Mc Nasty [Keating Five] first created this problem - since then we have allowed a S & L/Banks failure [paid by the taxpayers]; and have had two major maket "corrections" - and have not learned or resolved the issues. De-regulated further ...... instead !

Great partisan opportunity/timing to expose the causes; and win Congress and the Whitehouse
and reinstitute Democracy !


Now ...
A. Fire Paulson, Bush yes-man and wall st. DOG ... a temporary Sec. appointment of Warren Buffet would be great [impossible because of conflicts] ... maybe Bloomberg ..... that would be more appropriate.

B. Ride this through the elections ... it is the most important issue of out times - and has to be recognized as the major voter decision factor, not swept under the rug. Let the crooks absorb the losses, they have created.

C. Reinstitute "real comsumer" protection in real estate [price fixing - what cause housing value to go up 70 % between 2002-06 - was not demand - manipulation] ... allowing the Fannie Mae's etc. to overvalue their packaged "deals"; further inflating the derivative market.

D. Re-regulate the stock market [from undue destructive manipulation - i.e. Oil futures] - indict/fire those who ignored the laws and public good, for themselves.
And possibly destroy the derivative market, before it's bankruptcy takes down the whole WORLD !

E. And amplify the Bush "tax cut" effect [2 trillion dollars to 5%] and the resultant concentration of wealth, was "not trickle down", was not "job's creation incentives".
Reverse the Bush tax cuts now to pay for this - NOW !
This is a once in a generation time to do it ! Got the spotlight ... use it.

F. Protecting all Americans [reinstate all of the defaulted loans, renegotiated]
- predatory real estate price manipulation and greedy banks have created the majority of this problem.

G. Banks "seem to be" a necessary problem ... but that has not been proven yet, only alluded to with "fear-factoring" ... if we need to, save the Banks [it will be a loan with interest] ... AND then, LET THEM loan to responsible businesses.

H. Protecting AIG [insurance] , Freddie Mac, Fannie Mae, etc. seem overkill; unless we completely OWN them [AND EACH TAXPAYER GETS DIVIDENDS AND GROWTH] and hold them until they are re-regulated, stable and can be turned over to responsible management with adequate future oversight.


Future ...
A. Continue further investigation of the predatory loans, and causes all the way back to Bush "ownership society"; $4,000+ bonuses for manipulative/bankrupt loans ... and Wall St. corruption, that at east exacerbated this situation.

B. regulation similar to the New Deal, with consideration for high tech changes



Has to be front and center to win back the Congress and the Whitehouse simultaneously !

Deregulation and reverse the egregious tax-cuts have [b]decimated the middle-class, Reagan/Bushs 41/43
and Bush III [ John Sydney Mc Cain III ].

It is absolutely necessary to re-establish Democracy, by and for ALL the people ![/b]
Compasionately and more socialistically for the people, not the banks. This corporate, military industrial welfare has gone far beyond insanity !

We have to reinstill intergrity to the PEOPLE, revalue assets, allow working people to join the home owner society, create jobs, rebuild our infrastructure, convert to non-fossil fuels in the next ten years, or quit breathing, forever !

And ignore the "negativity" of rightwing distration of the month. And destroy them with it - once and forever !

Now ! With the candidate truely "dedicated" to it .....

I think all the ARM mortgages should be rewritten at a 6 1/2% fixed rate, and those in arrears should have the outstanding past due amounts tacked on to the end of the mortgage term and the term of the mortgages extended by however many months would be necessary for each individual mortgage. All of the affected homeowners who's credit ratings have had adverse reports placed on file due to late payments on the mortgage, utilities, insurance and credit cards as a result of increased mortgage payments on ARM mortgages, should be provided a process to clear those items from their credit reports. Reinstate regulation on mortgages. People who have already lost their homes that were part of this scheme, should have available a process to have that negative foreclosure report removed from their credit rating. Do not allow ARM mortgages. Reinstate the old formula for determining just what price home prospective buyers can afford, that should be a requirement imposed on the lender. Require a professional license and professional liability insurance for all people who write, originate, and sell mortgages issued by each state and based on rigid federal qualifiers.
Just for a start...
also, for individuals who have lost homes that were bought during this scam period that were ARM mortgages, or who lost their homes because they lost their jobs should be given job preference status.

I voted to come up with a new plan, And here is such a plan.

Let's "come up with a consumer-homeowner bailout plan".

it's hard to vote for "come up with some other plan" b/c i don't know what that is. as for "doing nothing", it's preferable to following the bush administration off of a cliff, again. no one can explain what paulson intends to do with the money because no one, maybe not even paulson, knows what he will do with it or how they will properly evaluate assets under this plan. how can we strike a good deal without having any idea what these troubled assets are worth. homeowners know what their worth, however.

moreover, we're not going to get real change in this country until Wall Street feels some pain. The kind of pain americans on so called "main street" have been feeling for years. if these banks collapse, perhaps working people can take over our government again. and we could put systems in place that work for us, not just the extremely rich.

I think the point should be clearly made that turning government functions and agencies that have regulations, over to the private sector without regulations is what got us here. There should be a plan to remedy that problem. But for now, they need to undo as much damage as they can, keep people in their homes to the greatest extent possible and stop this free fall of home values.

Small town banks, credit unions(member owned,also insured) are gonna be fine. Read your homework today.

They need to fix the problems (little or no oversight, etc) but keep it simple. It's hard to convince two-hundred, something people (sorry, don't know exact number to win) when a bunch of "extras" are in the bill.

When the bill gets to the Senate is when they can add all the juicy stuff, right?

You can tell me I'm wrong if you want...I'm a Dem...been hearing it for years!

I voted to come up with a new plan. Unfortunately with Bush still holding the veto pen, it may have to wait until January. But we start out by reinstating the Usury Laws and re-regulating the banking and insurance industries. We go back to pre-Raygun status on how these companies operate. If any go under between now and then, so what?

Let them eat coal cake!