Bailout Anger in the Streets

Sen. Maj. Leader Harry Reid is trying to pass an inadequate give away in the senate on Wed or Thurs. Call, email or phone him and give him your views at:
528 Hart Senate Office Bldg
Washington, DC 20510
Phone: 202-224-3542
Fax: 202-224-7327
Toll Free for Nevadans:
1-866-SEN-REID (736-7343)

The core concept proposed by Bush is flawed. Call some hearings and ask some economists. Google Sweden 1992 banking crisis. They had good success promptly steering their financial institutions back to safety. Learn the lessons, write it for the Democratic base, and own it. The “compromise” tweeking that was done to the Bush proposal resulted in a toothless and weak 100 page bill that tried to bury and hide its weakness from the voters. Rather than condescendingly claiming that the American people didn’t understand (Cf, McSame of Obama at first debate), or that the leadership didn’t explain it well enough, the reality is that public outrage finally made the Republicans blink, to borrow from Palin. If they vote in favor of bailing out the bad actors, they lose votes from constituents in five weeks at the next election. That is their only moral hazard. The bill that failed would not have prevented one of the 10K daily foreclosures, could have been filibustered until Bush spent all $700B, would only have made some parachutes non-tax-deductible, merely required a report “suggesting” how the taxpayer will be paid back, and allowed the same bunch of lobbyists to set prices for their trash that the taxpayers would pay. As a final insult, instead of providing more confidence through transparency, the failed bill would allow Paulson to suspend the mark-to-market rule. This is intellectual dishonesty that will further erode confidence in our banking system. Do a better job on all these issues and allow bankruptcy judges to implement the rewriting of loans, or face the wrath of the voters. I think many voters would accept a temporary governmental equity position in the banking sector as long as the bad guys aren’t seen as maintaining their ability to subvert the programs and continue to rip off the system. Don’t pull another FISA cave.