The Push Is On: Bringing The Bailout Back And Pressing For Its Passage
September 30th, 2008 - by: danny
WILL FREEDOM FRIES BE BACK?
“A certain idea of globalization is dying with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it. The idea of the all-powerful market that could not be contradicted by any rules, by any political intervention [is] a crazy idea. The idea that the market is always right is a crazy idea… Self-regulation, to fix all problems, is over. Laissez-faire is over”
Who said this? Why, none other than French President Nicolas Sarkozy
FULL COURT PRESS TO GET THE BAILOUT THROUGH
OTHER COUNTRIES IN DEEP DOO
LOU DOBBS SPEAKS WITH FORKED TONGUE
HOME SWEET HOME MUSICAL EVENT TONIGHT
Here we go again – a new offensive to make the bailout palatable, to revise the bill somewhat—”tweak it” in the words of an anonymous Treasury Department official and then run it again up the Congressional flagpole. This time, K Street and its lobbyists will help Wall Street impose its will on Main Street. And of course, our president who specializes in alarmism is right up front with new warnings and appeals
George Bush says the cost of not acting will be higher than the $700 billion rescue deal
US President George W Bush has warned the US economy is at a “critical moment”, and vowed to get his Wall Street rescue plan through Congress.
The new bill is being compared by AP to a rummage sale:
WASHINGTON – Congressional leaders, President Bush and the two rivals to succeed him rummaged through ideas new and old Tuesday, desperately seeking to change a dozen House members’ votes and pass a multibillion-dollar economic rescue plan. At the top of the list: Raise confidence in the banking system by increasing the government’s insurance.
In addition, there was talk of making it easier for financial institutions to hold questionable long-term assets, an idea embraced by some of the House Republicans who slapped down the bailout bill and sent stocks tumbling on Monday. Wall Street regained hope on Tuesday, and the Dow Jones industrials rose 485 points, making up a good bit of the ground lost in the 778-point plunge.
SENATE VOTES TODAY TO PRESSURE HOUSE
There was a game changer Tuesday night. Originally, the bailout was going back to the House Thursday but now in a legislative maneuver, the Senate will vote before the House Wedneday.
CNN: Senate to vote on rescue plan WednesdayRep. DeFazio and Kaptur introduce alternative to bailout bill
The two million-member SEIU (Service Employees International Union) is backing the plan announced today by Rep. Peter DeFazio and other Members of Congress to restore confidence in the financial markets. The new bill, called the “No BAILOUTS Act” (Bringing Accountability, Increased Liquidity, Oversight, and Upholding Taxpayer Security), is being introduced by Rep. DeFazio (OR-04), with Rep. Kaptur (OH-09), Rep. Scott (VA-03), Rep. Cummings (MD-07), Rep. Doggett (TX-25), Rep. Holt (NJ-12), Rep. Edwards (MD-04) and Rep. Hirono (HI-02).
“Oregon Democrat Peter DeFazio called on the Bush administration to fund an alternative bailout plan using money drawn from Wall Street itself and not the taxpayer.”
REAL NEWS: DOUG HENWOOD ON THE NEED FOR STRUCTURAL REFORM
WHAT’S THE STRATEGY HERE?
Naked Capitalism features a former Congressional Staffer’s assessment of next steps:
1) The House schedules a re-vote on the same bill.
Keep in mind that victory was a very narrow one. The final vote was 228-205. That means a switch by 12 congresspeople would make all the difference. All the leadership has to do is put 12 Bridges to Nowhere-type earmarks buried in the fine print of some appropriations bill, and those 12 votes can magically appear. Or promising to give/withhold campaign funds or plum committee assignments. The list of carrots and sticks available to the leadership is endless. In many ways, the vote turning out the way it did had nothing to with the bill per se, but rather represents a colossal failure of the leadership’s whipping process. You don’t walk into a critical vote like this without knowing how many votes you have beforehand. Indeed, a report in The Hill suggest that Roy Blunt, the Republican whip, miscalculated the votes in his pocket by 10, which was a huge mistake and probably cost them the vote.2) The House schedules a re-vote after some minor alterations.
The leadership is by no means out of options in the horse-trading that’s likely occurring now. Some of the congresspeople voted no not because they disagreed with the gist of the bill, but because their pet issue (e.g. foreclosure assistance, tax cuts, regulatory changes, etc. etc.) wasn’t included. Just like adding the meaningless bond insurance plan into the bill bought a few Republican votes, similar minor provisions can be added to convince a few more people.3) The Senate votes first, and the House uses that to pressure members to fall in line.
While the Senate seems to have the votes for passage, all bets are off right now until they come to grips with the House defeat. Senators are now deciding whether they want to walk the plank for Wall Street and possibly lose their jobs for a bill that won’t pass anyway.4) The process starts again, with new proposals and plans debated.
While this is perhaps the ideal situation, the likelihood of such an orderly debate will depend greatly on how the markets do in the next few days. If chaos continues to reign, the pressure will grow to pass something. This is where all those economists need to come together and come up with an alternate plan fast. While the University of Chicago writing a letter condemning the current plan was nice, it would have been better if they proposed an alternative. Remember that when a house is burning down, and someone proposes doing something, and another proposes doing nothing, chances are that something will win out, no matter how bad it is, simply because doing nothing is not an option.Economists with ties to the Hill, or with journalists that could publicize such a plan, need to come together to propose a reasonable alternative. Throw enough academic credentials behind it, and they have a fighting chance of being more trustworthy than Bernanke and Paulson. We’ll see if the academic community which has been so vociferous in its criticisms can also make constructive proposals (It doesn’t have to have all the details in place, just remember 3 goals that can be reduced to soundbites for public consumption: save the financial system, punish Wall St., and cost less than $700 bil).
OTHER CRISIS NEWS;
NY MAYOR MICHAEL BLOOMBERG TO TAKE ADVANTAGE OF CRISIS, SCUTTLE TERM LIMITS AND RUN FOR A THIRD TERM
NYC REPORTS REAL ESTATE MARKET WENT FROM BOOM TO BUST; OTHER CITIES AND STATE CANNOT GET BONDS TO FINANCE ONGOING PROJECTS; MAJOR CUTBACKS FEARED ON ALMOST EVERY FRONT
EUROPE CATCHING WHAT AILS US FINANCIAL SECTOR
WHAT WERE THEY THINKING? (UNDERNEWS)
CRASH TALK
Craig Crawford, CQ – How did anyone think the public would get behind something sold as a bailout of Wall Street multi-millionaires? Make it a bailout of homeowners, and you would have something that could pass in Congress. But to do that, the Bush administration needs to put something in the package that might actually help homeowners — like giving bankruptcy judges the power to order modifications of usurious loans. Or maybe some protections against exorbitant credit card interest. If this bailout ends up as a better deal for average homeowners in crisis, Monday’s turmoil in Congress will have been a very good thing.
David Korten, Yes Magazine – Rather than seeking to restore the health of Wall Street’s predatory private institutions, a proper plan would seek to rid Wall Street of its purely predatory elements while dismantling and reassembling its useable institutions to create a new system accountable to the needs of Main Street. Here are some of the basics.
Hedge funds and private equity funds pose great risks to society while performing no beneficial function. They should be dismantled. . .
DOWNWARD MOBILITY MEASURE
Ron Scherer reports on likely casualties:
New York – Lloyd Blankfein, chairman of Goldman Sachs, made $73.7 million last year. James “Jamie” Dimon, chairman of J.P. Morgan Chase, had to make do with $57.2 million, reported Forbes magazine.
But if either company takes part in the federal government’s $700 billion rescue plan for financial firms, Mr. Blankfein and Mr. Diamon may have to be content with $500,000 a year, or their company will have to pay higher taxes.
Oh the horror of it all.
The Financial Times reports “Banking’s crisis of confidence deepens”….Wall Street rebounded on Tuesday even as the global banking system was gripped by a worsening crisis of confidence. Colunmist Martin Wolf summed up the Congressional action this way”:
“Congress decides it is worth risking another depression.”
This is becoming a global crisis;
Rescues Going On Everywhere. “While we were watching Congress put together a $700 billion bailout, there were bailouts going on in six other countries. Britain seized Bradford & Bingley, a large mortgage lender. Germany provided an emergency loan to Hypo Real Estate, a real estate lender. And three European countries – Netherlands, Belgium and Luxembourg – bailed out Fortis, a large bank and insurance company. Then today Iceland joined the fray, bailing out Glitner Bank, the third largest in that country.” (NY Times, Sept. 29)
Here are two views from The Guardian in London:
GARY YOUNGE ON COMMON SENSE
“Common sense is not something rigid and stationary,” wrote the late Italian Marxist Antonio Gramsci, who crafted the distinction from Mussolini’s prison. “It creates the folklore of the future, a relatively rigidified phase of popular knowledge in a given time and place.” Good sense, he argued, was often concealed in common sense, but emerged primarily in times of crisis and transformation.
We find ourselves in one such crisis now. As markets plunge, banks fail and traders panic, the core principles that have underpinned western economic and political culture for a generation have been thoroughly discredited. Less than a month ago the invulnerability and inviolability of unregulated global capitalism was common sense. The system that leaves half of the world living on less than a dollar a day, with some so impoverished that they are eating mud cakes and selling their children into bondage, was apparently working well. To suggest otherwise was to be dismissed as extreme.
But such orthodoxies can collapse even faster than markets. By the end of last week the US treasury secretary Henry Paulson was literally on one knee before Nancy Pelosi, Democratic speaker of the House, begging her to save the bailout deal. Later George Bush warned of the entire American economy: “This sucker could go down.” Suddenly, government intervention in markets, reining in executive pay and placing controls on the flow of capital are good sense.
GEORGE MONBIOT IN THE GUARDIAN
“They baled out of the bail-out, but the money will still have to come from us. It always has.”
According to Senator Jim Bunning, the proposal to purchase $700bn of dodgy debt by the US government “is financial socialism, it is un-American”(1). The economics professor Nouriel Roubini calls George Bush, Henry Paulson and Ben Bernanke “a troika of Bolsheviks who turned the USA into the United Socialist State Republic of America”(2). Bill Perkins, the venture capitalist who took out an advertisement in the New York Times attacking the deal, calls it “trickle-down communism”(3).
They are wrong. The banking subsidies Congress rejected last night are as American as apple pie and obesity. The sums demanded by Bush and Paulson might be unprecedented, but there is nothing new about the principle: corporate welfare is a consistent feature of advanced capitalism. Only one thing has changed: Congress has been forced to confront its contradictions.
The Daiily Mail’s Robert Murphy goes further:
Henry Merritt ‘Hank’ Paulson Jr., A.K.A. ‘The Treasurer’The Paulson bailout failed in the House. If it isn’t a death blow to the plan, it should be. This is not an economic plan: it is a heist.
It will go down as The Great Bank Robbery of 2008.
The economics behind it are nonsense, but we are naïve if we spend much time even considering the “arguments” for it. This is a money and power grab, pure and simple.
Just as magazine covers today feature scantily clad women that would have been scandalous a generation ago, in the same manner Paulson’s proposal – made in broad daylight and on national TV! – is almost naked in its audacity.
POLICE STATE COMING?
Scott Thill: Will Wall Street’s Meltdown Turn America Into a Police State?
Here is what we see today: Crowds protesting in the streets, the people’s money wiped out thanks to the Bush administration’s latest economic shock and awe. An army brigade matter-of-factly betraying Posse Comitatus for the purpose of crowd control. The public trust and wealth almost robbed cleanly with congressional approval.
NYT: Credit Strains Worsen; U.S. Stocks Surge
The Dow gained about 400 points in early afternoon trading, but strains worsened overnight in the credit markets.
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NYT: Candidates Call for Increase in Deposit Insurance
John McCain and Barack Obama both proposed raising the federal insurance limit to $250,000.
DOLLAR GOES DOWN WITH BAILOUT PLAN
Kathy Lien on Seeking Alpha
rejection of the $700B bailout plan by the House of Representatives came completely out of the left field, driving a knife through both US equities and the US dollar. For the Bush Administration, it certainly feels like they are moving one step forward and taking two steps back, but the severity of the financial crisis makes it absolutely necessary for Washington to put economics ahead of politics.
Although traders were initially dissatisfied with Congress’ approval of Paulson’s plan, they were counting on a bailout. The combination of a huge liquidity injection by the Federal Reserve today and the hope that the bailout plan would move forward kept stocks from falling further. However those efforts and the sleepless weekend of debates turned out to be futile after the House rejected the bailout bill.
In fairness, there was no was guarantee that Paulson’s plan would have helped average Americans, but at least it could have brought some stability to the financial markets. Unfortunately it is now back to the drawing board for Paulson, who has to meet with Bush, Bernanke and Congress to discuss their next steps.
Volatility in the financial markets benefits no one, especially as more than $1 Trillion in market value has been wiped out from US stocks today. The VIX, which measures equity market volatility, shot to the highest level in 6 years while gold prices jumped 3.8 percent. LIBOR rates have also skyrocketed while the TED spread continued to widen, indicating that as a result of the House’s rejection of the bill, investors both domestically and internationally have become more risk averse. Those who are willing to part with their cash are demanding a high premium.
Roger Ehrenberg, Wall Streeter:
Lack of transparency. Intellectual dis-honesty. Failure to read the pulse of the nation. In my adult life I have never seen a backlash so powerful or so well-timed as this. The voting public called bull#$%& on Hank Paulson, the President, Congress, Ben Bernanke, and anyone else associated with the current proposal, right in the midst of an election year. It could have been so easy. See problem. Identify key elements of problem. Quantify magnitude of problem. Develop plan to address problem in conjunction with needs of key constituencies. Clearly and thoughtfully articulate the plan to solve the problem. Put plan on floor of Congress. Pass plan. Implement. Repeat if necessary. But this is not how it came to pass.
I have been a Paulson supporter since his appointment. But he has bungled the handling of the bailout worse than an intellectual midget. This is one circumstance where IQ points, hubris and ego served as a barrier to success. He was so convinced of his righteousness and correctness that he didn’t listen. During an election year. In the midst of one of the most severe financial crises this country has ever faced. He simply missed the boat. He didn’t have a read on the pulse of the country. And it cost his bill passing Congress. And perhaps his job as well.
Dennis Kucinich voted against the bailout. He Says:
We MUST do something to protect millions of Americans whose homes, bank deposits, investments, and pensions are at risk in a financial system that has become seriously corrupted. We are told that we must stabilize markets in order for the people to be protected. I think we need to protect peoples’ homes, bank deposits, investments, and pensions, to order to stabilize the market.
We cannot delay taking action. But the action must benefit all Americans, not just a privileged few. Otherwise, more plans will fail, and the financial security of everyone will be at risk.
WHAT CAN BE DONE?
An Emergency Bailout Plan That Americans Will Love
24.5 percent of all Americans earn poverty wages ($9.60 or less) – 10 percent of all Americans-15 million Americans-earn $6.79 or less – 33.3 percent of African American works and 39.3 of Hispanic workers earn poverty wages.
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WHOSE SIDE IS THE MEDIA ON? LOU DOBBS BAITS ACORN, Press Dissections
September 30th, 2008 - by: danny
ACORN Is Right, Lou Dobbs Is Wrong by David Swanson
In this video clip, Lou Dobbs of CNN tries to blame the community group
ACORN, for which I used to work, for the crimes of Wall Street and of
predatory lenders, not to mention Congress:
Dobbs seems to oppose the proposed bailout, and ACORN favors modifying
it to include relief for homeowners (which could include business for
ACORN Housing Corporation helping renegotiate loans). So, I agree with
Dobbs, not ACORN. I want the bill voted down in anything remotely
resembling the form it was in on Monday.
But the bulk of Dobbs’ reporting is absolutely crazy. He tries to depict
ACORN as a criminal operation because the Republican Justice Department
has leveled accusations of “voter fraud” against it. Dobbs doesn’t
mention that it was David Iglesias’ refusal to play along with this scam
that got him fired, something for which the former Attorney General of
the United States and honored guest of CNN Alberto Gonzales is under
investigation:
And Dobbs focuses on the claim that by promoting the Community
Reinvestment Act, ACORN has promoted predatory lending. Dobbs gives a
few seconds to a spokesperson from ACORN who points out that
three-quarters of subprime loans have had nothing to do with the
Community Reinvestment Act, but the point is lost in the blizzard of BS
coming out of Dobbs’ immigrant-hating, ignorance-spewing mouth.
Media Not Spared by Wall Street Bloodbath
Media companies took their lumps along with everybody else on Wall Street, with the Dow Jones Industrial Index down 777.68 points. It was the worst one-day drop in history and the largest percentage drop since right after the Sept. 11, 2001, terrorist attacks.
MEDIA COVERAGE OF CRISIS CRITIQUED IN CJR
Ouryay Eatbay Just Ewblay Upyay
Ten fundamentals for the business press now
By Dean Starkman
Confusion Revealed
Good bailout story by the CS Monitor
By Katia Bachko
“Gambling their Reputation”
Why would the Times run quotes slamming its own work?
By Clint Hendler
JAY DIAMOND WRITES TO THE TIMES ABOUT THE IMPACT OF TALK RADIO
As I was reading this essay by David Brooks, I found myself saying out loud that we have moronic, low-brow rightwing radio, to thank for the cosmic jam in which we are sadly, tragically, stuck.
Sure enough, in the very next sentence, Mr. Brooks wrote what I had just uttered to an empty room.
“Now they have once again confused talk radio with reality.”
In truth, hasn’t the GOP been doing that for 30 years !
With predictable results, that is, predictable to anybody with their eyes open and half a brain.
Thirty years !
Thirty years of outright lying, venom, and shameful ignorance proclaimed (and accepted) as revealed wisdom.
Where were the TV Networks with a modern “Harvest of Shame” to arouse a dull public to protest and to action?
Why to this day, do “sober” journalists and TV hosts make believe that Limbaugh, Hannity, and the other gargoyles walk on two feet !?
During the recent imbroglio over the immigration bill, it was Trent Lott, of all people, who said it best. He said ruefully, in expaining why the bi-partisan immigration bill, supported by President Bush, did not pass, “Talk radio is running the country, and that is something we need to deal with”.
We still do.
Talk radio has zero standards. There are no standards for truth, or for knowledge of history, economics, or anything.
Basically it is dumb people speaking to dumb people and encouraging them to be still more dumb….and evil.
Figure it out. The whole purpose of the show; why it exists, is to sell commercials. The irresponsible management does not care of a nation is turned into an ignorant, hate-filled mob so long as more skin cream, or sex pills, or money making schemes, are advertised to the audience of pre-screened airheads who are certified for their gullibility simply on the basis of their taking the idiot talk host seriously.
In other words, the individuals selling time in this format are actually selling the dumbness of the host to the potential advertisers on the axiom that anyone benighted enough to take this low-brow rightwing drivel seriously is an easy mark, and will eagerly buy your junk pills or get rich quick scheme, just as they take Rush or Sean, or whomever, seriously.
To borrow a familiar nostrum of the rightwing radio cadre,”Talk radio is the problem, not the solution.”
MORE DISGRACEFUL TREATMENT OF JOURNALISTS THE BUSHEVIKS DON”T LIKE
Cuban journalists say US denied them visas
EJC” Two Cuban journalists covering the United Nations said Monday that the U.S. government denied them re-entry after they took a vacation in their homeland. Ilsa Rodriguez Santana and Tomas A. Granados Jimenez have covered the United Nations for the Prensa Latina news agency since 2005. ‘We would also want to voice our strongest protest against such an outrageous and arbitrary act, which violates all standards regarding relations between the U.N. and the United States as the host country,’ they wrote in a letter to the president of the United Nations Correspondents Association. Tuyet Nguyen, president of the correspondents association, said the UNCA ‘has never been involved in helping journalists from any country get visas to enter the United States.’ Prensa Latina said American officials in Havana opted not to issue the visas under a regulation that can deny entry to persons and groups considered prejudicial to U.S. interests, as well as Cuban government officials and employees. Although the U.S. in recent years has increasingly denied entry to Cuban officials and others connected with the communist government, denying visas to full-time Cuban journalists permanently assigned to cover the United Nations was seen as highly unusual. (AP via International Herald Tribune)
ON PLUNDER
Deborah Emin writes:
Reading your book is like reading the news but with the facts in place rather than the pundits pontificating at me and shouting they were right or someone else was wrong all along. The funny thing was, last night I was on the LIRR reading it and proudly displaying it when a young MOU sat down next to me still carrying his AIG bag but not so proudly. As soon as I asked him if he worked there still, he placed his little ear buds in place and tuned me out. He looked like the angriest and most frightened man on the train.
Fortunately, he made good use of his Black berry while we were enroute and played games that looked about the level of a three-year old. I am sure he is burnt out and his skin looked it too, nicely tanned but stretched to reveal the imperfections beneath it.
And a friend of mine, whose husband works at Merrill Lynch, has been dealing with the loss of that stock price well, she runs a soup kitchen in Newark for a few years now and I do think that is the correct penance for being so hooked into the wealth machines.
And just one last thing before I dive back into your book. Did you see Gretchen M.’s article over the weekend? In it she mentions how the Goldman Sachs players played a huge role in setting up the rescues and most likely, this is me talking here, the bail out. Warren Buffett can afford to lose $5b and try to shore up the company. You and I cannot.
Dennis has been right about this all along and the media dumped on him big time, even the Nation, which is now singing his praises again. The two of you are linked in my mind because you both get it and don’t get the recognition you should for seeing clearly where others are afraid to speak truth to power.
Mark Stenzler writes:
I was disappointed to see how many “lib dems” actually voted in favor of the bailout.
I am happy to report that Rep. Maurice Hinchey, my congressman, had the balls to stand with Dennis Kucinich and oppose this madness.
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MUSIC TO FIGHT FORECLOSURES: SHOWTIME TONIGHT IN BROOKLYN
September 30th, 2008 - by: danny
Be There or Be Square. It’s time for musicians to stand up for economic justice.
The band Koko Dozo will headline a diverse gang of committed, pissed-off musicians out to get YOU pissed. Focused on the legalized loan-sharking that has fueled the subprime crisis and predatory credit card practices and school loans.
LINE-UP:
* Koko Dozo, w/ special guest & MC, La Bruja
* Brooklyn’s Soulchild Theophilus London (norm Rex)
* Joe Bendik
* One Word Song
* William Rottman
* Prez Powerz
* Mammi-ama Ofori
Reality Check by Danny Schechter ‘The News Dissector,’ journalist, Emmy award-winning filmmaker, author and agitator
WHEN: Wednesday, October 1st, 2008, 9PM-1AM
WHERE: Public Assembly (formerly known as Galapagos)
10 N. 6th Street
between Kent and Wythe Aves.
Williamsburg, Brooklyn
Subway Line: L to Bedford Ave.
PLUNDER
Chris Cook sends along the podcast of a radio show I did yesterday:
MArk Karlin of Buzzflash.com sends a review he posted on PLUNDER.
Help me get the word out about Plunder. I want to speak, do readings and spark a discussion about these issues.
Thanks for tuning in. We have two weeks left to save Mediachannel. Please look for our coming mother of all appeals. Comments to Dissector@mediachannel.org
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About Danny Schechter
Danny Schechter is an Emmy award winning journalist, television producer and independent filmmaker who also writes, blogs and speaks about media issues.
His latest film is PLUNDER The Crime Of Our Time.
Mr. Schechter is NOT the Godfather of Soul.
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