Just Say No To The Bailout

[filkertom]

Call your congresscritters. The House switchboard number is 202-224-3121.

ETA: Related -- wow.

ETA2: Atrios tells us about Chris Dodd's bill. Dodd apparently started out slow and bad on this, but he's trying to turn it around.

Comments

[bayushisan.livejournal.com]

I'm really torn about this. On the one hand I don't think the government should be in the business of bailing out companies to protect them from the consequences of their own bad actions. This feeling is compounded based on AIG's history of no following the rules when it comes to insurance.

On the other hand AIG is connected to so many other companies that if they fell the consequences of it wouldn't just be felt here in the U.S., it would be felt globally.

So the question is what do we do? (I really do mean that with all sincerity)

[janetmiles.livejournal.com]

CREDO Mobile (formerly Working Assets) has sent a mailing with the following suggestions:

...Congress ... can choose to impose a few sensible conditions on the bailout to ensure that it will be used responsibly. Here are a few suggestions courtesy of Robert Reich:

1. If the taxpayers are shouldering the risk, the taxpayers should reap any eventual benefits. We accomplish this by giving the government an equity stake in every company we bail out proportionate to the amount we give them.
   
2. If we're paying (more than) our fair share, the CEOs and executives should have to, too. All of the fat cats who got us into this mess should relinquish their stock options and salaries until they start showing us, their investors, that they can once again be profitable. Future salaries should be linked to profitability.
   
3. No more campaign contributions from Wall Street executives and PACs. Taxpayer dollars should be used to get our nation out of a crisis. They cannot be used to fund giant, powerful lobby operations that will be used to strong arm Congress into making bad policy.
   
4. Better regulations start right now. Wall Street can't expect to take thousands of dollars out of your paycheck without agreeing to increased transparency and more stringent oversight -- the kind that might have helped avoid this mess to begin with.
   
5. Bankruptcy judges get broader leeway to help homeowners. Why should we lose our homes so the CEOs can keep theirs?

[filkertom.livejournal.com]

What Janet said. The absolute first thing we do is not rush into something just because the Bush Administration says we have to do it right the hell now or else we're all gonna die. We've seen how well that works.

[bayushisan.livejournal.com]

Oh I'm saying that we should rush into doing anything only that the situation is catch 22. If we do nothing and AIG folds then the repurcussions will be felt all over the world. If we get involved in bailing them out then we're saving a company that, at least according to my mom, doesn't deserve saving because of how unethical their practices are.

[filkertom.livejournal.com]

I know. It's ridiculously tricky. Obviously something has to be done... just not the Give BushCo A Blank Check Quick 'Cause We Should Like Trust 'Em An' Stuff plan.

[admnaismith.livejournal.com]

What happens if the government nationalizes AIG and seizes its assets to fund cleaning up after it?

Both candidates for president say they're for national health coverage. Owning the world's biggest insurer would help make that possible, you'd think.

[umbran.livejournal.com]

Future salaries should be linked to profitability.

Small problem, in that profitability does not equate to stability. Were not most of these companies profitable until very recently, when the thing that was generating profit folded like a house of cards? Linking salary to profit means that there's incentive to do something similar all over again, so long as they bail out before it crumbles.

The basic idea of linking their compensation to some measure of performance is a good one, though. It just needs to be a bit more sophisticated than straight profitability.

[shockwave77598.livejournal.com]

Me, I understand the need for the fix. But I believe everyone responsible for removing the regulations that protected against it should be fired, and everyone who profitted horribly should be specially taxed to recover the monies the taxpayers have to pay. Make the criminals responsible pay for a change.

[dornbeast.livejournal.com]

While we're at it, I'll offer a completely untenable proposal:

Golden parachutes (http://en.wikipedia.org/wiki/Golden_parachute) are subject to a 100% tax rate in case of bankruptcy.

That idea would never survive to be voted on, but it's a tempting thought...

[naomi-de-plume.livejournal.com]

I hate to appear ignorant but I'll admit that I don't understand the whole thing... so one incredibly stupid question:

Why?

[shockwave77598.livejournal.com]

Big Businesses demanded laws passed after the depression to protect against bank failures be removed so they can reap huge profits.

Lawmakers in the pockets of said folks remove said laws.

Profits shoot up. Real estate prices rise. More and more homes get built and sold, then flipped and sold a few dozen more times with bankers getting a cut from every transaction.

To keep profits and stock prices up, more and more bad loans get made on the grounds that real estate prices always go up.

Finally, prices become so high people can't afford said real estate anymore. Prices fall, loans default, bankers are left holding properties with dropping values.

And the same people who cried that govt. shouldn't regulate their businesses, now want Uncle Sugardaddy to give them money to cover their gambling losses.

[alverant.livejournal.com]

Thanks, but I wouldn't say lawmakers are in the pockets. At least not to that extent. Businesses whining about how they can't grow with such protection or throwing a temper tantrum, threatening to move elsewhere unless it gets its way. Business and government have different goals and responsibilities and IMHO most of the time it's business manipulating government for its own profit.

[randwolf.livejournal.com]

Why it happenned? 30 years of bad financial policies, starting with Volcker and Reagan. McCain and his economic adviser Phil Gramm played a major role.

Why a bailout? Because if there's no bailout, the economy stops cold. No mortgages, no business loans, nada. After a year or so that, we'll be screaming for anything to rescue us--even the theocrats.

There's, more-or-less, two bailout plans: the Bush plan (give us $700,000,000 to distributed, no strings attached) and the Democratic plan (some strings, at least).

[shockwave77598.livejournal.com]

I personally would put the starting point at Nixen's reign, and our removal from the Gold standard. Now the govt. can print as much money as it wants and only fools save money anymore, since the value of your savings goes down, down, down...

[randwolf.livejournal.com]

I've never figured out why the gold standard is so important to some people; it's not like the market value of gold can't vary all on its own, and I don't particularly want to grant control of the money supply to miners and refiners.

[shockwave77598.livejournal.com]

Gold standard - a dollar buys a fixed amount of gold in ft. Knox. A dollar buys close to the same amount of property over 100 years time. Inflation is limited. Savings are worth about as much when you take them out after 20 years as when you put it in. Value of x number of shares of gold is the same from year to year since the number in circulation remains mostly constant.

currently - a dollar is backed by... nothing. Just trust in the govt is all. Govt. may print as many dollars into circulation as it desires, devaluing all previous dollars already in circulation. Inflation is high. Savings become borderline worthless as time passes. Value of a share of unsecured writ decreases - never increases - making it foolish to save money anymore.

[randwolf.livejournal.com]

If gold were made the basis of any major currency, mining operations would immediately be pushed to their highest rate, resulting in dramatic inflation, until gold wasn't worth very much. There would be government interventions in gold markets on top of that. In itself, gold is a metal of value mainly for electronics and jewelery. So the industrial demand for gold would affect the value of savings in terms of everyday purchasing. So a gold standard doesn't make a lot of sense to me. If you've got reasonable governance and banking, a gold standard doesn't make a lot of difference; if you don't have those things, a gold standard still doesn't make a lot of difference.

[brmj.livejournal.com]

If not a gold standard, how about a something-else standard? A gold standard might not be perfect for the modern world, but perhaps something else would work better.

[randwolf.livejournal.com]

Well, that's what we had for perhaps 50 years. The various regulatory devices put in place in the 1930s were intended to to make "money" track the reality of production. The idea was that some kinds of securities were regulated so that they reflected real production in the economy. S&L deposits were pegged to housing production. The SEC restricted the kinds of financial instruments that could be marketed. The Fed controlled the commercial banks. (And there are pieces I'm sure I've left out.) This system worked fairly well, until our peerless leaders decided to take it apart. The process started slightly before Reagan, with Fed chair Volcker, and has continued until today.

[palenoue.livejournal.com]

Gold standards have been manipulated many, many time throughout history, despite what you hear from the fiscal fantasies of it's supporters. Any government willing to screw up non-gold standard currency for profit would be just as willing to screw up gold standard currency for profit. And it would be easier. For example:

News guy: Gold value is on the rise! Record prices are being reported all across the globe! Experts agree that gold is _the_ safest investment of the century!

Bush Treasury Expert: If you buy gold now you can expect a 200% return in a matter of days! I'm an expert, and I say gold is going up and there's no stopping it!

Boss of news guy gets a phone call, it's Haliburton, they inform him that they have sold all their gold reserves at the new inflated price.

News Guy: Gold crashes! The price of Gold is in a downward spiral! Wall Street is hemorraging blood as the value of gold plummets! Experts agree that gold is worthless as an investment!

Bush Treasury Expert: Your gold is worthless! I'm an expert, and I say there's no hope for gold to ever reclaim its former value.

Boss of news guy gets another phone call from Haliburton, they have now used their profit to buy gold at the deflated price and want the price to go up again so they can make even more of a profit.

News Guy: Gold is on the rebound! Prices for gold are skyrocketing to new heights! Experts agree that gold will only increase in value for ever and ever!

Bush treasury Expert: Gold is the most stable investment you can make! I'm an expert and... what page of the script are we on now?

Now the libertarians and other gold-standard cheerleaders will tell you this could never happen, that governments can't manipulate the gold standard like this. Well, the fact is, this has happened several times in the past, throughout history. If anybody tells you the gold standard is the only safe way to base your currency, then they really don't understand economics or financial history well enough.

[hamadryad.livejournal.com]

I've emailed all three of them. And guess who my district rep is? ERIC FUCKING CANTOR. I don't hold out a lot of hope for that one.

[admnaismith.livejournal.com]

Eric Fucking Cantor is in a tight race for re-election. If he won't listen to you, maybe Anita Hartke will.

http://www.hartkeforcongress.com/

[hamadryad.livejournal.com]

Oh, I'm definitely voting against Cantor, so if she's it, she has my vote. However, for the record, stuff like this -

The Heart for the People - the Key to Change

- makes my stomach churn.

[ailsaek.livejournal.com]

I just called. Barney Frank's line was busy, so I left a message with Kennedy's receptionist instead.

[randwolf.livejournal.com]

Frank is proposing an alternate plan in the House; it actually looks fairly hopeful.

While you are at that

[capplor.livejournal.com]

Go to this silly little poll http://www.pbs.org/now/polls/poll-435.html & tell them what your opinion of Sarah Palin's qualifications are. Some Right wing group is trying to scam the vote to heavily pro.

You may return & vote as often as you wish.

Re: While you are at that

[r-caton.livejournal.com]

52% for, 46% against, 0% not sure....
Who skimmed the remaining 2%, hmmm?

Re: While you are at that

[stevemb.livejournal.com]

Probably rounding errors.

Re: While you are at that

[zibblsnrt.livejournal.com]

You may return & vote as often as you wish.

And that is why online polls (or petitions) are useless and not really worth paying that much attention to.

[rabidfangurl.livejournal.com]

At least one of my Senators is not a total sleazebag. *waves Dodd pompoms*