The bail-out plan

Starting with the collapse of Lehman Brothers in mid-month September 2008, the US economy started showing signs of distress. Looked like all of the bragging about the successes of Bush's economic stewardship weren't true after all. The trouble with the housing bubble actually started back during the Clinton Administration and with Alan Greenspan's habit of talking in vague, indecipherable mumbles.

Everyone should understand that we are in this mess for two reasons. First the financial regulators, both in the Bush administration and more importantly at the Fed, were completely asleep for most of the decade. As the housing bubble grew to ever more dangerous proportions, and lenders adopted increasingly questionable lending practices, the regulators did nothing.

Unfortunately, it doesn't seem as though Bush was very educated about how the economy worked before he entered the Oval Office. During a talk on the 23rd, he sure didn't talk as though his economic knowledge was very wide or deep.

"Well, my first instinct wasn't to lay out a huge government plan. My first instinct was to let the market work until I realized, upon being briefed by the experts, of how significant this problem became.

The full talk is at the link, but I read that and I'm like "Wow! Did this guy not know that the economy was very highly 'interlinked'?!?!?!" And when someone doesn't know much about the economy, is it really a good idea to "act boldly"?!?!? Really?!?!

Actually, the final bail-out plan that was voted on appears to have been a pretty good one. Krugman did not like Treasury Secretary Paulson's initial plan. Baker also didn't like it:

And let's also consider the Bush Administrations record in handling huge amounts of cash. These guys have a well-documented record of flushing billions and billions down the toilet.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. [emphases added]

This section simply made any trust in the administration absolutely impossible and made it necessary for Democrats to extensively re-work the proposal. That wasn't enough to save the plan, though.

The Republicans tried claiming that they couldn't vote for the bill because Speaker Pelosi was mean to them. A claim they later backed off on. Other conservatives came up with similarly unconvincing reasons as to why the crisis occurred in the first place. As the blogger emptywheel says:

Personally, my answer is that first, we have to remove Republicans from power. Getting Blue Dog Democrats out would be a good thing too. But there are simply no good solutions possible with the current crew in office.

Comments

Update

Submitted by Rich Gardner on Wed, 10/01/2008 - 9:28am

CNN reporter Christine Romans confirms my suspicions. She runs clips of President Bush saying how wonderful and marvelous and magnificent the economy is, followed by his cries of "Aaugh! Shriek! Gloom! Doom!" with no transition of saying anything to the effect of "Gee...we might be in trouble here..."

Tell Me Something

Submitted by Anonymous (not verified) on Thu, 10/02/2008 - 11:33am

How about Barney Frank stating in 03 that Fred and Fran were fine and needed no oversight that Bush had tried to impose. This dog won't hunt Rich. Actually it started with Carter, continued with pressure by Clinton, warned about by Bush several times and voted down by progressive Democrats every time. Bush sucks and has let the conservative base down, but this one he tried to get right. Actually what we have here is social engineering by progressives that has come home to roost.

If you weren't such a progressive head in the sand you might see the truth that's as plain as the nose on your face.

Heads in the sand

Submitted by Rich Gardner on Thu, 10/02/2008 - 1:33pm

Progressives have their heads in the sand, eh? I seem to remember a certain GeeDubya Bush invading Iraq without UN approval. Conservatives were all quiet as church mice while progressives were yelling about how he might need the UN in the future. Well, when Russia invaded Georgia, who was saying "Hey, that violates the UN Charter"? Why, one GeeDubya Bush, of course!

Jeff Jacoby of the Boston Globe makes the anti-Barney Frank case at:
http://tinyurl.com/3hjgf3

Representative Frank answers at:
http://tinyurl.com/3fgb84

"Mr. Dealey points to comments made by former Treasury Secretary John Snow as evidence that reform of the Government Sponsored Enterprises of Fannie Mae and Freddie Mac were "called" for by the Bush Administration as the basis for the attack against me, but please note he does not list GSE reform as an accomplishment of Mr. Snow's tenure at Treasury or the first seven years of the Administration—that did not happen until the eighth year of the Bush term when a bill that I authored was enacted into law. The President and Mr. Snow failed to deliver—even when their party was in charge of both houses of Congress.

"Dealey then cites comments I made in 2003 that the GSEs are not in trouble as evidence that I did not support reform. Wrong. I supported reform then, I support reform now and I delivered. Dealey also fails to report that the Bush Administration did not support the reform efforts of Republican former House Financial Services Committee Chairman Mike Oxley, who recently told the Financial Times that the White House gave him "the one-finger salute" for his efforts to bring about GSE reform."

Frank goes on to point out that there were special circumstances that compelled him to vote against GSE reform in 2005. Sorry, but Democrats have generally been pro-regulation and Republicans have generally been against it. Y'all may be able to find a few exceptions here and there, but the mess we're in is basically the fault of Republicans.

BTW, a blogger makes it quite clear that there is no unanimity on solutions to the problem:
http://tinyurl.com/4r96hq

Rich Gardner

http://www.prawnworks.net/

Yep, Head in the Sand

Submitted by Anonymous (not verified) on Fri, 10/03/2008 - 1:10pm

Please tell me that your don't think UN approval is something needed for the attack on Iraq. Shit, only a progressive idiot thinks that. I love the GeeDubya Bush shit. It shows contempt and that's fine, he deserves it for the blunders that he has made. But, I want you to explain where the US needs the UN. The UN is a joke of extreme uselessness. So, take your sneer and use it on someone that it may affect.

Well, let's see...

Submitted by Rich Gardner on Fri, 10/03/2008 - 2:37pm

The speech in which Bush finally shows some glimmerings that "Hey! We need to get along with other countries because the US simply can't solve certain problems all by itself!" is at
http://tny.nu/?BvX4F
In it, Bush "called on the UN to enforce sanctions against Iran and North Korea over their nuclear programmes." and "Mr Bush also urged the UN to support the 'young democracies' that were making 'brave stands for liberty', including Iraq, Afghanistan and Georgia."
Obviously, if Bush thought the US could do this stuff all by itself, than he wouldn't been at the UN to begin with.
How do the wannabe replacements for Bush & Cheney feel? Well, McCain is finding
http://tny.nu/?icwDJ
that the US really can't isolate Iran without international help. He's pushing for a "League of Democracies," but
"The call to move away from the isolationist policy McCain hopes to revive has been endorsed by five secretaries of state, including McCain adviser Henry Kissinger, as well as McCain’s own neocon foreign policy adviser Robert Kagan."
And his wannabe Vice-President Sarah Palin said during her debate last night that:
"...as we rely more and more on other countries that don't care as much about the climate as we do, we're allowing them to produce and to emit and even pollute more than America would ever stand for." In other words, even Palin would like to get international cooperation.

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