``We are literally maybe days away from a complete meltdown of our financial system,'' NYTimes

[jtabeb]

Re: A Pig Without Lipstick...

I think your average member of Congress is (a) absolutely clueless about how the financial system works, and (b) overjoyed to be offered the opportunity to turn responsibility for coming up with a plan over to Paulson. I think Congress will ask for broad assurances that (a) the power will be used wisely, (b) the taxpayer will be protected, and (c) that Paulson's plan will solve the problem. Paulson will say "yes" to all the above, Congress will take his word for it, and they will promptly sign the bill authorizing implementation of Paulson's plan. This way, if Paulson's plan works, they can take credit for acting rapidly and in a bipartisan manner to solve a national crisis. If Paulson's plan doesn't work in any of the ways cited, they will say they were misled by Paulson. Because so few of them have the foggiest idea what is going on, they lack the intellectual tools to safeguard the public interest, and appraise the plan on its merits themselves. Instead, they will abdicate their responsibility by substituting proforma questioning for actual policy-making and take the politically safe expedient of backing Paulson's plan.

... At least that's my prediction.

Then,

Please do SOMETHING. The only thing I could do was write my elected representatives and my mom and everyone else I could think of. It's not much, but it is not nothing. 100,000 not nothings make SOMETHING.

So please do SOMETHING and write you elected representatives and everyone you know and have them write their representatives.

Here is what I wrote to mine:

THIS BANKING BAILOUT IS A FARCE and a CRIME!!! I want to VOICE THE STRONGEST OBJECTION I CAN POSSIBLY MAKE!! This program steals from the poor to bailout the rich.


"Debt peonage for every American man, woman, child and many future generations is being planned by the W. Bush regime without sufficient taxation of the wealth and oversight of the institutions and individuals responsible for the crisis. A huge amount of wealth is being taken out of the economy by the very richest, leaving nothing for the rest of society and impoverishing it for decades."


September 21, 2008

"A PIG WITHOUT LIPSTICK.... I've been trying to find a credible voice on fiscal matters that believes the Bush administration's bailout is a good idea, and should be approved by Congress without alteration. I can't find one.

The plan seems to suffer more as the scrutiny grows more intense, but I'd go with the accountability/oversight problem as the most glaring.

The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.

"He's asking for a huge amount of power," said Nouriel Roubini, an economist at New York University. "He's saying, 'Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy."

Atrios, after noting the $700 billion price tag, highlights this portion of the proposal: "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."

If we were dealing with a competent, capable administration, which had proven itself reliable in dealing with fiscal and budgetary policy, it would still be an extraordinary gamble to turn over hundreds of billions of dollars with no strings at all. But we're dealing with the Bush administration, which hasn't exactly earned the benefit of the doubt.

I can understand the underlying point here. Companies showed some spectacularly bad judgment and bought up some ugly mortgages. To keep those companies from imploding, Paulson wants to use our money to take those mortgages off their hands. If the administration had a plan to buy them up for a song, the approach need not be completely ridiculous, though Paulson has not yet so much as hinted about pricing, or how, exactly, his plan might actually work in practice.

But that's why some safeguards -- you know, checks and balances -- seems like it might be helpful in a case like this. As the plan is currently written, not only will oversight be discouraged, it'll be impossible, by design. Congress is supposed to hand over in upwards of a trillion dollars to Bush's economic team, and then voluntarily forfeit the right to oversee how the money is spent.

If there's a good reason to establish this kind of process, it's hiding well."

[ASH]

Re: A Pig Without Lipstick...

To the contrary, these dudes may be clamoring to get their votes in "to save the US and the world" no less. I guess how this turns out might really be the final demonstration of just how screwed up we are, or perhaps a demonstration that enough of them are not buffoons so that they abdicate their responsibilities to an individual like Paulson.

I think your average member of Congress is (a) absolutely clueless about how the financial system works, and (b) overjoyed to be offered the opportunity to turn responsibility for coming up with a plan over to Paulson. I think Congress will ask for broad assurances that (a) the power will be used wisely, (b) the taxpayer will be protected, and (c) that Paulson's plan will solve the problem. Paulson will say "yes" to all the above, Congress will take his word for it, and they will promptly sign the bill authorizing implementation of Paulson's plan. This way, if Paulson's plan works, they can take credit for acting rapidly and in a bipartisan manner to solve a national crisis. If Paulson's plan doesn't work in any of the ways cited, they will say they were misled by Paulson. Because so few of them have the foggiest idea what is going on, they lack the intellectual tools to safeguard the public interest, and appraise the plan on its merits themselves. Instead, they will abdicate their responsibility by substituting proforma questioning for actual policy-making and take the politically safe expedient of backing Paulson's plan.

... At least that's my prediction.

[jtabeb]

Re: A Pig Without Lipstick...

Here's your chance to save the country [but maybe not the financial system]

You able to program in the coordinates of Hank's Treasury office in one of those devices you hang under the wing of that thing you fly?


Just askin'...:rolleyes:

Under the 5th amendment, I have the right not to answer that question.

But I did post this in news as a new thread:

FRED, EJ for all that is holy, leave this defense of the republic up on the front page section.

Rest of you, please do SOMETHING. The only thing I could do was write my elected representatives and my mom and everyone else I could think of. It's not much, but it is not nothing. 100,000 not nothings make SOMETHING.

So please do SOMETHING and write you elected representatives and everyone you know and have them write their representatives.

Here is what I wrote to mine:

THIS BANKING BAILOUT IS A FARCE and a CRIME!!! I want to VOICE THE STRONGEST OBJECTION I CAN POSSIBLY MAKE!! This program steals from the poor to bailout the rich.


"Debt peonage for every American man, woman, child and many future generations is being planned by the W. Bush regime without sufficient taxation of the wealth and oversight of the institutions and individuals responsible for the crisis. A huge amount of wealth is being taken out of the economy by the very richest, leaving nothing for the rest of society and impoverishing it for decades."


September 21, 2008

"A PIG WITHOUT LIPSTICK.... I've been trying to find a credible voice on fiscal matters that believes the Bush administration's bailout is a good idea, and should be approved by Congress without alteration. I can't find one.

The plan seems to suffer more as the scrutiny grows more intense, but I'd go with the accountability/oversight problem as the most glaring.

The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.

"He's asking for a huge amount of power," said Nouriel Roubini, an economist at New York University. "He's saying, 'Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy."

Atrios, after noting the $700 billion price tag, highlights this portion of the proposal: "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."

If we were dealing with a competent, capable administration, which had proven itself reliable in dealing with fiscal and budgetary policy, it would still be an extraordinary gamble to turn over hundreds of billions of dollars with no strings at all. But we're dealing with the Bush administration, which hasn't exactly earned the benefit of the doubt.

I can understand the underlying point here. Companies showed some spectacularly bad judgment and bought up some ugly mortgages. To keep those companies from imploding, Paulson wants to use our money to take those mortgages off their hands. If the administration had a plan to buy them up for a song, the approach need not be completely ridiculous, though Paulson has not yet so much as hinted about pricing, or how, exactly, his plan might actually work in practice.

But that's why some safeguards -- you know, checks and balances -- seems like it might be helpful in a case like this. As the plan is currently written, not only will oversight be discouraged, it'll be impossible, by design. Congress is supposed to hand over in upwards of a trillion dollars to Bush's economic team, and then voluntarily forfeit the right to oversee how the money is spent.

If there's a good reason to establish this kind of process, it's hiding well."

[ASH]

Re: "were literally maybe days away from a complete meltdown of our financial system"

not ej either but have noticed that questions are more reliably answered over on the Ask EJ forum. and i'd like to hear the answer, too...

Dang, metalman -- I was hoping you'd say something to the effect "yes, young ASH, you have correctly summarized what EJ has been saying" or "no, foolish young ASH, you fail reading comprehension." :confused:

[Jim Nickerson]

Re: A Pig Without Lipstick...

[quote=GRG55;49259]Jim: I don't know how the US Congressional and Senate legislation voting system works...how many are needed for a quorum, what %'age needed to pass a bill, etc.

But if I had to guess, and if the system allows, this bill may set a record for absences or abstentions when it comes to a vote. I cannot see a large appetite amongs politicians seeking re-election in a few short weeks to want to carry the taint of this one.[/quote}

To the contrary, these dudes may be clamoring to get their votes in "to save the US and the world" no less. I guess how this turns out might really be the final demonstration of just how screwed up we are, or perhaps a demonstration that enough of them are not buffoons so that they abdicate their responsibilities to an individual like Paulson.

[GRG55]

Re: A Pig Without Lipstick...

GRG, good article offering a perspective that suggests if Congress does extend all for which Paulson is requesting without oversight or legal recourse and without explanation for how Paulson will operate the plan, then we in the US without question have a democratic process that is proven efficient in election of buffoons.

Jim: I don't know how the US Congressional and Senate legislation voting system works...how many are needed for a quorum, what %'age needed to pass a bill, etc.

But if I had to guess, and if the system allows, this bill may set a record for absences or abstentions when it comes to a vote. I cannot see a large appetite amongs politicians seeking re-election in a few short weeks to want to carry the taint of this one.

[GRG55]

Re: A Pig Without Lipstick...

Wrong, we will have NO democratic process.

Here's your chance to save the country [but maybe not the financial system]

You able to program in the coordinates of Hank's Treasury office in one of those devices you hang under the wing of that thing you fly?


Just askin'...:rolleyes:

[jtabeb]

Re: A Pig Without Lipstick...

then we in the US without question have a democratic process that is proven efficient in election of buffoons.

Wrong, we will have NO democratic process.

[Jim Nickerson]

Re: A Pig Without Lipstick...

Best descriptive one-liner I've heard so far of the Paulson Super SIV...

From Steve Benen at the Washington Monthly:

A PIG WITHOUT LIPSTICK.... I've been trying to find a credible voice on fiscal matters that believes the Bush administration's bailout is a good idea, and should be approved by Congress without alteration. I can't find one.
The plan seems to suffer more as the scrutiny grows more intense, but I'd go with the accountability/oversight problem as the most glaring.

The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets. Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.
"He's asking for a huge amount of power," said Nouriel Roubini, an economist at New York University. "He's saying, 'Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy."

Atrios, after noting the $700 billion price tag, highlights this portion of the proposal: "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."
If we were dealing with a competent, capable administration, which had proven itself reliable in dealing with fiscal and budgetary policy, it would still be an extraordinary gamble to turn over hundreds of billions of dollars with no strings at all. But we're dealing with the Bush administration, which hasn't exactly earned the benefit of the doubt.
More...

GRG, good article offering a perspective that suggests if Congress does extend all for which Paulson is requesting without oversight or legal recourse and without explanation for how Paulson will operate the plan, then we in the US without question have a democratic process that is proven efficient in election of buffoons.

[GRG55]

A Pig Without Lipstick...

Best descriptive one-liner I've heard so far of the Paulson Super SIV...

From Steve Benen at the Washington Monthly:

A PIG WITHOUT LIPSTICK.... I've been trying to find a credible voice on fiscal matters that believes the Bush administration's bailout is a good idea, and should be approved by Congress without alteration. I can't find one.
The plan seems to suffer more as the scrutiny grows more intense, but I'd go with the accountability/oversight problem as the most glaring.

The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets. Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.
"He's asking for a huge amount of power," said Nouriel Roubini, an economist at New York University. "He's saying, 'Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy."

Atrios, after noting the $700 billion price tag, highlights this portion of the proposal: "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."
If we were dealing with a competent, capable administration, which had proven itself reliable in dealing with fiscal and budgetary policy, it would still be an extraordinary gamble to turn over hundreds of billions of dollars with no strings at all. But we're dealing with the Bush administration, which hasn't exactly earned the benefit of the doubt.
More...

[metalman]

Re: "were literally maybe days away from a complete meltdown of our financial system"

Hi EJ,

I'd like to quickly thank you for your dedication and hard work to educating those like myself about how we got here and what's the likely future of our economic and financial system. You have been more accurate than I could ever imagine and I still don't know how you do it. I'm 24 and I've been following Itulip for the last 3 years and I would be completely lost without your website and your incredible readers.

Regarding the aforementioned post, I'm a little confused about the panic that went on this week. The "Ituliper" in me wants to say, this is it, this is the financial panic that was in the works and I should expect it, however the contrarian in me is wondering if I should believe CNBC, Cramer, and all those political "strategists" in believing that had the government not stepped in this time, Bernanke would be right and Great Depression version 2.0 would be upon on us. I'm wondering if you believe this would have occured had the government not stepped in and said they would buy up some of these toxic securities.

Thanks again for all you've done.

-G-

not ej either but have noticed that questions are more reliably answered over on the Ask EJ forum. and i'd like to hear the answer, too...

[aweber]

Re: "were literally maybe days away from a complete meltdown of our financial system"

It's the context. I haven't changed my tune. I wrote this to AO readers in 2005:

What I want to make sure I get across here, in case it's not obvious, is that I'm fairly certain that an unseemly economic turn of events is more likely to happen than not, probably in the next three years, and it's going to happen here, in the U.S. To us. To you and me. While it's likely to be worse than most of us are prepared for—that is, it will not be your average recession—it will not be the end of the world either, although there may be times when things look that way. It will certainly be the end of living high off the hog on other people's savings, and it will represent a transformation that we must go through to get to a different place.

Whether you experience the new place as better or not is going to depend on where you started and what's important to you. While periods of economic readjustment are never painless, it's important to keep in mind that the challenges we face as individuals represent nothing worse than those that 90% of the world's citizens cope with every day with grace, dignity, and humor. No one owes us a high standard of living, and most of the world gets by without one. Our main challenge will be to accept and deal with our problems effectively in the short term. It will require strong, honest leadership. In the long term, we can count on the United States' and its people's extraordinary ability to adapt to change and come out ahead.

Inflation is Dead! Long Live Inflation!

Readers have had a good three years to prepare.

Thanks for sharing your somber thoughts. The Oil agenda is receiving less attention than it deserves, the devil of the detail is there, if it stabilize at less than 100 the economy can go and the adjusts will be made.

[Jim Nickerson]

Re: ``We are literally maybe days away from a complete meltdown of our financial system,'' NYTimes

Roubini was way on the light side !

What stupid idiot would buy usa bonds !

I would buy Aussie bonds as there wealth is out of the ground.
I would buy Japan bonds as their banks are the healthiest in the world ( after 20 years of cleaning)
If your real smart invest in Vietnam, that will be the new china in 5 years !

So why don't you put up your allocations and positions?

[icm63]

Re: ``We are literally maybe days away from a complete meltdown of our financial system,'' NYTimes

Roubini was way on the light side !

What stupid idiot would buy usa bonds !

I would buy Aussie bonds as there wealth is out of the ground.
I would buy Japan bonds as their banks are the healthiest in the world ( after 20 years of cleaning)
If your real smart invest in Vietnam, that will be the new china in 5 years !

[don]

Re: ``We are literally maybe days away from a complete meltdown of our financial system,'' NYTimes

PARIS — The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.


http://www.nytimes.com/2008/09/22/bu...hp&oref=slogin



Un-f**king-believable.