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NPR is reporting that the bailout has failed in the House of Representatives, killing the negotiated deal that had the support of both Presidential candidates. This afternoon, in response to the doomed bailout bill, the Dow is plummeting.

QUESTION: If you were Obama or McCain, what would you do right now to solve the financial crisis?


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krispyswife wrote:
Sep. 29th, 2008 06:18 pm (UTC)
That is a good question. :/ Pray lol this sucks
merenwentari wrote:
Sep. 29th, 2008 06:21 pm (UTC)
Why not do as Obama has been saying (regarding the middle class) and put the money on the bottom so it can trickle up? We all know that trickle down doesn't work -- let's try something new for once.
rararackel wrote:
Sep. 29th, 2008 06:29 pm (UTC)
Obama was agreeing to this bail out. It is a bit contradicting.
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rararackel wrote:
Sep. 29th, 2008 06:27 pm (UTC)
I think it is high time the leaders and mega millionaires of this country stop ripping off the hard workers of this world and our nation. If they are sooo "by the people, for the people" then let the one's who caused it suffer. Give the bail outs to the people. Relieve the people who have been struggling to pay their morgages. Change the laws for buying and selling and ripping people off who are buying and selling. We just bought a house. It is OUTRAGEOUS the amount of interest they charge, not to mention the thousands that lawyers and morgage brokers and banks all get to dip their hands into. We "the people" end up paying double for our homes what they are worth so that the CEO's can get fatter, our government can have many homes and many vacations... Yea, why don't they take the pay cuts? Why not lower the pay for government officials? How about lower the number of homes provided. Or how about give them the same retirement plans as all the 401K people across America have? Let's start the sacrafices from the "top down" not the "bottom up". Everyone of these major banks, real estate agencies, and more are ripping everyday people off and could care less if they have retirement, food, vacations, or able to send their kids to the best schools... Or how about if the government isn't doing what it is supposed to while ripping off our country of millions, why don't we have them all empeached, and let's see who wants a career in our Federal Government without all the perks and houses, and millions after they only serve a few years...
mefan wrote:
Sep. 29th, 2008 10:47 pm (UTC)
Re: Right.....
Yes, this is a good plan. In theory. Idealistically, the money should be given to the people since it is the people who are suffering the most. Unfortunately, the reality isn't nearly as simple as all of that.

So the government decides to bail out "the people" instead of the large financial institutions. That's good. That's great. But what it doesn't do is restore credit. You're assuming that "the people" are going to reinvest their money into the same banks that they are so violently opposed bailing out, but they won't. B/c they can't. B/c they were violently opposed to bailing them out, so those banks are gone. W/o confidence in the market and w/banks left to fend for themselves and face potential bankruptcy, the major credit institutions are going to stop offering credit (many of which have already done so - before long, it will be your visa card and your mastercard that is no longer worth anything).

And even then that wouldn't be so bad - people pay w/cash all the time. Except then you have the small business owners who can no longer operate their business b/c it's no longer profitable b/c they can no longer run on a line a credit (like most of them do). Even that wouldn't be terribly bad b/c hey, they could just run on cash except they can't b/c many other institutions will not conduct business w/them unless there is an established line of credit. Also, these same small business owners are now no longer able to pay their employees b/c, as noted above, they run on a line of credit (even if they could run on cash alone, they'd have to get the cash first and they can't b/c the banks won't offer them a loan and they have no other way to get cash b/c, as I said, they've been running off a credit line). So small business owners have to shut down their business, small business employees are out of work and that causes the unemployment rate to skyrocket. I suppose everyone could go work for Wal-Mart. Except that won't really work out too well either b/c all those small business owners are mainly farmers and the like so Wal-Mart isn't going to have as much product to sell as it normally does (except for all the crap from China). Less product means less jobs. And while the government has cut you a cheque for a few extra thousand dollars to "bail out the people" in the end it's just that, a few thousand dollars. That you'll never actually see b/c you have to use it to survive after you've lost your job, after your visa card has been shut off and after your bank has gone bust.

It's a grim picture and maybe it seems a bit extreme reading it here, but this is the reality that we now face b/c a few pansies in Congress decided to take out their butthurt over Nancy Pelosi's big girl speech on the American people. Also, most of them did exactly what their constituents wanted them to do - one of my friends works for one of these Congressmen and she's not had a moments rest since the bill was announced - the phone has been ringing off the hook w/pissed off voters w/o a clue. So, really, your Congressman represented your interests (universial you, mind). They did their job.
Re: Right..... - rararackel - Sep. 30th, 2008 03:51 am (UTC) Expand
hephaestionaz wrote:
Sep. 29th, 2008 06:27 pm (UTC)
I'm not sure either of them really have the influence to get house members to get on board with the plan...but they can make the yes votes for the plan a little easier by getting out in front of people and telling them why it's important to pass. They both need to take it out of the abstract macroeconomic terms and impress upon voters how it is going to personally impact them. If the voters feel it's the right thing to do then perhaps their representatives wouldn't be so hesitant to vote for it. Otherwise the Administration will have to continue "nationalizing" companies or use lots and lots of signing statements. He does it all the time.

As an aside, this is why privatizing Social Security was a crazy idea, and why John McCain's plan for a healthcare deregulation plan is also nuts.
rararackel wrote:
Sep. 29th, 2008 06:35 pm (UTC)
Or the voters know exactly what it means, and don't agree with it.
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vernon_j wrote:
Sep. 29th, 2008 06:34 pm (UTC)
America's #1
I am glad it failed to pass.

We're #1, We're #1!!!
rararackel wrote:
Sep. 29th, 2008 06:35 pm (UTC)
Re: America's #1
I am glad it failed, too!!!
alacsony wrote:
Sep. 29th, 2008 06:36 pm (UTC)
>If you were Obama or McCain, what would you do right now to solve the financial crisis?

Install a military dictatorship and return to the gold standard ;-)
hephaestionaz wrote:
Sep. 29th, 2008 06:51 pm (UTC)
Gold Standard FTW!
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lphybrid wrote:
Sep. 29th, 2008 07:04 pm (UTC)
Re: America's #1
It's greed that has gotten us into this mess so we need someone to stand up to these financial institutions and oil companies and say NO. I'm glad this bailout didn't pass. If they want to use 700 billion tax payers dollars why not use that money to invest in creating NEW green jobs? We've outsourced all of our jobs and we need to pull our workforce back into the US. Let's put people to work, pay them and we'll start spending internally again. FDR put us to work with bridges, buildings and dams... Obama (or McCain) could put us to work with solar/wind energy and moving us away from greedy oil companies. It'd be better for the US and better for the environment.

arussell84 wrote:
Sep. 29th, 2008 07:38 pm (UTC)
re-write the bill with some proper accountability and oversight amendments. Some Government money needs to be injected into the US economy but not in the way that 'President' Bush wants it to be. To have the Treasury Secretary almost unchallengeable in his decisions as part of such an important bill is insane.
galbinus_caeli wrote:
Sep. 29th, 2008 08:17 pm (UTC)
If I were Obama or McCain?

grace_om wrote:
Sep. 29th, 2008 09:23 pm (UTC)
Their roles should be to continue supporting a bipartisan approach to the crisis, and vote when (if) it becomes time for them to do so. What they don't need to do is pretend to have THE answer, and contribute to the negotiations becoming more partisan and bitter than they already are.
thelivingword wrote:
Sep. 29th, 2008 10:45 pm (UTC)
At least one point, to encourage investors to get back into the market would be to eliminate the capitol gains tax.
ysabetwordsmith wrote:
Sep. 30th, 2008 12:27 am (UTC)
I'd propose firing the people most responsible for causing the problem, and fine them some -- half, maybe -- of their wealth to help pay for repairs. If you're in charge of a bank or company that's failing because of foolish investments, you carry a big chunk of blame for its failure, and better that you suffer than innocent people suffer. Same for the government oversight crew who didn't oversee. You used your power unwisely and should reap the consequences.

I'd push for some oversight of the financial markets -- not necessarily government oversight; an independent board of economists, mathematicians, and single mothers might be more useful.

I'd look for ways to create good jobs that couldn't be outsourced: "green" industries are beginning what will probably be a big long boom, and the country's infrastructure needs repair too.

I'd seek to redesign the bad mortgages so that people could actually afford to buy and live in the houses. It's disgraceful to have homeless people and empty buildings. Poor people shouldn't be price-gouged; they should be offered very modest starter homes (or fixer-uppers for people with handyskills) at low rates as part of a program to increase home ownership; match the needs and the resources, don't be extravagant, and make sure people have the necessary skills for success.

I'd start patching the need/resource gap by doing an end-run around the cash economy and promoting barter exchange. If you've got skills but no cash, trade around -- other people may need what you can do. Same goes with government services: if you're getting food stamps or welfare, you should be giving something back. Maybe you can volunteer in a day care center so a single mother can put her kids there and work. Maybe you're bilingual and can help people practice their English. It's entirely possible to meet needs with people in ways that don't always require cash to change hands.

brashley46 wrote:
Sep. 30th, 2008 12:54 am (UTC)
Hang a few bankers, pour encourager les autres.
puzzlekitty wrote:
Sep. 30th, 2008 01:58 pm (UTC)
the bailout was put in place by the democrats, or rather the people. and now Obama is Effed for it and the republicans are on some kind of new plan and its gonna make McCain look real good in the next few days. and round and round we go
rararackel wrote:
Oct. 1st, 2008 04:13 pm (UTC)
Get the story straight!
Whose policies led to the credit crisis?

posted at 9:40 am on September 16, 2008 by Ed Morrissey
The credit crisis and the lack of oversight over government-subsidized lenders like Fannie Mae and Freddie Mac occurred on the watch of George Bush, and many blame his economic team for their lack of oversight in the collapse. Barack Obama has made this point one of his major campaign themes, arguing that John McCain would provide more of the same failures that Bush did. However, what many do not recall is that Bush wanted to tighten oversight with a new regulatory board for Fannie Mae, Freddie Mac, and other government recipients for the express purpose20of addressing bad loan practices — and Democrats blocked it.

The New York Times reported this five years ago:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Democrats objected: Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing," Mr. Watt said.

But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guard ed against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

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