This is hefty rationale for a sizable federal tax increase.

I agree Daniel,

But it bothers me that this is exactly like the decision to go into Iraq. My gut said no then, but I was willing to let “those in the know” meaning GW as well as others make the call – despite the fact that I didn’t trust his/their judgment, or honesty, and the fact that disagreed with him on most everything else.

My gut says no now too – but I'd like to think they know more than me, and are at least going on an educated guess – which is all I think they are going now.

Added:


I am more scared than impressed. As I understand it the bill is still essentially the GW Paulson bill. I am not surprised that GW has once again successfully used scare tactics to gain almost absolute control over something. In time this may well look like GW’s exit present to the big business world to many of us. Supporters I am sure will claim he saved our economy.

I don't think so. The Paulson plan was three pages long had no oversight. The proposed bill is over 100 pages. The Paulson plan gave taxpayers no equity stake in participating banks. The proposed bill does.

The plan does give the Treasury Secretary a lot of discretion over pricing the securities and acquiring equity stakes. Since no one knows what these things are worth, I'm not sure there's a good way around that problem.

But even with that discretion, there is a fair amount of oversight. According to Floyd Norris in today's NY Times, "This bill requires frequent reports to Congressional committees, including a Congressional oversight panel; audits by the comptroller general; and appointment of an inspector general for the program." So there is a lot of power given to the Treasurer, but with a degree of transparency and oversight.

Congress can't simply set prices here and expect the thing to have a chance of working. So the outcome seems like a reasonable compromise to me. It's understandable to be skeptical of an administration that has been so wrong in the past. But we do have a Congress which has been burned in the past and is not exactly politically inclined to bail out the Wall Street barons. There are countervailing forces at work here to provide some control over the process.

Oh, and alicex4? Looks like the Housing Trust Fund provision which would have provided affordable housing funds to community service groups was dropped from the final bill. (It's interesting that ACORN has become such bugaboo for conservatives. Seems to me that alleged improper actions by a few affiliates are being used to tar the entire organization--kind of like saying because Senator Ted Stevens was indicted, everyone in the Senate is corrupt. But as far as this bill is concerned, the issue is moot.)

I read the bill last night Daniel, while watching the Eagles blow it. Oversight my ass, it is still the Paulson Me me me bill. Oversight doesn't even begin until 60 days after the first transaction occurs. A panel will report to Congress on a regular monthly basis, which puts the first oversight one business quarter after the first transaction. That is no oversight. Given that these politicians got us into this mess, and nothing in this bailout removes the bad paper debt, how does this plan do anything positive for the market? I have written Congress and called demanding a no vote on this. Hopefully there will be leadership in House Republicans.

Also, what's the option if/when THIS bailout fails? How big is the next one, because that's where it's going to go. Wake up America.

"Wake up America"

Should be wake up world. Which it did today. (in a very bad way) The accelerated speed at which the world markets are falling is unprecedented and out right scary. The world markets need to know there is some kind of bottom to this. This is no longer a US thing.

I emailed Hillary, Chuck, and Maurice and said STOP THE BS. ACT NOW. Hopefully they listen.

It ceased being a US thing when Fannie Mae and Freddie Mac bundled these crap loans into securities that were sold abroad.

I think it is. Those making these transactions do so knowing that they will see the light of day and be subjected to public scrutiny. That puts at least some pressure on the Treasury officials when they make the deals. And frankly I don't see much in the way of alternatives; it's just not feasible to have Congress signing off on every transaction, especially as the markets fluctuate. Unless you're willing to suggest an alternative?



It does remove bad debt; more importantly, it buys up the uncertainties. It buys up the mortgage-backed securities, which are likely undervalued because no one can really figure out how good they are (which is why we're going to pay somewhere between market value and hold-to-maturity value on them). When the financial companies get rid of these securities which are dragging down their balance sheets, they'll be able to lend more readily because they'll have more capital.



Hope you've got an alternative in place that can pass in the next few days, then. Because things can get really bad, really fast, for a really long time. What's your suggestion?



Yup, it may not work. But better wake up to the fact that if we don't do something, we're almost certainly in for some terrible times ahead. Our choices are between bad and worse, so saying "this might be bad" is not a good way of making the decision. One has to consider the possible alternatives and pick the best of the bunch, even if the best still isn't very good.

Oh shit. Bailout plan was just rejected by the House of Reps. All bets are off, god speed America.

CSPAN is fun to watch today. Look out for some midnight Amendment that might yet pass this giant turd of a bill.