Finance Officials Beg Congress To Give Them $700 Billion
Treasury Secretary Henry M. Paulson Jr. was not warmly received at today's bailout hearing when he stared down an angry and disenchanted Senate Banking Committee. Federal Reserve chairman, Ben S. Bernanke, who appeared with Mr. Paulson, warned that unless Congress gave Mr. Paulson $700 billion that "inaction could lead to a recession." Oooh, they said the "R" word....
The New York Times says:
But one after another, senators from both parties said that, while they were prepared to move fast, they were far from ready to give the administration everything it wanted in its proposed $700 billion plan to buy up and hopefully resell troubled mortgages.
...
Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking panel, called the Treasury proposal “stunning and unprecedented in its scope and lack of detail.”Asserting that the plan would allow Mr. Paulson to act with “absolute impunity,” Senator Dodd said, “After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well.”
Another expression of disgust came from Senator Jim Bunning, Republican of Kentucky, who said the plan would “take Wall Street’s pain and spread it to the taxpayers.”
“It’s financial socialism, and it’s un-American,” Mr. Bunning said.
Paulson responded that he was "angry" at Wall Street and that he needed the bailout not for the fat cats who bet badly and lost, but for you, the taxpayer.
“This is all about the taxpayers. That is all we are about,” said Paulson, who was formerly the CEO of Goldman Sachs for 7 years before becoming Secretary of the Treasury in 2006.
Finance Officials Face Wary Lawmakers [NYT]
(Photo:Andrew Councill for The New York Times)
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Comments:
"This is all about the taxpayers. That is all we are about,"
It's only about the taxpayers because we're the only place he can borrow money anymore. The best part about it is that they won't even ask us whether we want to loan it to them.
At least some of our elected officials have enough balls to tell him that if doesn't have a good plan to quit wasting their time.
3 words;
Fuck you Bernanke
I would like to spend a weekend blowing all my savings in Vegas. Will the government please take over my house payment for me?
Here's the dirty secret of the baillout. Buried in the proposal is the following text:
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.
In other words, they want the money, we can't ask anything about the money after we give it to them, and we can't ask any court to review its use or have any other branch or agency of the government review its use.
None of the senators who listened to Mr. Paulson and Mr. Bernanke disputed the grim possibilities if Congress should do nothing, but it was clear that they were hearing from their angry constituents. Senator Elizabeth Dole of North Carolina, for instance, said residents of her state have been complaining about "costly and reckless" behavior on Wall Street, and the potential cost to people who are anything but wealthy. (Senator Dole is running for re-election.)
To reiterate what a few people said yesterday, take a few minutes to contact your state reps and let them know what you think.
I think they should let them all fail; people need to start banking and investing with reputable institutions without a snazzy commercial or unrealistic amenities. Sure there is going to be hardship for many, but we don't need crappy lending institutions like these staying in business and dragging everyone to the bottom.
Listen, this is the Bush doctrine.
1. We do whatever we want.
2. If you mess up, fuck you.
3. If we mess up, you bail us out. Then return to number 1.
That's it. There's nothing else to it.
Okay, so why not directly bail out the taxpayer? Seems like a more direct route and cheaper.
@lawnmowerdeth: This whole thing is a lot like Lost in America but without Albert Brooks (and any trace of comedy).
@holocron: We don't bail out poor people!!!
They're used to being poor.
The rich people cannot handle this. They need to be bailed out.
Doncha see? :)
I really hope that someone stands up to them and does NOT give them a blank check for 700 billion. If they do not stand up to them, I will probably lose my last drop of respect for any government agency. Bush and his cronies should all be shot. Totally useless and dirty.
Times have been so partisan for so long now, that it takes this to remind me that there are good politicians on both sides of the aisle. Here's to all of them for at least trying to call them for what this is.
In regards to Paulson:
``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.''
"The plan would raise the ceiling on the national debt and spend as much as the combined annual budgets of the Departments of Defense, Education and Health and Human Services."
Down here in Texas, we knew that GB had run two oil companies into the ground. Some of us told you not to elect him president and what did you go and do? Well, I guess he ran the US into the ground too.
Why is a recession worse than putting me (and my kids, and their kids...) on the hook for another $1,000,000,000,000 (you know when the government asks for $700,000,000,000, they'll actually spend more). Seriously?
@describe_one:I'm a new poster here but a long time reader of the site. I work for one of this site "favorite" banks, I won't say which one, and I'm a consumer too. I'm not a high ranking bank official but I am a floor manager and being a floor manager in a collections department has taught me ALOT about credit and how it can be good or bad. First I'd like to make the point that while I agree I don't want to have to pay to bail someone else out who messed up or got misguided, there has to be some sort of bailout for some of these companies. One example is Freddie and Fannie, if they fail we all fail, period. If any of you posters out there are like me and in between graduation and career you'll probably be hoping to buy a house in the next few years. If these companies go down, good luck to all of you because I'll be runnin for Canada. Your ability to get a loan on a home and to get a fair rate on that home are in direct relation to what companies are out there to back that sort of credit. Did the fat cats get greedy? yes they did. Do I want to pay for it? Hello no. But if this can be averted by some kind of backing I'm down if it'll help US ALL save some money in the future.
P.S.- $700 billion would be excessive, I say we make the CEO's each work at burger king to work off the debt to society and pick up the difference
Paulson helped draft the proposal that gives him a 700 BILLION dollar check with no strings, no oversite?
This is absolutely stunning in its arrogance. I'm thrilled to see both parties protesting this outrage.
With all the talk about parellels to the depression. Here's some interesting info:
The top one percent of households received 21.8 percent of all pre-tax income in 2005. This is the greatest concentration of income since 1928, when 23.9 percent of all income went to the richest one percent. [www.demos-usa.org]
@junip:
Another good quote from the end of the bloomberg article:
The Bush administration seeks ``dictatorial power unreviewable by the third branch of government, the courts, to try to resolve the crisis,'' said Frank Razzano, a former assistant chief trial attorney at the Securities and Exchange Commission now at Pepper Hamilton LLP in Washington. ``We are taking a huge leap of faith.''
I couldn't say it much better..other than, this sh*t is F'd UP. I guess this is Bush's going-away present to the US citizens.
Well with 700 billion, everyone could have healthcare, Refinace all these homes, fund all our schools and update all our infastructure. And they want us to just give it so some banks can lift there stock price? How can you be against all I said before (socialized, blah blah) and be for this?
I say screw them, let it all fail and we fix mainstreet. But congress will give in and 700B will be out the door and nothing gets fixed and the republicans can shout for 4 years that that the evil democrats are fiscally irresponsible and we will all be back to the same thing 10 years from now. It's a scam. Call your senator, rep or whoever and tell them if the agree to this, you will make sure they are invited to no longer represent the american people. Throwing 700 B at this problem will not do anything, but make some FOREIGN bans and CEOs rich because BUSH decided to fund a war thru China and the Middle East and they want there money NOW! It doesn't matter who gets in office, if this passes. We are ALL screwed!
If we're going to spend $700 BILLION to stem the financial crisis, why give it to the people who HAVE money already?
Let's give it to the people who are getting FUCKED by the poeple at the top, the poeple who are being shit on.
I'm so sick & tired of the Republicans and their "Trickle-down" theories. IT's all a lie; they tell the American people that it will help them out by "creating jobs," but in reality all it does is shift wealth away from the people who do most of the work and need the most assistance, and gives it to the people who need it the least.
Basically, the theory runs counter to everything that we say we stand for.
@copious28: You're the ones who elected that dumbass in the first place!
That being said, yes I saw in 2000 that Bush & Co were utterly evil and inept as well. I just had no idea of the scope of their evil plotting and their utterly cavalier attitude toward their own constituents - the constituents making less than 500k a year, anyway.
Just to put this in perspective.There were approximately 138 million taxpayers in the United States in 2007. At the 700 billion dollar price tag, that works out to over $5000 PER TAXPAYER. Could that money be given to the taxpayer and then funnel it either to their home loan that might be close to foreclosure, or to other things in the economy like cars, computers, clothes. The auto companies, computer industry and retailers could surely use 700 billion to help avoid possible recessions for them. I am disgusted.
This is a joke and the fact that Paulson would dare to state that this is for the benefit of us as taxpayers is outrageous. How about better funding for programs that actually directly affect the citizens? How about maybe for once actually giving a sh*t about those of us who are millionares? That's too much to ask, however 700 billion with no strings attached is just dandy.
*having a stroke*
@twophrasebark: It's around $2000 per person.
I am pretty sure that that has already been tried a couple of times. First, it wasn't enough to have an impact on an individual basis and second, most of us just blew it on junk.
@holocron: If we don't bail out the fatcats, they will be forced to sell off 2 of their 3 yachts and their summer home in France! They shouldn't have to experience such SUFFERING! Only by throwing taxpayer money at them without question can we make sure that they can afford solid gold toilets! It's the only right thing to do!
OK what do we need to do to educate "The Base?" How can we enlighten those who keep falling for this spiel hook-line-and-sinker? THAT'S what we need to do; whatever that is, we need to do THAT.
I am pretty sure it's education and removing money from politics, but there could be other steps, as well.
Bottom line, we need to change course grassroots. We need "The Base" to become educated & enlightened to what's ACTUALLY happening to them, and stop eating up what they're being told (that sounds so pretty!).
That McCain is so close to a tie in this race is a sad statement of the American Constituency as a whole.
@Mfalconieri: A full on public beheading, soemthing to send a clear message to all the douches that want to take advantage of the country.
Take the time to look up and contact your representatives in congress. The US Congress website makes it very easy to do. Some of your reps will even email or call you back and carry on some form of discussion. Very simple, and it takes so little time. Do YOUR part and let them know how you feel.
The new "Trickle Down" economics:
The banking industry blows their load all over the face of the American economy, trickling down and drowning taxpayers.
Why not just pillage the banks for assets and then take the assets to banks that were not stupid. Its time for fire sale prices on these people.
Were we going to have sympathy for the speculators on oil? Heck no I would dance on their empty pocketbooks...
Lets start by shutting down student loan lenders and forgiving some student loans so people can come out of the debt they need help with. Then kill off each of the easy loan mortgage companies. consolidate them into a company that uses a regular rate like 6-8%. They would only have to shutter a few companies running rates over 10% and suddenly the businesses would take notice and stop the rate gouging.
There is no real reason to see a home loan over 10% or a credit card at 29%
@twophrasebark: slight correction to #2
2. If we convince you to mess up by ignoring laws (mortgage predatory lending/fraud) - you are still screwed.
As suggested before, PLEASE call/write/e-mail/smoke signal your Rep. and let them know this proposal is completely unacceptable. How much more power are we going to allow Bush & Co. to take from the American people? NO oversight? NO questions?
You helped create this mess, Paulson, and now we're supposed to trust you to sort it out... but if you don't, there are no repercussions? I think not.
It's funny to think that even if America is against this, our system was BUILT to be run by a handful of people to have the "know-how" to do it.
Read some of the actual statements made by the founding fathers, and you'll see that they absolutely were NOT in favor of democracy, but rather a "represented democracy" where the knowing, educated, land-owning white men of the time could run things in generally the direction that the people wanted. HOWEVER, WITH the ability to negate the opinion of the masses "for their own good" should the need arise.
So now they're going to blame the recession on them not getting ~1 trillion dollars to flush down the toilet?
I've got a better use for that money. Reassess the values of upside down homes and adjust the mortgages accordingly. To recoop some of the loss, also reassess the value of forclosed homes and make that the sale price. The banks/assesors artifically inflated the home prices, and it's never going to be right until the prices are back to where they should be. If the forclosures are left out there this adjustment is going to overshoot and multiply.
...but NO! Let's spend a trillion dollars on buying useless pieces of paper to make the people responsible for this disaster happy?
Which is why it doesn't matter what America really thinks. The banks will get their money, hopefully with some sort of oversight, and it just doesn't MATTER what we the people want.
Which is why voting is such a crock.
The whole system needs to be overhauled.
Why are they talking about $700 billion in "bailouts" without first fixing the underlying problems ? $700 billion can patch a lot of potholes in Wall St but it's only a patch - the problems are still there.
@failurate: Wow. That's only $5/day.
That's cheap. You sure convinced me by dividing the number by 300 million.
;(
This is one of the worst magic shows I've ever seen by someone in a political office. Nothing more than "now you see it.... now you don't" - too bad it's 700 BILLION dollars.
For all that money, they could pay everyone's mortgage down to 60% of what's owed - the people take care of the 40% and the bank will make out b/c they'll get 60% upfront: instant equity infusion.
Homeowners get to be responsibly and the bailout ends up helping the people it's supposed to: homeowners.
It amazes me that it'll cost a trillion dollars to protect bank assets, but they don't care one bit if Americans are unable to spend any more b/c of their housing, healthcare, food related expenses.
The brass balls on these guys.
I am fairly certain that the $700 billion does not actually exist. That in order to make it exist, we will be experiencing instant inflation. The price of everything will go way up... except the price of your labor... that will stay the same. Welcome to the lower class, formerly middle class folk. And those rich people we hear about... they will be richer... much much richer.
maybe their wouldn't need to be a "bail out" if everything wasn't purchased on debt.
@randombob: yeah, i'd prefer it like in most other countries, where you're either royalty or really poor. i like no in-between myself. really levels the playing field.
every decade has something new to be "scared" of. the next 10 years will come, and we'll laugh about how easy we had it this time around, how could we have thought these were bad times, and 'how could things get worse than this!'
Let these CEO volunteer THEIR money! Not taxpayers.
...then why are you taking the money from us and not them?