$0 To $1 Trillion In 4 days Flat

[phantom power]

It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option. We've seen this game played before.

It's unrealistic to imagine that I'd be able to really get enough honest information to have an informed opinion, but I spent some time thinking about what question all the Very Serious People should, at a minimum, want answered before the start cheering on pony plans. This is what I came up with:

What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?

And, no, tumbling stock prices or babble about "deteriorating credit conditions" don't count. Bernanke, Paulson, the SEC, the FDIC should have had access to a set of facts independent of day to day market turmoil. What actually changed over the week? If it was new information, what was it? If it was newly discovered information, why didn't you know it before?

http://www.eschatonblog.com/2008_09_14_archive.html#6187592536358678953

[jimshoes]

1. One way or another the criminal gang that siezed power in 2000

is going to steal every asset that the United States once called its own. They wanted Social Security but since they can't have that they're doing an end run around SS and figured out a way steal the taxpayers money for their friends outright in the form of buyouts. This way they don't even have to go through the pretense of pretending to lose it in a shaky stock market.

[AdHocSolver]

9. Two comments. First, they already have stolen most of the Social Security Fund.

They "borrowed" money from the SS Fund to "hide" the real amount of the federal deficit and replaced the stolen money with IOU's (chuckle). Pigs (with lipstick) will fly before that money is ever repaid.

Second, the only purpose of this so-called bailout is to minimize the paper losses of the crooks who concocted this swindle. The corporations served to cover up the swindle. The physical assets and personnel assets (employees) of the companies still exist. Put the companies into receivership and replace the current management (no golden parachutes) with some honest financial managers (if any can be found) to keep the business running. There is NO reason to throw billions of dollars at these companies except to allow the crooks running these companies to steal it.

[catnhatnh]

2. K&R

Because lucid questioning should be rewarded...

[unblock]

3. what happened was that the dow dipped below what it was when bush took office

BEFORE THE DAY ENDED, they announce a bailout that wasn't even written yet.

note that the government doesn't do huge market-affecting news intra-day. for example, they did the various investment bank negotiations over the weekend, with markets closed.

but this ginormous news, they announce in the middle of the trading day, no doubt to prevent the market from closing below that mark.

[nichomachus]

4. When you adjust for inflation

the Dow is 20-30% below what it was when Bush took office -- and has been for some time. Everyone forgets to adjust for inflation.

To be the same as when Bush took office, the Dow would have to be substantially higher than it is.

[unblock]

5. true, though you also have to factor in dividends

and even then the dow is a notoriously stupid metric in any sense.

still, it's the stuff of politically damaging headlines....

[nichomachus]

6. What dividends?

Many companies weren't paying dividends.

[unblock]

7. um, all of them except gm

http://www.indexarb.com/dividendYieldSorteddj.html

yes, many companies aren't paying dividends, but 29 of the 30 dow components are.

[Ah Xoc Kin]

8. what if its not 1 trillion but 3? 5? 10?

The last cost estimate for big programs I remember
was Iraq and Afghanistan. What if the cost for bail outs
over the next few years reaches $3 trillion? or 5?

Will the same excuse be used that "we can't back out now"?