"NO DEAL"-Repubs Already Lining Up To Allow NO Meaningful Reform Or Taxpayer Protections

kpete

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Sun Sep-21-08 10:03 AM
Original message

"NO DEAL"-Repubs Already Lining Up To Allow NO Meaningful Reform Or Taxpayer Protections

Edited on Sun Sep-21-08 10:17 AM by kpete

This is a 3 AM moment. The time to lead is now. We will find out a lot about Barack Obama in the coming days. We already know what John McCain is, an incompetent ideologue. Let's hope that Obama proves himself a leader.
http://www.talkleft.com/story/2008/9/21/92845/7502

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Treasury needs to explain why this is supposed to work
— not try to panic Congress into giving it a blank check. Otherwise, no deal.

September 20, 2008, 4:46 pm
No deal
Paul Krugman

I hate to say this, but looking at the plan as leaked, I have to say no deal. Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets.

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The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.

And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.

more at:
http://krugman.blogs.nytimes.com/2008/09/20/no-deal/

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Also, (Josh Marshall) according to the Journal, finance industry lobbyists are already giving orders to Republican hill staffers not to allow any meaningful reforms or protections for taxpayers. So, just the money. No strings attached.

House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.

"We're opposed to adding provisions that will affect undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.

A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.

more at:
http://talkingpointsmemo.com/archives/218444.php

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“Bailout Plan A Historic Swindle”
Paulson Bailout Plan a Historic Swindle
By William Greider
September 19, 2008

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses–many hundreds of billions, maybe much more. What’s not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public–all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called “responsible opinion.” If this deal succeeds, I predict it will become a transforming event in American politics–exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.
more at: http://www.thenation.com/doc/20081006/greider