Thursday, October 02, 2008

Deja Vu All Over Again

I won't comment on the Senate's "Right Back At'cha, Muthfukas" version of the Big Bailout (aren't revenue bills supposed to originate in the fucking House, or have I just been smoking crack again..?) beyond what Stewart has to say about the Republican arguments in favor of this monstrosity:

I should reiterate that, while I think that Monday's House clusterfuck was a good example of the desuetude of our Republic, I do NOT think that either the original House version OR the Senate "Pickapecko'porkypeppers" version are actually good bills. Both of them leave WAY too much wriggle room for shenangans like the easing the "mark to market" (a.k.a "they're my assets and they worth what I want them") rules and the issue of how this money "buys" these dud loans/mortgages/who knows what. There are several better ideas floating around out there, including this one and this.

It's also depressing to be right, but I pretty much called it that the Congressional Dems would be too craven to write their own, left-wing bill and shove it to the Bushies and their Republican enablers in Congress to either spit out or choke down. It's depressing to be reminded that in the ultimate fighting ring of U.S. politics my party is sort of the Matt Roloff of all-in fighters.

8 comments:

Anonymous said...

What is your opinion of Warren Buffett's suggested approach to this whole mess?

http://money.cnn.com/2008/10/02/news/newsmakers/buffett.fortune/index.htm?cnn=yes

pluto said...

FDChief
Pluto, I'd be interested to hear, in particular, your take on the implications of what you describe as a "rebellion" that overwhelmed the original TARP bill Monday.

I'd say you've already got a pretty good understanding of what I'm talking about. Your Wednesday post attracted 11 posts and only one person reluctantly supported the bill.

I've talked to a lot of different people with a lot of different political views and they all come out saying the same thing; this bailout bill is poorly thought-out and rushed and it will benefit the bankers but is not likely to help anybody else. Nobody has any confidence that the taxpayer won't wind up paying a huge amount because of our energetic but brainless political class.

The rebellion I spoke of on Tuesday was an overwhelming tidal wave of anger against this bill, the people who would benefit from it, and the people who want to pass it. It manifested itself in a massive response from the left, right, and center of the political spectrum and jammed all lines of communication into and out of the Congress for two solid days.

The Representatives, all of them staring at re-election in 35 days, blinked and voted down the bill, much to the astonishment of the political class. Uniting all of those political points of view was an astonishing accomplishment, we could only accomplish it through the lack of leadership by our "Uniter" president.

The response from the administration has been nothing if not typical, shipped the bill over to the Senate adding $150 billion in tax cuts, health care benefits, and incentives (ballooning the original proposal from 2-1/2 pages to over 451 pages at last count) but NOT changing the original proposal or addressing any of the public's concerns.

The Representatives who voted against the bill are in a tough spot; they want to get out of Washington and go campaigning for re-election, the Prez and his allies have ladled up a nice tasty serving of pork, but the anger is still out there and it's GROWING and manifesting itself in new ways. This country is united against its political class to a degree rarely seen in US history.

You are dubious about this bill, Chief. So is Fox News, Fortune magazine, and Jon Stewart and literally hundreds of millions of other people. The administration has behaved in a typically heavy-handed, too-little-too-late, tone-deaf fashion and has finally succeeded in alienating the radical 25 percent that has supported them through thick and thin.

The House email and web servers collapsed yesterday under the weight of all of the traffic and emails. The IS manager said that he fixed the problem by instituting a "traffic cop" system. I'm not sure what that means but I'm afraid he might have just shut down the email system, it would certainly have made the President happier...

The administration seems to have just enough political power left to get the bill passed. But I don't know... Lightning struck once, can it strike again? The administration and the Democratic party leadership are doing everything they can to lock down the Representatives and force them to vote in favor of the bill but the overwhelming and growing anger of the average voter is not to be taken lightly just before the elections.

Can this public anger and involvement in the political process continue? Can it impact future decisions? My heart says 'Yes' but my brain disagrees. The politicians have lulled us to sleep before and they'll do it again.

But, on the other hand, future politicians need to remember that anger and treat the American public with more care or they may well be facing a situation not seen since the French Revolution.

pluto said...

I've got very mixed feelings about Buffet's proposal. It is DEFINITELY better than Paulson's proposal but doesn't give investors enough incentive to jump out from the sidelines and gamble with their money.

I strongly agree with Buffet's analysis that $700 billion isn't enough to turn things around. Playing with the numbers a bit suggests we'd need about another $1 trillion, assuming that the money is spent on the right things.

pluto said...

Chief, you were interested in my comments about divisions within the US.

You pointed out that I disagreed that we were divided and then started slamming the political parties for being at each others throats.

My point is simple and one that Sheera and a few other made to me back in the old Intel Dump days. The politicians are divided but the rest of the country is not.

I would even go so far as to say that the country, at least for the moment, is more unified by their anger at the politicians and their money-grubbing, pork-barrel, slash-and-burn, take-no-prisoners ways than they have been in at least a generation.

What happens to our Representative Democracy when the representatives no longer represent the people?

pluto said...

Here's an article that expresses my view of the current situation and the likely future all too well...

http://articles.moneycentral.msn.com/Investing/SuperModels/can-the-bailout-work-fat-chance.aspx

FDChief said...

Pluto: Here's my take on the "rebellion" and why I think it says something about the division of our populace rather than our unity. Let me try and work it around a little and tell me what you think.

What I saw Monday wasn't one set of defections from the party whips, it was two.

On the blue side, you had people like my guy DeFazio and all but one of the OR delegation who were hearing from people furious that they were being asked to put public money into private business and get nothing in return. No equity, no control, no regulation, no punishment for malefactors. Just a tankerload of sweet, sweet cash for the Masters of the Universe. Most of the D's had similar comments: not enough oversight, too expensive, no reform for the markets. The rage there was a populist rage, the old 1930's anger at the plutocrat in the boiled shirt and the eyeglass.

But the Rs? All their rhetoric was about how this was all a plot by Evil Gummint to turn us into Commie Reds, take over Pop's Malt Shoppe and how what Main Street needed was lower taxes and les regulation. How the problem wasn't greedy speculators and blind regulators but the "mark to market" regulations and the lazy spics and niggers who got home loans and didn't repay 'em. This anger was a sort of Rush Limbaugh rant writ large, more dogwhistle raving about the usual suspects: Dirty Fuckin' Hippies, Big Gummint and Granola Munching Ecoterrorists.

There was some "fuck Wall Street" thrown in the mixer, too, but that was just the dummy factor; the guy who stands the fire department off with a shotgun because he doesn't want them driving across his lawn to put out the fire in his carport.

I know people on both sides of the argument, and the "for" people are pretty much agreed that, shitty as it is, the financial panic is such that without some sort of cushion it could be 1929 again. The "against" people...there seems to be an "against" for every taste. Which, IMO, is part of what makes this so hard to deal with. There's not even much of a workable compromise for the "antis" to settle on. They hate this, but one side 'cause the think it throttles Wall Street too little, the other side, because it chokes the speculators to much...

Thoughts?

FDChief said...

anon: I'm not a good enough economist to really analyze Buffet's plan, but I do think that one problem is he assumes that the fundamental issue is one of bad mortgages, and that with a little investor angel dust nd a lick of paint these properties can be flipped for a profit.

But I think this situation is more serious. I think the American economy is fundamentally unsound. Were too dependant on financial pyramid schemes, too addicted to credit and interest. We overbuilt like hell when the market boomed; now the winter is here and the demand just isn't there. These mortgages are crap because, well, they ARE crap. You can't sell these properties for what you've paid for them. Hell, in lot of places (Florida?) you can't sell them at ALL!

So I'm not arguing that Buffett's public/private scheme couldn't work...just that it might take years TOO work and our financial system is too addicted to the quarterly balance sheet and the dividend and the growth percentage to be that patient...

I hope I'm wrong, of course.

Roger Bigod said...

A lot of the anger this week sounds to me like the Ultimatum Game. It's a psychological experiment in which the first player is promised a payoff, say $100, and has to decide how much to give to the second player. If the second player doesn't agree, there's no payoff for either player. If the division is fairly equal, the second player will take less than half. But below a 70-30 split, people start to refuse the payoff. They know perfectly well that rational game theory analysis says they're supposed to take the small payoff, but they don't care.

There's something wired into the human CNS that leads to this. It occurs across cultures and a twin study suggests it's maybe 40% genetic.

Essentially Paulson et al. were telling us to accept the short end of the payoff. And enough people were disgusted that congressmen got a 200:1 level of protest. I don't think that was representative of the general population, but people were saying that if something this rotten is what it takes to stave off calamity, then let the sucker go down.