Last week, the Bush administration wrote up a 3-page Bailout they wanted Congress to rubber-stamp. Were they forgetting that they lost control of Congress in 2006? Were they betting that the pro-corporate Democrat-led Congress would roll over for them the same way the pro-corporate Republican-led Congress rolled over for them for six solid years? Either way, populist elements of both parties raised their voices all last week following Bush’s Bailout bill, demanding substantial changes to the bill or rejection of it. The House worked on their own Bailout bill all week and nearly had something Thursday before John McCain wrecked things. So the House was left to renegotiate things over the weekend and finished up yesterday. The House “debated” the bill this morning and voted it down this afternoon.
The stock markets all tanked today, the dollar rose, oil prices fell and the bond markets received a lot of the money people are pulling out of the stock markets. There wasn’t enough change between Bush’s Bailout and Congress’ Bailout. Taxpayers were still overexposed, oversight wasn’t enhanced enough, and executive compensation wasn’t reined in. Most importantly however is the root causes of the financial industry’s problems weren’t meaningfully addressed. Housing prices were allowed to balloon for too long. Those prices have to come down to more realistic levels, which will take more time. Banks are maintaining a lock on their cash, stopping the flow of credit both here in the U.S. and is now starting to lock things up globally. Credit extended to borrowers will be reined in for a while and that’s a good thing. Too much of our recent economic expansion was based on too much credit being made available to unworthy borrowers. The Republican-build economic house of cards has to fall. Giving away $700 billion to Bush’s cronies isn’t going to fix our problems.
Americans are likely to want a quick fix to our economic morass and a quick fix isn’t what it needs. The U.S. economy needs a thorough cleaning-up. Everybody can’t get rich quickly all at the same time, and that certainly can’t happen if the richest are trying to do it by gambling with Americans’ mortgages. A number of viable solutions have been proposed by folks across the country in the past week. It is now time for Congress to open their eyes, ears and minds to those solutions. Those solutions address the actual causes of the economic mess, not its symptoms.
So what can happen moving forward? The Senate is going to take up their version of the Bailout Wednesday. I’m unsure how much the Senate and House versions differ. If the Senate version is passed, the House could, but doesn’t have to look at the bill. If the Senate version is not passed, nothing really changes. House Democrats want either a revote or a new bill to consider. House Republicans have said forget it and have threatened to go home for the year. Lots of politics are flying around the issue. At a minimum, the House leadership now has the time to look for additional/different solutions and work on something new.
A bill doesn’t have to be approved this year. It could wait until a new President and a new Congress go to work early next year. Taking into account the backers of the Bailout are the same people that helped create the conditions for the economic mess, waiting until next year might be a good idea. I personally have no confidence that Bush’s cronies or allies (Republican or Democratic) can come up with an honest attempt at correcting things. I’d like for candidates running for office this year offer their thoughts on solutions and let the people decide who they want to fix things.
[Update]: Read the following:
“The stock market was definitely taken by surprise,” said Drew Kanaly, chairman and CEO of Kanaly Trust Company, referring to the House vote. “If you watched the news stream over the weekend, it seemed like it was a done deal. But the money is being held hostage to the political process.”
Does anyone else find it interesting that an executive has clearly equated that a Constitutionally-defined process is the same thing as criminals taking hostages? How many millions of dollars is Drew in line to get when he leaves Kanaly? That’s the taxpayers’ money Drew is talking about, not his. If he and his chums hadn’t gambled Americans’ mortgages away, they wouldn’t be begging to be bailed out. This quote is proof that the “crisis” is phony. Drew, Bush and their allies are trying to pull a fast one on us. (h/t OpenLeft)
Where are all the headlines jabbing at the divided Republican Party? Republicans split their votes for and against the Bailout. The U.S. Chamber of Commerce threatened retaliation against those who voted against the Bailout while the right-wing extremist group Club for Growth threatened retaliation against those who voted for the Bailout. The Chamber’s threat sounds a lot like Drew’s (above). The fattest cats are likening people who didn’t like this Bailout (a majority of Americans) to criminals and threatening to destroy them politically. Of course, there’s no stern message from John McCain or John Boehner to the Chamber or the Club to keep politics out of a crisis. They’re too busy pointing fingers at Democrats. What leadership!
A real solution (courtesy of TrueMajority.org):
Putting real regulations back on runaway financial corporations, and taking an ownership stake in exchange for any taxpayer support Providing mortgage relief so ordinary Americans stop losing their homes Putting millions to work by investing in new green jobs and infrastructure Investing in a health care plan to cover everyone