Paul Krugman’s column explains Henry Paulson’s $700 billion rescue plan for the U.S. financial system. The title of the column provides a hint of Krugman’s opinion — “Cash for Trash.”
Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.
Once again, the Bush Administration and right-wingers in Congress are using a crisis to shift more wealth to the extremely wealthy. “Plan B” will reward the people who got us into this mess with a penalty-free bailout. Taxpayers and America in general will be the poorer for it.
Is there any reason outside avarice and corruption that the feds are pursuing this course? A conservative blogger (whose analysis of the crisis is reasonably sane) says,
Of course the almost hysterical urgency is partially because the locks on the coffers change in January. If Obama wins, so will the tax code. The administration’s preferred version of the bailout would be one last Wall Street giveaway before higher taxes and a tougher regulatory environment.
In other words, if Obama wins they’ll no longer be guarding the henhouse, so they’re making off with as many chickens as they can carry while they still can.
Dems in Congress are making noises about help for homeowners and caps on top executive compensation. Will they once again get railroaded into doing what the administration wants? Sean-Paul Kelley says there is room for hope. Very little room, I say. I don’t see what the Dems could lose by sticking to principles, and there is much they could gain, but we’ve been here too many times before, haven’t we?
Elsewhere: You know we’re approaching the End of Days when Sam Donaldson, George Will and Cokie Roberts trash a Republican and praise a Democrat. WTF? you say. My guess is that this trio lost a whole lot of money this week and realized that if they don’t want to be wiped out entirely they do not want to put John McCain in charge of the economy. “John McCain showed his personality this week,” Will said, “and made some of us fearful.” I know the feeling.
Meanwhile, most of the Right Blogosphere remains oblivious to the details of the financial crisis and the atrocity the feds are about to commit to “fix” it. Rather than concern themselves with understanding the issues, they’ve gone into hyper-blame mode. Clif give us his version of the shorter Right Blogosphere: “[T]he reason for the current financial crisis is that the Community Reinvestment Act passed by the Democrats forced banks to lend money to a bunch of shiftless darkies who couldn’t repay their loans.”
My version of the shorter Right Blogosphere: “The elitist Left is behind this. We hates them. We hates them, precious.”
Nothing much else to do but laugh.
It amazes me how clueless the Dems are about power politics. I just heard Senator Dodd on NPR talking about having been working with Republicans all weekend to craft a solution. The first thing he said was effusive praise of Hank Paulson.
Excuse me? The man just asked you to give him $700 Billion with no Congressional oversight, and made statements demanding that it be passed “clean”. He’s essentially said your branch of government is irrelevant, and dirty. It’s an insult. Respond like you’ve been insulted, dammit!
Don’t make the nicey-nice noises. Make the pissed-off, you’ll need to give me something to appease my righteous anger noises, even if you aren’t really angry. (Though, by god, you should be.) You don’t respond to a thug by saying, “My, you are a very talented fellow and the American people are lucky to have you. Perhaps, instead of robbing me blind, you might leave me some sight in one eye? And use of a cane? Because I’m happy to work with you in a bipartisan fashion on this very important mugging.”
Idiots. The Democrats have no idea how to negotiate. Hank will get his check.
A proper capitalist lives by the credo, make profit as close to the poison line as possible. What goes unmentioned is if, however, it turns out that you’ve polluted the enviromment with your toxic waste, work it out so that someone else will clean it up.
As far as Jeff G. is concerned…his banter is obviously borrowed from Leo Strauss etal – the superior intellectually and morally men of insight and superior wisdom must rule. Ordination into this superior society seems to be self-inflicted, unlike the more traditional conservatism in which rule was attained by condition of birth.
“John McCain showed his personality this week,†[George] Will said, “and made some of us fearful.â€
Laura Bush, Lynn Cheney and Sarah Palin ought to start a knitting circle, to make scarves and mittens for all the poor souls in Hell. I understand Richard Nixon and Lee Atwater, in particular, can’t stand the cold.
biggerbox, what do you think it would take to make Nancy Pelosi mad? Does she have a small, fluffy dog we could dangle out a 10th-storey window or something?
Better yet, let’s dangle Paulson.
I saw Paulson on This Week with George Stepanopoulis, and according to Paulson, the financial credit markets are a little irregular. They are “blocked up with illiquid assets”. Seems we need a 700 billion dollar physic to move things along and get us back in good health.
I was wondering whether Paulson was just trying to simplify a complex situation for the benefit of listeners who lack sophistication, or if he was intentionally dumbing down the situation in an effort to mislead. I guess that as a matter of semantics a bad loan is illiquid, but by the same token a good loan could be considered illiquid also. Maybe I’m just splitting frog hairs in looking for the hook, but I had a feeling of being played by Paulson.
Swami, one of the issues Krugman’s been discussing on his blog all weekend is whether this is really a liquidity issue, or an insolvency issue. If it’s the latter, this massive blank check isn’t going to solve the problem–just prolong it. And right now, he’s got a new post up praising the Dodd proposal as a huge improvement over the Paulson plan. He seems to think there’s hope…so perhaps it’s not unreasonable to keep our fingers crossed.
Did Clif really say, “forced banks to lend money to a bunch of shiftless darkies”? Lord. I knew they were racist, but that’s about as bad as I’ve seen in years, at least in writing. Perhaps I lead a sheltered life.
When I got my most recent mortgage in 2004, I had to INSIST on fixed rate, 30 years, 20% down. They kept pushing 100% financed, low initial rate, 5-year balloon. “Values are going up, up, up, and rates are going down, down, down. You’ll make out like a bandit.”
“…forced to lend money…” my ass. These guys were financial pushers.
Did Clif really say, “forced banks to lend money to a bunch of shiftless darkies�
Please be clear that Clif was not stating his own opinion. He was paraphrasing and mocking right wingers.
Ah. Sorry. I missed that. 🙁