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September 30, 2008

Why Pelosi Couldn't Muster the Votes

Try political expediency. Sometimes a picture is worth a thousand words.

Take a look at the graphic below. The meme rapidly gaining hold is that this was a failure of Republican leadership. It's an interesting idea, but an examination of the voting patterns suggests that the decisive factor, at least for Democrats, was whether their seat was up for grabs in November. I took the liberty of charting the information found here to make it more easily digestible:


Notice that a comfortable majority of House Republicans (curse their guts and livers) voted against the bailout regardless of whether their seats were considered to be hotly contested or not (65% vs. 85% voting against).

The Democrats, on the other hand, literally flipped their voting position based upon whether they were likely to face voter wrath come November (38% vs. 72% voting against the bailout).

On a vote that failed by a mere 12 votes, it's hard to argue that our Congressional Overlords weren't playing a fine game of CYA.

Meanwhile, Elise asked me a few days ago to elaborate upon why I continued to support the bailout. I genuinely saw no point in repeating my position over and over again; I'd made my point and no minds were being changed. However, since it no longer matters this is one of the better arguments I've seen, and it fairly represents my thoughts on the matter:

Conservatives are unhappy.

Over the last eight years they’ve seen an expansion of the size and scope of government under a Republican president, and now they’re being asked to vote for an unprecedented expansion of federal power to rescue the faltering financial system.

If I were back on Capitol Hill I’d be unhappy too.

But I’d definitely vote “yes” on the financial package.

I haven’t had a single conversation with anyone in the real economy that does not confirm the Paulsen/Bernanke warning that a failure to act now will precipitate a meltdown of our financial system that will, in all likelihood lead to a long and deep recession.

Simply put, it is that prospect that ought to worry conservatives most, because in tough times Washington expands exponentially.

The New Deal, which represented the major historic shift toward big government liberalism, came in response to unprecedented distress in the real world. Bankrupt farmers and small businesses and unemployed workers called for help and the government responded with massive assistance, and an entire new paradigm of government was born.

...A “yes” vote on the financial rescue package is a vote to intervene in the market precisely to prevent the collapse that could usher in the next vast expansion of government.

It's called being penny wise and pound foolish. There must be a million maxims to the same effect: a stitch in time saves nine, yada, yada, yada. For whatever it may be worth, I don't think we have to experience a catastrophic "doomsday" market failure in order for this to prove extremely damaging. Think of a stone being dropped in a pond. Now imagine the ripple effect from literally thousands of individuals cutting back on expenditures and acting more cautiously. It's the 'reverse multiplier' effect I discussed earlier: bubbles can operate in the other direction. It truly defies belief for me that the same people can speak of the prolonged housing bubble without understanding that the reverse phenomenon can take place if you suddenly remove the factors that created it.

I've heard a lot of what I consider irrelevant talk about mark to mark accounting rules and other technical jargon. None of this addresses the basic and immediate problem: worldwide investor confidence in the U.S. dollar as a medium of exchange and the delayed and potentially disastrous ripple effects that can come from a failure to act swiftly to restore confidence. The problem is, as several have noted, that we can't know for certain with lagging indicators what the downstream effects will be, but we have had credible expert after credible expert tell us that we can't afford the consequences of doing nothing and moreover, that we need to act quickly. And then out of the same side of their mouths, many of these same "experts" proceed to mumble a bunch of jargon that leads us in the direction of NOT acting swiftly and/or doing nothing. This is not helpful.

As my husband often says, sometimes a 70% solution now is better than a 100% solution that comes too late to do any good. When banks start toppling halfway around the world in response to events here in the U.S., it's a fairly safe bet that talk about having Congress (that ever-efficient and knowledgeable institution) muck about with accounting rules isn't the solution, at least in the short term. These are people who took a YEAR to pass the Patriot Act after 3000 people were murdered and then went on to revile and repudiate their own handiwork the next morning.

But according to many people I've heard, what's needed is "more time" for "sober deliberation". What evidence is there that Congress is capable of the kind of sober deliberation needed to produce a workable solution? All that is going to happen is that more pork will be loaded onto the bill which will eventually be passed far too late to do anyone any good. Moreover, if you glance at the polls, the financial crisis is not going to mediate on the side of fiscal conservatism. In layman's terms, come November we are not likely to have the votes to press for fiscal restraint in Congress thanks to what happened this week.

Congress wouldn't know an emergency if it slapped them on the a$$ and called them Susie. The quote of the day has to go to the NY Times:

The breakdown, even if temporary, pointed up the difficulties of dealing with fast-moving emergencies through the slow-moving and inherently political legislative process. And despite rare bipartisan agreement among party leaders in this case, the gulf between what lawmakers were hearing in Washington and what they have been hearing from home proved too vast for many people, particularly Republicans, to jump.

This is why the Founding Fathers gave us an Executive branch, but our reflexively anti-authoritarian populace have become so hostile to divided government that we rejected any notion of swift and decisive action because it was unpalatable.

My concern was - and remains - that we are very likely to get unpalatable anyway in the form of New Deal-like relief bills if the economy tanks, which is something we're not likely to know for some time. The polls are not rewarding the Republicans for their stand. This doesn't bode well for the November election.

It is something to think about. It might have been something to think about earlier, considering we are likely to have to live with the results for some time.

One final note: I didn't like the "bailout" either. I didn't like it one bit. But in my assessment, which I realize is different from that of others, it was necessary to avert a worse problem. This is why I applaud what I see as the courage of Congressional Republicans who didn't like the bailout - AT ALL - yet risked the wrath of their constituents for the good of the country as a whole. Not an easy stand, and I thank them for it. All the more so because I know it didn't come easily for them.

Posted by Cassandra at September 30, 2008 08:27 AM

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Nicely done. The smoke begins to clear.

DJIA up 298 on the day as of 12 noon. :)

I could go either way on the "bail-out", and frankly what comes next may be worse. But I had a queasy stomach all day long until I heard it was voted down, and afterwards, I didn't feel so bad, even though I lost about $5K dollars from my 401K/IRA's yesterday as the stock market fell.

So I listened to my stomach, doh!

FWIW, my wife, who worked for B-1 for years in the '90's, thought the "bail-out" was a bad idea. She is pretty intuitive about money matters a lot of the time, too.

Posted by: Don Brouhaha at September 30, 2008 12:13 PM

Don, if I believed that Congress would show some sensible restraint, I might have come down differently on this.

But 35 days before a Presidential election?

What bothers me is that I think we'll end up with a bailout either way, but we've lost any chance at restraining it. We choked on a gnat and may well end up having to swallow something far more 'unpalatable'. But I could always be wrong, and will be more than happy to be proved so. The thing is, if past performance is any indication (remember the big flap over bloggers and the FEC?) this was much ado over nothing and voters will stop paying attention.

Everyone gets their underwear all in a knot and there is a lot of posturing, but then they stop paying attention as usual. And then a lot of things get passed and the eventual price tag ends up being higher than what we originally objected to.

But no one cares, because Dancing with the Stars is on.

Posted by: Cass at September 30, 2008 12:22 PM

I just wish they'd get over the blame-game, the political-posturing, and the finger-pointing. Our "leaders" (said with a snicker) need to get on with finding a solution; whether it's a 70% solution or a 100% solution.

Posted by: lela at September 30, 2008 12:34 PM

That is pretty much where I am, Lela.

My husband had the best quip: "After this, I don't ever want to hear another one of our Congresstwits b**ch about the Iraqi Congress."

Pretty much says it all, doesn't it?

Posted by: Cass at September 30, 2008 12:46 PM

And continuing from the previous thread, it's the blame-game and political posturing that leads me to believe that congress is fundamentally unserious about the whole mess.

Posted by: Yu-Ain Gonnano at September 30, 2008 12:54 PM

I thought that the initial bailout bill was awful, and the bill that came to a vote yesterday only slight less so. But I am a big boy who can take bad tasting medicine if it makes me me feel better.

What ticks me off is that for all of their damned belly-aching about "protecting the taxpayer" this MORONS cost me three times as much yesterday as the bailout would have ever subjected me to. That, folks, is a tax levied and a tax paid without any benefit. Nicely done.

Posted by: spd rdr at September 30, 2008 12:54 PM


here is what i said about pelosi at another site

Vince P I think Pelosi sabotaged the bill on purpose.
of course she did, she is a communist. she wants a socialist command economy where the people cant get in the way of their policies.
the only way to do that is to convince the american public that capitalism is bad, free markets are bad, that it doesnt work, that it causes booms and busts, and so on and so forth.
running the beast into the ground with command economy laws that force unfair deals and trades undermine and destroy the parity in honest dealing.
people not understanding that investments are risks and so they can win OR lose, depending on circumstances and your ability to navigate them. so they think that if a bank sells them a property whose value goes down, they have been cheated by the bank who should have told them. meanwhile, if their property value doubles in 5 years of a 30 year mortgage, they would not consider giving the bank profit sharing since the property is theirs. they would say the bank was crazy for wanting their fair share!
the problem is that no one believes that usefull idiots would actuall sit on the gang plank over shark infested waters and saw away at their connection to the ship dashing themselves into the sea… but thats why they are referred to as useful idiots.. (while the fellow travelers standing on the same plank, hand them the saws and convince them to work faster).
“We shall destroy you from within!” — Nikita Krushchev, during the Kitchen Debate, 1959
“We can’t expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism.” — Nikita Kruschev
“Every collectivist revolution rides in on a Trojan horse of ‘emergency’. It was the tactic of Lenin, Hitler, and Mussolini. In the collectivist sweep over a dozen minor countries of Europe, it was the cry of men striving to get on horseback. And ‘emergency’ became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains.” — Herbert Hoover
how hard is it to understand that their idea of this game is to get you to grant them the steering wheel of your car. they then drive it at high speeds, take turns too fast, alternately pump the break and the gas, shift in reverse while going high speeds forward, and then end up skiddind and slamming into the wall.
they then toss you the key and say… that was a bad economy/car… it should never have let me be free enough to do those things. a good car/economy would never let me go too fast.. or let me reverse it like that.. a good car would force me to slow down ont eh curves, and so on and so forth.
no one ever says: your driving the economy in ways that no economy can be driven.
its a variation of the false purity argument. that if its not perfect, then its cr*p.
they have the EXACT SAME VIEW of the people and the state. socialism and communism are better since communism and socialism would never let their system be capbable of being driven by asswhipes and destroy it!
the islamics have the EXACT SAME VIEW, the west deserves to lose their property because they wont defend it.
all of these things are the same thing… that a surperior system would not only work, but would nto let such “deseases” enter it and have no way to stop them. (sudharto in indonesia did to the communists what they usually do to others when they come to power… he cleaned house, something that our morals were first confounded to avoid our being able to do. like some political aids virus, it disarmed morals with relativism before it created situations that would then create moral dissonance and an inability to handle the situation).
“Gentlemen, comrades, do not be concerned about all you hear about Glasnost and Perestroika and democracy in the coming years. They are primarily for outward consumption. There will be no significant internal changes in the Soviet Union, other than for cosmetic purposes. Our purpose is to disarm the Americans and let them fall asleep.” — Mikhail Gorbachev
i guess we have been asleep… and still are… as we watch pelosi and franks, the people that either caused this ore are egging it on, throw wrenches into the works, and not have our morals in place to say, these people are enemies, not poltiicians.
that they are hiding behind a game, in which their status of office allows them to subvert, and pervert, as well as be traitors, while being protected by our lack of ability to call evil “evil” and our lack of moral direction since we hacve no anchor.
“The threat of environmental crisis will be the ‘international disaster key’ that will unlock the New World Order.” — Mikhail Gorbachev, quoted in “A Special Report: The Wildlands Project Unleashes Its War On Mankind”, by Marilyn Brannan, Associate Editor, Monetary & Economic Review, 1996, p. 5
1996… he gave the signal.. and what years did the dems engage all the breaks at teh same time disengating all the accelerators?
the same time…
if one looked at each 5th column as an army in mental space, that translates to living policy, then you might see the war..
“Destroy the family, you destroy the country.” — V.I. Lenin
the feminists are the 5th column for this…
“A system of licensing and registration is the perfect device to deny gun ownership to the bourgeoisie.” — V.I. Lenin
the anti-gun lobby is the platoons against this.
“We must declare openly what is concealed, namely, the political function of the school…It is to construct communist society.” — V.I. Lenin
and the progressives in school (who started over 20 years before the feminists and created the adults that would don the radical and social destructive hate based ideological position in this 5th column war)
“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.” — V.I. Lenin
pelosi and her ilk are the 5th column at this point…
hows this for pelosia, obama and franks plan?
“…first ascertain exactly the position of the various capitalists, then control them, influence them by restricting or enlarging, facilitating or hindering their credits, and finally they can entirely determine their fate.” — V.I. Lenin
and giving into pelosi
“It would be the greatest mistake, certainly, to think that concessions mean peace. Nothing of the kind. Concessions are nothing but a new form of war.” — V.I. Lenin
and why are all the free states sharing in the collapse with their own property boom busts?
“The aim of socialism is not only to abolish the present division of mankind into smaller states and all-national isolation, not only to bring the nations closer to each other, but also to merge them.” — V.I. Lenin
and how do you get the good men to stand aside and do nothing?
“All that is necessary for the triumph of evil is that good men do nothing.” (Edmund Burke)
easy… demoralize them, marginlize them, make them dislike their society that they sign up with the enemy against it.
how do you do that? well, let the women do it.
“I feel what they feel: man-hating, that volatile admixture of pity, contempt, disgust, envy, alienation, fear, and rage at men. It is hatred not only for the anonymous man who makes sucking noises on the street, not only for the rapist or the judge who acquits him, but for what the Greeks called philo-aphilos, ‘hate in love,’ for the men women share their lives with–husbands, lovers, friends, fathers, brothers, sons, coworkers.” — Judith Levine, Authoress of My Enemy, My love
you kick them out of the family, and you give them no purpose… then you get them thinking why should i defend the women that hate me? go to the mens rights sites, a lot of young men have this false mentality (and the older men are lax to do anything about it because in a way its valid).
so what you are witnessing is a process to sell us social toxin, for the purpose of collapse, which gives them the ability to throw out those that rule by meritocracy, and replace them by those that rule by the power of a gun and the state monopoly on deadly force.
destroy the family, you destroy everything the men defend… you fracture us, and we cant get together to defend ourselves. we have no more reason to… men used to put pin ups to remind them what they are fighting for… imagine how we would have done in wwii if the pinups were later images of germain greer, susan faludi, etc…
would the men fight for women that say they are all rapists, that change the courts to be unfair to them, that make them belittled and destroy them financially. etc….
and even the gay lib movment seeks to make more effeminate men… thes men do not suddenly become real men and defend a way of life.. they tend to become cowering sell outs .. not all of course (not to disparage those that serve!), but those in the population more so than the average guy.
ever hear of softening them up for the slaughter. making them fat, lazy, and unable to defend themselves through weapons, or have the mental fortitide to do so. they would nto survive the camps because they would give up and die..
so yeah… pelosis thing was and is intentional… since the manate of the russians that fellow travelers shoudl target the parties and not swear oaths (that have legal ramifications), and take over parties. since america does not require a person to register for their party and swear that they are party members. in other words, communists should join both parties, and do their leftist goals (dems and rinos)…
this allows them to move us to communism and totalitarian (communi/tarian) state global control, by controllilng both sides of an issue, and confusing the situation as both sides seem to act odd for those that would be on a side.
feminist armies destroy birth, the family and more. they prevent the family from teaching the children. sex education sets parents and children against each other making the state seem like the friend.
gay libs have their goals in destroying marriage and family too, removing heteronormatiy, etc.
and so on and so forth… each are like armies of termites tasked with doing whatever they can without doing so much that we call them out on it.
with that, its only time… and communists serve for life, so they can make plans that are set in their 20s, and keep them in line to today, when they are in their 80s… the same rulers in russia and china were the same ones that were there in wwii!!!
this is how you take down a state with so much military power they think they are invulnerable.
Ethnic conflict stoked by government economic intervention, not globalization
turns out that their helping is following john cleeses rules.
John Cleese - How to Irritate People - Airplane Sketch
the point here is that he explains that you can have free reign to irritate (or hurt) soemone by basically pretending to help or being in a position of power (like a pilot who everyone trusts).
under the guise of helping to stop starvation, we cause it since local farm economy collapses when we give out free food and put the local farmers out of work. then next year they dont or cant grow food, and so we send more.
this has the effect of having americans think that their socialism is great and helpful, while the nasty power people are using it to destroy the food economy, which destroys births, which destroys communisty and self determinatino, which keeps their raw materials out of the market and keeps russia, and other socialist state materials more expensive.
even the desire to save the environment is a thinly veiled means of insuring that socialist and islamist countries are funded with our money as we hace no other choice but to buy from them.
by the way… these people may not knwo that they are fellow travelers. thats the beauty of creating them through educating your enemies children.
they are very sincere in their damaging and wrong beliefs, that they can sell tehm and never get caught as spys, or subversives, or anything.
like pre programmed automatons, they dont have to connect with the body politic to choose the wrong thing… they have been taught the wrong thing is the right thing, and the confusion in the population lets them not discover the validity.
once we stopped policing subversion (when lattimore won against the valid mccarthy), we no longer could stop them from poisoning the pillars of our society.
those who have experience in these political systems have a different view than americans, who are in the same state bella dodd was in before she lived and discovered what she was a part of.

Posted by: artfldgr at September 30, 2008 12:56 PM


Posted by: Don Brouhaha at September 30, 2008 01:02 PM

Well, the dollar is up against the Euro by 2.5%, today. Up 11% for the year.
Demand for dollars is up against most currencies (except the Japanese Yen), US banks hoarding dollars. What could it mean??

Could this be bigger than just home loans? I'm sure the best and the brightest have an explanation for this, Lucy, but there may be a bigger game afoot.

Posted by: Don Brouhaha at September 30, 2008 01:06 PM

I think we have to wait and watch it play out, Don.

If I were some of the really big players, I'd be intervening. I had an idea earlier today. Related thoughts over at Tigerhawk's place :)

Posted by: Cass at September 30, 2008 01:24 PM

Just a side note: Our retirement accounts took a pounding, but I bet the Engineer that the market would rally...and it did. I am almost hoping that the rally continues to the point where a HUGE bailout is unnecessary.

What was my win?

Heh. The Fabric Store, aka 'the sewing room' gets new shelves.

Once again, outstanding blogging.

Posted by: Cricket at September 30, 2008 01:26 PM

Back in the loop after three weeks of catching only bits and pieces of headlines. Some of the International Herald Trib newsbits that stuck were:

"Market Drops 360. Hits Lowest Point In Almost Three Years"

Next day: "Market Climbs 398. Almost Recovers From Yesterday's Loss"

Other items were in a similar vein, but those two stuck: the market had a net *gain* of 38 points over two days and the pundits announced it as a *loss*.

I think I've discovered the solution to the crisis -- teach the media simple arithmetic.

Posted by: BillT at September 30, 2008 01:59 PM

Dr. Cass prescribes beer.

I always prescribe beer though.

Posted by: Cass at September 30, 2008 02:21 PM

After this, I don't ever want to hear another one of our Congresstwits b**ch about the Iraqi Congress.

Heh. I just said more or less the same thing over at Winds of Change.

Well, the dollar is up against the Euro by 2.5%, today. Up 11% for the year.
Demand for dollars is up against most currencies (except the Japanese Yen), US banks hoarding dollars. What could it mean??

Could this be bigger than just home loans? I'm sure the best and the brightest have an explanation for this, Lucy, but there may be a bigger game afoot.

You want my reading on this?

The global economy is collapsing. It's all tied together, and the finance troubles here at home aren't forcing the collapse elsewhere, but tied into a general collapse.

What does that mean?

It means that people looking for a home for their money that is safe are looking at "fundamentals." China, which has enjoyed massive investment because of its growth, ceases to be at all attractive if there is a global recession or depression. Any money invested there will be lost in the chaos of the collapse of its civil society.

Europe has been crowing all week about how this crisis shows that the 'unfettered free market' of America doesn't work, but their banks are also in crisis. Unlike in America, there's no distribution: central planning means that when a mistake is made, it infects the entire system. The collapse there will be worse than here.

Here, the problems have the potential to become very bad, but the floor is higher. If everything falls apart, nevertheless we have a lot of land, sun, water, natural resources, infrastructure, an educated populace, and a frontier-based tradition that knows how to govern itself with little central input.

The reason the dollar is looking good in the middle of this crisis of American finance is that the crisis is worldwide. If you're pondering the worst, "the worst" is a lot worse everywhere else. If we go down, we'll all go down together because of the deep ties between all nations in the global economy; but we won't all go down as far.

Posted by: Grim at September 30, 2008 02:35 PM

Again, for whatever reason I'm not terribly concerned about our 401K. I haven't even looked at it.

We're in that for the long haul. I figure there is no point in getting excited about what I can't change at this point. I made a philosophical decision about what I was going to do in x, y, or z conditions and having done that, decided not to worry over the details unless I was going to get out when the market was down. Personally I didn't think that was either helpful or wise.

People love to (and I'm not saying you're doing this, Cricket) characterize concern as some sort of panic response. I'm not panicked.

I am worried, but about the long term consequences, and about more than the market. I agree with spd - especially for elderly folks, the losses could be really painful. But you never know.

Posted by: Cass at September 30, 2008 02:35 PM

I agree with you, Grim.

I think a lot of people fundamentally underestimated this. Christ though.

I have never wanted so badly to be so wrong in my entire life. That is why I am keeping my mouth shut.

Posted by: Cass at September 30, 2008 02:37 PM

Remember what I said earlier:

Connectivity and complexity.

Posted by: Cass at September 30, 2008 02:38 PM

"Dr. Cass prescribes beer."

"I always prescribe beer though."

Yeah yeah yeah.....and you always use the Mongo-gram delivery company! You may *prescribe* beer, but the potion never reaches the patient!

Posted by: Snarkammando at September 30, 2008 03:04 PM

Well, the delivery is part of the fun :)

Posted by: Cass at September 30, 2008 03:12 PM

That is why I am keeping my mouth shut.

I can tell.

Posted by: spd rdr at September 30, 2008 03:12 PM

Easily enough remedied.

Posted by: Cass at September 30, 2008 03:20 PM

Hmmmm.... I have that familiar feeling that if this blog had a couch I'd be sleeping on it tonight.

Posted by: spd rdr at September 30, 2008 03:57 PM

LMAO. Sounds like the Hostess is as thin skinned as the congressional republicans after a lecture from Madam Pelosi.

Posted by: stash at September 30, 2008 04:14 PM

It's a strange person who finds joy in intentionally needling people who haven't done anything to them, but there seems to be an awful lot of that going around.

If it is thin skinned to wonder why whether it does anyone any good to expend valuable time and energy taking crap from people, then yes, I suppose I am thin skinned.

Posted by: Cass at September 30, 2008 04:24 PM

Remember what I said earlier:

Connectivity and complexity.

the key to autocatalytic events...

[of which central order acts as a magnifying glass!]

Posted by: artfldgr at September 30, 2008 04:49 PM

I don't think anybody is that thin-skinned.

I think yesterday's "meme" was that a few Republicans bolted because Speaker Pelosi "hurt their feelings".
The truth was that Pelosi either was unable or unwilling to 'whip the vote' of her own caucus (see graph above), and when the votes started coming in, some Republicans decided they weren't going to die on that hill for something they didn't believe in and their constituents opposed. Both Republicans and Democrats in "toss-up" districts pretty much voted "no".
In the Ohio delegation, the Republicans voting no were:
Deb Pryce (retiring)
David Hobson (retiring)
Ralph Regula (retiring)
John Boehner (Minority Leader, obligated to vote 'yes')

Democrats voting no:
Marcy Kaptur (Toledo)
Dennis Kucinich (asteroid belt)

Zach Space (D) voted yes (and he might be going down)

Posted by: Don Brouhaha at September 30, 2008 05:14 PM

Oops! That was "Republicans voting YES!"

Those three are all retiring at the end of this congress.

Posted by: Don Brouhaha at September 30, 2008 05:16 PM

Yo, stash! The next time I need a character witness it ain't gonna be you.

Posted by: spd rdr (strange person banuished to the wilderness) at September 30, 2008 06:25 PM

> The polls are not rewarding the Republicans for their stand

OK, this is the behavior I don't grasp.

How is it that there were very loud denunciations for support of this, yet somehow, for actually making that stand, they're getting pilloried?

Someone has to be f***ing with the numbers. It makes no sense of any kind.

If numbers on Congress were going down evenly, that I could see, as a result of general disgust with Congress as a whole -- but blaming the GOP alone, for doing what, apparently, a hell of a lot of voters were speaking in favor of, just makes no sense of any kind.

Posted by: Obloodyhell at September 30, 2008 06:47 PM

You have not been banished to anywhere, spd.

I took what you said on board, that's all. It has been pretty obvious since this morning that I shouldn't have started posting again. I don't have that much free time and when I spend time on a post and then spend most of the day batting down snide remarks and end up wishing I hadn't bothered it's an indication that it wasn't a good use of my time and energy.

The only reason to do this is if I'm having fun and you all are too. When it starts to tilt too heavily the other way and I'm straining to juggle getting something written in the morning before work and taking care of things around my house that doesn't even end up being all that useful, then something just isn't working out.

That's all.

Posted by: Cass at September 30, 2008 07:11 PM


Posted by: spd rdr at September 30, 2008 07:30 PM

This bailout plan, and the associated discussion, reminds me of forest management discussions. We really have no idea whether the proposed action or inaction will really lead to the long term health of the forest.

We could have a modest floor fire which is healthy in the long run, or we could have a devastating crown fire. If this is a crown fire scenario we need to act, but I would add, after this action we need to let the smaller fires burn. Reduce the fuel load so to speak.

Posted by: Allen at September 30, 2008 07:58 PM

The bail-out or rescue plan is going to happen. The Resolution Trust Fund was twice as bad as the current crisis, in today's dollars, proving that only the full force and majesty of the U.S. government can get us into a mess like this and get us out of it.

Cox, Dodd, Frank, and a slew of lesser throw downs need to be forced to resign. Several, if not all of them, should do time. Pelosi and Reid need to be voted out at the first opportunity. Those that voted for these miserable pols succombed to the siren call of earmarks and political gamesmanship and brought this situation on themselves and the rest of us.

Like the cowards they are, they bring out the mirrors and shine the bright light of accountability away from themselves and on the political expedient "other guy."

Rescue the bastards, and investigate them like the WorldCom/Enron, etc. thieves they are and let the justice system deal with them after a fair and impartial trial.

This is the reality in the U.S. We need to deal with it, pick up the pieces and move forward.

Posted by: vet66 at September 30, 2008 08:11 PM

I am against the bailout, but for reasons that I won't go into here, but I truly was heartened to see a bit of a gain without expecting a handout. In other words, the free market was working, at least that is what I thought, so the eyeballing of the stocks was more to see what the fluctuations would be.

I am rather simplistic and tend to see things as black and white, when they are not. We have always had a contingency plan in place, and one of the things I remember my parents drumming into our impressionable little skulls was to stay out of debt except for a house; own land that will feed, shelter and clothe you, and make sure you can do something besides shovel cow cr*p for a living.

While I don't think we are there yet, it doesn't hurt to be prepared at a basic level. So, while the pounding we took isn't permanent, I do believe that it will take some time to recover.

Posted by: Cricket at September 30, 2008 09:56 PM

Sooooo, does that mean that I can't pick up my regular prescription of beer here anymore?
(Not that I ever *got* any here in the first place.......and, yanno, it's not like it's hard to find me....come into the room, go to the far corner. I'm the one wearing the purple, pointy hat with a really big feather. I mean seriously, how much more easy could it be? Even for Mongo-gram.....)

Posted by: Snarkammando at September 30, 2008 10:08 PM

Well, it's late and I have a two-bit analysis of some today's happenings and observations.

Dollar up 2.5% against the Euro in one day:

US Federal Treasury notes and bills are still seen as one of the safest 'harbors' , as they have never defaulted and are basically backed by the US Fed Gov and the world's largest economy. The EU has a common currency but not a unified monetary policy. Their interest rates have actually been too high the past six years, resulting in a false sense of "wealth" with too little real growth. Private/public financing of the welfare state has a lot of banks with too little cash to cover their demands; that is, too much lent out, etc. because of LOW growth. High growth also demands capital, but Europe is in more of a "stasis" economy, and has seen over -borrowing to sustain a high standard of living. The difference between them and the US is that the US economy has expanded, and thus can better sustain higher debt amounts. But stupid, unserviceable debt is what is getting us (the US) into deep trouble today.
The US suffers from the "double" deficit. Federal budget deficit and the trade deficit. If we were running a trade "surplus", the Federal deficit would not be worrisome, but we are not. How we get either or both of these back in order again is part of the overall credit problem; too many credit instruments created to sustain or accelerate the movement of dollars through the economic system. The Federal Reserve sorta controls the Money supply (M1, M2 and all those other esoteric M's), but the supply of money is never quite sufficient to create the wealth that some desire, so bad borrowing (CRA and the Freddie and Fannie disaster is part of that) and clever but destructive instruments created (derivatives and hedge funds) to hedge the bet of the known outcome of bad/low collateral loans.

Is 700 billion enough, too much, all wrong?

It actually might be "not enough", and will still require a lot of companies to liquidate some assets (hence the drop in the stock market), but it could be enough to allow MOST banks to get rid of a lot of bad loans and debt, so that there is more trust in inter-bank credit and loans. And that, in the short run, is what will cause the economy to grind to a halt, if there is not some Major Visible Hand Action (as opposed to the invisible hand of the free market) by the Fed Gov to fix the problem.

Major credit sources (Citigroup, Bank of America, JP Morgan-Chase, GE Financial, etc.) that are sound will be reluctant to lend dollars to other banks and investment houses who are holding paper assets of doubtful value (bad collateral).
GE Financial may limit the credit line to McDonalds (billions served!) for just such a reason. Ford, GM and Chrysler have already been cut off. Imagine that.

Most every major and minor business has a revolving credit line that allows them to always have money to pay bills, payroll, etc. If those credit lines freeze up because of a lack of "trust" in the system, then almost all the businesses in America start to spool down to full stop. Try and get that moving again, when the credit stops.

The Fed Gov still has some resources without Congress acting, such as the FDIC. They can force some shotgun marriages between banks (hence WaMu selling out to JP Morgan Chase, and Wachovia to Citigroup), but how much longer can that dance go on?
But some kind of asset swap to restore the cash balance of a lot of banks has got to take place, and soon. They are suffering from to many bad/underperforming assets and too little cash on hand. The underperforming assets are bad collateral, which are unusable to raise cash with the major money center banks, so they need to get the Fed Gov to buy their underperforming assets (and hold them until they are worth something again, someday) in exchange for "cash", so they have something in hand to maintain credit lines with all their customers, etc., and also allow them to do credit exchanges with other banks, which keeps the wheels of commerce moving.

The "bail-out" or "asset swap" has indeed been poorly explained to the public, which rightfully is angry about just how stupid this all seems, and how did all these people in big banks that are so smart do something just so dumb? All together?
The consequences go deeper than how much I (and all of us) lost on IRA and 401K accounts in the last few months, so expect something either profound or stupid (or possibly a combination of both) to happen in the next 10 days. I think we have 'till the middle of October before things really start to unravel in unpredictable and unstoppable ways.

But I could be all wrong about that, too.

Posted by: Don Brouhaha at September 30, 2008 11:31 PM

"I'm the one wearing the purple, pointy hat with a really big feather. I mean seriously, how much more easy could it be? Even for Mongo-gram.....)"

I don't know how rare purple, pointy hats with big feathers are in this crazy world, but...

...the clincher? 0>;~} ...wearing it point-down.

Posted by: socialism_is_error at October 1, 2008 03:00 PM

...and the feather looks a tad peaked, too.

Posted by: BillT at October 1, 2008 03:13 PM

The Thunder Run has linked to this post in the - Web Reconnaissance for 10/01/2008 A short recon of what’s out there that might draw your attention, updated throughout the day...so check back often.

Posted by: David M at October 1, 2008 04:29 PM

"Peaked", eh? :)

You the man, Bill.

Posted by: socialism_is_error at October 1, 2008 05:01 PM

Any time I can beat The Usual Suspects to a multi-level one-liner, I'll go for it.

It's my tragic flaw...

Posted by: BillT at October 1, 2008 05:34 PM

At least yours are amusing.

Posted by: Cass at October 1, 2008 05:46 PM

Points against the bailout:

Notice the big houses aren't even trying to sell bad paper as they did in July and August, they can afford to wait for the bailout. Why? Because they think they'll get better prices from their buddies on the new commission than they'd get in the market, and therefore larger year-end bonuses.

Notice the SEC quietly reversed its position on mark-to-market accounting yesterday and the markets rebounded. Arcane accounting rules are exactly what define "profit" versus "loss" and thereby largely determine stock value. This one change alone might solve the entire liquidity crisis, no bailout necessary.

Notice the first version of the House bill and the Senate version of the bailout were loaded up with the usual pork-barrel earmarks. Doesn't feel much like a world-ending crisis if we're still worried about wooden arrows for children (Sec. 503) and wool research (Sec. 325). As Glenn Reynolds says on Instapundit: "I'll start believing it's a crisis when the people who claim it's a crisis start acting like it's a crisis."

Joe Doakes, Como Park, Saint Paul, Minnesota

Posted by: Joe Doakes at October 1, 2008 05:57 PM

Some excellent points, Joe. I noted the earmark stuff early this morning as well, and couldn't help but wonder how much Barack and John would be squeamishly afeard of some quasi-intelligent reporter asking them to square that with their words (and words and words) on the subject of earmarks at the last debate.

(Not that the media has done a topnotch job on the crisis story or is especially overflowing with quasi-intelligent journalists)

Talk about a bridge to nowhere. Well. That's leadership for you.

Posted by: pogo at October 1, 2008 06:09 PM

At least yours are amusing.

In a coyote-strapped-to-Acme-Rocket-Sled-zipping-over-the-precipice kinda way...

Posted by: BillT at October 2, 2008 03:02 AM

I dunno. BillT's comments have always been the stuff of legend, along with Pile Juan's, spd's and the other knavery.

Posted by: Cricket at October 2, 2008 01:14 PM

I'll agree with the "stuff" part...

Posted by: BillT at October 2, 2008 02:29 PM