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Published Monday, Sept. 22, 2008 | 11 a.m.
Updated Tuesday, Oct. 28, 2008 | 10:15 a.m.
WASHINGTON -- Greetings, Early Liners. On the other end of my cell phone Saturday afternoon was a Las Vegas caller fuming mad about the Bush administration’s $700 bailout of Wall Street.
Apparently, he’s not alone.
Skeptical taxpayers are scrutinizing what experts say is the biggest government interaction in the market since the Great Depression, and finding themselves trapped in a Rumsfeldian-like maze of known unknowns about what this means to our pocketbooks.
Congress is under tremendous pressure this week to quickly pass the bailout plan that would enable the government to scoop up the rotten mortgage-backed securities Wall Street can no longer unload in hopes of keeping the economy from gridlock.
Senate Majority Leader Harry Reid and his counterpart in the House, Speaker Nancy Pelosi, agree broadly that the bailout is needed to prevent the economy from seizing up. Without credit flowing to Wall Street, growth will essentially cease. But they are trying to shoehorn in more direct assistance for Main Street, while also limiting golden parachutes for executives.
Democrats, though, are getting pushback from Republican leaders not to pile too many extras onto the bill.
Here’s this morning’s latest push from Bush as he tries to explain the broader implications of doing nothing and the need for swift action.
We’ll hear more from Reid in just a couple of hours here as he opens the Senate.
On Wednesday, Nevada Rep. Dean Heller will have a front-row seat to the action when the House Financial Services committee takes up the rescue bill.
As if you need anything else besides your bank statement to read this morning, here’s some of the other interesting political reporting from the weekend papers in Nevada:
-- As the fall campaigns get fully underway, the Sun digs deeper into the always interesting race for the Henderson congressional seat with early-life profiles of the candidates.
Check out the back story on Republican Rep. Jon Porter here and challenger Dina Titus here.
Be sure to see the cute little kid photos.
-- The Sun’s David McGrath Schwartz tells us that County Commission Chairman Rory Reid’s trip north was more than just a listening tour: "… but really about Reid’s broadcasting he is serious about a run for governor in 2010. The subtext of his stomp across the state was this: I’m the big dog, and you better think twice about taking me on. Privately, those close to Reid, 46, say he is all in."
--- The R-J says President Bush and Republican presidential candidate John McCain will both be in Nevada on Oct. 2, but nowhere near one another. Not a surprise as the contender is distancing himself from the unpopular incumbent.
-- Schwartz and colleague Sam Skolnik report that we may not see the end of the Goodman name in City Hall when Mayor Oscar Goodman is term-limited out in 2011. The mayor suggests his wife, Carolyn, could fill his shoes. The mayor says he’ll decide by January if he’s going to run for governor. The headline writers ("Hello Mayor! Hello Governor!") had fun with that one.
-- Rep. Shelley Berkley pens an op-ed warning that the nuclear dump lobby is using the pay-raise scandal in the state’s nuclear waste office as a “tool to undermine Nevada’s long-standing opposition to Yucca Mountain.”
-- From the read and weep department: A chart in the Sun shows the year-to-year drop in median price per square foot of residential real state around Las Vegas.
Other interesting reads:
-- The truthfulness of Heller’s first -- and negative -- ad against Democrat Jill Derby, his challenger in the 2nd congressional district race.
-- The AP reported Friday that First Lady Dawn Gibbons wants her husband to pay for private security as part of their divorce proceedings after the governor eliminated government security detail for her and other officials in a cost-cutting move.
-- Schwartz did an interesting takeout here on what Barack Obama’s trips to Elko mean for the Democratic presidential candidate’s chances for extracting votes from the conservative stronghold.
-- Coolican and Mishak hit the streets (and nail salons) with presidential campaign workers over the weekend.
That’s it for now. Check back later for updates.
Wall Street Journal editorial suggests that there is plenty to blame.
1 Corporate greed, giving out bad loans and taking high risk.
2. Individual greed as people seeking mortgages lied about their incomes.
3. Government regulation. Yes, newspapers like the SUN like to forget about government regulation, so here is the problems with our regulation as listed by the WSJ:
http://online.wsj.com/article/SB12220407...
This is a good article on the subject:
http://www.bloomberg.com/apps/news?pid=n...
the wall street journal is known as the bible for the business world, but they never said anything before the end was obvious.
the government is partially to blame for 2 reasons:
-the government allowed loans that helped get the country into the great depression to return (ie, the option arm)
-the government lowered the interest rates so low that in order to make any type of a return, banks were almost forced to do crazy, creative loans.
Why are we so excited about this 700 Billion. We send the same amount of money to Russia and Saudi every year and yet we don't do anything to fix that. Reid's boss, Nancy Pelosi, has now put a drilling ban in the continuing resolution to keep the government running starting Oct 1st because she can't get it passed any other way.
Neiman, you are refering to money for gasoline most of it goes to Mexico and Canada.
And who cares.
American dollars are worthless if they cannot be used to purchase something American at some point in its future.
But if you want to get technical if we want to buy oil from Russia (what little of it we actually get) the company takes American dollars and buys Rubbles. With the Rubbles we buy oil.
The company that sold the Rubbles and got American dollars will use those American dollars (in partnership with someone else perhaps) to buy some other US goods, mostly likely real estate or corporate stocks, or T-bills.
In 2005, here is an article that says: "For well over a year, Congress has been toying with ever tighter regulation of Fannie Mae and Freddie Mac, while studiously avoiding the elephant in the living room--the companies' massive portfolios of mortgages and mortgage-backed securities (MBS)"
"It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''"
The bill that they are talking a about is S.190 which was sponsored by John McCain.
The Democrats killed that bill.
http://www.aei.org/publications/pubID.22...
Dear Congress
Treasury Secretary Paulson is asking you to rush through a $700 billion package because "we're literally maybe days away from a complete meltdown of our financial system".
Paulson states that it must be done quickly and that it is better than the alternatives. Fed Chairman Bernanke agrees.
The first question Congress should ask is how would Paulson or Bernanke know?
It was only a month ago Paulson was reiterating to anyone who would listen how sound our banking system is. The fact of the matter is that neither Paulson nor Bernanke saw this coming, yet now Congress is supposed to trust they now "know" the solution.
Problem Defined
Before one can work out a solution, the first step is to identify the problem. The problem is not a lack of liquidity, it is not a lack of trust, it is not lack of consumer confidence, it is not subprime lending, and in fact the problem is not housing at all.
The problem is consumers and corporations are deep in debt with no way to service that debt.
Attempts to bail out banks and brokers at taxpayer expense will do nothing but add to consumer debt, weaken the US dollar, and literally waste $700+ billion dollars that can and should go to more productive uses.
What Caused The Problem?
The Fed
Congress
Fractional Reserve Lending
The Treasury
The root cause of this problem is the Fed micromanaging interest rates, the Treasury cheerleading every step of the way, and Congressional sponsored spending that went wild. The critical issue that ties everything together is fractional reserve lending allows banks to borrow money (credit really) into existence with insane amounts of leverage.
To top it all off, Greenspan slashed rates to 1% fueling the biggest global housing bubble the world has ever seen. Congress needs to figure out a way to eliminate the Fed.
CONTINUE:
http://globaleconomicanalysis.blogspot.c...
eccitante....good posting
The Democratic Party was born out mistrust of the national banking system. Jackson ran on that message. Today, neither party is anti-national banking.
Almost all of economic booms and bust can be traced to manipulation by the banking system.
Some believe that the boom of the 1920's was an oversupply of banking loans which was followed by over correction of tighting of loans when the banks started to fail in the early 1930's.
A similar pattern can see for the banking panics of 1819, 1893 and 1907.
I am not sure if we can ever get away from corrupt banking. I think it is part of this world. It has always been that way and it will always be that way. Hopefully, in Heaven (if there is such a thing) will not have banks.
I sure that hell will be full of banks.
So what is really scary is that now George Bush, Harry Reid, Nancy Pelosi, Charles Schumer, Chris Dodd, and Barney Franks are negotiating our future this weekend.
Obama has called out (on 9-22) that this effort is under siege from lobbyist.
President elect Barak Obama (backed by Robert Rubin, Jim Johnson, and 300 advisors on Friday morning) has made a point of NOT having on position on the negotiations.
It is important to understand and that Democrats like Bill Clinton, Barak Obama, Jimmy Carter, Harry Reid, Nancy Pelosi, Christopher Dodd, Richard Durbin, Charles Schumer, Patrick Leahy, Charles Rangel, have had done "nothing" with regard to the energy and financial laws in this country over the last 32 years.
But Democrats are not out of touch. They just need to kept ruminate.
By doing nothing and not being involved in the 2000 dot.com meltdown, the start of the housing meltdown of 2006, or the sending of 700 billion petro dollars overseas, Democrats clearly have no bloody fingerprints on anything.
By not having been involved in these energy security and financial laws, for the last 32 years these folk are "issue virgins", and can, with clean slates, come in and tell us what to do.
All week, Obama has carefully just demonized the economy and blamed the GOP for all our problems. Harry Reid and Nancy Pelosi have back him up on the lack of Democratic involvement in these issues for the last 32 years.
Obama has repeated this week that his wealth taxes, oil taxes, investment taxes, and payroll taxes, new spending (including those annual 1000 dollar welfare checks to those 44% not making $200k and that do not now pay taxes), turning oil companies into non-profits, Democratic are nationalizing financial institutions this weekend, nationalizing health care, eliminating foreign trade, peace dividend so we can cut the military, etc. is just the thing to re-invigorate the economy.
Since the Democrats have done nothing, and are not responsible for anything, this will be a great new fresh start.
Jim, that's not an article; it's very clearly labeled at the top "COMMENTARY".
IOW, it's someone's opinion .... just like the WSJ editorial link posted elsewhere on this thread and the post by "eccitante" which is simply someone ELSE'S blog post (yet another COMMENTARY/OPINION).
These are NOT primary sources of information.
You McCain supporters are twisting & spinning. It would be laughable if you weren't so serious about it. BLAME DEMS BLAME DEMS BLAME DEMS WHO HAD NOTHING TO DO WITH THIS.
This is your mantra; ALL of you. It's posted on every thread in four different ways. You all post EXACTLY the same thing ... over and over and over.
And not one of you can post a PRIMARY SOURCE for your information. NOT ONE. The only citations are business blogs and opinion/editorial pages.
Fortunately for you, the forte of your "base" isn't deductive reasoning and they don't realize what you all do to "grab" them. You live and die by the sound byte; the taken-out-of-context quote by your opponent that is regurgitated daily on talk radio, Fox "news", the Internet ... part and parcel of what you all bemoan is the "liberal media". It's repeated ad nauseum until (as you have all shown on these boards) it is believed to be gospel.
The dumbing down of America is near complete. Soon all we'll have are lockstep brownshirts.
Is that what you all want? Yes I suppose it is. How sad.
I've heard the $700 billion works out to $10,000 for every man woman and child in the US and I've heard it works out to $2000. Give us the money let us stimulate the economy. It is insane to give those that caused the problem more money. I say, bring on the depression. Most of us don't have much anyway. We'll survive. Will these fat cats survive? Let them run for cover. Let them find out how violent this society really is. They horde millions while we beg for a buck.