As with most people, I’ve been outraged by what I’ve been hearing about the financial sector. Let me reiterate that I am not an economist. I also own no stocks, don’t have a retirement fund, and utilize a small, statewide Credit Union, rather than a corporate bank. While I am no expert, I have been making it my business to find out what is going on. I’m not happy. And I don’t want a bail out, I don’t care if people get hurt. The way I see it, we avoid the bail out and everyone suffers today, and for a while, or we offer the bail out, and everyone but the people we bail out suffer, and for a long time. Either way I’m not happy, but I’m less happy about the latter scenario. Fuck people who fuck up for a living. Let me play a callous, working class Marie Antoinette evil twin for a sec and say: let them jump out of windows.
As an aside, if I hear the words Main Street one more time, I will scream. This has nothing to do with Main Street, because Main Street is not invested in the market. Wall Street is, as is Sequoia Avenue in the suburbs, but Main Street is in the city, and we don’t have a lot of brokers down here. Or retirement accounts tied up in hedge funds, for that matter.
So, what did I find, you may ask? Well, As usual, the only man telling the truth, the whole truth, and nothing but the truth is Arthur Silber. I also learned a lot about the Fannie Mae/Freddie Mac Crisis, including:
- One of the problems has been that executives have been artificially inflating their numbers in order to meet bonus thresholds. (Link to a speech John McCain gave in May 2006, when there was a bill under proposal by the Republican congress to address the financial situation and the mortgage crisis. FTR I don’t know much about that bill yet.)
- Freddie Mac and Fannie Mae are into Congress to the tune of nearly 5 million dollars.
- When sorted, the Democrats haul from the two companies is 3/4 of a million dollars higher, almost all accounted for by individual donations from company employees. Yeah, I suspect those employees were the executives, and their friends and family, trying to stave off regulation and reform.
- Apparently, both companies are chock full of former Democrats (including lots of former Clinton officials and former congressional staffers, relatives of congresspersons, etc.), creating a conduit between business and government that K-Streeters could only dream of. The insiderest of insider games.I can’t find the link to this data point now, but I’ll amend this later to include it.
So, if these data points suggest what I think they do (and I could be totally wrong; I’m way out of my comfort zone trying to analyze this stuff), then Democrats have a very good reason to help Freddie and Fannie out, to take control of them to the point that they can protect what comes out.
Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.
God Himself couldn’t have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That’s why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say “No” and go to the country with a stinging indictment of the majority in Congress….
In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while Obama punts.
History has shown us that “inevitable” “emergency” legislation like the Patriot Act or Sarbanes-Oxley is never more popular than on the day it is passed — and this isn’t all that popular to begin with. All the upside comes with voting against it.
That strategy is already in play. (See update below.) It remains to be seen how it will play out, but I suspect that if John McCain is in Washington with his sleeves rolled up and Obama is hitting him from the campaign trail, bullying him into wasting time with a debate, it will hurt Obama, not McCain.
But the real reason Democrats will bail, their own stupidity notwithstanding*, is because they owe it to their masters. Of the top 20 donors in politics today, 9 of them have direct ties to one of the bail outs. 7 of them currently support Democrats more than Republicans, one supports Republicans more than Democrats, and one is equally split.
Yes, that is almost 24 million dollars total to politicians from 9 companies that stand to benefit directly from the bail outs. And we are talking about multiple bail outs now. I’m not inclined to care if McCain is using this for political theater, as long as he and others are successful in stopping it. If they even try they’re on the right side of the issue. No corporate welfare for incompetence. The buck stops here.
Anyway, about that bill that the Republican Congress proposed in 2005 and in 2006. It never even made it to the Senate floor. Why? I don’t know. A lot of people on the right side of the aisle seem to think it had a lot to do with Dodd, and given his own Countrywide problems, and the history of Democratic obfuscation, it could be true, but I could not find an objective source to verify that.
*Yes, I do know that is the third time I’ve linked to that post today. It’s that good.
UPDATE: McCain has gone full monty. Will Obama match him?