I knew the Paulson plan was outrageous in its giveaway to Wall Street. The modifications as worked out by Congress are a huge improvement. On the other hand I recoil instinctively at the thought of having taxpayers bail out private corporations. Yet experts are telling us the whole economy could suffer big time if we don't, and then the taxpayers would be hurt even worse.
At this point, I'm undecided, but I tend to trust Barney Frank and Chris Dodd, even if I don't trust the Republicans.
But it's looking like, here at 9:30pm on Thursday that John McCain may have succeeded in scuttling the deal that seemed close to passing. Yes, I know that a number of Republican House members have been close to revolt. But how many, and what clout? Nancy Pelosi had said she had the votes to pass it.
So, Aviator McCain zooms into town (after a 24 hour detour since he "suspended" his campaign in order to rush to DC to rescue it). He meets privately with House Minority Leader Boehner. They then both go to Bush's White House meeting, at which Boehner says the Republican votes are not there to pass this "bipartisan" bill.
Dodd and Frank are furious with McCain, seeing their hard nonstop work for 6 days go down the tubes to try to save McCain's political life. With George Bush as enabler.
Are we seeing a political fix (or rather un-fix)? Is McCain trying to scuttle the Dodd-Frank deal so he can then pretend to fix it?. After some negotiations with Republicans, maybe a few modifications, will he then claim credit for breaking the "logjam" that didn't exist before he began mucking about?
No, I can't prove any of this. But this sequence of meetings did take place according to multiple news sources today. Am I full of cynicism toward this man whom I used to have some respect for? Sure, and I think he has earned my cynicism and scorn. And this is no way for a president to behave.
Ralph
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If he can get the democrats to align with the administration on this bailout, he can present himself the maverick who is bucking them. He will be the candidate for "change." I think he's reading the public as being against the bailout. So then, he either comes in with a plan of his own or spoils any bailout at all, I'm not sure which.
The thing I have been puzzling over w/r/t the bailout is why $700 billion? People have crunched the numbers and have come up with a likely number for the toxic mortgage papers at about $110B, and to give a comfortable cushion of 3X, then $330B. (see http://www.dailykos.com/storyonly/2008/9/25/73954/8082) So why $700B?
Then, the head of the Congressional Budget Office writes that he suspects that a bailout will uncover that there are a number of companies in trouble, holding much more toxic paper. See http://www.dailykos.com/storyonly/2008/9/25/115925/299/175/610043
Ah! This plot is definitely thickening. Maybe this is what Paulson used to scare the hell out of Congress to get them to treat the bailout as a catastrophe. What next?
I saw one comment from Paulson about the amount, which I understood was that it's primarily geared toward reassuring the markets. That's why he doesn't want it lowered or handed out piecemeal. His first goal is to stabilize the markets.
Others have argued that it's too much or that it's only a drop in the bucket. This vast, ephemeral trading in debt and bad loans is a nightmare house of cards.
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