Osler's Razor

I am completely floored by Paulson's request that he get to spend the money with no oversight.
 

Floored? Then you are not much of a negotiator. Rule 1 - Always ask for more than you are willing to accept.
 

McCain and the desire to postpone The debate.... hum this smells.

Is the man not capable of multi-tasking? Is this because the first debate was suppose to cover foreign security topics and will now cover economics? Is he scared to debate Obama? I understand that Obama is not a great debater. On the other hand, McCain is said to be a Masterdebator. Perhaps he has gone back to Washington to get a stash of little blue pills from Bob Dole.

hum... I smell a ......
 

If I'm being honest, I have to admit I really don't have enough knowledge to decide whether there should be a "bail out" or not. If we accept that between Paulson, Bernake, and Barney Frank (who has apparently been working on patching this boat for months already), among others, there is agreement that some sort of government stimulus package will help the general population -- nationally and globally -- in the long run, then I will support it.

The next question is how: clearly Paulson's "no strings attached" request is absurd. Assuring that the execs don't get much, at all, is essential, though admittedly complicated (where do you draw the line? Who is an "exec"?). I think it was Bill Clinton Monday night who said that the government, if run like a big bank (business) should make some money on this -- lend the money, at a reasonable, but high interest rate, and reap the rewards when things settle. And finally, tying it all to some much greater degree of regulation to ensure that this type of growth assures protection of the lower and middle classes (and the environment, but now I admit I'm getting pushy) seems like a good idea.

This failure is a clear sign, in my mind, of the failure of deregulated neoliberalism, so leaving it to itself will only exacerbate the problems. This is a time for reform.

Re. McCain's debate bail-out, I'm not sure it was a good move politically, but that will only be seen with a little more time. It reveals too much weakness. The only chance is if he can ride into Washington and be seen publicly as brokering the deal that is already close in the works, stealing the thunder of course from the hard-working likes of Barney Frank and many other congresspeople who have been working on this for months, let alone the last week.
 

The bailout...
The concept of no oversight is flat out wrong. No regulatory oversight is what helped perpetuate this mess.

Back in the 1930's an agency was set up to handle the defaulted properties. When it was closed 20 years later the agency had made a profit for the American people.
The fact remains that the bad loans will still exist and need to be dealt with.

I think the investment banks need to isolate and remove the bad loans from the MBS pools. They can return to trading securities with value. The fact is that only 3 to 5% of properties are in foreclosure.

The CDO and CDS issue is another component. I do not have insight to CDO's but CDS trades are SYNTHETIC (fake) and there are ways to find all of the miliions of these trades (isolate them)since an Investment Bank is party to each of these deals and there is an ISDA contract written for each and every trade defining the trade.

With regard to bailing out my neighbors and your neighbors who made bad and many times greedy financial decisions. It pains me to rescue someone with a good job that decided he needed to be better than the next guy. I might suggest that people need to stop keeping up with the Jone's and face up to their own realities. It is OKAY to say no to wants so you can focus on needs.

On the other hand, my husband and I owned and lived in a home in Florida and planned a move to NC (built a new home). We now own 2 homes. We can not sell the home in Tampa,FL because there are 142 foreclosure properties in our zip code alone. The glut of foreclosure properties mean that these homes are selling for 60 cents on the dollar ultimately devaluing our property.

Any type of bailout needs to address the root of the problem ~ the bad loans.
 

Remember, neither Bernanke nor Paulson were part of the original Bush team and neither had any ties to him before their appointments.

If Bush had put people like them and Robert Gates in charge from the beginning, we might have avoided some of the problems of the past 7 and a half years. Even the White House staff seems to be more professional and focused these days because people like Harriet Miers and Alberto Gonzalez are long gone.

Bush and his team do lack credibility though.

Looks like a deal will be cut, which is good. We don't want to do something without oversight, but as I have been saying for days, sitting on our collective hands is not an option...

--And a lot of principled Republicans also oppose this as a bailout for fat cats too. Remember, Obama and the Democrats get more money from Wall Street than McCain and the GOP.
 

Regarding postponing the debates, I think both Obama and McCain should've agreed to suspend their campaigns last weekend, when this started, and should've both gone back to Washington immediately to help work on this. They are still senators, after all. Why did McCain wait until now to ask to suspend the debate? It seems too late for that at this point.
 

This was a cheap political ploy by McCain and nothing else, and I'd be surprised if it works out for him. First, where was this "concern" when the banks were actually collapsing last week? He wasn't actively calling for a bailout then? I agree that the time to do this would have been last week, if it was going to be done at at all.

Second, neither McCain or Obama are on the Senate Finance or Banking Committees, the two committees in the senate that are working on the bailout. As a result, they aren't going to be on the negotiating teams that are crafting the compromise bills. They also aren't in the leadership, so they aren't going to be able to go crash the party. Its not like I'm going to show up the day before a trial that I haven't been involved in the preparation for and then just announce that I'm going to take over the case and save the day.

Third, even if they could crash the party, they haven't been involved in the negotiating process AT ALL. It makes no sense for McCain to just decide that suddenly he can just drop in and save the day when he has had no involvement in the process at all to this point. Progress was continually being made on a bailout over the last few days, it would only be counter-productive to inject presidential politics into this process late in the game.

Fourth, can McCain not multitask? As president he is going to have multiple major issues on his plate at the same time, the fact that he is suspending his campaign indicates to me that he's not up to the challenge. It also indicates that he has little to no faith in Sarah Palin. Why not just let her campaign for a couple of days and he can just show up for the debates? You don't forfeit the game when the starting QB goes down, you put in the back up. We haven't canceled debates during other crises, we should not start now. The whole point of this exercise may be to throw the schedule into chaos so that the VP debate gets canceled.

Sixth, if McCain's presence is so freaking vital, why did he not drop everything and go to DC RIGHT AWAY? He canceled on Letterman last night, but then he turns right around and does another interview with CBS News, and he's doing a speech this morning in New York. Something doesn't smell right here. Also, if one were to say that he doesn't physically have to be there, he can just use the phone, why can't he do that while on the trail or preparing for the debate? I'm sure he could simply take a few minutes and take some calls from senators.

Finally, Obama is right. We need to hear from our leaders and what they think now more than ever, and thats why this debate should go forward.
 

First, I'm against the bailout. From this point forward, every trade that is made on Wall Street, every loan that is made by a bank, and basically every other credit transaction that takes place will take place in a world in which the parties involved can simply say, "you know, if this all goes horribly wrong, at least we know the government will save us." That is a horrible way to do business, and will create more, not less, and longer-term problems than the current "crisis."

What should we do then? I think we need to create a positive environment for the markets to bounce back in. I think lower interest rates, a lower capital gains tax rate, and less (not more) regulation, all of which would create a pro-business environment that would allow markets to bounce back quickly. We need people to start buying homes again, so create an environment where that is encouraged. We need people to invest, so give them incentives to do so.

Instead, we will spend tax dollars to bail out these companies, which will probably lead to tax increases, and we will increase regulations on business while doing nothing to create a positive growth environment. These are the exact same things that made the Great Depression "Great."

Second, as for McCain and the "I'm going back to Washington" fiasco, I'm against Senators actually doing things, like tinkering with financial policy, so I would prefer that he show up and debate.

In fact, I think he ought to show up and the first thing out of his mouth should be, "Senator Obama, assuming regulation is a good idea and a solution to the current crisis, how can anyone trust you to implement those regulations when you are the second largest recepient of donations from Fannie and Freddie, the two financial institutions most responsible for the current situation, the former chairman of Fannie Mae (the man that implemeneted many of the policies designed to encourage teh types of loans that caused this problem) was on your VP search team, and he is still playing a back room role in your campaign?"

It is a long question, but one I would love to hear the answer to.
 

rrl said that from this point forward "basically every other credit transaction that takes place will take place in a world in which the parties involved can simply say, "you know, if this all goes horribly wrong, at least we know the government will save us." That's not true. Big businesses can say that. The middle-class guy trying to get a loan or paying off his mortgage can't. I don't know enough about the bail out to make any sort of intelligent comment on it except that this feels extremely wrong to me.
Furthermore, I believe that McCain's decision not to debate was a cheap political move. What exactly is he going to be doing to help? How is his presence going to save the day?
 

The bailout may "feel wrong" to you, but I bet complete collapse of the financial system would feel worse. If nobody can get a mortgage, borrow for a car, or take any other loan because the banks have stopped lending money in order to conserve cash then it all comes to a grinding halt...We're in this mess because there has been no regulation whatsoever of these markets.
 

The Four Categories:

1. principled Democrats who agree with Prof. Osler

2. principled Republicans who agree with Prof. Osler

3. fatheads who slavishly follow every mindless whim of George W. Bush

4. other

Mark me down for number four. If we are looking for a non-pejorative word for guys like me (just to keep it friendly), I suggest pragmatists.
 

Just to clarify, the principled Democrats don't agree with me (they want a broader bailout, I want none). I'm with the people I described as principled Republicans.

And I do love the word "fathead."
 

I think most Americans will agree that something has to be done, and that something should help everyone, across the board. Bad loans were made by bad banks and greedy people used those loans to buy houses they can't afford. Now the banks are foreclosing on the houses, and selling them for 60 cents on the dollar, as one commenter noted. But is that really helping? Could the person who was foreclosed on now afford the home at the new reduced price? Should we be focusing on a way to keep people in their homes, a way to allow the current homeowners to refinance, if you will at a new/reasonable home price at a reasonable interest rate? It may be to simple, but it seems to me that if we keep people in their homes, paying on their debt, both the homeowner and the lienholder win. Maybe the bank won't earn as much profit from interest as they otherwise would, and maybe the greedy people won't be able to flip their house for a 150% return, but won't everyone be a little better off?
 

Sorry, floored that this request is taken seriously. Not floored that it was proposed.

I am curios to see what people will be hired by the federal government to help distribute the 700+ Billion. If only there was some group of available professionals with strong educational credentials and experience in the financial markets . . . .

gd3
 

ged3 - sign me up for one of those jobs.

Anonymous 4:05
From what I have heard and read, the banks (local home town or those that bought the loans from the mortgage broker (scheisters)) are not always willing party's to the discussions that you suggest. I sounds logical, but it is not happening.
 

First, I'm going to lodge a formal protest at the description of this bailout as socialist. If it were really socialist, what the government would do is walk in to Wall Street, seize assets, nationalize the struggling companies (and a few others, for good measure) and oversee the distribution of assets to stockholders while at the same time absorbing these institutions into itself.

Even I can see why that's not a good idea, and I'm the socialist.

Do we need the bailout? Yeah, probably, or at least some sort of structure to prevent more economic harm. Whether that's a bailout or merely a bolstering of other sectors of the economy, I don't know. I'm tempted to say "let it all collapse" and
"rebuild a better system in its place" but too many good people will suffer for the bad business decisions of the few.

I adamantly oppose letting this happen again, though. We don't need "more" regulation; we need good regulations. Regulation can be minimal as long as it is the right regulation and efficient. The problem is that we've let greed blind business sense, and we think that for-profit, pro-business mindsets are inherently pro-consumer/pro-citizen as well. They're not; a profit literally means that businesses are cutting overhead while increasing income, i.e., getting more money from us while cutting their own costs somewhere.

Eventually, we've got to realize that we need socially responsible businesses. Do they need to be nationalized for this? Absolutely not, and we don't have the regulatory or social apparatus to handle that right now. We don't have the right mindset for a good old fashioned communist revolution in this country, and socialism would be a disaster until we recover from the Bush & Cronies, Inc. mismanagement.

Some smart regulations in the right places, a legal tamping down of greed, and some actual oversight is a start. Federal money to stave off a collapse is one of those necessary evils. But realize that doing this is a band-aid on a cut throat. The old way of doing business, that unsustainable, consume-consume-consume economy, has to go. As resources dwindle and greed rises, the poorest among us hurt, and when the middle class evaporates like it has under Bush, there's nothing to keep up the tottering upper echelons of society.

And while we can always eat the rich, their fatty, paté-infused flesh doesn't seem as appetizing to me.
 

Country First. If it means his political aspirations are ruined, so be it.
 

The debate still in the air. This from a man who was upset with Obama becuase he wouldn't commit to weekly town hall meetings.

We will be watching in Durham to see if you show up tonight!