Ohio senator: Phones 'ringing off the hook' against bailout

A key quote in this morning's Senate hearing about the Paulson bailout is worth repeating. This comes from Ohio Sen. Sherrod Brown, a Democrat:

"Like my colleagues, my phones have been ringing off the hook. The sentiment from Ohioans about this proposal is universally negative."

Not "overwhelmingly negative." Not "deeply suspicious." Not "extremely upset." Universally negative.

I'll state the obvious: Members of Congress aren't generally in the habit of passing historic and spectacularly unpopular legislation five weeks before election day. Republicans in Congress hate this bill, and I'm unconvinced the Democrats in Congress will take a bullet, figuratively, for the most unpopular president since the final days of Nixon. (Trivia: Henry Paulson worked in the Nixon administration.)

Watching the Paulson-Bernanke hearing on CNBC, this struck me as news: the suggestion by Sen. Charles Schumer (D-N.Y.) that instead of granting one giant bailout, Congress might instead break it into smaller pieces, giving the administration permission to begin buying securities, but with an initial budget of far less than $700 billion. In other words, let the Treasury go out and buy $50 billion or so worth of mortgage securities and see how it works before granting the authority to spend a trillion dollars or so.

If you want to contact your representative in Congress, click here for contact information for the entire California delegation.

--Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles

Photo Credit: Sens. Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.) listen to testimony at this morning's hearing, via Getty Images.
 

Comments

[Steve]

These lost sucks do not have a clue. There will be only one solution for these morons and that is to start the printing presses. Inflation will rival the 70s and hard assetts is it is where it is at..

[The Original RZ]

I just read on the Freakonomics blog that a group of 100 economists (and growing) have sent a letter to Congress detailing their concerns with the bailout legislation. Here's the link: http://freakonomics.blogs.nytimes.com/2008/09/23/economists-on-the-bailout/#more-3113

[356man]

Hoover was inept, Bush & Co. are outright crooks and should be dealt with accordingly.

[Nick]

I disagree that this bailout is necessary. For reference, here's some other things I disagreed with historically:

- I disagreed that Fannie and Freddie should be allowed to get into the risky mortgage business to inflate their returns

- I disagreed that Fannie and Freddie should have been nationalized, and through they should have failed

- I felt the FHA had no business insuring subprime loans at low rates with high risk when private banks were not willing to do so

- I disagreed that the Fed needed to absorb $29 billion in losses belonging to Bear Sterns

- I feel DPA is fundamentally bad for any loan directly or indirectly insured by the government with taxpayer money

- I felt all the oversight we have constructed over the years (GSE oversight, SEC, etc.) was completely ineffectual at preventing problems, and should be largely replaced by simple laws preventing abuse, instead of relying on a lack of corruption and political manipulation

I have heard/read nothing to indicate that the bailout is nothing more than socializing private losses in a massive payout program for the financial institutions at taxpayer expense. I'm encouraged that the response is universally negative from the people, as it should be (after all, they are getting no perceptible benefit from this massive payoff initiative). May every politician who supports this program, in any form, be voted out of office and tried for treason against the people of this country.

[jb]

Alex,
You claim that a depression will come if we do not do the bailout. I assume that you will support
1) no high salaries (not just ceo's, but all managers at every level, and no bonuses).

and most important

2) shared future profits returned to the taxpayer

We reject private gains and public losses. You say that public losses are REQUIRED, then so are public gains.

[Gary Noel]

I am still not over the RTC bailout. I think that the responsible ones of that mess should have been whipped publicly. Instead Uncle Billy came in and took care of it. Daddy's boys (remember Niel Bush and Silverado S&L?) were treated as if they had done their best, it really wasn't their fault. As if the failure was some kind of act of god.

Maggie is right. I really don't understand why Paulson has such a reputation. Even if you can get past the stammering, he is hardly more articulate than George Bush. His ideas are vague and not thought through (not just in this hearing but in all of his performances I have watched) and he is totally reactive rather than forward looking. He clearly doesn't like being questioned or challenged and can't seem to understand the questions most of the time. He just doesn't appear that bright. What he seems to count on is his size and intimidation.

Paulson was head of Goldman when it took on it's share of these toxic assets, he told us for months on end that there really wasn't a problem, and the guys on TV seem to think that he is settling old scores when he decides who is going to get bailed out.

Now we are being forced to deal with things in an emergency situation. Once again we are being told by the Bush administration the we have to trust them. That this is too complicated for ordinary citizens to understand. I don't doubt that if we don't do this there will be a huge recession. However I believe that due to our profligate ways and the fact we have financed unsustainable development for decades, (see comments above regarding RTC) we are going to have the depression no matter what. All the bailout is going to do is take the rich off the hook.

[MyLessThanPrimeBeef]

I guess Warren doens't want to be bothered with starting his own bank. That takes too much of his time away from bridge. He just bought $5 billion worth of perpetual preferred stock in Goldman.

[fool me once, shame on you, fool me twice....]

I keep hearing vague sentiments in favor of the bailout such as "inaction MAY cause the financial system to fail" or "no bailout COULD lead to a depression".

If somebdoy is going to be entrusted with $1T of my hard earned I want to hear a little bit more reasoned argument than vague, "wishy washy" opinions.

Paulson and Bernanke's substitution of scaremongering for reasoned argument supported by verifiable facts points to one thing NO TO WAR IN IRAQ (sorry, that was the other great lie, I mean NO TO THE BAILOUT!)

[GDC]

Based on some of these posts, I guess fear mongering still works. Osama will destroy the Western Civilization so we need to spend over $2 trillion to go to war against . . . Iraq. While the regular taxpayer pays for the war, Halliburton and other government contractors get filthy rich.

If these financial institutions are that desperate for capital they should be perfectly willing to give up profits for the next 5 years and forgo six figure bonuses. But that's not anywhere in the plan, is it? How much you wanna bet that my investment banker friend will still end up with a bonus THIS YEAR bigger than the median wage? Wake up dudes. It's Paulson, Bernake and other rich elitists taking care of their Wall Street buddies by instilling fear in the populace.

This is sickening.

[Grandmago]

I am tired of Bush getting the blame for this disaster. This goes back to Fannie Mae/Freddie Mac. In his first term he kept ringing the bell that they were in trouble and it needed to be fixed. The democrats on the committee refused to even let the Repubican bill out of committee.
And guess who has gotten the most money from those companies - Chris Dodd, who is chairing the commitee on this, Barney Frank who chairs another committee & Barrack Obama who scooped up loads in just a couple of years in the senate. Talk about the fox guarding the hen house. Both Dodd & Frank should be bounced off their committees. And they are asking for oversight: translated - covering their butts - and Fox News is just now reporting that the FBI is stepping in to investigate Fannie Mae & Freddie Mc - good!

[GunTrash]

Is there really a place for a government sponsored enterprise in a supposedly free market economy? The government doesn't need to be in the mortgage business. You either can afford a mortgage or you can't and the lenders should be the one who determines who's creditworthy and who's not. The government's only role in the process shold be to ensure the rules are fair and impartial.

Regarding mortgages, you can't afford a home? Okay, fine. Do like me and a lot of others have done. Get an extra job and bank the wages. Also, learn how to live on less and again, bank what you save by being frugal. It's called sacrifice and it won't kill you.

Also, I saw a comment re "Repubs had a President and Congressional majority...." implying that the Repubs called all the shots during that time. Wrong. Because unless you have 60 Senators you don't have a majority. There's this thing called a filibuster and it takes 60 senators to pass a vote for cloture to end a filibuster. So that "Repubs had a majority" doesn't mean a hill of beans in the Senate as it wasn't a majority of 60.

[Henry W]

This is insane!!! There should be no bailout. They (Bush, Paulson, Bernanke, and etc) have known all along that this will happen. How can they not know?

They have known for a long time this would happen and they have not done anything to prevent it. Nothing!!! They have not even try to regulate. This morning Paulson told congress that he was shocked of all the deregulation. What the heck??? They just wish that this would not explode on their watch.

Oh! Lehman still gives out 2.5 BILLIONS to 10,000 of their employees in bonuses. These people have no shame.

No bailout. I know that I will feel the pain of financial collaspe as much as everyone else. Let build from the ground up again.

[Colorado]

I am so surprised that the congress has not appointed a committee yet to "investigate" itself. What a joke that is! Face it, both parties are to blame. President Bush didn't do enough to stop the jackals who caused this. I don't blame Wall Street as much as i do congress. Paulson is not to be trusted, why do they want to get the fix in so fast? Something stinks in River City. Fight this Americans, call your congressmen and put in your two cents. Go to Google & put in Congress and you will get phone numbers. I called yesterday, today and tomorrow. We need to let those jerks know what we think of this situation. The future of our kids and grandkids is at stake here.

Colorado

[AngryYouth]

I think this is all about retirement security and as someone in my late 20's who has worked "full time" as a contractor with a 1099 going on four years for the same company what can I say I don't care if the older generations have a good retirement. Really why should I pay for the baby boomer generation's retirement? I've seen the "business ethics". Half my IT department is on a visa. Meanwhile guess who we are giving nuclear technologies to?

Let the economy crash at least that should take care of the illegal immigration problem. My back is good and my legs work so bring it on.

[Kate]

For starters...we as a people pretty much have believed that our government tells us the truth. That was in the old days. Don't blame George Bush for all this mess. Let's go back and start with Jimmy Carter, Bill Clinton and then George Bush. And then try reading the NY Times for September 11, 2004 and see how two of the Democrats who are squealing the loudest right now for reform were the very ones who stopped legislation put forth by George Bush and supported by John McCain to put regulations on Fannie May and Freddie Mac."NO", cried Sen Frank "the little people couldn't get a home".

These are investment banks they are not our commercial banks. We should do everything to protect our commercial banks. But, best I can tell Wall Street started playing with money like they were in a monopoly game and now we the taxpayers who have been working our entire lives should bail them out? Get real. Paulson is trying to save his buddies at Goldman Sachs. Many of us have suffered finanical losses in our lifetimes. Did the federal government come to our aid and bail us out. No! We need to start demanding integrity and stop letting the media scare us into allowing our government to put leglislation on our backs when the people who are responsible for this should bear that burden. It is time for "We the people" to stand up. Contact your congressman now. We need to know exactly who, what, when and where this was allowed to happen and by whom. As American citizens and the funding source for the U.S. Government we need answers and now.

[Silverfern]

Here's an article on the deregulation of the financial industry under "Clinton and the Republicans".

http://www.wsws.org/articles/1999/nov1999/
bank-n01_prn.shtml

[Mucker]

Valerius. Who is this we? The we that is going to punish the guilty later? You know when I hear that phrase I hear a lie. There will be no later.

You keep knocking Democrats. If it's ever been partisan this is it. Yes we need to fix the crises but giving Paulson unlimited control is not it. Bailing out banks on the claim that housing will recover is not it. Oversight, regulation and return to fundamentals is it - in home lending and in investment banking. The rest is lies.

[NoMoreMortgagePayments]

In protest, I think October 1st should be National Don't Pay Your Mortgage day. I intend to NOT pay my mortgage on October 1st. If all mortgage holders in America did this, do you think we might send a message to King Paulson?

[Seethruthe BS]

"Nice try, Ward.
Who is "we"? Are you referring to the republican congress that was in power under the republican president at that time?

Posted by: BetterAmerica-in-2008 | September 23, 2008 at 01:28 PM "

This mess didn't get started until the DEMOCRAT controlled Congress we have now was elected. Before that, everything was good.

[PacificGatePost]

THE PANIC TRAIN ROLLS ON

PANIC IS BEING INSTILLED IN THE PUBLIC MIND

CATASTROPHE? THIS IS NO TIME TO PANIC

http://pacificgatepost.blogspot.com/2008/09/
road-to-panick-get-off.html

This is a crisis, but not a disaster that should strain thinking toward the abandonment of common sense. America is still America.