Senate loves the bailout, 74-25

It was fluffed up to 451 pages, sweetened with tax cuts and smeared with lipstick, but the bailout the Senate passed tonight was, at its core, essentially the same approach to the financial crisis that House Minority Leader John Boehner aptly called a "crap sandwich."  A crap sandwich with special condiments.

Links and headlines:

The Los Angeles Times:

With both presidential candidates returning to the Capitol to lend support, the Senate voted reluctantly but solidly in favor of a modified $700-billion Wall Street rescue plan tonight. But it remained uncertain whether the legislation, even with a carefully designed package of tax breaks, would be able to withstand the fierce crosswinds of liberal and conservative resistance in the House later this week.

The New York Times:

The Senate strongly endorsed the $700 billion economic bailout plan on Wednesday, leaving backers optimistic that the easy approval, coupled with an array of popular additions, would lead to House acceptance by Friday and end the legislative uncertainty that has rocked the markets.

--Peter Viles

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

Photo Credit: Getty Images

Comments

[upthecreek]

BOOM BOOM OUT GO THE LIGHTS.

[Senate Corporate Schill]

Feinstein and Boxer are absolute garbage for voting for this. Time to vote these jerks out of office when their up for election.

It is obvious that these idiots don't represent the people of California, but Wall Street lobbyists.

Thanks for rolling over again!

[Crash and Burn]

Thanks everyone for waking up to realize that our leaders are beholden to big business and the financial Oligarchy. But I would urge everyone to be a bit more strategic and surgical in voting for change. We need to look for the people who actually have ideas on how to set up alternatives to “let the market run itself” principles and not those beholden to the super-rich and big business oligarchy. We need to look out for those (incumbent and challengers a like) who are going to keep the crooked system going. We need people who are going to be working to do the right thing even when everyone is not paying attention (i.e. the usual status of things).

Look out for people who claim that making corporations not have to pay their share of taxes (or as they call it, “tax relief” that goes to big business) by opening up tax loopholes is critical to the strength of the economy. This is complete BS and is a give away to their buddies in big business in return for campaign cash and just increases executive compensation and maybe trickles down to profits in Wall Street with no economic benefit to the economy. Look out for those who say cutting capital gains taxes is the best way to help the economy and not payroll taxes for middle class, because capital gains profits are hoarded into fat bank accounts and hedge funds (who are probably all now in foreign markets), where the middle class actually puts it money back into the economy by being spent or invested in the US stock market. Look for people who say we shouldn’t rescind tax breaks to oil companies because they now need the money to look for new oil because obviously “we the people” aren’t paying enough of our own money for the oil company’s to actually have to work for their profits (just think about this the next time you buy gas and look at the total, now think of your taxes that are going out of your wallet to “tax rebates” for oil companies). Look out for those that say Big Oil needs big government pay outs so that we don’t have to get oil from the Middle East when they know at best 1 to 2 % increases can be made in the US (actually big oil makes little money in buying high from the Middle East and selling high in the US, but huge profits for drilling for low prices on public land, making sure the US taxpayer instead of getting a benefit from having their oil sucked out of their land actually has to pay a subsidy for having the honor of big oil companies suck it out and sell it at incredible profits). Look out for those who think your tax dollars should go to big business in “tax relief” instead of going to back to you in terms of building new highways, bridges, healthcare, and middle class tax rebates where the money invested goes directly back to the American worker (construction workers, more efficient transportation to the middle class, nurses, health care you can count on (even when you are sick)) instead of golden parachutes. Look out for those who state that foreign trade is all roses and that paying the Chinese government to make widgets and shipping them to the US actually makes jobs, instead of pointing out that we actually need to have jobs in America that make things instead of voodoo financial instruments and new ways to market Chinese junk products. These are all the signs and code words for being in bed with big business. These are the people who set up this system, and who made the system so inextricably linked to the economy, that a failure of Wall Street, really would affect the US economy. Its time to start voting for people who are furthest away from these big businesses principles to really make effective change. Its perfectly natural to be completely pissed off and frustrated with the current situation, but realize, it was a long time coming and this is just the *^*$% hitting the fan. The crooks that have orchestrating this have been cooking the pot for a long time.

When you go to vote, ask yourself which candidate is least beholden to big business (not exactly something to get excited about, but it is the most practical and effective coarse of action). This is how real change can be made. It may be incremental, it may take a while, but throwing one incumbent beholden to Wall Street to a new face beholden by big oil (or vice versa) isn’t going to change anything.

[Rational Renter]

Futures market is plummeting for tomorrow. This was an incredible waste of money; it won't stop a thing.

[arroyogrande]

Naked Capitalism has a new post, mostly authored by "FairEconomist", with an interesting twist on the possible unintended consequences of the TARP/No Banker Left Behind bill:

http://www.nakedcapitalism.com/2008/10/
more-discussion-of-why-bailout-bill.html

"...When Paulson dumps out his 700 billion in treasuries it's going to be at the short end. That will drive up rates for short-term treasuries. This will obviously draw even *more* deposits into the treasury MMs. That means even less in the commercial MMs and thus less working credit, the eventual commercial MM product. Hence Paulson's billions remove working capital by competing for the deposits that could get used to make working capital loans. That 700 billion is going to go to fairly long-term mortgage securities. So Paulson's billions divert credit from working capital to long-term mortgages - from where it's most needed to where it's most wasted..."

Will this happen? Who knows. However, it should be mentioned that the effect of this $700B "gift to Wall Street" may actually be the opposite of what is intended.

Always beware The Law of Unintended Consequences...

- arroyogrande

[Roger Ramjet]

How does Uncle Sam get this money? Easy! More borrowing from around the world and he'll print up what he is short. It is Monoply money time! Oh boy.....

[Tim K.]

David Dreier is a liar:

From the AP: "California's David Dreier said Thursday morning that "I hated" the initial version of the bill but that he plans to vote for it this time around."

Oh really David? You VOTED FOR IT. Nice quote there, AP. Makes it sound like he's switching sides when he's clearly NOT.

Oh, and it's finally obvious whom this bailout is for - it's for FOREIGN BANKS. The provision which the Treasury insists on keeping in the bill is that any foreign bank can transfer money into a teeny-tiny office they have in this country and then turn around and sell it to the treasury IMMEDIATELY. This is why foreign governments are lobbying hard on this also - they want the US to bail their banks out too! Why is Paulson caving? Because they are threatening to dump their Treasury notes! If they do this, he fears the dollar will collapse.

Frankly, I think THAT is the financial armageddon Paulson is scared about and he's not saying it. But I think he's wrong. The other countries KNOW they can't dump their notes without also causing damage to themselves. It's an empty threat.

[mike]

what did i say yesterday?????? it would only take one time for them to wear the public down and the bill will pass...

[150 multiple choice questions]

They are all the worst kind of self serving liars. Not one of them said WHY OR HOW THIS BILL WILL HELP, but mentioned constantly how much they didn't like it while they were voting for this crap! It won't help at all, it will hurt. But now these jackals will say how much they did in an election year! Nice work going to the same "experts" who got you here for advice. I wouldn't want any senators to actually think for themselves or strain their advanced brains with 6th grade math so they could figure out that you can't support asset prices.

How did the recent 250 Billion for the exact same purpose work out? Kind of makes you wish an asteroid were headed for DC.

[MyLessThanPrimeBeef]

And now, let's go to Captain Renult in Casablanca for his reaction:

Capt. R: 'I was shocked, shocked to find Ms. Feinstein naked in bed, not with her husband, but with Big Business. She claimed she's married to "it," so everything, according to her, was OK.'

There you have it, ladies and gentelmen, a potentially profitable bigamy case for a young, ambitious district attorney.

[ry]

What this country needs is an enema. Instead, we got a crap sandwich.

[RealSedated]

What happened to McCain and all of his rants about earmarks? I wish he could have actually had a spine and voted no on this senate bill. Reality is, none of the congress has a firm understanding of the actual ramifications of this economic disaster. Even economists around the world are torn. But to use the ending of earmarks as a major campaign promise and then support a bill that includes some of the most inane language ever imagined makes McCain just like everyone else. He could have been a Maverick. He is losing the election because he does not have the guts to stand up for his principles. As a republican, I am very sad.

[sheila]

wow, i never thought i'd say it here, but all the comments are really on point!!

if you don't want the "corporate" candidates, then we HAVE to publicly finance elections and outlaw all lobbying that involves an exchange of anything "of value" (like the $2 million slush fund "foundation" ole Arnie has for luxury travel, financed by corporations with business directly in front of him). NO MONEY IN POLITICS, FROM ELECTIONS ALL THE WAY THROUGH is the only answer.

screw Scalia (on everything) but especially on his insistence that bribing our government is a protected form of "free speech." we need a return to a one man one vote democracy, a sustainable economic and ecological policy that is not modeled on ever-increasing exploitation (referred to as a "pyramid scheme"), and much more accountability for elected representatives and corporations.

there is plenty of money to go around for everyone to earn a living wage and live comfortably without killing the planet or destroying the lives of other people. the problem is that without a healthy infrastructure, money and power breed more money and power until we end up with Robber Barons (as now) and ecological/economic collapse. both unchecked communism and unchecked capitalism fail to account for GREED, so we need to find a system that uses greed as an incentive to perform, but stops short of allowing it to destroy everything and everyone in its path...

and that's my manifesto on the corporate and government corruption we are seeing, for better or worse.

[cas127]

If the House passes the crap sandwich, my sense is that there will be a very widespread internet effort to terminate every single "Yes" incumbent in November.

With the internet, more citizens then ever know what is happening and can be organized on very short notice.

That is how the crap sandwich was beaten in the House.

It is the height of stupdity and cynicism to think that giveaways will sway the House "No"'s - better that the Senate simply vote the House "No's" lifetime bribes because any "House" flippers (hell, House members voting "Yes" at all) are about to have their professional lives terminated this November.

[CM]

There are so many media stories about how the "credit crisis" is effecting small businesses. This is BS! I heard someone on the radio the other day saying that if the bill doesn't pass that small businesses would go under. Like a plumber that gets a large job and can't borrow money to buy the supplies. Most of industry relies on supplier credit, not bank credit. Do you really think that Home Depot is going to stop offering credit. Please.

[ry]

If it's all about the stock market, why don't today's headlines read, "Stock Market Plunges After Senate Passes Bailout Package"? Linking Monday's stock market drop to the House vote was disingenuous. As usual, the mainstream media are subtly promoting their own corporate interests over the will of the people.

[ry]

To show how the LA Times is beholden to their corporate interests, just take a look at today's Section A, where one can see advertisements from Indy Mac, WaMu, B of A, Wachovia, Union Bank, Bank of the West, and last but not least, a full page ad by some lobbyist organization www.MainStreetNeedsYou.org, who represents among others the National Association of Home Builders, the NAR, and the Real Estate Round Table.

[fred]

A deal may be needed - but not this one - we deserve a lot more for our 700B.

I am a democrat and calling for the removal of Dodd, then locally Feinstein and Boxer (I have voted for them in every previous election). Out they go.

[Maggie Knowles]

Here’s a small list of some of the more annoying tax breaks in the senate bill
* $223M for Alaskan fisherman
* $192M for rum producers in Puerto Rico and the Virgin Islands
* $128M for auto racing
* $33M for companies operating in American Samoa
* $10M for film & TV production
* $6M for producers of wooden arrows

[LA]

Vote for Ron Paul. Write his name in if he's not on your ballot.

Why? Because he tells the truth whether people want to hear it or not. He's the ONLY candidate who saw the economic crisis coming and spoke up about it.

It's time for honest, hard-working Americans to stand on our hind legs and vote our conscience.

[Wilson]

Zimbabwe here we come!!!!!!!!!!!!!!!!!!!!!

[fred]

The top 400 people in the country made 700 B last year.

This is where the money is and everyone knows it. Either our politicians get the rich to give it up or we burn this country to the ground.

[JimR]

Democracy has failed when the citizens aren't smart enough to participate meaningfully in their government. All the incumbents will be re-elected. I feel bad for the next generation, we are failing them.

[puckhead]

Per CM

"There are so many media stories about how the "credit crisis" is effecting small businesses. This is BS! I heard someone on the radio the other day saying that if the bill doesn't pass that small businesses would go under. Like a plumber that gets a large job and can't borrow money to buy the supplies. Most of industry relies on supplier credit, not bank credit. Do you really think that Home Depot is going to stop offering credit. Please."

Brilliant observation CM. So where does HD get the money to supply credit to their customers? The National Bank of Home Depot? If HD wants to open a new store or remodel an existing store, where do you think they get the money? You think HD has a gigantic piggy bank behind the lumber section? Look, argue the merits of the bailout plan all you want, but Fed funds rates are 2% while overnight LIBOR rates are +6%. That my friend, is a credit crunch and sticking your head in the sand and saying over and over again, "there is no problem, there is no problem" will not make it go away.

[HandyDan]

HEY, check out the EARMARK in the Senate bill. Look at Section 3 (Definitions), paragraph 9, "B". This was not in the House version. "B" authorizes the Secretary to pay banks for "bad auto loans, bad credit card debt, bad student loans" and other things the Secretary considers necessary. Call everyone you know or ever heard of in Congress and ask them to delete subparagraph "B" of paragraph 9 in Section 3 of the TARP bill (HR 1424).
Senator Dodd's office didn't even know this clause was added! Let everyone know we DO NOT want this giveaway.