Bush gets his bailout -- what will history say?

So it looks like George W. Bush will get his bailout -- a bill allowing the Treasury Department to buy $700 billion in toxic debt from Wall Street in what could become the largest financial bailout in U.S. history.

Poised to come to the House floor on Monday, the package hammered out by congressional negotiators  late last night is a lot heftier than the three-page power grab that the administration sent to the Hill more than a week ago. As Democrats insisted, the bill, now running at more than 100 pages, includes limits on compensation for executives if their companies seek the help, oversight on the people running the deal, a more aggressive government plan to help individual homeowners from losing their homes and a stake for taxpayers in the profits if the bad mortgages turn around. As Republicans insisted, it requires financial institutions to help pay for bailing out less solvent companies. Of course everything could still collapse again, but insiders were hopeful. "I think we're there," said Treasury Secretary Henry Paulson at a post-midnight press conference flanked by House Speaker Nancy Pelosi (D-San Francisco), Senate Majority Leader Harry Reid (D-Nev.) and other congressional leaders, including Roy Blunt of Missouri, representing the House Republicans who torpedoed the last "looks like we have a deal" package.

If this deal is sealed, what will history say about a president who presided over first one of the largest increases in federal spending and then one of the largest rescues for those who benefited from the spending?

Bush's reputation as a free spender is cemented. As Veronique de Rugy of the conservative American Enterprise Institute calculates, Bush has already authorized more in discretionary spending than any recent president since the free-spending, Great Society's Lyndon Johnson.

As for the financial crisis, widely blamed on bank deregulation approved by both parties and lax supervision during the Bush administration, Ken Duberstein, former White House chief of staff under President Reagan, told CNBC's Ben Feller that the Wall Street mess could come to rival the 9/11 terror attacks as one of the key definers of Bush's presidency.

"This has the potential to move up there in the first tier," said Duberstein, now a Republican strategist. "9/11 is in there. Katrina is in there. The Iraq war. And the financial crisis."

-- Johanna Neuman and Richard Simon

Photo: Lauren Victoria Burke/Associated Press

Comments

[Ron James]

Let's hope that the publicly funded bailout of Wall Street will be remembered every time the proposition of privatizing Social Security raises its head.

[Fred]

$512 Million Reasons to say "no" to the Bailout -- http://www.stopthebailoutgroups.com/512.php

[RD Bowlus]

What better president to create the Endowment for the Arts of Raking-it-in.

[Bob Fanning]

Banking panic of 1907 & 2008.....or; "crisis is the friend of the state"

If the banking panic of 1907 was contrived to pave the way for a contraction of the banking system for the enrichment and consolidation of power of J.P. Morgan & his Jekyll Island cronies then how is it not possible that this one we are living through isn't just as contrived, seeking the same competition crushing goals of 1907 under the guise of "financial system melt down" in 2008 ? http://www.youtube.com:80/watch?v=Wt1Lo-WPDQg&NR=1

Oh, I know that you'll point to radio active GNMA's with speed pools drying up thus forcing CDO swaps to fail or partially fail.
But let's just say I was God of this "crisis"; that R. Christopher Whalen (bank solvency expert) and Janet Tavakoli (structured finance or swaps expert) and I all agree is an appalling abuse of the banking system , the markets and the American taxpayer.
http://us1.institutionalriskanalytics.com/pub/IRAstory.asp?tag=311

http://www.tavakolistructuredfinance.com/TSF8.html
Let's just say ,that if the debasement of the dollar & the precipitous expansion and subsequent precipitous contraction of M3 was all calculated to strip Americans of 60 years of wealth accumulation in a matter of months, in a slight of hand orchestrated by federal politicians and the banking cabal using debt instead of tax increases to steal from America bigger , faster and less noticeably.

Let's say that we could cram down a "bailout" on the lawyer / politicians and their accomplices on Wall Street and in the banking cabal instead of them doing it to us.
How would we trump those who seek to tightly dispense and control credit in central planning by placing it into the hands of the very few? Will our children be forced to swear allegiance to a political party and register in that party before credit is rationed to them in the future?
What if we could use the tax code and credit markets on those that are cramming down the bail out instead of the other way around?

This is an issue of perception. Bankers don't trust bankers right now.
This is not an issue of fully collateralized securities being worthless; they just can't be priced fast enough to suit the over leveraged.
America is being FORCED to believe that there is a crisis by those who created these securities and financially engineered them into losers.
The banking system is frozen because bankers 'perceive' that other bankers are holding toxic debt and that the price, quality and quantity of toxic debt is 'unknowable' , as Rumsfeld used to say.
Lets say that instead of three remaining super banks we instead shoot for 301 million competing small banks known as individual investors..
How would you do that?
You bring all the "toxic" paper into the Treasury Clearing House holding account purchased at a severe discount ; that discount and quality determined by an oversight board / committee with no banking or brokerage industry conflict of interests for reoffering to the public with the intent of spreading the risk and OPPORTUNITY over all 301 million Americans.

How do you do that?
You make the interest and the gains on capital appreciation free of all taxes from any taxing authority in America,ever.
You give those debt securities a feature where they would be exempt from estate taxes.
You make those securities completely judgment proof and out of the reach and off limits from bankruptcy courts and divorce courts.
We can call them No Mas Bonds to celebrate the boxing coward Roberto Duran and the spineless lenders now throwing in the towel, frozen in fear.

Instead of screwing Baby Boomers out of their retirements by first slashing the value of the dollar in half and then slash the value of their largest investment, their homes, by another half......turn the tables on politicians who tax us via issuing debt by screwing them with the most powerful class of debt instrument investment ever re - offered to the American individual;.... a debt instrument that is so bullet proof that no court or tax man could ever touch it and rewards the American taxpayer for stepping up and individually bailing out spineless and greedy actions of corrupt politicians, bureaucrats ,vile profiteers on Wall Street and the banking cabal.

Beat 'em at their own game and keep the debt out of the hands of foreigners ,and retain competition in a nationwide diversified decentralized banking the banking system at the same time .You might be surprised at how the $700 billion price tag will contract if Wall Street and the banking cabal are precluded from participating in the upside of today's questionable securities that become next years' fully collateralized AAA rated performing debt.


Imagine the look on Paulson & Bernake's face when the American taxpayer / individual investor steals Doc Holiday's line in the movie "Tombstone" . Doc Holiday told Johnny Ringo, "I'm your Huckleberry", meaning he would play his game, whatever it was.

Robert T Fanning Jr.MBA
Member Chicago Board of Trade 1981 - 1994
P.O. Box 7 Pray, Montana 59065
Phone 406-333-4121
E-mail: rtfanning@worldnet.att.net

[Web Smith]

As far as Bush goes, history will say that he first created a massive terror campaign to get the country involved in an unnecessary war in order to transfer wealth to the oil and military industrial complex. He then allowed Congress and the Senate to become so involved in private industry that they instigated the largest transfer financial meltdown and transfer of wealth in history. He also created another terror campaign to help this happen.

History will note that the true terrorists, who were already entrenched worldwide and armed with WMD, wore suits and smoked cigars in their private jets.

What people are not realizing is that what is being negotiated here is a loan. The money involved belongs to the privately owned Federal Reserve Bank. Paulson is saying that we have to take out this loan and give it to the banks that have been instigated to cause this problem by the federal government.

The federal government, which was established to protect the human and property rights of American citizens should be asking, how can we borrow this money and use it to benefit the American people and allow the banks to benefit at the same time?

http://ewebsmith.com/bus/taxpayers.html

[Tony]

I knew from the biggining the dems would fold on this issue as always. I'm changing my vote to all Republican to bring the final calapse and get it over with.48 years of the Greatest Generation rule has brought this country to it's knees.

[Melvin markwardt]

Frankly I'm getting tired of everyone blaming Bush for ALL the illls in this fiasco. Last I heard Congress although they saw this problems years ago, they did NOTHING to stop Fanny Mae and other from getting into this hole. Bush probably deserves some small part of the blame but Congress is the Loser in this game.

[Chloe]

What would really help us a lot would be to stop the "economic aid" that we are sending to other countries, especially to those that have no problem in getting in front of a tv camera to put us down (namely, Brazil). There are many, many programs that we can stop for the time being to help our bottom line. Just as a household that has had a money crunch, we have to tighten our belts as a government, and thus need to stop this outpouring of money to other countries until our own economy is secure and healthy. That is one of the very first things to go. I applaud the bill's requirement of the companies that seek aid to NOT give outrageous bonus or severance packages to exiting CEO's of these faling companies. To read of the pay outs to some of these executives is outrageous.
We need to treat our government's finances as if somebody had lost a job in the household.... in essence, we have. We need to stop supporting other countries and support our own!

In voting this year, let's keep in mind that the economy almost always goes south under a Republican president, including the sainted Regan, Papa Bush, and the truly lamentable, feckless Sonny Bosh--maybe it's genetic. Not to mention Hoover. This financial debacle has a long history, but along 911, the Iraq war, the scandalous Patriot Act, and crimes against the Constitution and against humanity, this mess will be forever--and rightly--an integral part of W's legacy.

[BudinOK]

This isn't a financial Rescue Bailout Plan. This is a Financial Sellout Plan for the American Taxpayers.

[Vera]

What will history say? World history will say, "This bailout was the one of the biggest crimes in US History, in the 21st century, perpetrated by the President Bush, the US Government itself and Wall Street Financiers. First 2.3 Trillion dollars go completely missing from the DOD budget announced on 9/10 2001 by Rumsfeld, then 9.11, then the immediate elimination of the Constitution and the Bill of Rights (Patriot Act, written before 9/11), followed by the illegal invasion of Iraq and other countries, marking the beginning of the end of the American Empire.

[pav]

what you mean by " Bush will get his bailout"? It is for you as well as for me, and Dems as well as Reps rally behind the Bush to support it!
your Clinton got what he wanted years ago when he forced Wall Street to give loans to the "underpriviledged" with no restrictions, now it exploded into your face and Bush is saving your ass, so shut up and be happy

[jb]

Republicans can never again comment on government spending.

[Max]

Failed Economic policies of Bush administration on every front drove this nation to bankruptcy, Health care, jobs, economy, Immigration, Worst President in history of this nation EVER.

[Mark]

I've already written both my House and Senate representative notifying them if they vote in favor of this farce, I'll vote against them in their next election. The call for immediate action with no debate of substantive alternatives is a sure sign of a last-minute, administration power play for our wallets, completely ignoring some of the corrections already provided by existing free market and government remedies (Buffet, J.P. Morgan, AIG loan, etc.). The fact that the plan does nothing to address the underlying causes of this fiasco simply underscores the intellectual laziness and simple greed driving American politics.

History will judge Bush harshly, I hope, as the President of no principles who gutted not only our constitution, but also our treasury, all for the benefit of corporate interests.

[Ted]

$700 Billion is nothing compared to this 2.3 Trillion, yes that's Trillion, unaccounted for by the Department of Defense. in September 10, 2001.(the day before 911)
Watch this hearing with Donald Rumsfeld:
http://www.youtube.com/watch?v=_rRqeJcuK-A&feature=related
and this CBS Report:
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml
Where is all of the money going?

[Democrats 08]

Obama and the Democrats are looking out for the American PEOPLE. The reason this bail out agreement wasn't done sooner is because the Dems were in there telling Bush they would not support his bill unless he added protections for the taxpayers so we don't end up saddled with the debt of these banks. Anyone trashing Obama is a stupid fool. The Republicans are corrupt and greedy, you stupid dimwits supporting these Republican criminals are the reason why the rest of this world hates America. You are the problem, you are in the way of progress and America ever being strong, respected, prosperous and healthy again because you obviously have poor values and don't love your country. Your attitude and prejudice is as ugly as the disaster that is the failure, corruption, laughing stock Bush administration. You McCain/Bush supporters have zero credibility, you had your chance and you BLEW IT BIG TIME, so shut up and sit down, you're done. Good riddance Bush!

Obama / Biden

[scootmandubious]

Actually, it was not Bush's bailout, or there would be a blank check with no oversight and ludicrous, exorbitant payments to CEOs. Something had to be done, or the potential damage to our economy (if China and other lender nations started calling in their chips) would have been devastating.

Fortunately, the Dems came prepared to solve, and McCain and the GOP...well, listen to what Frank Rich had to say. He was brilliant.

I have the story, and link, at:
http://scootmandubious.blogspot.com/2008/09/frank-rich-exposes-john-mccain.html

[Jane Quatam]

Is Bush really that unlucky, to have so many terrible things happen while he's at the helm of the Federal Government, or is he incompetent? He has a master in business administration from Harvard, he is a graduate of Yale. Is he stupid, unlucky or has all this been deliberate?

He has run the government in such a way his cronies and the cronies of his cronies, were enriched massively, such as the no-bid contracts in Iraq, at the expense of all others.

This is a deliberate looting of the treasury, by wall street and the old money east coast oligarchy which is strangling this country to death.

Bush may in all liklihood be the last president of the United States, certainly whatever is mutated out of this disastrous economic meltdown, will not be a constitutional government. Bush has failed on his sworn oath to protect the constitution, he has gutted the founding document.

The question is will he step down in January, or will he use his manufactured financial collapse to invoke his executive orders and declare martial law?

[George Dewey]

Anyone who voted for this needs to be immediately tried for treason.

[edabe]

Bush and Cheney have driven our country to near ruin and Harry Reid and Nancy Pelosi were is co-pilots in congress. Bush and Cheney were responsible for the executive branch of the government that failed to follow our constitution, lied and falsely led us to war, and allowed big oil, Enron, and others to rip off hard working Americans. Nancy pelosi and Harry Reid were responsible for the legislative branch that failed to control budgetary spending, stop corruption in the house and senate, and change regulations responsible for this whole financial melt down. These two leaders knew most of the senate and house of representatives were getting paid contributions by Fannie Mae, Freddie Mac, Aig, etc. and they just let it all happen in the name of politics. This is just sad! The congressional banking oversight leader Chistopher Dodd failed to provide proper oversight of the nations banking system, he should step down.

Who is responsible for all the mess the country is in? all of or leaders Bush, Cheney, Harry Reid, and Nancy Pelosi. Public approval rating are very low for both the president and the congress.

It is now time for real change! Harry Reid and Nancy Pelosi should step down from office when the next president takes office. If they do not, we really will not get real change, but just more of the same.

Our national leaders have failed us big time.

[Sandra]

Please - let us not worry about history until George Bush is really out of office and Obama is in.

I get this sinking feeling in my stomach that Bush and the Repubicans may pull some slick October suprise trick to torture us even further after eight years of Bush torture. I will feel relieved once Obama takes the oath of office, then I can comment on how history will judge Bush. (If I had my way, he would be sent to prison, along with Cheney and a few other of his partners in crime).

[Sandra]

Melvin wrote: "Frankly I'm getting tired of everyone blaming Bush for ALL the illls in this fiasco. Last I heard Congress although they saw this problems years ago, they did NOTHING to stop Fanny Mae and other from getting into this hole. Bush probably deserves some small part of the blame but Congress is the Loser in this game."

Oh yes, the blame, blame, blame game like the bomb, bomb, bomb game, like the drill, drill, drill game. Guilt at voting in a totally inept man and then blaming Congress? If it wasn't for Congress, Bush's initial bill would not have had ANY oversight, would have given CEO's full compensation and would have screwed the American people even more than it is already. Congress is a check on the dictatorial power that a president has, and in this case, Bush had to cooperate because he knew the bill would not get passed otherwise.

Personally, I think we should have let the economy tank and see what happens. Perhaps Americans need to be taught a lesson such as paying the price for voting in people that are constantly screwing them. Insanity is doing the same thing over and over expecting different results, and since voters keep voting in the same people, well you figure it out.

I also feel that the people that voted for Bush should be the ones to pay the price, and should be the first to suffer from this fiasco. The buck should stop there.

[DaveT]

G.W. Bush has a knack of pushing the American People into a corner with no way out. He his the great F-up in American History. From the Iraq War, Hurricane Katrina and now this 700 BILLION DOLLAR bailout. First it was a 2 and a half page document sent down from Henry Paulsen. Precisely what the President wanted, just hand over the money, no strings attached. No oversight. Nothing about accountability. And that Paulsen would have complete power. Thankfully, Congress pushed back. Bi-partisan language that puts in assurances, insurance, oversight, the end to the golden-parachutes for the top bankers. None of which was in the initial proposal from Paulsen or Bernake. How stupid does Bush think "we" are? We've all been duped by crooks. Wall street and Pennsylvania Avenue. With Bush and McCain, the Sword of Damocles continues to hang over all our heads.

[DaveT]

We can write our Senators, and Congressmen and vote against this bill. Yes, it is flawed. We as tax-payers cannot and should not be responsible for the mismanagement on Wall Street. But we have no choice. We are indeed between a rock and a hard place. Our pensions are tied to these banks. Small business lending. Lending for homes. The small farmer in Montana trying to buy feed for his livestock. Our entire economy, the global economy is tied into this web. Sure, I'm all for letting Wall Street crumble like walls of Jericho. But there is a chance that we will face a economic meltdown. Perhaps a Depression. So we have this gun pointed at our head yet again. Thanks to George Bush and his administration. Impeachment? Oh, I'm all for it. He has a few more months left to face the music.