Bush on Wall Street meltdown: taxpayers on the line

For the third time this week, President Bush issued a statement on the economy, hoping to stop the meltdown on Wall Street.

The week began with the bailout of insurance giant American International Group and is ending with talks between the White House and Congress over a comprehensive rescue plan to bolster Wall Street that Treasury Secretary Henry Paulson said could cost taxpayers "hundreds of billions" of dollars.

Flanked by Paulson, Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commission Chairman Christopher Cox, Bush acknowledged that the economic crisis will put "a significant amount of taxpayer dollars on the line," but said the risk of doing nothing is greater.

In his statement, Bush said:

This is a pivotal moment for America's economy. Problems that originated in the credit markets -- and first showed up in the area of subprime mortgages -- have spread throughout our financial system. This has led to an erosion of confidence that has frozen many financial transactions, including loans to consumers and to businesses seeking to expand and create jobs. As a result, we must act now to protect our nation's economic health from serious risk.

There will be ample opportunity to debate the origins of this problem. Now is the time to solve it. In our nation's history, there have been moments that require us to come together across party lines to address major challenges. This is such a moment.

Calling for a bipartisan effort -- "this is no time for partisanship," he said --  Bush also defended the Republican philosophy of less government intervention.

"We should intervene only when necessary," he said, adding that at the moment, "government intervention is not only warranted, it is essential."

-- Johanna Neuman

Photo credit: Saul Loeb / AFP

Comments

[Web Smith]

The federal government is supposed to be taking care of its citizens, not banks. It has passed legislation that has allowed banks to rape its citizens and is now on the verge of taking more of the citizens' wealth to give to the ones who have raped them.

The disaster that has been created by the government does call for unprecedented action, but the taxpayers should not be the only ones to suffer. Instead of spending taxpayer money on bailing out the banks, they should be spending taxpayer money to bail out taxpayers and the banks will benefit as a result. They should:

- eliminate all variable rate mortgages and replace them with fixed rate mortgages at reasonable rates of no more than 6%.

- Recalculate the amount that home owners are in default at the new rate.

- Pay that amount to the banks who wish to participate on behalf of the taxpayers.

- Allow taxpayers who have been foreclosed on and who can afford the payments at the new rates to move back into their homes.

- The banks that do not wish to participate do not get paid.

- Forbid credit card interest at loan shark rates and forbid credit card companies from raising interest rates once cardholders have used their cards.

- Force banks to recalculate credit card debts at no more than 12%.

- Roll back legislation that was passed three years ago to allow this to happen.

- The banks that cannot live with the amount of money that they will be recovering, should just be allowed to go under.

- Arrest, imprison, and fine those who spread the rumors, which led to the collapse of financial institutions.

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

[mark]

IT MATTERS (0.00 / 0)
Bush had to admit what a TOTAL Disaster he's been on the Economy, and sounded like Whimpy saying, " I'll gladly pay you Tuesday for a hamburger today."
Bush also doesn't hold the country's purse strings, so he has to go along with the remedies CONGRESS insists upon.
McCain seems to be beligerant squared and playing the Rovian game of trying to win the NEWS cycle with railing against Obama.
Obama is steady today answering questions and reasuring the Market...THAT'S LEADERSHIP.

IT MATTERS that you are in the top of your class in Harvard, not Daddy's alumni beneficiary to get your C+ average into YALE or your Daddy the admiral getting you into West Point when you rank 884th in a class of 890.

[mark]

Accounting for all Cheney/Bush's excesses
I am so grateful this total market meltdown happened before Cheney/Bush could slink out of office. I want EVERY dirty secret of their no bid contracts in Katrina and Iraq where BILLIONS are simply unaccounted for, gone over in painful details.
The next president will have such a HORRENDOUS mess to clean up, it''s a miracle Obama and Biden would even want to step up to tackle this DISASTER. EVERY Senior needs to remember Obama and Biden saw through the danger of privatizing Social Security,and voted against it, or it''d be your personal account GUTTED this week.

[Unbelievable]

It's very important to make sure the rich stay rich and don't lose anything on risky investments. That's called "tinkle down" economics. Because the average man is too ignorant to understand tinkle down economics, some Wall St. executives can explain it to them.

Only 46 days left until November 4th, do you know the Top 50 Swing Voter Demographics in 2008?

#50 - Hockey Moms

#49 - Godless Hollywood Liberals

#48 - Baristas

#47 - People with STDs

#46 - ???

Check out http://swingvoters.wordpress.com

[Paula]

I am so angry about this bail out I guess socialism is only good for corporations not for your average american tax payer i.e. universal healthcare.

[Conrad]

Wall Street Socialists might be an important Swing Voter Demographic in the Presidential Election. But will Wall Street Socialists make the Top 50?

Only 46 days left until November 4th, do you know the Top 50 Swing Voter Demographics in 2008?

#50 - Hockey Moms

#49 - Godless Hollywood Liberals

#48 - Baristas

#47 - People with STDs

#46 - ???

Check out http://swingvoters.wordpress.com

[fran]

I have not rec'd any answers from the FDIC on my questions, particularly regarding comments from the Taxpayer Advocacy office and the FDIC calling a capital loss a "dividend" (please see below), but I want to know how these bail outs affect 10,000 IndyMac depositors whose cash deposits were removed at IndyMac in July? Are they going to be restored and if not, why not?

If the gov't is bailing out subprime mortgages, does it not plan to restore removed "cash"? for accounts that were not subprime borrowers but in fact cash deposits?

So far, the FDIC has said if I expect them to require member banks to alert depositors with any sort of notice, this would require "An Act of Congress" (but apparently removing 50% of my business operating account "excess" does not), and the Taxpayer Advocacy Unit has said that FDIC/IndyMac's calling a capital loss an "advance dividend" is incorrect and will create IRS problems.

If these agencies which were to supervised instiutions did not do their jobs and are now rescuing defaulted mortgage holders, I would like to see rescue for cash deposits taken away with no warning AND a requirement to inform placed out there by the FDIC to its member institutions.

Comments????

[Mr Question]

It's like the only thing that's not messed up is the only thing Congress said no to Bush about.

Social Security

Bush got tax cuts, deregulation, a War thats "off the books"

And we get a total failure of the financial systems and a big bill.

So the big thing McCain has always been for are deregulation, more tax cuts and the War.

Do the damn math.

[Robert NYC]

Why isnt the mainstream media reporting on the september 2 release on opensecrets.com about the top politicians taking money from Fannie and Freddie over the past 19 years?

maybe it is because Obama is number 2 in taking $126,000 in a few short years and voted against McCain's Housing Reform Bill in 2005?

Come on major papers - its all over the internet - why is it not covered in the mainstgream media? This is the smoking gun - Obama - blood up to his elbows.

[Robert NYC]

Mark- you have no idea what you are talking about.

The CRA Act passed in 1977 by Carter and fortified by Clinton in 1995 created this mess more than anything else. Not that you would know.

Google it.. terms... 'clinton', 'carter' and 'cra' you will see

also - go to opensecrets.com - there you can see in a report released on Sep 2, 2008 that Obama took more than $120,000 from Fannie in the last few years alone and that he VOTED AGAINST a bill co-sponsored by McCain in 2005 to reform Fannie and Freddie.

now assuming you can read - want to update your comments?

[Anti Web Smith]

Great! So a bunch of greedy people sell over-priced properties to a bunch of stupid people and now I own these properties... Actually that's not entirely true. I am paying for these properties, but I am seeing some folks on the braintrust here suggesting that the stupid people should move back into the properties. Now that makes perfect sense. I'm moving to Canada.

Later idiots...

[cesar zevallos]

Another 3000 dollars that each US citizen will pay bankers so that they will stop choking the economy. That means less health care, less roads to be fixed, less money to schools and universities, etc.

[ted in pdx]

I am a Republican supporting Obama. I want to know why 'Congressional Leaders' are agreeing to a demand from President Bush to take emergency action behind closed doors. I have entered a protest on my blog at the Obama website:

http://my.barackobama.com/page/community/post/tedthomas/gGgmpC

We are repeating the same mistake we made after 9/11, only this time, it's as if we were hiring Al Qaeda to go find and punish the people who attacked us. This financial crisis was precipitated by years of reckless negligence in oversight of our financial markets, coupled with unrestricted deficit spending by the Bush administration. I do not trust this administration to fix anything, and I do not trust their assertions that waiting longer than 3 days risks worse damage. Why is CNN so willing to accept this and report it as if we should all quietly accept the claims of these people?

As I said in my blog for Senator Obama: if I lived in Washington D.C. I would be out in front of the White House or the Capital holding a protest sign (and I'm 55 years old!). How many times are we going to allow George W. Bush to scam this country?