Bailout vote FAILS in House

Current Events Economic News
21

I received a reply from one of my senators - it appears to have been written specifically for the House bill failure.

Thank you for expressing your concerns with the problems in the financial sector and proposals to address them. With the House’s rejection of the legislation on Monday, the situation is unsettled.

A lot of Ohioans, including me, are angry at the thought of bailing out people who made a lot of money making bad business decisions that created problems in neighborhoods across Ohio. I agree that we need to avoid rewarding excessive risk taking. These institutions made unwise decisions, and taxpayers should not be expected to simply cover their losses.

On September 20th, Treasury Secretary Paulson sent a proposal to Congress that would have given him almost unfettered authority to spend $700 billion purchasing troubled assets from financial institutions. A few days later, my colleagues on the Banking Committee and I held a hearing at which Secretary Paulson, Federal Reserve Chairman Bernanke, and others testified.

They made a strong case for the need to act quickly to prevent further damage to our economy. The turmoil in the credit markets has the potential to do great damage to a lot of innocent bystanders. I am afraid that if we do not act, the economic instability could affect thousands of American jobs and the savings of countless middle class families.

But Secretary Paulson’s proposal is not the right answer. No Secretary should be given a $700 billion blank check. Taxpayers must be given an opportunity to recover their money, and assurances their tax dollars will not fund lavish pay and golden parachutes. We need strong rules to guard against abuse and we need ensure that Ohio is helped and not just Wall Street.

In the days ahead, we need to focus on containing the damage to middle class families and local businesses as much as possible. In the months ahead, we need to take a hard look at how financial markets are regulated so we never find ourselves in this situation again.

Thank you again for contacting me. I will certainly keep your views in mind as Congress debates how to restore strength to our economy.

Sincerely,

Sherrod Brown

More than anything, it sounds like the only thing saving us from destruction is partisan bickering. Both parties want more regulation - they just can’t agree about what should be done, and none of them want the other party’s changes to succeed. In that case, I don’t know if I should be thanking them.

22

This news story states how short-sellers are long-range thinkers and don’t move the market but rather predict it in the long-run.

But isn’t that the point? They speed up the process Kendall was describing - in fact, it’s their very job to do what needs to be done now.

23

http://us.cnn.com/2008/POLITICS/09/29/miro…lout/index.html

Decent article.

24

http://us.cnn.com/2008/POLITICS/09/29/miro…lout/index.html

Decent article.

DIGG IT! :slight_smile: :stuck_out_tongue: :thumbsup:

25

DIGG IT! :slight_smile: :stuck_out_tongue: :thumbsup:

Interesting article.

Though I wouldn’t start celebrating yet since the politicians will just try for the bailout again with different language in the new bill.

26

Here is a breakdown of the Representative votes.

But I agree with those who are still worried, because they want to vote for it again, and they may pull a fast one on us.

Of course, they are blaming each other, but a lot of Representatives just didn’t want to vote for this Bill on both sides of the House; primarily because they heard from their constituents.

27

Well I just finished e-mailing my brains out to the politicians in my state. My representative voted for the bill, and he’s lucky his website is down or he’d be hearing from me exactly what I think about such a repugnant stance.

28

I’m not sure how short sellers would have saved the plummet, except perhaps that they would have signaled it ahead of time, so it might have been 300 down Friday and 300 down Monday. Unless you are talking about something else.

Short sellers sell high and buy back low to make a profit. The key is that they always have to buy back the shares that they sold. Since the short interest in much of the market was slim-to-none, there were no buyers for the buy-and-hold guys to sell to. If shorting was not banned, there would have been a large amount of shorts covering (buying back shares) today, and they would have tempered the move down. In short, the market was in full sell mode today, with a sparse amount of bids because no shorts were covering. The move down was therefore sharp and quick.

29

Well I just finished e-mailing my brains out to the politicians in my state. My representative voted for the bill

Turns out mine did , too – and he’s a Republican! I have been trying for many hours to get through to http://www.house.gov and finally got through to leave him a message to vote against The Emergency Economic Stabilization Act of 2008 and to reverse the Community Reinvestment Act and to set the markets free so they can operate.

I was able to get onto http://www.senate.gov and was able to leave both of my Senators a message saying the same thing.

If they do this, they do it very much against the American people, and with elections right around the corner, they will be out!

30

My rep voted against the bill too. I think this is the first time I have been happy with him.

As thrilled as I am that the bill failed, I think that it is, most likely, a temporary respite. It didn’t fail by too many votes, and I think if they proposed something slightly smaller it would pass, unfortunately. A lot of the dissent also seems to be caused by the typical partisan argument rather than actual opposition, so I imagine it will eventually get resolved, sadly.

31

I think we have to thank, at least in part, the stupidity of the house leadership in general and Nancy Pelosi in particular. Any number of house Dems stepped up to the mic and basically labelled this bill as a repudiation of Republican ideology–then called for a bipartisan vote. Passing this bill would have been political suicide for Republicans. At least they were smart enough to realize that fact.

32

At this point I have a question. If President Bush’s 700b plan is not the answer despite his attempt to jam it down our collective throats, what if anything should be done? I’ve heard about lowering the capitol gains tax as an option but am unsure what that implies economically.

Eliminating the capital gains tax has the effect of making capital less expensive. This would provide an instant boost to the markets and spur economic activity. The other change I would suggest is a large reduction in the corporate income tax. We already tax corporate earnings twice, and US corporate rates are some of the highest in the world. You could also offer a tax break to homebuyers. This would help to stabilize real estate prices.

I see this morning that all of the politicians on Capitol Hill are scurrying around to come up with another variation on this mess of a bill that they think will pass. It’s stomach churning to watch the likes of Bush, Pelosi and Reid as they attempt to over-regulate and constrain our economy. I hope partisanship comes back with a vengeance and we have more gridlock. Go gridlock! :stuck_out_tongue:

Thomas Sowell has a nice piece on the bailout and the causes of our current problems. It’s worth a read:

http://townhall.com/columnists/ThomasSowel…ailout_politics

33

I see this morning that all of the politicians on Capitol Hill are scurrying around to come up with another variation on this mess of a bill that they think will pass. It’s stomach churning to watch the likes of Bush, Pelosi and Reid as they attempt to over-regulate and constrain our economy. I hope partisanship comes back with a vengeance and we have more gridlock. Go gridlock! :thumbsup:

…and if all else fails, the new President always has the power of an Executive Order at his disposal :slight_smile:

34

I am so annoyed with the way the media is representing this, like the bill failing to pass is some great tragedy. Really they are just so up their own ass in leftist ideology they don’t want to admit that it didn’t pass because people don’t want it to.