Super Moderator
Location: essex ma
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the seeds of this were sown by the rise of neoliberalism during the fucking mid-1970s, by its rise to hegemony under ronald reagan, by every institution that has operated as if that ideology was an accurate description of either markets or the world or the relations between them. this enormous turd of a situation is squarely and unavoidable a republican production. clinton-the-centrist was and remains a neoliberal, but not a "fundamentalist" in the way the wacky right economic libertarians might prefer--but maybe--just maybe--we're approaching the moment where those folk will no longer be confused with anything serious.
meanwhile, the 2-page proposal from the administration for the "bailout"---you know, the one that said "you congress will let us do whatever we want"---hasn't passed and probably won't pass for a couple more days because "we can do whatever we want" really isn't much of a plan. there are alternatives---like maybe a bank holiday in the course of which auditors might try to get some realistic idea of what's being maybe taken on---and protection for social solidarity--and a reduction of the explicit obscenity of this in the form of "executive compensation" packages---and these **could** be getting discussed publicly. but instead, it seems that we are now involved in a game of chicken. and as happens in such games:
Quote:
Stocks Fall as Rescue Plan Is Negotiated
By DAVID M. HERSZENHORN
This article was reported by David M. Herszenhorn, Stephen Labaton and Mark Landler, and written by Mr. Herszenhorn.
WASHINGTON — Senate and House Democratic leaders said on Monday that they had reached an agreement on their conditions for approving a $700 billion rescue plan for the financial system, including more oversight of the program and a requirement that the government do more to help troubled borrowers refinance their mortgages.
But even as Congressional Democrats and the administration began to narrow their differences, Democrats are bracing for a battle over efforts to limit the pay of executives whose firms seek help and over whether to grant bankruptcy judges authority to modify the mortgages of borrowers in danger of foreclosure.
Investors were skeptical. Concerns that the bailout plan may not move smoothly through Congress contributed to the anxiety in the markets that pushed the Dow Jones industrial average down more than 372 points and pushed crude oil up more than $16 a barrel.
President Bush on Monday morning urged legislators to resist the temptation to add provisions that, he said, “would undermine the effectiveness of the plan.” Still, Treasury officials indicated a willingness to negotiate.
Within hours, Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, said he had reached a general agreement with the Treasury Department over mortgage aid and Congressional oversight.
But Mr. Bush may find that members of his own party are among the holdouts. Some conservative Republicans criticized the plan, raising the stakes for Treasury Secretary Henry M. Paulson Jr., who has been trying to persuade lawmakers and an increasingly frustrated American public that the rescue package was needed.
Newt Gingrich, the former House speaker, said he expected Republican lawmakers to oppose the plan in increasing numbers. “I think this is going to be a much bigger fight than he expected,” Mr. Gingrich said, referring to President Bush, who called again for swift action on Monday morning. “I think this bill is a long way from done,” Mr. Gingrich added.
Republican leaders who support the administration’s plan warned Democrats on Monday to exercise restraint and not slow the bailout package, even as they prepared for an aggressive internal campaign to rally Republican support.
“When there’s a fire in your kitchen threatening to burn down your home, you don’t want someone stopping the firefighters on the way and demanding they hand out smoke detectors first or lecturing you about the hazards of keeping paint in the basement,” Senator Mitch McConnell of Kentucky, the Republican leader, said in a speech on the Senate floor. “You want them to put out the fire before it burns down your home and everything you’ve saved for your whole life.”
Mr. McConnell added: “The same is true of our current economic situation. We know that there is a serious threat to our economy, and we know that we must take action to try and head off a serious blow to Main Street.”
The Senate Democrats’ proposals includes two bold provisions. One would grant the Treasury "contingent shares" of stock in any financial institution that wants to sell bad debt to the government; the other would grant bankruptcy judges the authority to modify the terms of primary mortgages, a step aimed at helping homeowners at risk of foreclosure.
The bankruptcy provision is staunchly opposed by the banking, lending and securities industries and by many Republicans in Congress, but Democrats insist that it is one of the few mechanisms to provide direct assistance to homeowners caught in the foreclosure crisis.
The contingent shares would give taxpayers an equity stake in companies seeking help through the rescue program, potentially allowing the government not only to recoup however much of the $700 billion it spends on bad debt, but also to profit should the financial firms prosper in years ahead. The legislation would require the value of the contingent shares to equal the value of the assets purchased by the government.
The 44-page Senate proposal, pulled together by Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, would require the Treasury to run the rescue plan through a new "Office of Financial Stability" to be headed by an assistant treasury secretary. It would also establish an "Emergency Oversight Board" to monitor the bailout effort, made up of the Fed Chairman; the chairman of the Federal Deposit Insurance Corporation; the chairman of the Securities and Exchange Commission; and two non-government employees with "financial expertise" in the public and private sectors, one each appointed by the majority and minority leadership in Congress.
In addition, the Senate proposal would require monthly reports to Congress, rather than the biannual reports that would be required under the Bush administration’s proposal.
Amid continuing concerns over the deep global ramifications of the crisis, the finance ministers and central bank governors of the Group of Seven major industrial nations said on Monday that they were maintaining “heightened close cooperation.” In a joint statement, they pledged to take “whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system.”
The ministers and governors welcomed the “extraordinary” actions proposed by American officials to take illiquid assets off bank balance sheets, Reuters reported. But the statement made no other mention of any specific steps to be taken by the group’s member nations.
The Bush administration’s proposal could prove to be the largest government bailout of private industry in the nation’s history. It calls for nearly unfettered powers for the Treasury secretary in managing the bailout.
Though the jittery state of the financial markets put pressure on officials and legislators to move quickly, some lawmakers said they did not want to be rushed into approving extraordinary new powers for the Treasury secretary and the government without full consideration of the consequences.
Both presidential nominees, who face the prospect of inheriting an enormous program, said there had to be more oversight of the Treasury Department than the Bush administration had proposed.
Financial companies were already lobbying to broaden the plan. And the Bush administration did indeed widen the scope by allowing the government to buy out assets other than mortgage-related securities as well as making foreign companies eligible for government assistance.
Banks and traders also braced themselves for another tumultuous week in the markets. But early signs indicate that investors in Asia were reacting positively to the developments in Washington. Meanwhile, top Democrats and Republicans on Capitol Hill said on Sunday that they would act swiftly on the administration’s request, but not without setting their own conditions.
“We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome,” House Speaker Nancy Pelosi said.
Top administration officials and senior lawmakers said that the markets could be devastated if Congress and the administration failed to reach agreement on the plan.
Mr. Paulson said he hoped that the government would recoup much of the cost of buying distressed mortgage-related assets. But he did not rule out that the initial cost of the bailout could rise beyond $700 billion, the limit set in the terse proposal sent by the Treasury to Congress on Saturday.
“That doesn’t mean we’ll go all the way there, or it doesn’t mean it will stop there and we won’t ask for more,” Mr. Paulson said Sunday on the CBS program, “Face the Nation.” “What we need is something that is big enough to get the job done. We’ll ask for what we think is a right amount to give us plenty of flexibility.”
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http://www.nytimes.com/2008/09/23/bu...nted=2&_r=1&hp
there's nowhere near enough discussion about options or implications. the administration is in high panic mode. they need to have panic around them so their panic is amenable to being framed as a coherent response. but why not more a discussion? here are the problems--here are the options---here are the consequences of each---in a democratic society, you'd think this would be routine, since in the end it is the citizens--who are more than taxpayers--the citizens who are supposed to have some power--whose consent this lay with...and it'd calm the fuckwits on what's left of wall street.
but hey, why do that?
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a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear
it make you sick.
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