Heck, we already have several threads, why not start another..



Gingrich On Why Bailout Plan Is 'Just Wrong' : NPR


One prominent conservative urging Congress to step hard on the brakes in the $700 billion bailout plan is Newt Gingrich, the former speaker of the House of Representatives.

In Sunday's National Review online, Gingrich writes: "Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess."

In a conversation with NPR's Melissa Block, Gingrich says he thinks the bailout plan is "just wrong," and that "it's likely to fail, and it's likely to make the situation worse over time." A transcript of their conversation follows.

This $700 billion bailout plan, this potential 20-year mess that you're talking about, comes from a Republican administration, comes from your own party. What's happened to Republican faith in small government and free markets?

Well, I think you have a Goldman Sachs chief of staff to the president and the Goldman Sachs secretary of the Treasury. And they convinced the president that the American people ought to send $700 billion to Wall Street, which I think is a very, very bad idea, and I would argue is a very un-Republican idea. I don't understand what they think they're doing.

Do you feel betrayed by the Bush administration and by the president?

Well, betrayed is too strong a word. I think what they're doing is just wrong. And I think that it's likely to fail, and it's likely to make the situation worse over time. And I think that [U.S. Treasury] Secretary [Henry] Paulson has shown almost no understanding of how a democracy operates. His initial draft would have given him $700 billion of your tax money with no oversight, no judicial review, no accountability. I mean, we're not a dictatorship.

But the idea, obviously, is that this goes to Congress and that provisions are written in — and that's just what they're doing now.

Are you not reassured by what the debate is in Congress right now?

Well, the last time we were promised they were going to save us, it was $300 billion; it was a housing bill. Now we have brand-new liberal Democrats, many of whom — for example [Connecticut Sen.] Chris Dodd — was the largest single recipient of money from Fannie Mae and Freddie Mac, and he is the chairman of the Banking Committee. So the guy who got the most money is now going to write a bill to give taxpayers' money to the people who gave him money. Somehow, I am not reassured.

But Mr. Gingrich, a lot of the Republicans in Congress seem to be saying this needs to go forward.

Well, I think they're just wrong. I think we need to slow down, take a deep breath, hold public hearings, have experts testify, understand exactly what the agreement would be, where the money would go, how we would account for it. I don't think the taxpayers should be socked for $700 billion for welfare for Wall Street. I think it's fundamentally wrong, and I think that it is very likely to create a bureaucratic control of our financial system in a way that will cripple us for 20 years.

You know, when congressional leaders met on Thursday night with Secretary Paulson and with the Fed chair, Ben Bernanke, the message was dire. You heard Sen. Chris Dodd saying they were told we are maybe days away from a complete meltdown of our financial system. Don't you think that there's an imminent crisis here, that if they were to wait, there could be really drastic results?

To be honest, I don't know. Secretary Paulson has been consistently wrong for a year-and-a-half. He told us for a year-and-a-half this wasn't a dire crisis; this wasn't going to happen. So the very people who told us for a long time not to worry about it are — I know they're panicked. Whether that means that we should be panicked, I'm not sure. And I think the purpose of the Congress, the purpose of the House and Senate, is to be a check and balance on the executive branch, not to automatically write blank checks.

What if you're wrong?

Well, if I'm wrong, then we're going to have a significant problem. And if I'm right, we're going to have a bigger problem. So I think part of the question is, why can't this be done out in an open debate, have an openly marked-up bill, have the American people know what's being asked of them?

I was just reading an analysis by a very sophisticated person who said that there's been at least one leak from a congressional staff briefing by Secretary Paulson, in which he clearly indicated he intended to buy assets at above their market value. And that — why should the taxpayer do that? I mean, why are we not saying, 'We'll provide enough capital to avoid collapse, but we're not going to provide enough capital to guarantee the profits of Wall Street people' — who, after all, last year, at Goldman Sachs alone had three people each earning $73 million a year. Now, why should we bail them out?

What are you saying the incentive would be for, say, Secretary Paulson or Ben Bernanke to be rushing something through if it weren't urgently needed? What would their motivation be for that?

A couple of things — first of all, they're probably genuinely panicked. And I think that's real. I think they're tired; I think they've been consistently wrong, and now they're looking at a precipice that's very frightening. I think, second, that they have a very Wall Street-centric view of the world. And I think that rather than saying, 'What are the big, profound changes we need to fix America?,' they are saying, 'What are the immediate quick fixes for Wall Street?' — which I think, in the long run, just makes us weaker and sicker.

I think, third, they know that if they don't rush it through, it has no hope, because as the American people learn the details, they're just going to scream at their House and Senate members.

I agree with you!

I really need to stop reading as I get madder & maddser about the whole thing..but this is an interesting blog read..

Searching For The Truth: Shameless Cronyism

I tend to agree. Let the chips fall where they may.

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Proud Wife of an Army Soldier and proud mother of an Army MP currently serving in Iraq.


"To any critics who say a woman can't think and work and carry a baby at the same time, I'd just like to escort that Neanderthal back to the cave." - Sarah Palin

A note on Paulson, if you wiki him, nevermind his direct conflict of interest with his Goldman Sachs link, he has also "personally built close relations with China during his career." Given that China is one of the largest at risk of losing money if it colapses, isn't that another conflict? Does this not smell fishy to anyone else? Why is this man given so much weight?

Interesting..a bill was already passed for 500 million for bail out. just months ago..but I don't recall hearing about this one..

OpenMarket.org Archive An Untrustworthy Housing Fund — Housing bill has likely ACORN slush Fund

But the granddaddy of all phony government trust funds may be soon enacted in housing bailout legislation before Congress. The so-called Affordable Housing Trust Fund — part of the legislation that passed the Senate Banking Committee in May and is poised to come to the Senate floor as early as this week — is almost set up from the beginning to be diverted to purposes other than affordable housing. The holes in this “trust fund” would allow the money to be easily siphoned off to liberal activist groups such as Association of Community Organizations for Reform Now (ACORN) for lobbying and even political campaigning.

Long a priority of groups on the Left, the “trust fund” — also called the “affordable housing fund” — would get its revenues from a legislatively fixed share of the surpluses of the government’s Federal Housing Administration or the profits from the government-sponsored enterprises Fannie Mae and Freddie Mac. The latest version — in the housing and GSE oversight bill that cleared the Senate Banking Committee in May — would establish the fund by taking 1.2 basis points of interest from Fannie and Freddie’s loan portfolio — about $500 million a year.

Enacting an off-budget funding entity for housing has long been a goal of Rep. Barney Frank, and since he became chairman of the powerful House Financial Services Comittee when the Democrats took Congress back a year and a half ago, he has inserted several versions of the “trust fund” into many housing bills. “Given our severely constrained fiscal realities,” Frank has argued, there needs to be “a low income housing trust fund that will be paid for in ways that do not draw from federal tax revenues.”

It all stinks! I hope the American taxpayers yell and scream and wave their arms enough about this that this bail out doesn't happen. I was just watching the news and there was a story showing people protesting in the streets here. . .NO BAILOUT! I think we have to get behind that message. Interesting in one of those stories linked above it said that we would hold the notes, but not hold any of the equity. WTF??

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

I'm telling you my blood pressure rises with every new link I find!

So, if we don't do the bail out ( I must have been drinking when this was announced???LOL) what hapepens?


What is the good that would come from a bail out?




BTW, who are we bailing out? I'll pitch in a $100!

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Never grow a wishbone, daughter, where your backbone ought to be!

We're F'd any way we look at it...tidal wave effect., starting with the bank crash I just posted on another thread.

But daggonit, to just write a blank check? No way!! I am so happy for those who have stepped up & stopped the initial negotiations! You all realize that 700 billion figure is more like 2 trillion when all is said & done, right?

Yep. . .and the thing is they are all going to go like dominoes. WaMu just went belly up. . .at least Chase took them over. . .it just keeps getting crazier and crazier!

ETA: On the news they said in the Asian markets right now WaMu is trading for $1.69. . .down from a high of about $36 earlier this year. I am sooooo glad I sold off my WaMu last year!

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

Finally! Gingrich says something I can agree with.

What's the hurry? Why can't they take their time and do it right? Not that I'm sure we need to do anything.

You may have seen this already, but I think it's clever. Someone emailed it to me the other day. And I think it applies to the whole bail-out fiasco.

"Here's the Fix"

I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425, 000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free.
So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.
That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.
A husband and wife have $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage - housing crisis solved.
Repay college loans - what a great boost to new grads
Put away money for college - it'll be there
Save in a bank - create money to loan to entrepreneurs.
Buy a new car - create jobs
Invest in the market - capital drives growth
Pay for your parent's medical insurance - health care improves
Enable Deadbeat Dads to come clean or else.

Remember this is for every adult U S Citizen 18+ including the folks
who lost their jobs at Lehman Brothers and every other company y
that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 economic incentive that is being proposed by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG - liquidate it.
Sell off its parts.
Let American General go back to being American General.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can work.

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion
We Deserve It Dividend more than the geniuses at AIG or in Washington DC .

And remember, The Family plan n only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

I assume part of the hurry is fearing wall street figures..sigh..

But hey, I'm up for a block party too!

The apocalypse apparently.

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We can't stop here this is bat country.....

Before D.C. Gets Our Money, It Owes Us Some Answers
Question One: Is the current financial crisis the only crisis affecting the economy?

Answer: There are actually multiple crises hurting the economy.

There is an immediate crisis of liquidity on Wall Street.

There is a longer time crisis of a bad energy policy transferring $700 billion a year to foreign countries (so foreign sovereign capital funds are now using our energy payments to buy our companies).

There is a longer term crisis of Sarbanes-Oxley (the last "crisis"-inspired congressional disaster) crippling entrepreneurial start ups, driving public companies private, driving smart business people off public boards, and driving offerings from New York to London.

There is a long term crisis of a high corporate tax rate driving business out of the United States.

No solution to the immediate liquidity crisis should further cripple the American economy for the long run. Instead, the liquidity solution should be designed to strengthen the economy for competition in the world market.


Question Two: Is a big bureaucracy solution the only answer?

Answer: There is a non-bureaucratic solution that would stop the liquidity crisis almost overnight and do it using private capital rather than taxpayer money.

Four reform steps will have capital flowing with no government bureaucracy and no taxpayer burden.

First, suspend the mark-to-market rule which is insanely driving companies to unnecessary bankruptcy. If short selling can be suspended on 799 stocks (an arbitrary number and a warning of the rule by bureaucrats which is coming under the Paulson plan), the mark-to-market rule can be suspended for six months and then replaced with a more accurate three year rolling average mark-to-market.

Second, repeal Sarbanes-Oxley. It failed with Freddy Mac. It failed with Fannie Mae. It failed with Bear Stearns. It failed with Lehman Brothers. It failed with AIG. It is crippling our entrepreneurial economy. I spent three days this week in Silicon Valley. Everyone agreed Sarbanes-Oxley was crippling the economy. One firm told me they would bring more than 20 companies public in the next year if the law was repealed. Its Sarbanes-Oxley’s $3 million per startup annual accounting fee that is keeping these companies private.

Third, match our competitors in China and Singapore by going to a zero capital gains tax. Private capital will flood into Wall Street with zero capital gains and it will come at no cost to the taxpayer. Even if you believe in a static analytical model in which lower capital gains taxes mean lower revenues for the Treasury, a zero capital gains tax costs much less than the Paulson plan. And if you believe in a historic model (as I do), a zero capital gains tax would lead to a dramatic increase in federal revenue through a larger, more competitive and more prosperous economy.

Fourth, immediately pass an “all of the above” energy plan designed to bring home $500 billion of the $700 billion a year we are sending overseas. With that much energy income the American economy would boom and government revenues would grow.


Question Three: Will the Paulson plan be implemented with transparency and oversight?

Answer: Implementation of the Paulson plan is going to be a mess. It is going to be a great opportunity for lobbyists and lawyers to make a lot of money. Who are the financial magicians Paulson is going to hire? Are they from Wall Street? If they’re from Wall Street, aren't they the very people we are saving? And doesn’t that mean that we’re using the taxpayers’ money to hire people to save their friends with even more taxpayer money? Won't this inevitably lead to crony capitalism? Who is going to do oversight? How much transparency is there going to be? We still haven't seen the report which led to bailing out Fannie Mae and Freddie Mac. It is "secret". Is our $700 billion going to be spent in "secret" too? In practical terms, will a bill be written in public so people can analyze it? Or will it be written in a closed room by the very people who have been collecting money from the institutions they are now going to use our money to bail out?

Question Four: In two months we will have an election and then there will be a new administration. Is this plan something we want to trust to a post-Paulson Treasury?

Answer: We don’t know who will inherit this plan.

The balance of power on election day will shift to either McCain or Obama. Who will they pick for Treasury Secretary? What will their allies want done? We are about to give the next administration a level of detailed control over big companies on a scale even FDR did not exercise during the Great Depression. Is this really wise?

For these reasons I hope Congress will slow down and have an open debate.

And in the course of that debate, I hope someone will introduce an economic recovery act that makes America a better place to grow jobs. I hope the details will be made public before the vote.

For more details on my action plan for getting the American economy back on track and building long-term economic prosperity, you can read this message recorded yesterday to American Solutions members.

This is a very important week for the integrity of the Congress.

This is a very important week for the future of America.

If Washington wants our money, then it owes us some answers.

I could do a lot with that money!!!

I thought that was 2012?


Oh wait, that is another thread....

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Never grow a wishbone, daughter, where your backbone ought to be!

We must demand that we all become owners of these companies, and that the Government's investment is one that will show a return, not bring us into an even larger hole.

There is a model believe it or not. When Mexico had a currency crisis about 12 years ago, the United States stepped in with several central bank stabilization programs. We not only got paid back quickly, the US Government made a several billion dollar profit off the transaction(s). If we do it right this time, each of us should become partial owners through stock or bonds issued to all of us of any company being bailed out. But this way all of us could benefit when these companies that are temporarily in the down cycle go the other way and turn back into the up cycle.