What is Digg?135 Comments
- Proel, on 09/23/2008, -5/+43And they say that the Republicans are the party of ideas. I'll take this idea over Paulson, thanks.
- DD2CC2U, on 09/23/2008, -8/+34I think they need to let these companies fail. The bail - out is too high of a price to pay by US taxpayers. Let the companies go under then let wall street rebuild on the ruins!
- cramtod, on 09/23/2008, -0/+19"The Republicans are the party that says government doesn't work and then they get elected and prove it. " - P.J. O' Rourke
- dakine01, on 09/22/2008, -6/+23Showdown at high noon at the Capital and the Marshall Dodd team is on the case.
- badqat, on 09/23/2008, -8/+20You mean the same "Marshall" Dodd who is the #1 recipient of Fannie/Freddy cash?
The same "Marshall" Dodd who got a sweet no-interest mortgage from Countrywide?
That guy? - pjr12345, on 09/23/2008, -4/+16Considering that Dodd is the all-time largest recipient of Fannie and Freddie largesse, he is intimately familiar with the corruption. Since he knows how to exploit all the flaws, I suppose he knows how to plug them. Still, I wish someone who actually has the national interest in his heart would take charge of this.
- n00ptic, on 09/23/2008, -7/+18Sure, let the financial sector collapse. We haven't had a depression since the 1930s, and now seems like as a good a time as any. To make it even more fun we'll very likely take down a good chunk of the global economy with us. That sounds like a great idea.
Or... we could try and prevent a global economic collapse. The Dodd plan is good because it doesn't reward bad behavior or place an excessive burden on the tax payer. Maybe we should give that a shot. - mfc5200, on 09/23/2008, -0/+9I agree. It will be tough, but its for the long term good I think. Did you watch the testimony today? Here is basically want Bernanke asked for.
He wants the taxpayers to buy the "toxic assets" of the bank, at the price the banks originally bought them for. Keep in mind that right now they are pretty much worthless because no one wants to buy them. So instead of buying them for 10 cents or 50 cents on the dollar, they want to buy them all at $1 on the dollar. Ridiculous, talk about sticking it to the taxpayer.
Also, they want NO punitive measures for the banks if they commit to this plan. So even though they are getting bailed out, and are responsible for this mess, they don't want any punishment and want to go on afterwords as if nothing happened. They want this $700 billion bailout with no strings attached.
Then he blackmailed us. Stating that if they don't do anything, the economy will go down with them. If thats really true, then these guys have too much power, and serious reforms are needed to make sure NO companies can ever become that important. If the banks go under, the nation goes under? When were the banks supposed to be as important as say our military?
If we bail them out, I say we attach strong punitive measures to those who require a bailout. We want to make sure that the irresponsible companies go under, as a lesson to all companies in the future. - inactive, on 09/23/2008, -14/+23Dodd? You mean part of the reason we're in this mess?
Take your proposals and shove them up your lobbyist kickback ass. As for Reid, the only fighting he does is for legislation that he's been paid to support. - bowens44, on 09/23/2008, -3/+12Who are they? I've never heard the republicans called the party of ideas. For the most part, they're a bunch of lemmings.
- Hercules, on 09/23/2008, -1/+9How about the Hercules' plan? Tell everybody who ***** up -- including the idiots who bought houses they couldn't afford -- and tell them to ***** themselves.
I'll fill you in on the details later :) - SmartfulDodger, on 09/23/2008, -6/+14You do know that the Republicans controlled Congress in 2000, don't you? And you do know that Phil Gramm's legislation is cited as the main cause of this, don't you? And Phil Gramm is one of McCain's economic advisers, isn't he?
But yeah, it must be Dodd and the Democrats who are are fault. - PennFarmer, on 09/23/2008, -5/+12How does government ownership of these companies equal a good idea for those of us who are not sold on Socialism yet? We either have Paulson's method of forced Socialism or we have Dodd's. I fail to see how one or the other actually benefits anyone besides the government (and don't give me any crap about taxpayers being the gov't. I'm talking about Congress here). Let the market sort itself out.
Yes, we will all be burned some, and yes some will be burned badly and some (probably a lot) businesses will not make it. That's the way the real world works. Only then will we have a real feel for where things actually stand and how much they are actually worth. 15% down is all? That's a pipe dream. Let an actual free market reign (which none of us has seen in our lifetimes) and this will sort itself out. - gaqua, on 09/23/2008, -1/+8For the past few decades, it seems that the Republicans were the party of bad ideas, and the Democrats were the party of no ideas.
I didn't make that up, but it's so unfortunately accurate. - NonLeftistDiggr, on 09/23/2008, -6/+13Dodd certainly has experience with his plan, getting special corrupt deals to pay less for a mortgage than the market price. What a hypocrite. Although I should quit complaining, it's nice to see a democrat, a politician, call for accountability with government spending for once.
- dreicher, on 09/23/2008, -2/+9Can someone please draw a line from "not bailing out failing companies" to "depression" for me? I keep hearing the same rhetoric, and, frankly, I don't buy it. If your monetary policy's sole objective is a shell game to mask the truth about our actual financial state it isn't working.
Truly, this "we're going to put in place policies that lead us to the brink of depression so that we can put in place policies to keep us from going into said depression" isn't flying with me any more. Let 'em fail. If there is a market with profit potential, something or someone will step in to fill it. - purzzzell, on 09/23/2008, -2/+9Damn right it's my business. When someone's paid millions to save the company money by laying off thousands of others, some of whom could have been paid with the millions the CEO is getting, it impacts the economy - it reduces disposable income, which means less gets spent, which means other companies have less money to pay employees.
The companies lack of responsibility has a negative impact on the rest of society, and I, being a part of that impacted society, hold them accountable! - gooniegoogooz, on 09/23/2008, -1/+7"It's really none of your business or mine unless you are a shareholder"
Ahhhh, isn't it soon going to be exactly that, OUR BUSINESS? - X86BSD, on 09/23/2008, -0/+6Buried for NO MORE GOD DAMN GOVERNMENT INTERVENTION! Let corrupt bankers, hedge fund managers, and morons that can't balance their budget FAIL!
- whuddafugger, on 09/23/2008, -1/+7I watched part of that senate hearing. Jim Bunning (R-Kentucky) gave Paulson the worst grilling by far. He grilled him about the fact that they're trying to include school loans and credit card debt in the proposed bill and had Paulson stuttering and stammering. Then Bunning snuck in one final jab over the fact that prior to becoming Treasure Secretary, Paulson was CEO of Goldman Sachs. Someone in the audience cheered when Bunning asked the question. Then Bunning grouchily replied, "I don't need any help from the audience. I know how to ask my own questions!"
Funny old man. - zeusthemoose, on 09/23/2008, -3/+8LOLOLOLOL
Republican Mantra: "When in doubt, BLAME CLINTON!" - BESTenemy, on 09/23/2008, -0/+5It's different from Socialism because it promises people nothing in return for their investment. "Proper" socialism, at least, offers an even re-distribution of largess among the populous. Paulson's solution is closer to fascism.
- ClarenceDarrow, on 09/23/2008, -4/+9As long as Chief Executives like Nardelli can take home a half a billion dollars for 4 years work and devalue the company by 50% which comes out of stockholders pockets... and do it legally.... we are all still in trouble.
- TonyG2021, on 09/23/2008, -1/+6I have to say I liked what Senator Shelby had to say at the end of the meeting today. Where the market will dictate who wins and losses and that the pain today might be worth it tomorrow. Let it straighten itself out with no bailout option. Because, yes, if the Fed does buy up the bad assets with the $700 billion it will get us out of this mess (maybe) for the short term, but long term it has the potential of being even more disastrous.
Also, who the hell wants the government OWNING businesses, this writer's nuts. - StupidLiberal, on 09/23/2008, -0/+4Party of having sex with boys
- kimathi, on 09/23/2008, -0/+4He didn't say good ideas. Republicans have had many ideas...invading nations, deregulation, invading privacy, coming up with innovative ways to make themselves even more wealthy at the expense of others...to name a few.
- zeusthemoose, on 09/23/2008, -2/+6Thats true, but why destroy something when you can still fix it through other means? Don't get me wrong here I think that the bailout is absolutely ridiculous. If wall street fails, all the richie riches lose all of their precious money, so instead of letting wall street fail and having the common man suffer, let the government bail it out, and in return for the bailout take away all of the corrupt CEO's money who allowed this mess to happen. If it costs 700 billion to bailout wallstreet, immediately raise the top income tax bracket by 5%, as they are the ones who got us into this mess (I know its a blatent overgeneralization but it has to be paid for somehow).
The real losers in a depression are not the rich, but rather the middle and lower classes. The rich might lose all of their investments, but they always have a nest egg put away and could survive through any depression. If our economy collapses, how are you going to pay for your house when the bank demands you to pay up, how are you going to pay for your car when the bank demands for you to pay up, how are you going to even feed your family?
Government regulation doesn't look like such a bad thing after all. At least its a consolation prize that the ideas of Regan were a lie and looked nice on paper but never works in reality. - BESTenemy, on 09/23/2008, -1/+5 15% markdown? Is he serious? The housing prices have declined 40% off their 2007 peaks in some areas and still there is no sign of bottom. Nobody knows what the properties are worth and throwing a blanket regulation over all the assets amounts to nothing but a blind regulation. Dodd should be using a sniper rifle as oppose to his sawed-off shotgun.
You know what constitutes price discovery? The point where the prices fall to the level people are willing and are able to pay. We are not there yet. 15% markdown? Just let another few months pass and you'll have that markdown through natural depreciation, yet people will still not be buying homes.
Dodd says: "Hold on with the bubble! I think it's about to pop! How about you loosen the string a bit, let a few gusts out and then resume pumping, with plenty of room to spare?"
I think Dodd's solution doesn't go far enough. I think the bankers deserve a big fat zero. The faster the housing values deflate to their actual worth the sooner the crisis will be over. Picking half-way points and nitpicking is not going to solve anything. 15% less of a ripoff just doesn't cut it. It is still a ripoff. - inactive, on 09/23/2008, -2/+6What does Marshal Dodd say about the sweetheart mortgage he got from Countrywide?
http://blogs.courant.com/colin_mcenroe_to_wit/2008 ...
Or the huge contributions he received from Fannea Mae?
I have to laugh that America is looking to Chris Dodd, and Barney Frank for a solution to the crisis. They should be in jail. - lfrankow, on 09/23/2008, -3/+6How is the American economy a free market if the government steps in to regulate it?
Wish I had a senator or rep that I could call whenever I make a poor business decision. - nates, on 09/23/2008, -5/+8Has Harry Reid *ever* had a fight? The dems back down on everything, even at the slightest hint of opposition.
- zeusthemoose, on 09/23/2008, -2/+5The current situation is a case in point of why you are dead wrong. The market is inherently flawed and cannot sort itself out. Greed is that inherent flaw. Every single time a country has become a "actual free market" it has always led to its economic collapse. When you have a truly free market, one without any sort of government interaction, it is driven completely by greed. In fact, that greed is so strong that it grows without limit. It creates these false bubbles that are just waiting to pop, which will in turn take down the rest of the economy with it. At first, when a market becomes completely free, everything works out great. Unprecedented growth. But that growth is unsustainable, and its inherent greed continues driving the market up without control. With government oversight and regulation, it puts a limit on this growth and although it is correct that the market will not grow as fast or as strong as it could without this government oversight, you will be able to avoid situations such as these.
Look at US history alone. What caused the great depression? Unchecked greed. What caused this current economic nightmare? Unchecked greed. What allowed that unchecked greed? A lack of government oversight and regulation. Don't get me wrong, the government is full of greed. However, what sets it apart from the free market is that it is not driven through greed (the best way to word this would be its driven by a different sort of greed than the market).
The best society is not the perfect society, but rather one that is built on checks and double checks. One that has three pillars. We the people, the government of the people, and the markets for the people. Allow any one to grow too powerful and everything will always fall apart. The inherent greed of man assures its own destruction without the greed of the collective to keep him in check. - dreicher, on 09/23/2008, -4/+7Nowhere in the bill (that I read) does it say anything about 15% reduction in current market value. And why exactly is this plan better? A bailout is a bailout no matter how you present it. Stop me if you've heard this one, but "you can put lipstick on a pig, but it's still a pig".
http://www.politico.com/static/PPM41_ayo08b28.html - Buddhaismybuddy, on 09/23/2008, -5/+8Right because Bush had nothing to do with it.
***** moron. - durden0, on 09/23/2008, -0/+3This plan would just put the government in the position of assigning value to something that the private industry is unable to do at this time. How in the world are the people who gave us a 9 trillion dollar debt going to assign value to anything???
Arbitrarily assigning a value to something will not fix the problem, otherwise the private industry would have already done that. How can anyone not understand that. This amounts to price fixing and will do much more harm than good. - algaeturd, on 09/23/2008, -2/+5Thanks for the link. Buried as inaccurate.
- cmorriss, on 09/23/2008, -0/+3Agreed, except for the AIG CEO who actually turned down his $24 million golden parachute.
- inactive, on 09/23/2008, -0/+3Agreed. Sellers of these mortgage securities should be brought to their knees. The Treasury Department should drive many of them out of business just to make some examples. This should turn out to be a major money maker for the treasury if it was run by a tough businessman with skin in the game.
- eauxnguyen, on 09/23/2008, -2/+5Dugg. Did I understand that his proposal pays the banks at 15% below current value? I thought the debate was paying the $.50 or even $.20 on the dollar that much of the non performing assets are truly worth.
- PennFarmer, on 09/23/2008, -1/+4With all due respect, Zeus, I have to say that I disagree with you 100%. Greed is actually what makes a completely free market work. Our market is not free and has not been since before the Great Depression (which was caused in large part by the Fed and sustained by the government's bungling of it. bernanke admitted that the Fed caused it. Look it up.).
In a totally free market, and that includes the government making money without a real sustainable basis for it, greed keeps all of the players in check because they are all equally greedy. If one company has a product that is popular and costs a lot, and company B offers the same product at a lower rate, B will do better because the greedy consumer wants to save the most money. In response A will either go out of business or lower its price to be competitive. A and B will not lower their price too far because both companies are motivated by greed and want a decent profit margin.
If company C has a CEO making millions because he's greedy but is doing poorly for the company, the shareholders, being greedy, will fire him and hire a new guy who is likewise greedy and will want to keep his millions a year job to help the company make money. When the company makes money, it hires more people which lowers unemployment.
In the current case, if you look at the mortgage industry, you will see that the villain here is not greed, but the government. In the 80's, as a general rule if one wanted to buy a house, you had to prove employment and income and put 20% down. For the most part banks would not authorize a mortgage that went above 25-30% of your income. This is greed on the bank's part because defaulted mortgages lose them money. Therefore they were conservative in who they lent money to. Then Congress passed the Community Reinvestment Act and promised to back up the forced bad loans with Freddie and Fannie, both of whom were effectively government institutions with the authority of the federal government.
At this point, greed became unbalanced because it was no longer market forces working on the market. No longer would banks take a hit with bad loans. Now the government would cover them. The banks were also told as part of this bill that they had to make what were effectively bad loans (read the bill). Now the banks had greed with no check from the market and individuals greed was not checked by the banks' caution. Thus we had who knows how many bad loans put out there to people with no money down and mortgages running 50% or more of monthly income. This was a direct result of government intervention in the market.
If this bubble had occurred naturally in a free market (possible, likely even) it would have burst much sooner when the loans started defaulting and the banks took hits on their bottom line. This is a simplification because the Fed's messing with the interest rates also played a large part in this, but the basic premise is the same. left to themselves, the banks would not have let it get this bad because market forces would have kept them in check as they did for years. Had it happened on its own, it would have looked much more like the dot com bubble of the 90's instead. Yes it caused the economy to hiccup, but not badly. Most of the people affected were directly involved. The market steadied itself and now most of the dot com investments are where they should be rather than inflated.
Business died, and even some banks went under as a result of bad investing, but this is a good thing in a free market. The bad needs to be weeded out and cast aside so that the good can prosper. Greed drives this. Capitalism and free market economic theories work precisely because they acknowledge that people are basically greedy and they use that to keep the whole system in check between customer, producer, and seller. It was the government's intervention that upset the balance and caused this mess.
The Great Depression by the way followed much the same line. Banks looking out for themselves would not issue many bad loans. Those smaller banks that got too greedy and had runs on them were shut down by the big banks who sorted it out and covered the losses. They did this out of greed (so there would be no runs on the big banks), but it cost them money, so they kept the little banks in check along with themselves. Then the Fed came along and promised the big banks they would be the police from now on. The big banks took them at their word and stopped paying attention to the little banks (government intervention on market forces again). Problem was the Fed didn't do its job and so the runs on the little banks went unchecked and it spread to the big banks and the stock market and everything went boom. Rather than letting the market right itself, FDR kept interfering and caused the Great Depression to keep on going through intensive government intervention on market forces.
Sorry for the long post, but the issue is complicated and you appear to have no understanding of what an actual free market looks like. If you could give me an example of an actual free market failing (and don't try the US, we don't have a free market), I would appreciate it as I am aware of none. Governments always interfere and upset the market balance. - n00ptic, on 09/23/2008, -1/+4@dreicher - We had policies in place to prevent just this type of crisis, but the free market ideologues removed them piece-by-piece over the course of 70 years. Now we're feeling the impact of that deregulation and the government needs to step in and prevent this crisis in the short term. In the long term we need updated regulatory policy to prevent a future crisis like this.
And to the whole "let it fail crowd," please give me one good reason why that approach makes sense. - markpoepsel, on 09/23/2008, -0/+3What about an alternative to the bailout, for example, we let the bad lenders fail but the let the federal government lend 700 billion to people who want to buy homes at ... 2 % ?
This way...
People can get money. That's the whole point of this is to stop a freeze in the credit market.
Companies pay for taking on bad loans, investing in bad loans and acting predatory in their lending practices.
And, if you have buyers, some ppl. who just want out from under their homes can sell rather than go through foreclosure.
How about that plan: direct to the consumer loans starting now...with a $700 billion cap...and no golden parachutes.
You might argue that this undercuts the current lenders...but they're already screwed.
If someone has a home loan and wants to refinance to take advantage of this lower government rate, they should face a different refinance rate, but this kind of direct loan seems to be much more safe than the $700 billion, no strings, no oversight, no limitations on CEO pay plan that was originally proposed in a three-page document. - MacEnvy, on 09/23/2008, -2/+5"In fact, Bush and several republican senators tried many times to push through tighter regulations, but the democrats, flush with donations from Fannie and Freddie prevented it."
The op-ed (NOT "article") you posted does not support this statement. Furthermore, I think you'd be hard pressed to find anyone on the Hill or in the financial sector who would agree with that statement, except perhaps the lobbyist-led McCain campaign (what a putrid bunch of liars they are). And you certainly won't find support for it on digg, where we value evidence over unsupported statements.
That's why it wouldn't be on the front page. - rthakidn, on 09/23/2008, -4/+7You do know that McCain cosponsored a bill (s190) in 2005 that would have help avert this mess, but democrats on the senate banking voted ALONG PARTY LINES to kill it, but being in the majority, they had a majority on the committee and passed the bill to the full senate. You do know that that it takes 60 votes to pass a bill, and since the repubs never had a 60-40 majority and it was clear the dems would play the party card the bill did not pass? You do know that the bill was never voted on because of partisanship?
- liljewnbug2023, on 09/23/2008, -1/+4His name was Robert Paulson.
- publiclurker, on 09/23/2008, -0/+3When I'm expected to bail out their criminal actions and incompetence, then it sure as hell is my business.
- StupidLiberal, on 09/23/2008, -0/+3Are you kidding me? There needs to be NO bailout. This is a total farce. Next month there will be another DISASTER about to happen which will require more of the US taxpayer's money.
***** them. ***** this. ***** any senator or rep who votes for this *****.
Call them up and tell them how you feel.
Many of them are up for re-election and let them know your stance by you voting them out. - inactive, on 09/23/2008, -0/+3Actually, it was at the Dirksen Senate Office Building. I was just down the hall filming a different event. That place was a freakin' mad house this morning.
- BESTenemy, on 09/23/2008, -0/+3Completely agree. The sooner the people are out of their overpriced houses, the sooner they can be registered as "foreclosures", the sooner the banks will have to write them down as losses, the sooner the values can depreciate to where they need to be. Supporting artificial demand for unaffordable housing solves nothing.
- cmorriss, on 09/23/2008, -0/+3No *****, and for more information about the culpable democrats in this mess, including Senator Obama (3rd on the list of donation money from Freddie and Fannie), the Washington Post lays it out nicely.
http://www.washingtonpost.com/wp-dyn/content/artic ... -
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