09/29/2008 (1:53 pm)
Doesn’t Matter How Good the Bailout Plan Was
More to come as information trickles in.
Update: The vote was as follows:
Yea: Democrats 141
Republicans 66
Nay: Democrats 94
Republicans 132
There’s talk that a particularly partisan speech by Speaker Pelosi, blaming the Republicans for the economic crisis and calling them hypocrites for supporting the free market, was responsible for the loss of the measure. I find that a little hard to fathom, especially since Pelosi could only land 60% of her own caucus. Hot Air has some discussion, along with a video of the speech.
This is disturbing. The reason for the bailout is the freezing up of capital markets. The fact that Congress is debating what to do about them will, itself, cause the markets to remain frozen until Congress decides what it’s going to do. In a way, the worst fears of the crisis are self-fulfilling. The longer it takes Congress to decide what to do — or to announce that they’re going to do nothing — the longer the market will remain frozen, holding its breath.
Update II:Jim Geraghty at The Corner asks an interesting question: how on earth did Pelosi and company conduct negotiations on the bailout measure without knowing the minds of their own caucus? How is it that 40% of Democrats voted “No?”
Update III: The comments I’m reading from Democrats who voted against the proposal suggest they’re upset about the vast increase of Executive power, and a windfall to bloated Wall Street executives who caused the problem. Whadaya know? I agree with them! I can feel the temperature dropping under my feet as I write.
Here’s a link to the New York Times Business Section’s write-up on the afternoon’s events.
Update IV: Michelle Malkin has the roll-call vote from the House. Use it to see how your Congressman voted. Mine — William Delahunt (D, MA), voted “No.” I’m astonished; I think this is the first measure about which he and I agree.
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24 Comments »
Comment by darkhorse
I think it’s pretty important, in light of our discussion of why fearing the passage of this bill, to note that the “no” votes overwhelmingly face re-election campaigns (all but two):
http://voices.washingtonpost.com/thefix/2008/09/the_failure_of_the_financial.html?nav=rss_blog
Here’s a question to research: did the US make money on the S&L bailout? I think the answer was “yes” – but I am far from sure.
Comment by Phil
Um… everyone in the House faces re-election every two years. And yes, I think that has some impact.
I don’t know much about the S&L bailout. You’re right, it would be worth finding this out.
Comment by darkhorse
Sorry, Phil, I was referring to CLOSE re-election campaigns, of course…see the Washington Post article.
Comment by Zanzibar
With regards to the previous suggestion that some GOP members voted against the bill because Pelosi made a partisan speech, Barney Frank said:
Frank: “We don’t believe they had the votes and I think they are covering up the embarrassment of not having the votes. But think about this: somebody hurt my feelings so I will punish the country. I mean that’s hardly plausible. And there were twelve Republicans who were ready to stand up for the economic interest of America but not if anybody insulted them. I’ll make an offer: Give me those twelve people’s names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are, and maybe they’ll now think about the country.”
Love him or hate him, he’s got the occasional dead-on point.
Comment by marybel
Barney had to say something to provide cover for Pelosi’s brain-dead, despicably partisan comments just prior to the vote. A lot of these republicans may well have constituents who are mightily against this and they may have been taking a hit “for the gipper.” So, to have Nancy deliver a partisan poison pill, after Republicans were being bipartisan, might have just been too much to swallow. And it overarchingly seems to me that Madame Speaker couldn’t manage her JOB – there were plenty of Dems who voted no. If she can’t keep her majority caucus in line, she needs to get another job.
Comment by marybel
And also, Barney, where were the DEMOCRATS
“ready to stand up for the economic interest of America” ??? Sheila Jackson-Lee, who I saw speak in favor of the bill, actually voted NO. Barney and Nancy needed plenty of Country First Republicans, because they certainly couldn’t count on twelve of their own Me First Democrats. Hmmmmmm?
Comment by Phil
I agree that voting against the measure because Nancy Pelosi makes Pelosi-like noises is not plausible; but for Barney Frank to lecture anybody about caring more about himself than about the country is simply unbearable. That sonofabitch belongs in JAIL, not in Congress. He got greased up by the Fannie Mae lobbyists, and he greased them back. “There’s no crisis,” said he of the corrupt relationship with the corrupt executives.
If there’s anybody in Congress on whom the blame for this crisis rests personally, Barney Frank is somewhere about 2nd on the list, behind only Chris Dodd (D, CT) and maybe a nose ahead of Chuck Schumer (D, NY).
[...] Plumb Bob Blog » Doesn’t Matter How Good the Bailout Plan Was [...]
Comment by darkhorse
Again, Phil, very telling that you are listing only Democrats. Since when did “follow the money” stop being the rule in Washington, no matter WHO was in power?
It will all come out, the big mixture of people that were involved in this mess. I wouldn’t be too very quick to point the finger at only Dems, since those were the ones RIGHT NOW who had the power to do something.
Power corrupts, and so does money. Party notwithstanding.
Comment by Phil
Again, Phil, very telling that you are listing only Democrats.
Did you listen to that video from the House GSE Oversight Committee hearing that I posted earlier today?
I’m not playing the “there are some on both sides” game anymore. Democrats insist that I do that when they get their corrupt asses caught — and then blame Republicans without a qualm at every other turn. F*** that. If they want goodwill from me, it’s their turn, about 3,500 times over.
Republicans have been calling for controls on Fannie Mae for 5 years. The Wall Street Journal has been all over this. So has Michelle Malkin. So were several members of Congress. BARNEY GOD DAMNED FRANK led the charge that stopped them from doing anything. He should be JAILED. We’ll deal with the Republicans that went along once we’ve gotten the chief roach out of the cupboard.
As to your earlier comment, Ramesh Ponuru notes at The Corner that while 44 Congressmen in tight races voted against the bailout, there were 216 “No” votes. There were arguably some cowards in the mix, but the opposition was from both sides and rested on real objections to the legislation. Pretty much everybody agreed the bill was a sh*t sandwich. Lots of Congressmen decided not to eat. Good for them, sez I.
Comment by Zanzibar
Urgh. Go look up info about the derivatives market. THAT is Ground Zero for this. Fannie and Freddie deal primarily with mortgages that huge banks create and then sell on the unregulated derivatives market – via hedge funds, for example.
Greenspan’s been against regulating the derivatives market from the dawn of time, and so to blame the Democrats for not wanting to regulate an entity when that entity deals primarily with an unregulated market is disengenuous.
If the Republicans wanted action, then they should have started with regulating the hedge funds and the derivative markets. That would have put the safeguards in place that would have prevented this disaster.
But no, they didn’t want to hinder the free market, and they only wanted to regulate the assets AFTER they were already bought by Freddie/Fannie. Well, we’re all paying the price now.
Comment by Phil
Greenspan’s been against regulating the derivatives market from the dawn of time, and so to blame the Democrats for not wanting to regulate an entity when that entity deals primarily with an unregulated market is disengenuous.
A) You want to try to explain the logic of this statement?
This is like saying “It’s dishonest to want limits on gun purchases unless you also impose controls over gun design.” What’s dishonest about it? The truth is, they’re unrelated, and there’s no reason on God’s green earth why you can’t control one and not the other.
And more to the point, why isn’t it proper to look into an organization that we know has been falsifying financial statements, just in its own rite, without having to regulate the rest of the world?
B) Greenspan may have an R after his name for the purpose of casting his own vote, but he does not represent the Republican party in any reasonable sense. So what’s he got to do with this?
I’m not even sure what the derivatives market is at this point — you’re about a step outside of my knowledge — but those stuck out of your comment pretty badly.
Comment by Zanzibar
Republicans have killed every effort to start any kind of regulation of the derivatives market. In fact, here’s an article that shows some of the calamities that the unregulated derivatives market has caused, including Enron:
http://www.cfo.com/article.cfm/3009636/1/c_2984417?f=related
The best metaphor for regulating Fannie/Freddie but not the outlying markets I can come up with is being forced to compete with China for making shirts for an unnamed third country. We can’t have sweatshops, we can’t take shortcuts with quality, and we’re therefore at an inherent disadvantage.
The ‘Take The Risk’ mantra over at Freddie/Fannie was because they wanted to make sure that credit was freely available, and derivative market regulation would have stifled that to a great extent. In hindsight, of course, it’s a GREAT idea.
I’m not saying that there isn’t blame to go around, but the Democrats fought regulation of Freddie and Fannie because it would put them at a disadvantage compared to other investment banks. Putting them solely in your sights when it was a widespread issue – particularly when the ‘Free Market or Bust’ Republicans are included – seems unfair to me.
Comment by Phil
You need to go read my comment on the Fannie/Freddie oversight thread, then come back here.
The problem addressed by the cfo.com article is the difficulty of understanding derivatives. I don’t see how regulation helps solve that problem. The regulators have the same problem as the investors, and the complexity of the investment vehicles guarantees that any restrictions they do apply will have unintended and unforeseeable consequences.
Back to the specific topic: your analogy about Freddie and Fannie being “disadvantaged” by oversight banks didn’t have is bass ackwards. Freddie and Fannie LACKED oversight ordinary banks had to meet; Sarbanes/Oxley didn’t apply to F & F because they were a GSE. F & F also don’t pay any state taxes, since they’re a GSE of the federal government. F & F also borrows from the Fed at a guaranteed rate, something no bank has access to. Fannie isn’t hamstrung, it’s privileged.
Look, Ray, I understand your wanting to defend some of your favorite politicos here, it’s an impulse I’m familiar with, and a common one. But what they did is something Democrats have been complaining about for years in other arenas — they took contributions and sweetheart loans from an entity and its lobbyists, then turned around and granted that entity favors. With 20/20 hindsight we see what they were about. It was wrong. You should admit it.
Comment by darkhorse
Phil -
I have the freedom of not loving the Dems or the GOP – and I will still say “follow the money” on where the corruption is in this:
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
Democrats got 57% of the campaign contributions from FM and FM since 1989, but they have also had more people in both houses during that time.
Comment by RM
Phil,
Honestly curious. Has there EVER, within, say, the past approximate decade, been an Democrat who did something wrong, was caught, and simply took the blame and left office either voluntarily or because his Democrat peers forced him out?
I’m sure there are a few examples out there, but my perception is that if an R gets caught out, he’s normally booted out summarily due to pressure from other Republicans. But if Dems are caught, the ranks close and the guy goes on to serve the remainder of his term.
I will not hold my breath waiting for one Democrat to take one ounce of blame for this fiasco, period.
Comment by Phil
Democrats got 57% of the campaign contributions from FM and FM since 1989, but they have also had more people in both houses during that time.
The time period 1989 – 2008 is 20 years that include the 16 years that the Republicans held the majority in both houses of Congress. You are incorrect.
Comment by Phil
Honestly curious. Has there EVER, within, say, the past approximate decade, been an Democrat who did something wrong, was caught, and simply took the blame and left office either voluntarily or because his Democrat peers forced him out?
There were some incidents like this during the Clinton administration; however, it seems likely that the resignations were pre-emptive, attempting to forestall prosecution. I’m thinking of Bernie Nussbaum resigning because he obstructed the FBI’s investigation of Vince Foster’s office.
Aside from some instances like that, Democrats typically have to be convicted of a crime before they’ll leave. This happened to House Speaker Jim Wright in … was it 1993? And I think it happened to Dan Rostenkowski over the Congressional Post Office scandal back in the 80s.
Meanwhile, Congressional Republicans have a standing rule that whenever any member of their caucus comes under indictment, they will voluntarily leave office until the matter is settled. This is why Democrats are using corrupt law enforcement officers like Ronnie Earle to scare up grand jury bills of indictment, to get rid of particularly effective Republicans, like Tom Delay.
Comment by darkhorse
We are dealing with one of those very honorable Republicans right next to us in Northern Idaho, Larry Craig. He is in holding on in his year-long battle to have his conviction reversed for solicitation in his little “bathroom incident”, and holding on strong to his duties.
Thanks for the correction, Phil, on the time for the house majorities. My point still stands – 43% of the FM’s money went to Republicans.
Comment by Phil
darkhorse,
You’re really full of yourself, aren’t you?
I have no more use for corrupt Republicans than I do corrupt Democrats. You have no reason to infer that I do.
There are fewer corrupt Republicans, and Republicans’ handling of corruption among themselves is more honorable than is Democrats’.
Now, can we bring the discussion back to something relevant?
Comment by darkhorse
Why the personal attack? And the accusation of same? It doesn’t help dialog a whit. You mentioned a standard rule of the Republicans in order to contrast their virtue to the Dems, and I have a shining counter-example that I have to read about in the paper every single day. There was NO inferring that you love anyone corrupt; only that you over-emphasize the corruption of those in one particular party over another.
As to relevance – what about the 43%?
Comment by Phil
Here, darkhorse, go ahead and tell me “They’re doing it too.”
FAN, FRED, AND FRANK
House Democrats are concerned that it wasn’t just Rep. Barney Frank who was having extracurricular relations with Fannie Mae and Freddie Mac executives, and that those relationships will come to light before the election a month from now.According to a former Democrat staffer working for the House Committee on Financial Services, there were a number of stories involving Democrat members of the committee, as well as staffers for those Democrats, participating in retreats and getaway weekends paid for by Fan and Fred executives and lobbyists.
“Republicans were in the majority, and they weren’t getting invited on these trips,” says the former aide, who now works for an investment house in New York. “It’s not that Republicans weren’t enjoying themselves, but not the way my guys were. If I were a Democratic member in the mid to late 90s and dealt with financial services or housing issues, I’d be real nervous right now.”
Frank has not hidden the fact that he was in a romantic relationship with a former executive for Fannie Mae. Frank now chairs the Financial Services Committee and was one of several longtime Democrat members who sought assurances from Speaker of the House Nancy Pelosi that no action would be taken on Fan or Fred investigations until after the election in November.
Did you catch the part about a romantic relationship with a Fannie Mae executive? This is a case of the Democrat most responsible for oversight literally being in bed with the organization he’s refusing to oversee.
And you want me to acknowledge “Republicans are just as bad?”
No, Jim, they are not just as bad, not this time (and really, not any time.) Your desire to view both sides “objectively” is honorable in a fashion, but it does not excuse you from acknowledging the truth. Truth, and not “fairness,” is your Master.
Frank should resign, and if he does not, he should be impeached. Fact.
Comment by darkhorse
Phil -
If specific congressmen have acted in the way that the Spectator article states, prosecute them. And if I haven’t been able to pay attention to this kind of violation, my hats off to you for bringing it up.
Certain Republicans have acted horribly, but if the case is that Democrats are doing so now, have at ‘em!
Jim
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