we could build a shit load of guillotines for $700 billion

Michael Moore came out this morning calling the $700 billion bailout package “the biggest robbery in the history of this country.” I guess there’s no way of knowing whether or not our elected leaders in the House of Representatives agreed with him, but, for whatever reason, a majority of them chose to vote “no” to the massive emergency funding package this morning, despite cries from every corner that, if it didn’t pass, all hell would break loose and our economy would go into a death spiral.

Here’s a clip from Michael Moore, who makes a great point about healthcare:

…Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies — who must soon vacate the White House — are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door…

And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!

Falling for whom? NOTHING in this “bailout” package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.

Health insurance? Mike, why are you bringing this up? What’s this got to do with the Wall Street collapse?
It has everything to do with it. This so-called “collapse” was triggered by the massive defaulting and foreclosures going on with people’s home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it’s because too many working class idiots were given mortgages that they really couldn’t afford. Here’s the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage “crisis” may never have happened…

Ultimately, the bill was defeated 205-228. (The “Wall Street Journal” analysis of the bill can be found here.) My Congressman, John Dingell, voted for it, as did 139 other Dems. On the other side of the aisle, only 65 Republicans voted for it. (You can see how your member of Congress voted here.) John McCain, who had suspended his campaign to focus on the problem, had tried wielding his considerable power to make it happen, but he couldn’t convince enough of his fellow Republicans to join him. In the end, 133 Republicans voted against it, essentially killing it dead. McCain, who staked everything on getting the bill to pass, had failed miserably.

And, speaking of McCain’s rapidly fading Presidential prospects, I thought that you might enjoy this note from my bankruptcy attorney friend in New Jersey, Mike Busche:

…I find polls on the presidential election a little hard to follow. However, people who put their money where their mouth is, are speaking loud and clear — and the clear edge is in favor of Barack Obama.

For the last several months I’ve been tracking two web sites.

The British William Hill betting site currently has a one dollar bet on Obama paying $0.40; a one dollar bet on McCain pays $1.75. This is the smallest payout on Obama and highest payout on McCain since I’ve been keeping track. Just before last Friday’s debate the site was paying $0.66 on Obama and $1.10 on McCain. The trend has been an increasing spread making Obama a clear favorite.

The other site is from the University of Iowa. On that site people buy shares in the candidate they think will win. The site graphs offering prices for both candidates. Obama’s shares have been selling for more than $50 for the entire period. McCain’s shares have never sold for more than $50.00. In May of this year both were pretty close to $50.00 each. However, since then, even after a bump in McCain’s price right after the Palin selection, the trend is up for Obama and down for McCain. Today you can buy Obama shares for $65 and McCain shares for $35.

Gambler’s favor Oboma. Let’s see if the concept of the wisdom of the betting crowd is valid…

Given McCain’s affinity for gambling, I’m sure none of this is news to him.

Back to the financial crisis, I’m not sure what the best course of action is. I can see the appeal of just yelling, “No Bailout for Wall Street Assholes,” but I’m not willing to go quite that far. I’m not completely convinced that some kind of intervention isn’t necessary. I will say, however, that if we do use taxpayer dollars to bail these companies out, we need to nationalize the financial institutions like they did in Sweden, and aggressively pursue legal action against those individuals responsible in the first place. (And, just so you don’t make the mistake I made and head off a very pleasant, but ultimately non-informative, Google tangent looking for the details of the “Swedish model,” here’s a link.) One thing is certain – the House will again try to pass legislation later this week to address the issue. The question is, how will it be different from what was proposed today? Some are suggesting the Democrats band together, stop making concessions and pass a truly progressive bill, even though they know that Bush would veto it. I don’t know that it would be a productive use of time, but it might help erode even more of McCain’s support. If it weren’t so serious of an issue, I might be inclined to agree.

One thing I do know is that McCain isn’t the right man to see us through this. On that point, I’m in total agreement with Paul Krugman, who said the following in today’s “New York Time“:

…We’ve known for a long time, of course, that Mr. McCain doesn’t know much about economics — he’s said so himself, although he’s also denied having said it. That wouldn’t matter too much if he had good taste in advisers — but he doesn’t.

Remember, his chief mentor on economics is Phil Gramm, the arch-deregulator, who took special care in his Senate days to prevent oversight of financial derivatives — the very instruments that sank Lehman and A.I.G., and brought the credit markets to the edge of collapse. Mr. Gramm hasn’t had an official role in the McCain campaign since he pronounced America a “nation of whiners,” but he’s still considered a likely choice as Treasury secretary.

And last year, when the McCain campaign announced that the candidate had assembled “an impressive collection of economists, professors, and prominent conservative policy leaders” to advise him on economic policy, who was prominently featured? Kevin Hassett, the co-author of “Dow 36,000.” Enough said.

Now, to a large extent the poor quality of Mr. McCain’s advisers reflects the tattered intellectual state of his party. Has there ever been a more pathetic economic proposal than the suggestion of House Republicans that we try to solve the financial crisis by eliminating capital gains taxes? (Troubled financial institutions, by definition, don’t have capital gains to tax.)…

One wonders if McCain will suspend his campaign again, now the bill didn’t pass… I’m betting no.

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17 Comments

  1. Posted September 29, 2008 at 10:55 pm | Permalink

    I think that Michael Moore is about as qualified to talk about economics as Sarah Palin.

  2. Brackache
    Posted September 29, 2008 at 11:20 pm | Permalink

    I know I’ll never talk you into free market economics, so I’ll just give you an “ataboy” for posting negative stuff about the bailout. Good enough. I hope we’re ready to keep opposing it if it comes up again.

    Dingell, by the way, can get as many NRA endorsements as he wants, and drive around in a hummer with a machinegun on top. I will oppose his every move from now on for voting for this tyrannical monstrosity. I watched his speech on cspan; he and barney frank should be announcing their engagement any day now. Pathetic.

  3. Michael Moore by proxy
    Posted September 30, 2008 at 9:17 am | Permalink

    Friends,

    Everyone said the bill would pass. The masters of the universe were already making celebratory dinner reservations at Manhattan’s finest restaurants. Personal shoppers in Dallas and Atlanta were dispatched to do the early Christmas gifting. Mad Men of Chicago and Miami were popping corks and toasting each other long before the morning latte run.

    But what they didn’t know was that hundreds of thousands of Americans woke up yesterday morning and decided it was time for revolt. The politicians never saw it coming. Millions of phone calls and emails hit Congress so hard it was as if Marshall Dillon, Elliot Ness and Dog the Bounty Hunter had descended on D.C. to stop the looting and arrest the thieves.

    The Corporate Crime of the Century was halted by a vote of 228 to 205. It was rare and historic; no one could remember a time when a bill supported by the president and the leadership of both parties went down in defeat. That just never happens.

    A lot of people are wondering why the right wing of the Republican Party joined with the left wing of the Democratic Party in voting down the thievery. Forty percent of Democrats and two-thirds of Republicans voted against the bill.

    Here’s what happened:

    The presidential race may still be close in the polls, but the Congressional races are pointing toward a landslide for the Democrats. Few dispute the prediction that the Republicans are in for a whoopin’ on November 4th. Up to 30 Republican House seats could be lost in what would be a stunning repudiation of their agenda.

    The Republican reps are so scared of losing their seats, when this “financial crisis” reared its head two weeks ago, they realized they had just been handed their one and only chance to separate themselves from Bush before the election, while doing something that would make them look like they were on the side of “the people.”

    Watching C-Span yesterday morning was one of the best comedy shows I’d seen in ages. There they were, one Republican after another who had backed the war and sunk the country into record debt, who had voted to kill every regulation that would have kept Wall Street in check — there they were, now crying foul and standing up for the little guy! One after another, they stood at the microphone on the House floor and threw Bush under the bus, under the train (even though they had voted to kill off our nation’s trains, too), heck, they would’ve thrown him under the rising waters of the Lower Ninth Ward if they could’ve conjured up another hurricane. You know how your dog acts when sprayed by a skunk? He howls and runs around trying to shake it off, rubbing and rolling himself on every piece of your carpet, trying to get rid of the stench. That’s what it looked like on the Republican side of the aisle yesterday, and it was a sight to behold.

    The 95 brave Dems who broke with Barney Frank and Chris Dodd were the real heroes, just like those few who stood up and voted against the war in October of 2002. Watch the remarks from yesterday of Reps. Marcy Kaptur, Sheila Jackson Lee, and Dennis Kucinich. They spoke the truth.

    The Dems who voted for the giveaway did so mostly because they were scared by the threats of Wall Street, that if the rich didn’t get their handout, the market would go nuts and then it’s bye-bye stock-based pension and retirement funds.

    And guess what? That’s exactly what Wall Street did! The largest, single-day drop in the Dow in the history of the New York Stock exchange. The news anchors last night screamed it out: Americans just lost 1.2 trillion dollars in the stock market!! It’s a financial Pearl Harbor! The sky is falling! Bird flu! Killer Bees!

    Of course, sane people know that nobody “lost” anything yesterday, that stocks go up and down and this too shall pass because the rich will now buy low, hold, then sell off, then buy low again.

    But for now, Wall Street and its propaganda arm (the networks and media it owns) will continue to try and scare the bejesus out of you. It will be harder to get a loan. Some people will lose their jobs. A weak nation of wimps won’t last long under this torture. Or will we? Is this our line in the sand?

    Here’s my guess: The Democratic leadership in the House secretly hoped all along that this lousy bill would go down. With Bush’s proposals shredded, the Dems knew they could then write their own bill that favors the average American, not the upper 10% who were hoping for another kegger of gold.

    So the ball is in the Democrats’ hands. The gun from Wall Street remains at their head. Before they make their next move, let me tell you what the media kept silent about while this bill was being debated:

    1. The bailout bill had NO enforcement provisions for the so-called oversight group that was going to monitor Wall Street’s spending of the $700 billion;

    2. It had NO penalties, fines or imprisonment for any executive who might steal any of the people’s money;

    3. It did NOTHING to force banks and lenders to rewrite people’s mortgages to avoid foreclosures — this bill would not have stopped ONE foreclosure!;

    4. It had NO teeth anywhere in the entire piece of legislation, using words like “suggested” when referring to the government being paid back for the bailout;

    5. Over 200 economists wrote to Congress and said this bill might actually WORSEN the “financial crisis” and cause even MORE of a meltdown.

    Put a fork in this slab of pork. It’s over. Now it is time for our side to state very clearly the laws WE want passed. I will send you my proposals later today. We’ve bought ourselves less than 72 hours.

    Yours,
    Michael Moore
    MMFlint@aol.com
    MichaelMoore.com

  4. Meta
    Posted September 30, 2008 at 9:35 am | Permalink

    Harvard econ professor says, “talk of Armageddon is ridiculous scare-mongering.” He advocates bankruptcy, not bailout.

    http://edition.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html

  5. Posted September 30, 2008 at 9:58 am | Permalink

    Like I said, Michael Moore is no more qualifed to speak on the economy than Rush Limbaugh.

  6. Brent
    Posted September 30, 2008 at 10:43 am | Permalink

    What I don’t get is (and I’m not economy expert, so feel free to debate this with me, I’m open to hearing the other side) if these privately owned financial institutions are “too big to fail” aren’t they too big? If they are too big too fail, shouldn’t we be putting back into place legislation that prohibits all the consolidation. Every day one bank is swallowed by another, seemingly only making the problem worse. If WalMart went around gobbling up KMart, Target, Meijer, and all the other big box chains and then suddenly Wal-Mart started to fail would we have to step in to save Wal-Mart from itself? The notion seems completely implausable, yet we’re expected to swallow the same pill when it comes to financial institutions.

    Again I’m certainly not an expect on the economy, but some intervention is necessary to fix this horrible mess, I just don’t know if I can stomach throwing more money at the problem.

  7. Old Goat
    Posted September 30, 2008 at 11:05 am | Permalink

    Had the bailout passed, and the gov’n’ment poured all that freshly minted cash into the system, we surely would have seen an even more rapid rise of the rate at which our ‘cash’ depreciates. Add inflation to the energy and health care burden and see your wages shrink all the more. ‘Capital’ has been clobbering ‘Labor’ ever since Reaganomics. The credit collapse is just one more symptom of how flawed supply-side is.
    Consumer-side economics can only work when it is fed by real wage gains, not by being propped up with easy credit.

  8. Brackache
    Posted September 30, 2008 at 11:27 am | Permalink

    Wow. Michael Moore is really full of shit. I watched everybody’s speaches on cspan about the bill, and he is really, really full of shit.

    The Republicans who voted against the bill vastly outnumbered the democrats who voted against the bill because the bill was about a MASSIVE government intervention in the free markets, and a HUGE increase in the unnaccountable powers of Paulsen and Bernanke, and the republicans’ constituants rightly threw a shit fit about it. Plain and simple. The free market is about deregulation and no safety nets if you fall on your face like a jackass. This bill wanted to violate that second part, and they said, “fuck that, you broke it, you bought it, enjoy your bankruptcy.”

    Dingellberry, on the other hand, was creaming his jeans to vote for it because his paramour Barney Frank threw in some free cash for Dingell’s rich pals, the auto industry. Same basic thing Paulsen was doing. Cash grab for the rich by violating the free market, giving the Feds tyrannical control of the economy, screwing taxpayers, and destroying the dollar.

  9. Curt Waugh
    Posted September 30, 2008 at 11:39 am | Permalink

    Brent, good luck getting any bite on your comments. For what it’s worth, I agree with you 100%. The Wal-Mart example is actually a very good one. It leads to the question: Where does this end? I, personally, have no desire to live in a nation where every large business in trouble becomes nationalized.

    Lord knows the government propped up Exxon by not making them pay their fines and then giving them near-monopoly status by allowing the merger with Mobile. How’s that workin’ for everybody? Then, our government was too stupid to even get their piece by taxing this behemoth and its over-paid executives. Go figure.

  10. Brackache
    Posted September 30, 2008 at 11:47 am | Permalink

    I can not spell for shit.

    What is it, unlucky in spelling, great in the sack?

  11. not one of the cool kids
    Posted September 30, 2008 at 12:13 pm | Permalink

    They all suck big fat donkey dicks!

  12. Brent
    Posted September 30, 2008 at 1:49 pm | Permalink

    “One wonders if McCain will suspend his campaign again, now the bill didn’t pass… I’m betting no.”

    Looks like that is certainly on the table
    Excellent way to avoid having Palin have to debate…

    http://www.huffingtonpost.com/2008/09/30/mccain-may-suspend-campai_n_130553.html

  13. Posted September 30, 2008 at 3:21 pm | Permalink

    I got the following via e-mail:

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

    Instead, I’m in favor of giving $85,000,000,000.00 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 billion that equals $425,000.00.

    My plan is to give $425,000.00 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 $25,500,000,000.00 right back to Uncle Sam.

    But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $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, safe in a bank. Buy a new car – it helps create and keep 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 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 economic incentive checks.

    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 never 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 I do the geniuses at AIG or in Washington DC.

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

  14. Posted September 30, 2008 at 4:09 pm | Permalink

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

    Err, no it doesn’t; maybe they’re using the British definition of “billion”.

    And anyway the $85 billion was a loan, wasn’t it? Which doesn’t necessarily mean it won’t involve in a loss, but it’s unlikely to be an $85 billion loss….

  15. urch
    Posted September 30, 2008 at 7:02 pm | Permalink

    about Brent’s ‘too big to fail’ — i agree. yet what’s happening as company’s fail is that there is more consolidation. I mean — how much more can Chase buy? and how big will that be?

  16. Robert
    Posted October 2, 2008 at 2:49 pm | Permalink

    85 billion divided by 200 million = $425

    I’m not sure “I trust my fellow adult Americans to know how to use the $85 Billion” if I can’t even trust them with a simple math problem.

  17. cargarmastrum
    Posted November 16, 2011 at 3:26 pm | Permalink

    That’s what we should have erected at zuccotti park instead of a tent city. Guillotines.

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