Why You Think the Rescue Bill Failed

Earlier today, we asked readers why you thought the House rejected the proposed $700 billion Wall Street rescue bill yesterday, sending markets tumbling and lawmakers back to the drawing boards.

It's nice to know we weren't shouting into a vacuum.

So far, we've gotten 187 comments.

And yes, we've read them all. Basically, they break down into a few categories, which we've labeled, and included a sample comment from each category:


- Despite the warnings of Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke, lawmakers and citizens didn't understand how dire the situation is.

"Our leadership has failed. People don't understand how this affects them and are leading themselves like lambs to slaughter with their macho attitudes. Paulson's explanations are lofty, Bush's are simplistic, the candidates are self-serving and no one is in charge. We're like a bunch of parents at a soccer game running up and down the field screaming because the coaches and referees have lost control of the game."

- The situation actually is not dire.
"There was no bailout because there is no crisis."

- The bill was poorly sold to the American public.
"There has been a real failure to define the problem to the American people, who don't know that much about the credit system and how it works. This is a credit crisis first and foremost. Paulson or [Conn. Dem. Sen. Chris] Dodd (for example) should have explained that credit is like motor oil: if your car's engine runs out of motor oil, it freezes up and your car's a goner. If credit dries up, the economy freezes up, and your job (or your small business or your student loan) could be a goner."

- Even if it had been well-sold, the American public wasn't buying.
"No one trusts this administration or government or Wall Street or the banks."

- Specifically, because the bill was backed by President Bush.
"It failed because the country has been lied to by the Bush administration so often that they no longer believe anything that is said from there. Plain and simple, few believe that there is an economic disaster coming. Why should they? Just weeks ago Bush was assuring them that the economy was strong and solid."

- It would have benefited only fat cats.
"I believe the bailout bill failed because the American people simply couldn't stomach the thought of paying for the mistakes of the rich."

- It contained insufficient transparency and assurances that it would work.
"The legislation failed, too, because it is a classic pig in a poke. All of the key details of the program -- how prices for the toxic assets will be set, how much equity the government will take in these asset purchase deals, how the assets will be managed and sold, whether golden parachutes will be eliminated -- are left to the discretion of the Treasury Secretary. General principles and guidelines need to be worked out BEFORE the legislation is passed, not afterwards."

- It was unpopular enough with voters that lawmakers standing for re-election would not vote for it.
"With elections only weeks away, failure of the House to pass the Rescue Bill was to be expected. Democrats were not about to pass the bill without substantial support from Republicans and reap the wrath of their constituents while the Republicans would blame the Democrats for the bill's passage."

- A lack of Republican party discipline:
"President Bush's bill did not pass because two-thirds of the Republicans in the House voted against it. Their vote was not only a repudiation of a sitting Republican president, it was also an unprecedented vote of non-confidence in [Ariz. Republican Sen.] John McCain, the presidential nominee of their own Republican party."

- It was the votes, stupid.
"Our democracy worked. The American people overwhelmingly opposed this Wall Street bailout, and Congress followed their lead."

- Taxpayer pettiness.
"The bill failed because of the jealousy, envy and petulance of Main Street who were more interested in sticking it to 'somebody' than in solving a problem; which in fairness most had not contributed to."

-- Frank Ahrens

September 30, 2008; 7:55 PM ET  | Category:  business
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Comments

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The market will thaw once the interest rates get high enough. Just like oil, it really moves at $140.00/bbl. Bernanke & Co. really don't have a clue. Negative real interest rates and negative real returns don't work now.

The legacy of Alan Greenspan. Enjoy!

Posted by: A.V. | September 30, 2008 8:42 PM

Talk about fleecing. It's prox. $5800 per taxpayer before amoritization.Oh wait, now I remember ; NO CREDIT CHECK !

Posted by: John Starkweather | September 30, 2008 8:56 PM

Mainly because the IQ of the average american is rather very low when it comes to political and economic matters! That's why the politicians have been able to take them for a ride all the time and especially during elections. About 80% of the pubilic get their information from the taking heads of TV and not many of them read in depth articles and try get an understnding of the issues. In this case, Secretary Paulson also should be faulted for not articulating well as to how his plan will work.

Posted by: Ram | September 30, 2008 8:59 PM

Everything that is wrong with this country is because they are letting queers get married and covering up the existence of UFOs and letting illegal aliens run for office.

Posted by: Anonymous | September 30, 2008 9:02 PM

The bill failed because Congress listened to their constituents. They listened because they wanted to be re-elected, and as representatives, they are supposed to follow the will of the people.

Why were the people against it? It was a bad bill. There was not sufficient evidence that it was in the best interests of the American people. That is a reflection of the public's desire to stop deficit spending, wariness of government interference in free markets (socialism), and total lack of trust in all authority -- government and business. After being lied to repeatedly for years, why should they believe anything that is said? To have any trust in Bush or the Congress would be completely foolish at this point. It is that simple.

Posted by: Mark | September 30, 2008 9:04 PM

You forgot the #1 reason: Nancy Pelosi.

Posted by: Scooby | September 30, 2008 9:05 PM

I think people are reluctant to hand over more financial power to the federal government, the originator of this credit fiasco. In 1977, Carter kicked off this crisis by signing into law the Community Reinvestment Act (CRA), which required banks to provide credit to "under-served" populations by granting them "affordable mortgages." Fast forward to 1995 when under Clinton, the CRA was retooled to increase access to mortgages for the "under-served" and banks were warned that if they didn't make these loans, they would face penalties. As a result, banks were forced to issue $1 trillion in subprime mortgages. And when the Bush administration tried to rein in Fannie and Freddie in 2003, Barney Frank's response was "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing" (NY Times, 9/11/2003). In 2005, McCain co-sponsored legislation that would have provided oversight of Fannie and Freddie and reined in their mortgage portfolios, but the Democrats did not allow the bill to come to a vote. The 2005 legislation was reintroduced in 2007 but was again blocked by the Democrats. The current crisis is neither a Wall Street crisis nor a crisis spurred by deregulation. It's a national credit crisis precipitated by the government gratuitously allowing anyone regardless of credit worthiness to buy into the "American dream" of home ownership.

Posted by: judithod | September 30, 2008 9:15 PM

the bill failed because it is a bad bill. if it is passed tomorrow, it won't be because it is a good bill, it will be because we have bad leaders.

Posted by: jjtwo | September 30, 2008 9:16 PM

"You forgot the #1 reason: Nancy Pelosi."

You forgot Republican crybabies. 'She hurt our feelings by saying mean things to us about the last eight years and telling us the party's over. Waaaaaaaaaaaaaa! We don't want the party to be over, so we're gonna screw the country!'

Posted by: Sam | September 30, 2008 9:19 PM

The Republicans, who know they must retreat from power, are operating a scorched earth policy.

It may not be a deliberate plot, but it's a temptation they're succumbing to. Especially those who know they're losing their seats, who ALL voted to kill the plan.

Like a retreating army blows up bridges and factories, they're blowing up the whole economy.

They're betting on the American voter's legendary ADD. Two years from now, they reckon, all this will be forgotten and Joe Sixpack will be blaming Obama and the Democrats for the recession.

Given Congress' invariably low ratings these days, they figure there'll be another anti-incumbent wave in 2010, this time to their benefit.

It's probably a winning strategy in the United States of Amnesia. The GOP will be back because the electorate are suckers.
Is that insulting? Need more proof? GW Bush got a second term.

Posted by: OD | September 30, 2008 9:22 PM

Pelosi didn't have the votes. Poor leadership. Only about 2 or 3 Republicans were offended enough to keep their votes out. Hardly enough to sway the vote. It was convictions made both Democrats and Republicans vote NO, for different reasons. Conservative sense and liberal leanings caused the NO votes. Some were worried about re-election. THAT IS GOOD. Otherwise, taxation without representation. Let the deadbeats go down the drain. We need to start fresh.

Posted by: TommyF | September 30, 2008 9:23 PM

Thinking people know that all the bailout amounts to is a massive money grab for King George's pals before he gets evicted from the White House.

Posted by: Watchful Fox | September 30, 2008 9:24 PM

WOW! Our elected representatives actually doing what WE want them to do. That alone is amazing!

Posted by: David | September 30, 2008 9:26 PM

I think it failed because no one, like me the average person has no idea what is in this "bailout" deal.

Posted by: Michael Giusani | September 30, 2008 9:26 PM

It was Obama's fault because he was busy on the phone. lol

Posted by: Ian | September 30, 2008 9:26 PM

I am a non partisan. I believe the bailout bill failed because of the Republicans who chose to play petty politics when people's nest eggs, jobs and ability to obtain credit were all in jeopardy. They are acting like Nero who chose to fiddle while Rome as on fire. Previously, I was leaning towards McCain but now, I have decided to vote democratic for all postions. The current situation is more than a bailout of the fat cats. It is really the saving of peoples jobs, 401Ks, IRAs, ability to finance homes, cars, their children's education and so on. Shame on the Republicans.

Posted by: ChatM | September 30, 2008 9:26 PM

It should fail because taxpayers should not come to the rescue of super bankers risking it all for big bucks. Let them and the marketplace sort it out via bankruptcy protection.

Posted by: SZ | September 30, 2008 9:27 PM

You reap what you sow

Posted by: Dr. Gonzo | September 30, 2008 9:28 PM

The election is just over a month away. Both parties don't want to take responsibility for it, be blaimed if it doesn't help, or risk the other party getting credit if it does work...

Posted by: C | September 30, 2008 9:28 PM

The Bush administration probably is learning that if you cry wolf too often, no one believes you when the wolf really comes

Posted by: Hemant | September 30, 2008 9:29 PM

People who have a high credit line use their credit cards to fill the tanks of their oversized vehicles with overpriced gasoline then cannot pay the credit balance or their mortgage. Tough

Posted by: djthompson | September 30, 2008 9:29 PM

Just a double reverse play..make us think they are listening to to public outcry..then in backrooms,in a few days,a real bail out that will be costly,a transfer of wealth from middle America to those in power. Americans are too strong,we must be reduced in finacial holdings to balance the socialist swing of our current government. its a feel good move.period.

Posted by: oldecarguy | September 30, 2008 9:29 PM

Why should my hard earned money go to some Fat Cat on wall Street who has just ripped me of in the first place?

Let Wal Street crash and burn!

Posted by: Anon | September 30, 2008 9:29 PM

Who says we need this? The same clueless people who have been managing the financial markets during this entire debacle.

Posted by: PNJ | September 30, 2008 9:29 PM

ChatM: If it's "shame on the Republicans" then don't forget to vote out the 95 Democrats who voted NO also.

What the Congress ought to have done is posted their proposal on the web and announced it for all to see. Then, the public might have known exactly what was in it. IF they wanted our support, which they obviously didn't.

The Dems tried to sneak this through, and wanted the Republicans on board so they wouldn't soak all the blame.

Posted by: TommyF | September 30, 2008 9:29 PM

It was sold as a Bailout and not an acquisition of assets by the treasury, which can wait for the mortgages to mature, can use money for the purchase at the lowest possible cost, and will buy these assets at a deep discount, eventually making money for the US taxpayer.

Also, the Republicans think they are being "principled" when they should be LEADING their constituents, and voting for this to save the world financial system. They are pitiful.

Posted by: JAY BOSLIN | September 30, 2008 9:29 PM

Chris Dodd, Barney Frank, Nancy Pelosi, Harry Reid, Bill Clinton and the Democratzi Party are solely to blame for this mess...And they know it. Seven years of anti-Bush and Republican major media have taken root however, and the dumbed down, great unwashed of the American electorate remain blind to the cause as a result.
Our children will pay dearly for our gullibility. God Help America.

Posted by: Karpy | September 30, 2008 9:30 PM

Why should we believe Pres. Bush about the urgency of this bill in that he lied to us about Niger and Iraq. I see no reason to hand over $700 billion based on the credibility of this administration.

While financial assistance may be warranted, I think it rather naive to hand over $700 billion with no checks on expenditures.

Posted by: Janice Ornellas | September 30, 2008 9:30 PM

I wonder how much the banks and brokerage houses have "borrowed" from the treasury over the last say 6 months? Money that they are expected to pay back. Anyone else think it's about 700 billion?

Posted by: Mike | September 30, 2008 9:30 PM

This is another example of greed. Who in their right mind actually BELIEVES that the millionaires on capitol hill give a crap about the regular "Joe"?

I cannot wait until the 2012 ticket of Ron Paul and Jesse Ventura!!!!

Buy Gold, 'cause the dollar is almost history!

Posted by: MAD AS HELL | September 30, 2008 9:30 PM

Simple put the Govt. does not have the money for this bailout.........which translates into the U.S. Taxpayer not having the money to give to the Govt. to bailout the companies. Nobody is bailing out the average working stiff that works 10-12 hr days and can barely pay the rent and utilities. So why expect those same 10-12hr aday working stiffs to foot the tax increase?

Posted by: LC in Colorado | September 30, 2008 9:30 PM

Even the people that are bashing those of us "constituents" that are glad the bill was defeated don't quite understand the entire repercussions to this country, though they try to sound as if they do. Seems to be a bit of snobbery going around these days on both sides, when there really is a better fix to this than letting the government take us nearly a trillion dollars further into debt. (http://www.daveramsey.com/etc/fed_bailout/3_steps_to_change_the_nations_future_10928.htmlc?ictid=sml)

Posted by: JH | September 30, 2008 9:31 PM

Why is the US in this mess and countless others??? Foolish do as foolish does. G W for an illegal 3rd term? Why not!!!

Posted by: Ian Thomson | September 30, 2008 9:31 PM

Americans called and emailed in record numbers 100-1 against this bailout. Congress listened (for now)....by the way 40% of Democrats in the House voted against it so lets stop blaming Republicans.
Congress needs to listen to the vast majority of Americans that don't want $700 Billion dollars taken from us. "The taxpayers will make a profit"...what a bunch of baloney. Higher taxes and more Government is all that will come from passing this bill.

Posted by: M DeRosa | September 30, 2008 9:31 PM

Jews decided to get some money from the next generations' pocket. Make sure you pack the money nicely, so jews will be able to enjoy it. They will organise the 3d world war using the bailout. Teach your kids not just to pay off jewish debts but also to die for their interests. Basically it's either you or them and you decide. It's time to get rid of the cancer.

Posted by: Jagger | September 30, 2008 9:32 PM

Wow.. I can't believe people still think this bill is a good idea. Very Sad. I hope people will hold thier congress people who vote yes on this bill resposible on election day. I say any one voting yes on a bail out should not be re-elected. There shold be a web sight were we can get the names of our congress people who vote yes and get rid of them.
Wake up people.. it is one last f-you by the bush administration. If the economy is so bad then how is it that companies can spend billions bying other companies.
How is it that the dow can bounce back in one day. I say let the economy get back to were is should be. Let the home prices fall to the level were they should be. And finnally the state and cities should get out of the housing market by giving interest free loans to first time home purchasers. That only increases the price of the home.
Eddie

Posted by: silverlake ca | September 30, 2008 9:32 PM

Rump Republicans don't understand Markets. Libor is up sharply, near 7%, because "Mark to Value" obscures creditor worth, i.e. credit default risk on borrowers balance sheet. Hence don't and won't lend.

Posted by: Matt | September 30, 2008 9:32 PM

Why? The size of the bill. The haste to approve it. Overblown crisis. Another Bush disaster. Money for imaginary securities. No guarantees. Distaste for government and Wall Street. A handout TO those boneheads on Wall Street when Americans are suffering economically. Oversight by the same Bush people that got us in this mess. Need I go on?

Posted by: fdsajkl | September 30, 2008 9:33 PM

We have to get rid of lobbyist and special interest groups in American politics. Our government represents "the American people" and not banks, corporations or foreign governments. Vote out ALL incumbents that support this massive theft of taxpayer funds.

Posted by: Stephen | September 30, 2008 9:33 PM

OK.. I want you to THINK.

If George Bush is trying to bilk the American people (and maybe he is), then why would liberals back Barack Obama, who has been on board with this bailout bill, tepidly, with some attachments... but basically for it. If Bush is in on it, so is Obama.

And so is McCain, because he seems to be for it.

I'm not convinced that either of these guys has a bucket full of sense on the economy.

Posted by: TommyF | September 30, 2008 9:33 PM

The bill failed because the "all" of the Democrat representatives didn't cast a Yea vote. Word is that Nancy Pelosi told all the representatives that are up for re-election this year that they could vote no. She doesn't want them to lose their seats by disappointing their constituents. The "people, (the taxpayers) don't want to bailout Wall Street and understandably so. They Dems wouldn't need the republican votes if they "all the Dems" voted for the bill, but they want to drag the republicans in so they will not be blamed for the failure of a rushed and inappropriate action that is going to cost the taxpayers BILLIONS. So for Nancy Pelosi to blame the Republican when she didn't even have the full support to the Dems, is ludicrous. She is so stupid ... to stand up and act in a partisan way right before a vote on a bill that what was touted as a bipartisan effort, was tacky ... whether or not it influenced the Rep vote is irrelevant.

Posted by: sk1966 | September 30, 2008 9:33 PM

i can't believe someone said there is no crisis. the 600 hundred trillion dollar credit derivative market ties in all financial institutions globally, it won't take much to topple all the dominoes and the western financial world with it -- as is evident by the systemic risk of just having one major institution fail - lehman brothers. because that was allowed to happen we now have the fed backstopping the 1.6 trillion dollar commercial paper market, keeping it on life support. tick tock!

Posted by: pete | September 30, 2008 9:34 PM

Bankers are thieves. Paulson is a banker. You get my drift?

Posted by: chuck | September 30, 2008 9:34 PM

Tumbling? Overall, the market appears to have actually had a good day. Am I wrong?

Posted by: TG | September 30, 2008 9:34 PM

We will look back 10-15 years from now and recognize that the failure of this bailout was the beginning of the High Tide of the Revolution that Ron Paul and the Campaign for Liberty are going to lead.

It is undeniable that the leadership that the Ron Paul Revolution has shown in the last week is responsible for the defeat of this Corporate Socialist "Rescue" of insolvent banks.

Lets hope that our Representatives value their jobs more than the approval of King Bush, Queen Pelosi, and Crown Prince McBama.

Posted by: Brad | September 30, 2008 9:34 PM

It was sold as a Bailout and not an acquisition of assets by the treasury, which can wait for the mortgages to mature, can use money for the purchase at the lowest possible cost, and will buy these assets at a deep discount, eventually making money for the US taxpayer.
-------------------

Nonsense. It was a bailout that could never make a profit because they were going to deliberately overpay for the rubbish these companies hold. All the good stuff would be retained by the banksters, dont you worry about that.

Posted by: Anonymous | September 30, 2008 9:34 PM

We did everything we were supposed to do; we went to college and saved our money to buy a home and then have a child. Now, neither of us can afford to quit our jobs. Whether we call it a “rescue,” an “investment,” or a “bailout,” it is, what it is – corporate welfare. We do not have a small business and raising the federal deposit insurance limit from $100,000 per account, to $250,000 per account, does not do a thing for us considering our extra money goes to making ends-meet.

Yesterday, September 29, 2008, Federal Reserve Chairman Ben Bernanke and his colleagues pumped an extra $630 billion dollars ($630,000,000,000) into the global financial system. Now, our politicians are pushing for a $700 billion dollars ($700,000,000,000) to bailout American and non-American financial institutions and/or businesses. That comes to a total of $1.3 trillion dollars ($1,330,000,000,000) of taxpayer money pumped into the financial system in less than a week.

Wall Street's five biggest firms paid more than $3 billion dollars ($3,000,000,000) in the last five years to their top executives. Merrill Lynch & Co. paid its chief executives the most, with Stanley O'Neal taking in $172 million dollars from 2003 to 2007 and John Thain getting $86 million dollars, including a signing bonus, after beginning work in December. The company agreed to be acquired by Bank of America Corp. for about $50 billion dollars on Sept. 15. Bear Stearns Cos.'s James ``Jimmy'' Cayne made $161 million dollars before the company collapsed and was sold to JPMorgan Chase & Co. in June. Our current U.S. Treasury Secretary pushing for the bailout, Henry Paulson, former Goldman Sachs Group Inc. CEO, received about $111 million dollars ($111,000,000) between 2003 and 2006.

We feel betrayed, we feel lied to and we want those financial institutions and individuals responsible for this mess to be held accountable. If our politicians want to let them off the hook by giving them our money, our $700,000,000,000, then we need to hold those politicians accountable when we vote this November.

Posted by: Anonymous | September 30, 2008 9:35 PM

$700 billion could buy up all 1.2 million homes in foreclosure (assuming average price of $300,000, which is HIGH) and still have almost half left over. Why does it take more to bail out Wall Street? Because it's going in their POCKET.

Posted by: Whiplash | September 30, 2008 9:36 PM

Am I incorrect in assuming we live in a capitalistic society? Markets fluctuate. It is basically socialistic involvement. We are headed towards economic collapse due to a shrinking middle class, until we correct this slippery slope.

Posted by: Whatzit | September 30, 2008 9:36 PM

I am sick of the partisan language of Washington. There is lots of blame to go around for sure on both sides for the situation we find ourselves in. For once, I wish we could have real leadership in Washington and come up with a solution that really gets to the root of the problem vs just throwing tax payer dollars at a poorly defined problem. Plus, our leadership has done a crappy job of defining what the real problem is and how it relates to main street and the average joe.

Posted by: Donald | September 30, 2008 9:36 PM

The American dream is the pursuit of happiness. Pursuit does not guarantee anything. Not everyone is going to be able to be a home owner. Unfortunately there are bankers/lenders who did not care. The tax payers should not have to pay for those errors. Where is big oil with their profits coming in to help as their patriotic duty?

Also, Bush has been telling everyone to BUY BUY BUY when American's are at record lows of savings.

$1.3 trillion lost on the stock market is only a paper exercise until someone sells the stocks. It's good to see the market rebounded some today.

Posted by: Becky | September 30, 2008 9:36 PM

It failed because even the majority of the President's party can no longer believe him or his administration.

Maybe there's a crisis, maybe there isn't. Maybe it's all like those pesky weapons of mass destruction.

Yesterday's vote was one of the clearest indications of what can happen when confidence in a country's leader has been betrayed.

Posted by: John A.Broussard | September 30, 2008 9:37 PM

the democrats had enough votes they could have passed this bill without the republicans. They wanted to blame the republicans in a political move. Ask why they wanted money for Acorn. Obama job at Acorn to get loans for low income loans that failed miserably. Democrats did not want to ask for it in the bill they passed. They tried to frame the republicans. It did not work.

Posted by: thelmal | September 30, 2008 9:37 PM

And one more thing.. I was going to vote for obama.. but if he insist on backing this plan i will vote for another party.
I would even vote for McCain if he were against the bail out, even though im Gay and cant stand Palin or Mccains stance on gay marriage.
E

Posted by: silverlake ca | September 30, 2008 9:37 PM

pete: you are one of the few who understands the full extent of it. The "credit default swaps" are trillion-dollar gushers for the true fat cats, those who make money from crisis.

BACK TO OBAMA:

If Obama is FOR the bailout, then he is fundamentally eroding his promises. He will not be able to deliver tax cuts AND have new spending.

The keys will be to CUT capital gains and corporate taxes, to change accounting standards, and to allow for private-sector loans/investments/insurance.

The taxpayer will risk nothing, and the economy will be saved.

Posted by: TommyF | September 30, 2008 9:37 PM

The total lack of governmental leadership, and the lack of faith by the American public in their ability. We just don't trust Washington anymore...thank you W.

Posted by: TODCO | September 30, 2008 9:39 PM

IT MIGHT BE A GOOD IDEA FOR THE HOUSE AND CONGRESS TO INVITE WARREN BUFFET TO GIVE HIS IDEAS ON METHODS OF DEALING WITH THIS SITUATION. FROM WHAT I CAN TELL, HE SEEMS TO HAVE A GOOD GRASP OF WHAT IS NOT RIGHT ABOUT THESE ESOTERIC GAMBLING MANIPULATIONS, THAT PAULSON HELPED INVENT.

Posted by: M.J. | September 30, 2008 9:40 PM

The reason we are in this crisis is not only because big business greed, it's because people who should have never been able to qualify for a mortgage applied, accepted and defaulted on it. That is what happened. People who knew they could not afford a loan purchased the home under FHA program, 0 to 3% down, figured either if they put themselves into the situation it would work out, others bought thinking they were going to make a quick profit by flipping homes. Unfortunately the housing market started to drop and homes are no longer worth what they used to be, hard to sell especially to make a profit. It was greed among every single person who was foreclosed upon. If you cannot afford something don' buy it. Now everyone else is going to have clean up the mess. It wasn't just big business greed but average person greed. This is just the tip of the iceberg. What about all those car loans these people took out against their homes? Credit cards? This will hit us soon. I would like to read something that show the carelessness of the consumer as well as the banks.

Posted by: Needachange | September 30, 2008 9:40 PM

The American people can't live beyond our means. The financial firms can't lend to people so they can live beyond their means. The government can't turn a blind eye.

This (huge) market correction is a necessary, albeit rough, disciplinary tool to teach the American public, financial firms and politicians to learn from our mistakes.

Posted by: Joe A | September 30, 2008 9:40 PM

I agree with "let's start fresh" and from this point on allow only a base plus commission on "PROFITS" as a salary to those that lead the band. By the way get new leaders and let this be a lesson for those that vote based on speaches, check the record first. I also believe Corporate Amercia should provide the funds for any bailout and retrieve the money given to those over paid money junkies that allowed this happen.

Posted by: Vern | September 30, 2008 9:41 PM

It failed for a number of reasons as many comments correctly hightlight. However, I think the largest reason is that the serious consequences of non-passage is underestimated or not understood. My own representative, Adam Schiff (D - CA), said point blank on his site that he thought Paulson and Bernanke were using scare tactics to exaggerate the potential consequences. I replied to him trying to explain that they were not. A commenter above has it right - credit is like motor oil for a car in our Keynesian economic system. We could very well end up in a hyperinflationary depression (the opposite kind of depression we had in 1929, i.e. an actual dollar crash) if we fail to act sufficiently.

Posted by: Jerome | September 30, 2008 9:41 PM

Contrary to popular belief the American people are not stupid. I don't know why congress rejected it. The American people repeated it for a lot of the same reasons they sought freedom from England. It was clearly an abuse of power with numerous conflicts of interest. There are peoblems on wall street, main street and in the national and state capitals,this bill was not the solution. All the things that were wrong with this bill are being discussed throughout the country.Mr Bush and Mr Cheney should be held accountable for their actions,which should be investigated at all costs,so that we may gaurd against the atrocities of the last eight years.

Posted by: U.S. citizen | September 30, 2008 9:42 PM

Mr. Ahrens seems to have over looked another subject. It was a bad bill that gave the executive branch too much power.

Posted by: Linda | September 30, 2008 9:43 PM

The bill was successfully voted down by the elected representative, because their constituents asked them to vote against it. The ones getting FIRE money voted for it. (except Ron Paul) Bad Bill Bad Idea! Some Americans are not gamblers, we have savings that would have been wiped out by a worthless US Dollar.

Posted by: SoccerRef | September 30, 2008 9:44 PM

As I understand it, the core problem is that commercial paper assets such as mortgages have lost much of their value in the face of forclosures and other mortgage walk-aways. Were homeowners gambling on low ARM rates in the future any more foolish, greedy, or short-sighted that Wall Street investors? Looks like a wash on the greed meter. So let's try a trickle-up solution rather than the ususl trickle-down approach. Commit the money earmarked for bailing out the investment banks to funding mortgage rewrites that convert ARMs to lower interest fix-rate mortgages instead. Then the commercial paper has value once again and the investment houses don't go belly-up from bad mortgage assets on their books. Plus, it keeps us in our homes.

Posted by: JLF | September 30, 2008 9:45 PM

Wow.. I can't believe people still think this bill is a good idea. Very Sad. I hope people will hold thier congress people who vote yes on this bill resposible on election day. I say any one voting yes on a bail out should not be re-elected. There shold be a web sight were we can get the names of our congress people who vote yes and get rid of them.
Wake up people.. it is one last f-you by the bush administration. If the economy is so bad then how is it that companies can spend billions bying other companies.
How is it that the dow can bounce back in one day. I say let the economy get back to were is should be. Let the home prices fall to the level were they should be. And finnally the state and cities should get out of the housing market by giving interest free loans to first time home purchasers. That only increases the price of the home.
Eddie

PS.. its funny how i tried to email something to obamas web site and it just sends back a form email.. is he hearing us?
No No No on this $700 billion bill.

Posted by: silverlake ca | September 30, 2008 9:45 PM

It failed because the American people raised our voices very loudly and called our Representatives, and we have just enough democracy left in this country that a critical mass of them actually LISTENED to us.

Now, I want to address the political punditry, who are buying this deal like they bought WMD. Maybe you are not as smart as you think you are. Maybe you should consider that some of us who oppose this bill, are actually very well informed; that we read a lot more about this subject than most of you; that we read mainstream economists, who are all over the place on this bailout. Some like it. Some LOVE it. Some think it's rotten but necessary. Some think it's a manufactured crisis. Some think it's a right-wing attempt to strap progressive policy shifts from happening under the next administration. Some of us think that pieces of all of these things have some truth, and we are genuinely conflicted about it, but have concluded that the bill in its current form is much more negative for working people than it is positive. We think that when the very rich mess up so very badly, there should be consequences for them. And, apparently we have a heretical view that markets should be subject to the democratic process, and not the other way around.

Stop framing opposition to this bill as a thing of the uneducated masses. While not everyone who opposes the bill is a PhD economist, the punditry should take a little self-reflective look at how their "we're in the know" attitude has covered for a culture of lazy journalism in the media establishment - where investigative journalism is now a rarity - and has recklessly led the country to the edge of the abyss.

Posted by: Matt Smucker | September 30, 2008 9:45 PM

READ THE BILL It is so full of loopholes that there are no true taxpayer safeguards. It is completely corroded with trapdoors that amount to the blank check everyone fears.

Posted by: shark89 | September 30, 2008 9:45 PM

it failed for number of reasons as follows including some I haven't listed.
#1 We need a 3rd party that represents the interests of the taxpayers
#2 The taxpayers are so tired of the bi-partisan bull----t, finger pointing and assignment of blame.
#3 The taxpayers that have been diligent and have made their mortgage payments on time
and haven't sucummed to the banks BS of equity borrowing do not see the reason for those that haven't been doing the same
#4 BANKS have been sticking it to the consumer for so long with so many fees etc that we have no sympathy at all for them.
#5 As a taxpayer we have been fed so much BS that we are suspect of anything the government provides us, besides they were the ones that were in charge of keeping the banks in line.
So many reasons so little time

Posted by: exccel | September 30, 2008 9:45 PM

The handout measure failed because it was a scam. What a really bad idea to give money to the very people that have been fleecing Americans. That's rewarding crime.
To keep this from ever happening again we need to get rid of the Federal Reserve Bank and return control of our currency to the US government. Getting rid of the Fed would also allow the market to operate in a free manner rather than being controlled by one "private" corporation.

Posted by: DWayne | September 30, 2008 9:45 PM

It failed because not enough Democrats backed it regardless of how many Republicans voted against it. There needs to be inquiries in Congress and Wallstreet. We are at a time of war and our economy is a major security risk. It failed because we have a bunch of criminals in washington that have profitted and do not want to pay the price to correct the issues because they are now indebted. I am a small busines owner and noone is going to bail me out. If anything we should be buying into ownership but not ONE CEO or any other level of management in these failing businesses should walk away with a penny of the tax payers money until they make US a profit. I wonder how many MORE lobbyists are in Washington this week than usual?
Isnt it strange that this came out of nowhere about the same time that oil fell to a years low?
The market is broken and needs fixing and both Washington and Wallstreet need to be held accountable.
This is no time for political correctness when our retirements are being stolen while corruption makes others stinking rich.
The Sheople are one step closer to a form of socialism or even worse Slavery.

Posted by: BobF | September 30, 2008 9:46 PM

It's like the proverbial "Boy, who cried wolf". Bush has cried Wolf, once too many times, now no one believes him. Remember the S&L fiasco, the 70's oil crisis, what about black Friday. The market needs to adjust itself without government intervention, isn't that what all these CEO's have been telling us? Deregulate so we can pay ourselves fat salaries, fleece companies and you, then ask the government to save us.

Posted by: casaslindas | September 30, 2008 9:46 PM

Remember, it was Pelosi who called Republicans "unpatriotic" for not voting initially for the "deal" which was not a deal.

REMEMBER: Pelosi was insulting the Republicans when the Dems wanted passed a WORSE bill than was voted down.

Posted by: TommyF | September 30, 2008 9:46 PM

Posted by: Dbsandis | September 30, 2008 9:47 PM

It is quite possible that Paulson accidentally the socialism

Posted by: Anonymous | September 30, 2008 9:47 PM

I am sick of the partisan language of Washington. There is lots of blame to go around for sure on both sides for the situation we find ourselves in. For once, I wish we could have real leadership in Washington and come up with a solution that really gets to the root of the problem vs just throwing tax payer dollars at a poorly defined problem. Plus, our leadership has done a crappy job of defining what the real problem is and how it relates to main street and the average joe.

Posted by: Donald | September 30, 2008 9:48 PM

I believe it was the media and 24-hour news that made the bill unpalatable to the America people. The purpose of the bill is to allow the credit markets to operate properly, thereby providing the America public and American business access to credit in order to carry on their daily business activities. Instead of describing the purpose of the bill, they called it a “Wall Street Bailout”. Most Americans don’t see the connection between Wall Street and Main Street. They are not concerned about wealthy New York executives. I guess headlines like “Wall Street Bailout” sells more news than “Easing Credit on Main Street”!

Posted by: Rick Gartner | September 30, 2008 9:48 PM

From judithod: "In 1977, Carter kicked off this crisis by signing into law the Community Reinvestment Act (CRA), which required banks to provide credit to "under-served" populations by granting them "affordable mortgages." Fast forward to 1995 when under Clinton, the CRA was retooled to increase access to mortgages for the "under-served" and banks were warned that if they didn't make these loans, they would face penalties."

Ahhh blame Carter AND Clinton...

not the people in office.
NEVER them.

NEVER NEVER them.

Posted by: Dude1 | September 30, 2008 9:48 PM

The Democratic party wants it to fail so they can drag it out as long and as close to election day as possible. If they wanted it to pass they would have made they members vote for it and Nancy Palosi wouldn't have given her partisan talk. They are playing politacs as they do with every issue!!!!!!

Posted by: David Shealor | September 30, 2008 9:48 PM

MORE ON OBAMA:

Here is a fellow who said we have to be "as careful getting out of Iraq as we were careless getting in" and he is encouraging a quick passage of a bill which is financially the equivalent of SEVENTY MONTHS IN IRAQ!

Posted by: TommyF | September 30, 2008 9:48 PM

As a nation, we have turned our collective anger inward and are intent on self-destruction.

See you in the bread lines.

Posted by: Paul | September 30, 2008 9:48 PM

I was glad to see this Bailout fail and the reasons being as follows:
1. With all the lies that we have got from Bush no wonder it failed.
2. So now we the people(TAXPAYERS) have to pick up the pieces of broken wall street at a price tag of 700 billion. That is a crock of you know what. I don't see the small company's being bailed out.
Finally, if the housing loans is the issue then pay off the loans that the homeowners have with that 700 billion.
I have heard it all being blamed on housing, If you all think about it this started when fuel prices went through the roof.
What should also done is these ajustable loans should be outlawed, we see where that went.
I say help the people NOT the corp.s

Posted by: Michael | September 30, 2008 9:49 PM

The bill failed because those of us who believe in the Constitution, checks and balances, and all the effort Andrew Jackson went to in order to tear down the central bank, went out of our way to tell congress that if they voted yes they would be FIRED. This is our government and we're not going to let them ignore us any longer.

Posted by: William Harris | September 30, 2008 9:49 PM

I am sick of the partisan language of Washington. There is lots of blame to go around for sure on both sides for the situation we find ourselves in. For once, I wish we could have real leadership in Washington and come up with a solution that really gets to the root of the problem vs just throwing tax payer dollars at a poorly defined problem. Plus, our leadership has done a crappy job of defining what the real problem is and how it relates to main street and the average joe.

Posted by: Donald | September 30, 2008 9:50 PM

Dude1:

I am a Republican who will be HAPPY to blame those in office. Yes, I will put George Bush in that class. BUT... Barney Frank, Chris Dodd, Maxine Waters, Nancy Pelosi... all in office... all culpable.

Go back to 2005 and watch the C-Span video on YouTube.

Posted by: TommyF | September 30, 2008 9:50 PM

Few people, including legislators, seem to have read the bill. It was a piece of garbage that would not have accomplished anything it was purported to do, other than transfer an ocean of money to a bunch of folks who have already gotten rich at our expense.

Read Section 110 of the bill, which supposedly limits executive compensation. Many companies would have been totally exempted from limits, and all the others would be almost unimpeded in setting compensation at whatever levels they desire, as long as they pay standard taxes on it. Big deal.

Read the Section on Justice, in which Congress directs the Justice Department to use available legal authorities such as the RICO Act to freeze assets and pursue the thieves who did this to the limits of our legal system. You didn't see that section? Oops -- they forgot to include it.

How about the section where they propose to enhance market liquidity by infusing the money up the financial chain, instead of only at the top. At irst glance, it sort of looks like they did some things along that line, until you read the text closely.

Thus far, this whole thing has been a sham. The Sky is Falling, but no explanation of exactly how. A Paulson/Bush plan that would have allowed the Secretary of Treasury to establish an army and capture domestic or foreign oil fields if he deemed it necessary. No legal recourse to question his decisions. I am not kidding. Me and seven other people seem to have been the only ones who read the draft that was submitted to Congress.

Now we are supposed to get in line and jump for joy because they plan to raise the limit on FDIC deposits. How many of you have more than $100,000 on deposit at one bank? Who the hell does? Why is this supposed to make me happy?

Posted by: Phil | September 30, 2008 9:50 PM

Also, it wasn't a "rescue" bill. It was a bail-out that would have been paid for by inflating the dollar. That is what would really hurt "main street."

Posted by: William Harris | September 30, 2008 9:51 PM

I hope it failed, because it was a bad solution to the problem.

My favorite solution : initiate a government bank
1) Let the government bank act as a mortager, offering a 30 year fixed rate mortgage at 5% to anyone with a single property, or buying a first property, in America, up to the median home value
2) Let the government bank purchase the homes for resale from anyone who does not qualify for refinancing of their sole home, allowing them to qualify for a cheaper home under 1
3) Let the government bank expand the small business loan program, offering loans at 5% to any business with a cash flow adequate for the repayment schedule, up to a set limit
4) Let the government bank issue small business and personal credit cards offering interest at 5%, with a credit limit not to exceed a years labor at minium wage
This will directly resolve the underlying problem, the mortgage crisis, and its effects, a credit crunch, without a bailout, but on a competitive basis.

The only banks that survive would be those that could outcompete the goverment by the introduction of efficiencies. In 5 to 10 years time, the government could sell its banking business in pieces to this new generation of banks.
The government could easily enter banking business along these lines since credit evaulation and debt collection are among its core competencies.

Any profits the government would accrue from its business enterprise would be dedicated first to reducing the deficit, then the debt, and then the tax rates.

Posted by: Don Edwards | September 30, 2008 9:52 PM

I would also like to know what makes the clowns in Congress believe they know how to handle money, or "fix" the economy.

Posted by: TommyF | September 30, 2008 9:52 PM

Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I have no confidence whatsoever in those who have stood before the cameras trying to implement such a policy. Instead, I submit the following three steps, suggested by Dave Ramsey and others who I put a lot more stock in than those I have seen on TV:

Common Sense Plan.

I. INSURANCE

A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.

B. In order for a company to accept the government-backed insurance, they must do two things:

1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
working with the borrower—again limiting foreclosures and ruined lives.

2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.

C. This backstop will cost less than $50 billion—a small fraction of the current proposal.

II. MARK TO MARKET

A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.

B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.

III. CAPITAL GAINS TAX

A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.

B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to stand up, speak out, and fix this mess.

This makes more sense to me than pulling the figure of $700 Billion out of the air, and then coming back in a few days asking for more, as has been the track record in the recent past.

Posted by: Charles | September 30, 2008 9:52 PM

The bail out failed because the American people spoke out loud and clear in their opposition to the plan that privatized profits and socialized losses. John Q. Public sent e-mail and letters, made phone calls and signed petition to let their elected representatives know that the deal was a no deal, no way, no how. Thankfully, the American people are finally awakening from their coma that has been in existence since the U. S. Supreme Court decision which allowed the inexperienced and unqualified George W. Bush to take the oath as President.

Posted by: Fl Voter | September 30, 2008 9:53 PM

Every Republican interviewed said that Nancy Pelosi's comments had nothing to do with their decision to vote against the bill. I believe that's just another political something thrown out there to cover up the fact that they're all more interested in getting reelected than anything else. Some want to appease the people who don't want this bill. Some are starting to wonder about all the retirees in their districts who are seeing the value of the retirement funds drop more each day and how they'll vote.

I believe the bill failed because the members of the general American public, hardworking, ethical people of all faiths or of no faith, do not trust anyone in Washington, and this includes Congress, the President (where are those weapons of mass destruction?), lobbyists, the list goes on and on and on.

I believe the oversight on this bill and all bills that come out of that place should be by private citizens, one from each state, who are appointed by a committe made up of equal numbers of Democrats and Republicans. These appointed people report to the government of their own states and the states report to the people.

These "oversight citizens" should be paid a normal salary equal to what they made in the private sector. Their expenses and reimbursements are published each month in the newspaper. If they meet or speak with any member of the congress or any other politican or lobbyist privately, even on the phone, they are fired. They must agree that their phone calls, e-mails, both personal and private, are open to scrutiny at any time. If there is even an appearance of impropriety, they are out and someone else is in. The term is one year. The next year, a whole new group is appointed.

Having the government oversee the government is like having children oversee children. It just does not work well.

Posted by: Maha | September 30, 2008 9:54 PM

judithod nailed it. The blame is squarely on the socialists who made a market for bad credit by demanding subprime loans.

Posted by: huck | September 30, 2008 9:54 PM

I don't remember having a referendum scheduled on this... so I am not sure where the argument of the government actually worked for us is coming from?

Posted by: Adam L. | September 30, 2008 9:55 PM

I hope you all realize that it won't matter whether this bill passes or not. We WILL go into recession.

THIS IS GOOD!

Shake out the dead wood. Let the strong survive. The American Dream is a PRIVILEGE not a right. EARN IT!

Posted by: TommyF | September 30, 2008 9:55 PM

I think Sandra Pelosi should step down. She has an abismal record of utter failure. Charles "Taxman" Rangel? Forget about it! Harry Reid is on life-support. Barney Frank? The man is disgusting.....
I pay my bills on time and it's time congress and the bankers do the same!!!!
NO BAILOUT -NEVER!

Posted by: Larry Clifton | September 30, 2008 9:55 PM

It's because of the carter administration that we're in this mess! Free homes for everyone! No need to qualify! No credit check! We're afraid of liberal lawyers and judges! That's why!

Posted by: joejoe | September 30, 2008 9:56 PM

I don't think there has been any big disconnect between Main street and Wall Street. I just think the American people are ready for the big wigs to take their medicine, and if we little people must take it too, so be it.

Posted by: John | September 30, 2008 9:56 PM

$700 billion is a lot of money for one single individual to control. What people don't seem to understand is that if the bill would have passed, only one individual had control over the allocation of the resources. The congress and the Republican party specifically is not against the bill itself, they are against the certain clauses that are written in the bill, specially the one that protects the distribution of the money.

Posted by: David | September 30, 2008 9:58 PM

The bill failed because the American public is tired of being used and let their displeasure be known. The economy has been an issue from at least 2005 but instead of dealing with it when the signs were first seen the administration waits until an election year and a debate week to broadcast that there is an economic crisis. Immediately, banks and insurance companies fail and the American public is caught footing the bill. We saw this is the 80's with the savings and loan bailout and we are seing it again.

The American public wants truth, not for this administration to attempt to scare us into submission.

Where is the $700 billion going and how did they arrive at that figure? What does each line of the bill say? Is it a clean bill or will it serve to line the pockets of executives? How will the taxpayer benefit and how can we keep this from occuring again? Lending must be fair but it has to be smart.

I know that a lot of people experiencing the financial crunch high gas and food prices has brought on would like to experience a bailout of some sort. The American public is not going to blindly sit by and take it for granted that Congress is working in our best interest. We have seen that the wealthy are favored while the taxpayer is taken for granted. We want answers and we want to know that our tax dollars are going to be used wisely and prudently.

Posted by: CW | September 30, 2008 9:58 PM

Republicans faced with the consequences of the worst administration in US history; theirs, including their trademark failed de-reg policies are faced with a curious situation: wether to accept the bill from their party's leaders; representing the antithesis of conservative ideology.
What do you expect from a failed administration, its failed policies, and its republican party but more failure?
I'd say it's par for the course.... consider the source.

Posted by: ukeman | September 30, 2008 9:59 PM

it has to do with globalization. this already happened back in the '70s. they bailed out the banks that time and screwed over all the countries with loans. look how well that went. were back to square one again. seriously globalization ftl.

Posted by: greg | September 30, 2008 9:59 PM

john: EXACTLY! I, for one, am willing to take the pain. But Washington wants to bailout the weak and greedy, including themselves.

Posted by: TommyF | September 30, 2008 9:59 PM

ok, so I worked for nearly 40 years providing for my family and learned to pay my bills on time and and save for the future. I actually saved enough to make at 20% downpayment on my first house....what a concept!

The problem is people got too loose with their money and had to have all the toys and trappings of people who saved for them, when they were not financially stable enough to have them. Everyone has to have the latest thing now vs the old way of saving to buy something. Remember the old "lay away" features of Sears, etc. What a Concept!!!!

I worked hard and I'll not support a bail out for the dumb, stupid, irresponsible actions of citizens who do not have enough guts to live within their means.

This bail out plan sucks, was poorly sold, and does not get at the heart of the real problem.

PEOPLE.....LISTEN TO ME.....LIVE WITHIN YOUR MEANS AND STOP TRYING TO KEEP UP WITH THE JONES'S, YOUR CLASSMATES, ETC. AND GET A GRIP ON YOUR LIFE!!!!

Posted by: Donald | September 30, 2008 9:59 PM

The bill failed because we have two parties in Congress that don't give a damn about "Main Street" they care about maintaining their status in the power brokers of America. They are both too busy telling you diversely opposing reasons why your life sucks and scaring you about sensationalized worst case scenarios of whats killing America, the world, finance, etc. Not only that they want to tell you that the other guy is to blame for it. Don't blame Obama, McCain, Pelosi, or Bush alone cause they are ALL to blame. Cannot blame a football player for trying to win by exploiting the weaknesses of the other team, and believe me when I say thatthis is ALL a game to them. Let them makeyou believe that they care and they win. Either they did something to sabotage the financial health of this country directly, or they didn't do something and they could have so they sabotaged by their inaction. Either way, our leaders are either corrupt, inept, or morally bankrupt, but don't just blame one person or one party.

Posted by: Jim S | September 30, 2008 10:00 PM

I can list several reasons why this bill failed:

1. This bill did not address the needs of the voters who have and will lose their homes because they did not fully understand the consequences of ARM's and that it would be a completely new mortgage in 3 to 5 years. That was the fault of the brokers who were only in it for the money: they were not advising their clients.

2. Those of us who bought a house we knew we could afford do not want to bail out the speculators. That probably was the most vocal opponents to this bailout.

3. THE PEOPLE ARE MAD AS HELL AND WON'T TAKE IT ANYMORE!

4. Any Republican Congressmen looking to survive the November blood-bath does not want anything to do with lame duck Bush's poison pill. This is Bush's last attempt to reward his supporters and at the same time a way to put this nation in so much debt that Obama could not deliver on his social programs. Then the Republicans can say in 4 years the Democrats were a do-nothing administration.

Posted by: History Buff | September 30, 2008 10:00 PM

The "Rescue Bill" failed in the House yesterday because a large number of House Republicans weren't committed and their leadership wasn't clear on the situation until the vote.

The Bill was supposed to have 50% of House congressmen from each party commit to the vote. 60% of democrats voted for it and 40% of Republicans voted for it. Pilosi brought in more than she had originally committed and the Republicans slipped at the final call. A rebellion of Republican "idealogues, people afraid to be voted out of office, and partisons".

The trouble is that the credit collapse is difficult for anyone to understand except for the professional finance class and they haven't communicated this well. Paulson, Pilosi, Frank, and others haven't communicated the problem and the solution very well. Too many people have crazy ideas for alternatives without understanding credit and how money flows in an international network. You have a lot of people with old archaic ideas who think they can solve this the same way they solved the Savings & Loan collapse in the 80s. You have many idealogues who think "free markets" and "no or inconsequential government" and banty around archaic words like "socialism". These guys are wingnuts. No way.

Posted by: Lucy2008 | September 30, 2008 10:00 PM

There is a political meltdown within the Republican party. Many Congressmen and their constituents lean to the libertarian side, believing in total free market deregulation and non-interference. Newt Gingrich has be shouting "no bailout" from his soap box also. They say it is normal to have boom and bust cycles and if ordinary people don't know better, and don't prepare, then that's their fault. Bad business models must fail by the means of the markeplace. Period.

Washington politics, however, requires Republicans to demonize the Democrats to divert attention from the fact many would have voted that way anyway because their constituency demanded it. Pelosi has very little to do with the difficulty in passage, - this bill is just a political bombshell for Republican and Democrats alike.

Top economists can't fully understand this economic mess or the best way to proceed, and therefore certainly neither can Congressmen, - and in times of urgent confusion, they will stick with the wishes people who got them elected before anyone else.

Since the outcome will be bad with or without a bill, just in different ways, it's a lose-lose bill which Congressmen are terrified to take a position on, thereby deferring to the popularity poll.

If a Wall Street plunge can scare the public into favoring a bailout, then that is what will have to happen first. Did enough of the public change their minds on this yet, enough to tell their Congressmen? Thursday will tell.

Remember, the whole basis for a "good" outcome to this bailout is a revival of confidence in U.S. securities as a place for the global pool of money to return to. That is a big "IF" right now, about as certain as the belief in 2005 that housing prices will always go up at double digit rates.

Posted by: d.baritone | September 30, 2008 10:01 PM

Members of Congress really didn't have a clue. Some listened to advisers, and others listened to the American people. If those that didn't understand listened to the people instead of their advisers, then the system is working as it should.

That doesn't mean we're not going to feel the pain as a result.

Posted by: John McCue | September 30, 2008 10:01 PM

It didn't pass because Bush is just using it to help his Wall Street friends and Congressmen had too strong of a conscience to let it pass. Thankfully, they were loyal to the American people and not just the rich and greedy.

Posted by: Julia | September 30, 2008 10:01 PM

Did Lehman Brothers, Bear Sterns and all those arrogant Wall St bankers deserve to be bankrupt? Absolutely. In Darwinian sense, those guys are unfit to be alive. So, we don't need to bail them out.

Posted by: Wibawa | September 30, 2008 10:03 PM

Clearly, you can't fool all the people all of the time, as Lincoln reminded us. I am distraught that those who would tell us the raw facts of the matter are being largely ignored by the media. Rep. Dennis Kucinich, in an interview with DemocracyNow, stated he read the bill, and that the language that was meant to protect taxpayers was vague, interpretive, and non-binding. This, after all the hype that taxpayers' interests would be looked after! What does it take to make the charlatans in Washington come to some meager moral awakening - and put the interests of working people before their own greed? It is certain that some tortured weasel of a bill will be passed, the taxpayers will NOT be protected, and their distrust of government to serve the interests -- ANY interests -- of the nation will have been made permanent. But perhaps that was the intent all along....

Posted by: PorkyNoh | September 30, 2008 10:03 PM

No one could or should trust politicians. Having said that, if you've paying attention at all, you know that this problem was caused in very large part by the Democrat Party by pandering to their main base, the poor, uneducated, disenfranchised and uninformed, minorities. Wall street can be faulted but not blamed for following the rules that allowed them to risk money giving loans to people who could obviously not afford them and then to hope that the real estate market would continue to go up. Any thinking, non partisan person knows better. But the Demos controlled congress and always seem to put pandering over American values every time. These are not opinions they are facts if you read the record. Don't listen to Rush, don't listen to Barney, just read the Congressional record or any non political periodical. You can deny them because you want to but that doesn't change the facts. This was a problem so big that even though the cure will stink to high heaven, the alternative is worse. And frankly, the majority of the "sound bite" populace are not smart enough to realize when we're up to our necks in quicksand. They'd rather deny the problem and blame the other guy.

Posted by: Marv Grisham | September 30, 2008 10:03 PM

All of you are right. We are so right that
we are worng. We need to blame some one or something. We are all the same we look for the American dream. Once we have it we look for more were greedy. We look for honesty, Integerty, when we think we have it, it's gone. We ask for an honest answer. When we get we think it's a lie. We trust our system and depend on it, but that has failed us. Our leader tell what is best and we believe,because we want to. THINKING has become an option. We don't question untill after the fact. We quite woundering. We don't hold ourselves accountable. This is a battle for our lives and future. UNITED WE STAND DIVIDED WE FALL. Our leader are seperating us. We are becomming DEVIDED. Iam tell you Middle
Class America we need to Stick together and hold our leaders accoutable. Ask the tought question. DEMAND IT!!! It's everone's right to question. We need strong
leader who look out for all of US. We do not need a bandaid we need a fix. Our jobs back.
We need to compete with the rest of the world on a level playing field. Don't believe that the politicians are the only blame that our jobs have gone elswhere. We are to be held blame for not taking the bull by the horns and holding on. We are the most productive Country in the World and the most gullable. We need to take back what is ours and improve on it. I want what you want. I don't want to give up what I worked so hard for. It's not in us to give up our homes our jobs. This country was not put together that way. Our forfathers did not intend for us to fail. We are a 200+ mistake that keeps working. We live together while other cultures and countries tear them selves apart. We know it can work. So lets keep working, let's keep questioning, moving forward. We need our thinkers and self started to give us kick. We need to kick ourselfs. Let our politicens know it Unexceptable to fail, to be greedey we need to move forward.
So Who's Right and Who's Wrong?????????.
Search your souls and mind. I know I have been. I woun't go down without a fight. I believe in America. The system is in being tested. Americans need to stand United.


Posted by: Joe | September 30, 2008 10:04 PM

The American people do not want to bail out:

(1) people who lived beyond their means;

(2) banks who loaned to these people;

(3) Wall Streeters who bought the banks' packaged junk mortgages

(4) Washington politicians who encouraged banks to make these loans.

Some banks were THREATENED with lawsuits if they DIDN'T loan to the disadvantaged.

Posted by: TommyF | September 30, 2008 10:04 PM

It failed because Republicans thought it would pass even if they voted against it, leaving Democrats with the blame for an unpopular bill but getting Republicans off the hook for the consequences of it not passing. Remember, these are the strategic geniuses who thought invading Iraq was a good way to go after al-Qaeda.

Posted by: aleks | September 30, 2008 10:05 PM

I read the entire bill and it is a scam of the American People. Now the politicians can all stand up and blame each other. While they are doing this, more back room deals will be made which will not benefit the American people. It is a really bad bill. If the politicians want to help the American People, they can clamp down on the way banks and credit card companies do business. The bill for "Trickle down economics" or "VooDoo Economics" as Bush I called it is coming due and the American People will be the ones paying it.

Posted by: Nighttrain | September 30, 2008 10:06 PM

I was offered a high risk loan back 2006. I faced the facts that myself and my husband could not afford to own a home because the risk was too great of losing it later on down the road.. Now my tax dollars have to pay the debt of others? NO WAY! For once congress heard the voice of many others like me and voted NO! thanx

Posted by: Liz | September 30, 2008 10:07 PM

CONGRESS, HEAR US:

If you vote for the bill, you will be VOTED OUT of office.

You MUST enlist GOOD advice from Warren Buffett, Donald Trump, Steve Wynn, Jeffrey Sachs, and other brilliant minds.

Call me.

Posted by: TommyF | September 30, 2008 10:08 PM

The bill failed because John McCain attempted to swoop in and claim credit for the bill as it was about to get passed. His political stunt, the mock suspension of his campaign and arrival in Washington injected politics into the process, and upset the rare and fragile consensus that the bailout team had achieved up to that point. If we recall, leaders from both parties were appearing jointly on press statements about the bill, until John McCain got involved. McCain's divisive presence drove a partisan wedge into the process, and led to house republicans revolting against the plan, and the democrats getting defensive about who should get credit because it could end up affecting the outcome of the election, which resulted in Pelosi's ill advised speech. At one level it is George Bush's failing as leader of the country to unite both sides, but more importantly, I think it was John McCain's failing as the new party leader to rally support for the bill. Everything started from McCain's wednesday announcement that he was 'suspending' his campaign, putting his ambition ahead of national interests.

Posted by: Richard D | September 30, 2008 10:08 PM

Three words: GREED, GREED, GREED.

It failed because it's irresponsible, it will NEVER pay for itself, and the bill was presented in the same ARROGANT manner as everything else this administration has tried to shove down the throats of Americans. Listen up: "We the people, are not quite as simple-minded as you think!"

Why should we give you 700 billion to "fritter away" (because you have NO CLUE as to what is REALLY going on and you certainly will make this mess worse, merely doling out money to your friends). And then in two months, you'll say, "oh, now we need 1.5 Trillion." pfffft!!

Here's a plan:
Take the money from those who profited from these NINJA loans. Put those greedy jerks in jail. Put the greedy defaulters in jail too. Since when do we not have accountability?!?. Put banking people who haven't the sense of a chicken without its head in jail. Throw away the keys. I don't want to pay 75k/year for their maintenance in jail, either. Let their high-powered friends bring them all the bread and water they can eat.

Posted by: Michael | September 30, 2008 10:08 PM

Stop saying its the republicans. It is a Democratic controlled Congress and Dem's failed to secure 95 Democrat votes if the report is correct.

They did not need any more Republican votes to make this pass. If it were the Republicans only, then why couldn't the Democrats control 95 of their own.

Don't be stupid and blame them both.

Posted by: Jim S | September 30, 2008 10:08 PM

It was a bad bill filled with loopholes to benefit Wall Street. For every passage designed to pacify the American people, there was the "exception" or "exclusion" at the discretion of a Bush pundit. There was no mention of those that have already lost their homes and lost their credit rating and little for those who stand to lose their homes. Congress needs to wake up and realize that we are not so stupid as they apparently think we are. If the matter was indeed so dire, would our fearless leaders really taken a day off to celebrate a holiday? Try as they may to pass the package, we will have the final say thought the ballot box. We have very long memories too.

Posted by: SBT | September 30, 2008 10:09 PM

We are pointing our fingers at our leaders - business and political. We should be looking into the mirror. What we are seeing is a result of self servicing. The best way to fight this is to reconsider our spending habits; our wants vs. our needs; to see that it is more noble to help our neighbors than it is to seek ways to increase our wages. I am no hippie - I see them as self servicing greeds themselves. I am not a big businessman who loves money more than the environment. I am common. It is time we toss away the winds of the right and left political parties and start working together to make a free enterprise, compassionate Republic work. From where I stand, people are more interested in the left and right issues so much so that rational thought has lost it's light.

We are a great nation in a changing world. I have no answers, however, I believe we should not act too quickly, but we should act swiftly. How about FDR's "Brain Trust"? We are seeing a symptom of a much greater project. We don't trust our leaders; we don't trust our neighbors; our families are questionable and often end up broken.

The cost is dear and the future - for the next 50 years or so - often looks grim. I fear for the decisions of the generations since the 60's - and it seems to worsen. What is the solution? Who knows? Perhaps a first step is to realize that we are all family in humanity - we are not strangers as we see when great tragedies occur. Patch the short term issue, but focus on the long term efforts. I'm 28. I dream of a day when Congressional votes are purple on the issues. I dream of the day when I receive a Presidential profile with the issues they do and do not believe in and blindly vote without regard to party lines, charisma, or popularity. I dream of a world where we can trust each other again and where rational thought is royalty.

Posted by: Shane Shepard | September 30, 2008 10:09 PM

This is politics at work. I fault Pelosi for citing partisan politics as the reason for the failur of Wall Street. I fault the House of Representatives for being so scared of losing a re-election that they won't step up to the stand and do something that's right as opposed to doing something that's popular.

But I also fault the American People (me included) for not telling our representatives how we feel. See, a lot of these constintuents are hardcore voters, and likely vote well along party lines. The reason so many republicans voted no is because the constintuents see it as government getting involved in business. The straight away belief of Republicans is "limited government." You bet those hardcore voters will complain to their reps. And shame on many of us for not also voicing our concern to our reps.

So then comes the dreaded decision. Politics aside, the representatives may need to ignore their constintuents if they don't fully understand the issue. Sometimes, the general public does not know it wants. As someone pointed out, we have talking heads on TV giving us guidance. The bill should've passed. It's not a political issue. It's a "do or die" issue. This goes beyond the November election vote. I liken the situation to fireman arguing how to put out a fire while the building continues to burn. There's no since arguing about it. It NEEDS to be done.

Posted by: Tim | September 30, 2008 10:09 PM

When did credit and debt replace earnings as the engine that drives the U.S. economy?

Posted by: Dave | September 30, 2008 10:10 PM

The point about the 'no confidence' vote on both Bush, but more importantly McCain is a very good one. That was a really bad thing for him. Bush not so much since he's a lame duck.

It also made it clear that 2/3 of Republican leaders are the idiots that got us into this mess.

Posted by: Nym | September 30, 2008 10:10 PM

The Republican apologists are out in full force. Not only are we blaming Barney Frank and Bill Clinton, but some commenters are even dredging up Jimmy Carter. They haven't mentioned Teddy Roosevelt, the true father of this financial crisis, but they'll get around to him eventually. It's all Abraham Lincoln's fault -- oh wait, he was a Republican...

Let me repeat. This crisis was not caused by Democrats' desire to ensure affordable housing for our citizens. It was caused by the unregulated explosion of derivatives in the financial markets, which Warren Buffett famously described as "financial weapons of mass destruction" -- specifically credit default swaps, which were highly leveraged bets on whether companies would default on their obligations. CDSs turned our financial system into a gigantic casino filled with delusional "players."

The housing crisis was simply the trigger for an event which was waiting to happen. The Republicans love to put the blame squarely on average citizens -- it's a lot more fun than looking in the mirror...

Posted by: Steve | September 30, 2008 10:10 PM

700 billion so they can fix their books and still foreclose on my house, yeah I should have known better than to get such a big mortgage; but if the bank wants to give me money who was I not to take a shortcut into a nice house. Let the bank come back to me and renegotiate. My house is now worth 100 k less. Instead of letting them write off the value of my mortgage at 35 cents on the dollar and foreclose on my house renegotiate with me for what my house is now worth. It works for me because it's better than paying rent It works for them because the bank has money coming in and they have to own up to their mistake. Force these fat cats to work with me directly instead of stealing my money through taxes. By the way if the mortgagee goes bankrupt who do I make payments too?

Posted by: Truth talker | September 30, 2008 10:12 PM

If your teenage son came to you and said, "Dad, I just wrecked the car. Can I have another one?" what would you say?

Now, the investment bankers and other fat cats are coming to us and saying, "We just squandered all the money that you entrusted to us. Can we have more?" What should we say?

Posted by: rb | September 30, 2008 10:12 PM

Ha!

When the "disadvantaged" are receiving NINJA loans, the liberals say "The system works."

Then, when the system crashes because these deadbeats won't or can't pay their bills, they blame the Republicans for ALLOWING the very system the Democrats implemented.

And WHY did the Republicans allow it? Because we believe in FREE MARKET, even if that means the Dems add a bit of socialism.

But as you can see, when you do this, not only do the "little people" suffer, but the banks, fat cats, Joe Main Street, and the government suffers.

Figure it out.

Posted by: TommyF | September 30, 2008 10:14 PM

We don't need a Wall Street bailout. What we need is a low cost and simple solution. 1. The Fed needs to insure the mortgage debt securities on the Wall Street books. The firms can then inturn sell their questionable assets. 2. Rewrite all the delinquent mortgages to 6% fix rate 30 year mortgages. 3. The FDIC insures all bank deposits at $200,000. 4. Waive the requirement for Wall Street firms to write down the assets until it is determine that the securities are indeed worth less than face value. 5. The Fed cuts the interest rate to 1%. The 14 banks that control LIBOR are encouraged to keep the interbank rate at pre scare levels. 6. Congress stays out of setting economic policy. 7. Bush spends his last few months in office in quiet. 8. The American people elected a President and a Congress that are not financed by Wall Street.

Posted by: David Hendrickson | September 30, 2008 10:16 PM

Hahaha! We taxpayers are paying for bailouts without a bill anyway! What do you think the Fed, the Treasury and FDIC are doing now and have been doing in the past, and without any oversight or accountability?! What do you think Wachovia was all about?

Posted by: pocketnunu | September 30, 2008 10:18 PM

As I understand it the GNP is 65% consumer spending, we have a lot of power in light of that %, so if we don't buy or don't agree with the fed's so be it. We have more power as consumers than we realizie.

Posted by: exccel | September 30, 2008 10:18 PM

The Bush administration WARNED congress there was trouble with freddie & fannie back in 2OO4. The buy the vote Democrats who said make more loans to the poor underprivledged, the GSEs will guarantee the loans, chose to ignore this warning rather than credit the Republicans, and disillision their mass voting base.

Remember the Social Security warnings? Be prepared for the next crises.

Posted by: Ron | September 30, 2008 10:19 PM

As the Government continues to intrude into our liberties and destroy our economy, we must remember that any legislation that takes away our freedoms should not pass. If this bill was addressing core issues then it would have support. However, it was taking liberties from the people and giving them to a central government. We must keep the freedom and ability to succeed and to fail as an American way of life.

Benjamin Franklin once said, "Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety."

Yes times will be tough, but that is what life is, tough. Maybe we just forgot because too many of us do truly live outside our means.

Posted by: Greg from Texas | September 30, 2008 10:20 PM

The common sense American would see this for what is the biggest lie in history. For the people in power (Congress) to act as if this is a surprise is a joke at best and more to the point criminal. We all want to point the finger at Wall Street and the banks, the reality is this was stuffed down their throats by Washington. If one takes a quick glance at history it is not too hard to see where the blame lands. In the seventies while Mr. Carter was president they had a well-intentioned idea (Jimmie had lots of well intentioned good ideas) and that was, let’s get low-income people housing (The war on Poverty).

The error was forcing the lending intuitions into the sub prime market. They had standards for loans but the government had a better understanding. Forcing the lending institutions into accepting as a percentage of their overall loans as sub prime. If they did not comply they paid a penalty.

This was all good until 1995 when the administration (Clintons) then decided to broaden the criteria and expand it even further and widen the percentage of loan dollars that had to be sub prime.

In 2003 GW Bush tried to get legislation passed regulating the mortgage industry and more to the point the sub-prime market. The Dem’s defeated it. In 2005 John McCain tried again to introduce a bill for regulation of the mortgage industry and was also shot down by the Dem’s

For the Dem’s to now sit and blame the current administration is one of the biggest frauds in history. I am not a huge Bush fan but to try and place this on him is a fraud. Each and every one of our current members of congress shares an equal burden. But what the heck they have a 15% approval rating Bush only has a 30% approval rating.

If we allow these frauds to pass this bill it will be the biggest failure in history. Tell them NO let the free market work, yes the market will drop. But it will be a long time over due correction.

It is time to clean house UN ELLECT EVERY ONE CONGRESS.

Posted by: DC Danielson | September 30, 2008 10:21 PM

For an activist government, people need to vote. A higher percentage need to vote. Intelligent people need to be informed by factual information sources like well vetted sources (such as Wikipedia, FactCheck, and so forth).

People usually don't exercize their power of vote for government. If the entire population could easily register on line and up to 24 hrs before they vote on line with little fraud, we'd enable a real democracy for all our people.

Voting registration is difficult with all kinds of difficult rules for the poor and students. These rules need to support greater citizen participation vs. voter suppression. People who have had their vote taken away because of being convicted of a federal crime, should have their vote given back. Significant population segments have had their vote removed due to drug crime, unfair prosecution of the poor and blacks. It is class war and disinfranchisement.

Posted by: Lucy2008 | September 30, 2008 10:21 PM

David:

I respect your idea, but I must disagree.

Mainly, the idea presupposes that a large portion of the defaulting mortgages can be rewritten in such a way that the homeowners won't default. I don't think the percentage is so high.

I like the idea of insurance but, as with all insurance, the insured must be inspected for fatal flaws. In such a case, I think a quick solution would be impossible.

Posted by: TommyF | September 30, 2008 10:22 PM

The bill failed because the squirmy congress critters were forced to listen to the their constituents for once. The vast majority of America is sick and tired of being told to sit down and shut up by the Washington fat cats, and all their lobbiest buddies. In an era of political correctness we are all suppose just be nice and never say the truth. As if the constitution was somehow shredded and is now invalid and we all have to take orders from Washington. That is not the balance of power intended by the founders and they are rolling in their graves today. The truth is that any bailout will also include immunity to all the big banking tycoons that lobbied to relax or lift the rules which allowed them drive us into this mess. And why wouldn't it, the same people who got us into this mess are writting the legislation and they all protect each other. This mess at best is a shell game that the American public has already lost, and now they are trying to take our last buck. Believe me there are more than a few people that should be sitting in a prison cell over this one, but there won't be anyone paying for this crime against America but us.

Posted by: DarrenG | September 30, 2008 10:24 PM

The bail out fail for one reason only because it SHOULD NEVER OF BEEN ATEMPDED in the first place given enough time the sharks on WALL STREET will eat there way back to the top and be Pi..ing on the little guy again

Posted by: Ed McAllister | September 30, 2008 10:25 PM

As many have already commented, there is no real taxpayer protection in the $700B handout. Something needs to be done to ease the taxpayer burden and provide an incentive to jump-start the economy. The Bill should include: 1) really fixing the Alternative Minimum Tax; 2) eliminating long-term capital gains tax at least until the economy recovers; 3) eliminating tax on dividends and interest; 4) providing a shield for retired citizens who will be unable to absorb the personal financial burden.

Posted by: Richard | September 30, 2008 10:28 PM

O:\AYO\AYO08C04.xml
[DISCUSSION DRAFT]
110TH CONGRESS
2D SESSION H. R. ll
To provide authority for the Federal Government to purchase and insure
certain types of troubled assets that no one in their right mind would touch with a ten foot pole, but we will, being a body of quite unsound mind, but quite large appetite, for the purposes of providing stability
to and preventing disruption and especially to prevent experiencing consequences of running out of money for people who need it most, who do Credit Default Swaps every day so they can keep their doors open and keep the little people coming in and bringing in their little bundles of money for safekeeping in the economy and financial system and
protecting taxpayers, especially BIG taxpayers, or people who might pay a lot of taxes, if they were the taxpaying type, and for other purposes, and also to protect all those pension funds and raider funds who have more commitments to more people than anyone ever counted up, since we don’t have enough fingers and toes and to help our ranch friends out down in Texas Cattleman’s Association, lest we forget. .
IN THE HOUSE OF REPRESENTATIVES
Ml. llllll introduced the following bill; which was referred to the
Committee on llllllllllllll
A BILL
To provide authority for the Federal Government to purchase
and insure certain types of troubled assets that no one in their right mind would touch with a ten foot pole, but we will, being a body of quite unsound mind, but quite large appetite for the purposes
of providing stability to and preventing disruptionand especially to prevent experiencing consequences of running out of money for people who need it most, who do Credit Default Swaps every day so they can keep their doors open and keep the little people coming in and bringing in their little bundles of money for safekeeping
in the economy and financial system and protecting taxpayers especially BIG taxpayers, or people who might pay a lot of taxes, if they were the taxpaying type,
and for other purposes and also to protect all those pension funds and raider funds who have more commitments to more people than anyone ever counted up, since we don’t have enough fingers and toes, and to help our ranch friends out down in Texas Cattleman’s Association, lest we forget.
.
1 Be it enacted by the Senate and House of Representa2
tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
4 (a) SHORT TITLE.—This Act may be cited as the
5 ‘‘Emergency Economic Stabilization Act of 2008’’.

Posted by: Dave McCrae | September 30, 2008 10:31 PM

The 700 Billion dollar farce...There are many acquisitioning institutions trying to buy large pools of loans in default, and or in the REO (real estate owned) stage. The current holders of the distressed loans and devalued REOs do not want to sell them at a discount- because then they would have to show these disposals at a substantial loss on the books, and become accountable for their imprudent lending actions to their stockholders- So what magic bullet would the bailout offer? Forced stock warrants, CEO pay reductions,-give us a break, they aren't selling these portfolios now-and they can its ludicrous to think they will sell at a greater loss to the government-public.
Let us not forget once the government owns these properties, the properties are exempt from state, county, and or city property taxes.. Just a little extra budget item for communities to swallow. Forget the bailout- UP the FDIC guarantee to $250,000 or 1 Million- let the morons who came up with NINA LIBOR ARM products with unconscionable margin spreads loans live with the junk they jammed onto every unqualified pigeon found. In large part they are also responsible for overheating the real estate market- a vast majority of foreclosures are investment holdings- meant to be short term flippers-the over inventory of homes will take years to absorb. The banks will now have to compete with the builders and the general population to unload their housing inventories. I hope they can carry the cost of the forced insurance they jam on to homes in default, also carry the maintenance and annual property taxes on every one of the homes in their portfolio- or start selling or working out REAL deals with the home owners in distress.

Posted by: Shannon DuPont | September 30, 2008 10:33 PM

The Democrats have only been "in power" since January 2008 when they were able to achieve enough majority to override a veto. This imperialist Presidency has shown itself to use the veto many times more than any presidency. This has been the most partison congress and administration since Andrew Jackson.

The Democrats become "in real power" in January 2009 when they gain enough majority to override the fillibuster. This government has used the fillibuster and threat of fillibuster more than any government including the days of the civil rights.

The Democrats will come into "change power" when they bring in Senators Obama and Biden for the new administration with their congressional majority. They will then be able to restore the rule of law, remove Bush/Cheney cronies and unqualified idealogues that have caused government in most parts to be disfunctional or slow down and not enforce consumer protection. They will restore the rule of law and clean up constitutional-abuse; e.g.,protect habeus corpus, remove torture, protect privacy.

I can't wait until our country is restored and the constitution is honored.

Posted by: lucy2008 | September 30, 2008 10:33 PM

Does wallstreet need a bailout? Yes. But it does not have to be this week. If it needs a month to work out details of the bailout, take a month. As long as there is a sense of progress, wallstreet will be fine.

Queen Pelosi is a different story. Many democrats will lose seats because of her.

Posted by: FloridaCounts | September 30, 2008 10:35 PM

Carefully vetted? How absurd. I have read the original bill that almost passed the house. No one could have read this and thought it was a reasonable solution to the problem. In truth this is more bs from Wall Street to bride the Senators they control. If this passes it will be a sad day for this country and another step towards economic collapse. Maybe Harry Reid will get better boxing seats or Nancy will get the gay courage award. They all follow Bush for their own selfish reasons. We are in big trouble and there is no leadership in either Party.

Posted by: bob12 | September 30, 2008 10:35 PM

OH YES, I BELIEVE IN OUR CONSTITUTION, OUR BILL OF RIGHTS,AND THE CHECKS AND BALANCES. IT IS HARD TO KEEP UP WITH IT ALL WHEN YOU ARE OUT THERE WORKING HARD TO KEEP YOUR FAMILY. MOST AMERICANS DON'T HAVE THE TIME, NOR THE ENERGY LEFT AT THE END OF THE DAY TO PLAY WATCH DOG IN THE POLITICAL FIELD. IT IS EASY TO POINT FINGERS AT YOUR PRESIDENT FOR THE FAILURES IN THE SYSTEM. MOST SPEND MORE TIME AT THAT THEN THEY DO COMMUNICATING WITH THEIR REPRESENTATIVES. I, TOO ,HAVE BEEN GUILTY OF THIS DON'T BE FOOLISH ENOUGH TO LISTEN TO THOSE WHO PREACH "CHANGE". IT IS ONLY A POLITICAL MANEAUVER. THE CHANGE WILL HAPPEN WHEN YOU MAKE A CHANGE IN YOURSELVES. ASK YOURSELVES WHAT YOU ARE WILLING TO GIVE UP.

Posted by: DJ | September 30, 2008 10:39 PM

The bankers got themselves into this with poorly managed lending and poor risk assessments. They expected to package crappy loans and sell it back to us (hide it) within mutual funds and when they could not get buyers for their garbage they want the government (taxpayers) to give them more money to keep the good times rolling. Excuse me If I don't sympathize with people whose bonus is more than I earn in twenty years. If my congressman votes for this when they bring it up again I will not vote for him. This is america that's what I will do.

Posted by: Truth talker | September 30, 2008 10:41 PM

The economy doesn't need a cash infusion; it needs an overhaul. I have seen the light, and it isn't pretty. This economy has been raped and pillaged for years, and it is now only smoke and mirrors. Better get to the hard work sooner, rather than later.

Posted by: facethemusic | September 30, 2008 10:45 PM

Why don't we just send every tax payer $200,000 to put back into the system. I don't see how giving it to the banks will help me.......I am a middle class american and don't see any help for our class!!!!
Does anyone agree?

Posted by: Jacob | September 30, 2008 10:47 PM

(FORTUNE Magazine January 24, 2005) – On a sunny Monday in June 2002, President George W. Bush stood in the St. Paul AME Church in a formerly dilapidated neighborhood on the south side of Atlanta. Sitting in prime seats were Franklin Raines, the CEO of Fannie Mae, and Leland Brendsel, the CEO of Freddie Mac. The President was there to unveil an initiative aimed at helping 5.5 million minority families buy homes before the end of the decade--"Part of being a secure America," he said, "is to encourage home-ownership."

Posted by: Bush initiative | September 30, 2008 10:48 PM

Congress MUST refuse to grant Bush the $700 billion gift he's asking for. They've been frightened and intimidated like they were when Bush threatened them with the blame if Saddam used WMDs - when they approved Bush's request for permission to go to war. Not This Time! The Democratic leaders must take control and demand that fresh, strong economists look at the "financial meltdown disaster capitalism stories" Paulson and Bernanke are selling and they must not allow themselves to be stampeded into passing legislation like they did when they allowed Bush to take us into war. Any legislation passed must instead DIRECTLY assist the American homeowners who are the ultimate victims of the mortgage and housing economic problems facing America, for that is the real and only way to save the banks as well.

Posted by: Steven | September 30, 2008 10:48 PM

It failed because of the 3 stooges, me myself and I, nobody cares about anybody else it's just "what is it going to cost me?" a tax raise, a vote?

Posted by: nyuck nyuck | September 30, 2008 10:51 PM

Earlier Question: 'When did credit and debt replace earnings as the engine that drives the U.S. economy?'

Answer: 'Late 18th Century' Reference the founding of the New York Stock Exchange

The explanation for the failure of collective action on the part of the people in a time of crisis is simple. In one week most people have a fair amount to catch up on concerning how capital works. (Yes, me too!) We all know politicians (and everyones cuddly conservative Rush Limbaugh) are not there because they know things. But somebody needs to get out a blackboard. If only someone trustworthy understood it. So, scrub Bush and Paulson. Maybe Bloomberg or Buffett. They don't seem all that bad to me at least.

Posted by: Neil | September 30, 2008 10:52 PM

I say call back all the ceo.bonuses and other bribes,payoffs and there probably wouldn't have been a problem in the first place. I say go after the people that were responsible in the first place.

Posted by: Jackie | September 30, 2008 10:53 PM

Our financial system is a house of cards. Bailouts are efforts to shore up the status quo. Such efforts continue the problems of a system that is prone to collapse. The catalyst for collapse might come from international political events, from scarcity of resources, from environmental disaster, or from the greed and manipulation of investment professionals. Or it might come from all sides at once.

Legal mechanisms, dire warnings, and appeals to conscience do little to stem the impulse toward greed that is built into the game of wealth accumulation. We all sense this but continue to play along because this is the system we have inherited. Now, some of the old myths like the fundamental strength of the economy and the soundness of free market principals are caving in. We hear warnings of impending systemic collapse. Voting against a bailout plan is a desperate and purblind attempt to stem the tide of economic collapse. The same can be said of voting for a bailout plan.

Posted by: mr cheerful | September 30, 2008 10:54 PM

They need to come up with smart regulation. My fear is that government, given the inability for the right and left to moderate their governance, will set policy that will make Sarbanes Oxley look small. My hope is that the right and left will learn from this… and realize that government has lost credibility among Americans due to their partisan bickering, inefficiency, and their focus on individual special interest groups and lobbyists. My hope is that they’ll start listening to the majority of Americans… and set regulations that make sense… while allowing businesses to remain efficient. For example: I asked my MBA professor, 9 years ago, whether anyone measures consumer and corporate debt on the same page that they use to measure consumer spending and the consumer price index. Her answer was as expected, and I remarked very abruptly, “It is only a matter of time.” My comment was made as the federal reserve was reducing interest rates to improve liquidity and make available more credit for consumers to take on more debt. I elaborated on that assessment with many over the course of the past 9 years, and became very vocal about it over the past 3 years. Late last year and early this year, I sent e-mails to family and friends identifying the many economic variables that were all running negative… and I literally forecasted “economic Armageddon” would occur within the year, maybe two… turns out that it took about 9 months… though we’re not quite there yet. I’m not an expert… I think that many Americans saw the same things happening… I was just looking at the simple fundamentals and watching my neighbors over leverage themselves with reckless abandon… and watching federal monetary policy and government housing initiatives promote it. We need smart regulation: like simply producing transparency into lending practices so that we can measure domestic debt levels properly… and over a long period of time… such a practice would help the federal reserve set proper monetary policy.

Even if they pass this bailout bill over the coming days, we’re not out of the woods here. Oil has risen over many years… which has only begun, this year, to really influence inflation. The fed is supposed to raise interest rates to fight inflation, but if they raise interest rates our credit situation will be exacerbated. I could go on… just about every economic variable remains negative… and $700 billion to free up the lending markets is not going to right all of the economic variables. We’re in trouble.

That’s my assessment… maybe I’m wrong… I hope that I am…

I see a solution in tapping into our domestic oil reserves, to the point where we drive the prices of foreign oil into the ground. We should then tax that oil so that the price “felt” by Americans doesn’t really change… and use that tax to invest in alternative energy. In the short run, we’d diminish our oil reserves quickly, but we’d also create jobs quickly as companies focus on developing and leveraging the benefits of alternative energy. In the long run we’d improve large industries such as our auto industry, we’d virtually free ourselves of a dependence on foreign oil… and we’d use less, overall, of our own domestic oil reserves. It is a risky proposition… to some extent, because you’re hoping that the alternative energy solutions are effective. But in reality… I don’t see how we can fail because we already have a lot of the technology - and because Americans now have a very visible vested interest. I also don’t see any other way to dig ourselves out of this mess.

Posted by: Tony | September 30, 2008 10:56 PM

If or when this bill passes it will confirm two of my suspicions.

1) That we effectively no longer have a three branch government where each branch can be relied on to police the actions of the other two. "Give me $700 billion but don't anyone ask what I do with it.....just trust me" ???? Yeah right!! Based on what, past performance?

2)That we are in truth no closer to a true free market capitalism than China is or the USSR was to true communism.
Is it possible that what we are seeing is the beginning of our version of the same sort of thing that happened when the USSR broke up?
So let's coin a new term for when, if you win you keep the cash but when you lose, everyone else covers the loss. How 'bout Capummism?

Posted by: Broter | September 30, 2008 10:57 PM

Easy credit = Bad investments

End the Federal Reserve and less regulation, and the problem will be solved on the long term. The Economy needs a recession, be it 2..3..5 years. But if the Federal Reserve keeps inflating the world with dollars, temporarily the economy will bounce up..but the down cycle will only be exponentially worse.

So..if you are a short term person, you want the bail out and excessive spending (on credit).

If you want the problem to be solved in the long term, end the FED and balance the budget.

The government can only go so far swiping their credit card before they max it out..and its getting darn near that limit.

Posted by: Tony H | September 30, 2008 11:02 PM

Republicans keep trying to suggest that Pelosi and the House Democrats are more at fault than the House Republicans.

Now, when 70% of House Republicans vote against the bill proposed and supported by their own caucus leaders, the sitting President, and their candidate for President, even thought their leaders are saying it is an emergency, and assured the Democrats that they had sufficient votes . . .

But 60% of Democrats vote for the bill even though it is proposed by the other party, which is exactly the percent of votes the Democrats promised to deliver in their pre-vote agreement with Republicans . . .

It's hard for me to see how you can blame the failure on Democrats. The unpredictable thing that happened was: House Republicans completely rejected their leadership.

Now, if you want to question whether the current administration is believable, worth trusting, if the plan is good or not, whether it really is an emergency etc., etc., etc., those are debatable points (unless you have a PhD in economics, I guess).

But there can really be no debate that the Republicans fell into utter and total disarray on this issue, did not respect the urging of their president or candidate, did not keep the promises made by their legislative leadership, and that is why the bill did not pass.

Posted by: drossless | September 30, 2008 11:04 PM

The Democratic side of the House did their part in voting for the bill. The Republicans bailed out because they were afraid they may be voted out of office if they voted for a bill no one likes. Once again they put their own pocketbooks ahead instead of looking out for the American taxpayer. Unfortunately, that is the way they have been acting for the last eight years.

Posted by: JerryTexas | September 30, 2008 11:05 PM

I think it failed because it is a poor plan and enough members of the House had the courage to label it as such. The very notion that the U.S. government would consider taking an equity position in private sector business is appalling because it changes what should be the motivation of protecting the taxpayers from crass and greedy capitalists into a profit-hungry stockholder. Thus they are trying to convince the American people that they can really serve three masters concurrently: the taxpayers/voters, the lobbyists and the profit motive of a private enterprise.

Posted by: Mike | September 30, 2008 11:08 PM

The reason it failed and should have failed is lack of responsible action prior to this time and lack of any deliberation.

Shame on centrist Democrats and Republicans for letting themselves be stampeded into a taxpayer funded bailout by Bush and hyperventilating financial media spokesmen! I learned about the coming collapse in real estate in a cover story in Harper’s Magazine, May 2006, 28 months ago! These “leaders” pushed the bailout without even one hearing on alternatives like 1) Issa's Guaranteed Recovery Bonds, 2) enacting Financial Transaction Taxes, 3) letting the Federal Reserve, rather than Treasury, buy the questionable debt with new money it creates, 4) prohibiting any kind of future mortgage backed security except European - style covered bonds, and 5) requiring bad security issuers to have larger cash asset reserves. I'm a retired, long-term, small investor with significant unrealized losses. But I'll wait for my investments to recover.

Congress must hold hearings! During them, let the worst purveyors of bad securities be bought or go bankrupt! Voters should de-register from the Democratic and Republican parties. Then, whoever you hold your nose and vote for to be President, voters in the centrist’s districts should remove these irresponsible “leaders’ (Reid, McConnell, Pelosi, Boehner.) They knew this problem was coming for a long time and didn't stop or mitigate it before!


Posted by: Robert Cogan | September 30, 2008 11:11 PM

This is an example of the system's working.
We have a crisis, ONLY a crisis.
It was not as bad as Pearl Harbor in 1941.
We weathered that.
It's not as bad as Watergate in the 70's.
We weathered that.
And we'll weather this.
If history has taught us anything, it is that In times of peril, leaders emerge to meet challenges at hand.
True, the recent bill proposed to deal with the present crisis failed. But the system of government, which we don't seem to trust, and the legislative process, operating in the brightness of our Democracy, remains intact.
Undoubtedly, the foreseeable future poses much difficulty for all of us.
But our government, with its checks and balances, remains strong.
When we come to the realization that our nation has faced repeated stresses from within and outside our borders before, abd that we, as a people, have always prevailed --when we have an opportunity to view these moments from the perspective of America's history -- we'll be alright.
I know that we'll be alright.

Posted by: James Procopio, M.A.T. | September 30, 2008 11:15 PM

Many of the homes currently in foreclosure were sold to illegal immigrants based on fraudulent documentation and no credit history, while hardworking Americans were denied loans due to mediocre credit scores because they actually had a verifiable credit history. The illegal aliens overcrowded homes to pool resources, driving up housing prices while draining government resources. They won't pay one penny of this bailout. Why should the American taxpayers pay for their deceit, and that of the mortgage lenders? The inflated housing market will balance itself and will end up on more solid footing.

Posted by: FedUp | September 30, 2008 11:18 PM

It failed because Ron Paul cured my apathy. So I wrote my congresswomen whom I have no respect for and told her I would campaign for her if she voted no. She was possibly one of the 12 republicans who backed out.

I agree that we need to get rid of the fed. But the quickest way to start the repair of the economy is to close all 700 military bases world-wide.

I think we should also stop penalizing savings, by allowing banks to offer tax free savings accounts.

Eliminate the IRS.

Close the Department of Education.
Get rid of all tax loopholes and incentives to agriculture and energy.

As the costs of staples skyrockets, small business will fill the demand by creating jobs in alternatives, which will have a chance to compete since oil will not be subsidized, farming will move closer to homes, and the country will evolve those roots that helped keep us one nation for so long.

Shooting down the 700 billion dollar heist and the resurgance of the market today give me hope, for a change.

Posted by: Earl E The Lost City | September 30, 2008 11:23 PM

House Republicans gambled that it would pass with enough Democratic votes to enable a large majority of Republicans to vote against it and take cover from the wrath of unhappy voters. The Democrats didn't play along.

Posted by: Jim Currence | September 30, 2008 11:37 PM

The bill needed 218 votes to pass.

It got 208 votes.

That's why it failed: Not enough votes.

Posted by: Duh | October 1, 2008 12:21 AM

Times are tough. I think the banks need to just need pull themselves up by their bootstraps. I give the same advice they give the rest of us.

Posted by: jw360 | October 1, 2008 12:25 AM

The arrogant politicians and reporters seem to think they are smarter that the people! This plan is not going to help anybody but a few Wall Street / DC Cronies that are trying to further loot our country, and most likely will send the treasure to some off shore accounts. Our representatives are are in Washington to represent us, the last vote was one of the few times they did not completely ignore their constituents because they were scared of doing the right thing against the party bosses and big money. What really burns me up is how the advertiser driven media has been trying to sell this fear too, this is so transparent. I say let the credit balloon pop, it will sting but we will live through it and be much better on the other end. I was undecided between McCain and Obama, I may very well vote for Ron Paul if these crooks vote against the public will.

Posted by: Alan Black | October 1, 2008 12:25 AM

For all of you looking down your noses at those who oppose the bill, as though we are total idiots,

Yes, we get it. We realize that NOT implementing this might cause some serious pain and hardship.

We want the markets to take care of this. We don't want to see irresponsibility wiped away with the use of taxpayer money. We want the markets to impose the punishment. And we understand that we may feel it too, but better that than ONLY us feeling it.

We also realize that it will not last forever, that there will be a recovery and that in the absence of government (ahem, taxpayer) intervention our economy will come out stronger. That benefits us all.

Posted by: Not an idiot | October 1, 2008 12:28 AM

Pelosi and Harry Reid must go. They have their pockets lined by special interests it's obvious. Vote for Dennis Kucinich. He's a true man for the people.

Posted by: jw360 | October 1, 2008 12:29 AM

The bill failed because the American people saw right through it. The bill wasn't going to fix what ails the country, a consumer that is in debt up to his eyeballs. If the bill was a comprehensive bill that took care of the liquidity and the economic situation so that workers can get back to making a living and business back to making a profit, then a little help to the banks would not be seen as allowing the corporate raiders who just finished cleaning the bank vaults to walk into the US Treasury and raid the taxpayer too.

Posted by: R2D2 | October 1, 2008 12:38 AM

I agree with R2D2 and NotAnIdiot and others above who oppose this horrific burden the middle class is now being forced to bear. The first obvious flaw with this plan is that it is not a "plan": no one knows how this will be implimented nor if this has even a prayer of "working", nor even what the definition of "working" means here. Also, most suspect there is something far worse lurking on the other side of this $700 billion mountain of cash which no one now sees - and no one is addressing that at all.


Posted by: Taxpayer | October 1, 2008 12:51 AM

I've read comments blaming Democrats all the way back to Carter (I'm surprised is not FDR) and Democrats blaming the Republicans. It's interesting that those who blame Democrats never stop a minute to remember that from 2002 to 2006 Republicans had the House and the Senate with enough votes to pass any bill Congress wanted and the WH to have Bush sign it. So excuses you can make up, but those excuses won't hold. The Republicans did nothing because it was not in their political interest to look after the interests of the American people.

Democrats blaming Republicans also won't hold. The problem was already an issue when McCain introduced a bill to bring accountability to Fannie Mae and Freddie Mac in 2006. The Democrats voted against it. Then in 2006 Democrats were elected to change the course set by the Bush administration. After October 2007 when Merrill Lynch and Citicorp plus other financial institutions reported billions of losses, it was clear that the bomb was set off and it was ticking away, but Pelosi and Reid sat on their hands. My guess is that both are poor leaders who cared more about their political interests, not the American people.

Neither party holds the high ground on this. Tell Pelosi and Reid that their party is over if they don't do their job before the November elections.

Posted by: R2D2 | October 1, 2008 12:58 AM

Dennis Kucinich for President! He is against this bill. This is true leadership. Read about his proposals here.
http://kucinich.house.gov/News/

Posted by: jw360 | October 1, 2008 1:08 AM

[As I understand it, the core problem is that commercial paper assets such as mortgages have lost much of their value in the face of forclosures and other mortgage walk-aways. Were homeowners gambling on low ARM rates in the future any more foolish, greedy, or short-sighted that Wall Street investors? Looks like a wash on the greed meter. So let's try a trickle-up solution rather than the ususl trickle-down approach. Commit the money earmarked for bailing out the investment banks to funding mortgage rewrites that convert ARMs to lower interest fix-rate mortgages instead. Then the commercial paper has value once again and the investment houses don't go belly-up from bad mortgage assets on their books. Plus, it keeps us in our homes.

Posted by: JLF | September 30, 2008 9:45 PM ]


That, JLF, is nothing more than switching the bailout money from one clown to another. I don't care to pay for anyone's folly, Wall Street or Main Street.

The bill failed because it is a piece of s**t legislation that is ambiguous at best. You want support for something? Drag it out in the light of day and let it stand on it's merits or fall on it's shortcomings. I don't think we should be giving anyone $700 billion dollars. LEND it to them? Okay. Let them get on their feet and pay it back, every dime, with interest.

Posted by: roncee | October 1, 2008 1:18 AM

Three and a half years ago, John McCain belatedly cosponsored an apparently "dead" bill on mortgage regulation. He then did nothing else to revive it or bring it back up for consideration.

S.190 - A bill to address the regulation of secondary mortgage market enterprises, and for other purposes.
Sponsor: Sen Hagel, Chuck [NE] (introduced 1/26/2005)
Latest Major Action: 7/28/2005 Senate committee/subcommittee actions. Status: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
--------------------------------------------------------------------------------
COSPONSORS(3)
Sen Dole, Elizabeth [NC] - 1/26/2005
Sen Sununu, John E. [NH] - 1/26/2005
...time passes...
7/28/2005 (the date of this bill's LAST activity)
Sen McCain, John [AZ] - 5/25/2006

10 MONTHS after anyone had looked at this bill, McCain blew the dust off it and cosponsored it. He didn't do anything to push it forward, and the bill never saw any more activity in the Senate.

That seems to demonstrate a serious lack of leadership. It also continues the pattern of McCain stretching the truth, distorting the facts and outright lying to get elected. "Journalists" need to do their jobs here. Explode this MYTH. McCain has stood for deregulation. His has not been a reformer on the economy. His tax cut for the rich is more of the same.

http://4thoffense.com/mc.html

Posted by: More Of The Same | October 1, 2008 1:35 AM

"The problem was already an issue when McCain introduced a bill to bring accountability to Fannie Mae and Freddie Mac in 2006. The Democrats voted against it."

THAT ISN'T TRUE. MCCAIN NEVER INTRODUCED SUCH A BILL. THE CLOSEST HE COMES IS THIS CO-SPONSORED BILL. It was DEAD by the time he co-sponsored it.

Posted by: Get Facts Straight | October 1, 2008 1:37 AM

Three and a half years ago, John McCain belatedly cosponsored an apparently "dead" bill on mortgage regulation. He then did nothing else to revive it or bring it back up for consideration.

http://4thoffense.com/mc.html

S.190 - A bill to address the regulation of secondary mortgage market enterprises, and for other purposes.
Sponsor: Sen Hagel, Chuck [NE] (introduced 1/26/2005)
Latest Major Action: 7/28/2005 Senate committee/subcommittee actions. Status: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
--------------------------------------------------------------------------------
COSPONSORS(3)
Sen Dole, Elizabeth [NC] - 1/26/2005
Sen Sununu, John E. [NH] - 1/26/2005
...time passes...
7/28/2005 (the date of this bill's LAST activity)
Sen McCain, John [AZ] - 5/25/2006

10 MONTHS after anyone had looked at this bill, McCain blew the dust off it and cosponsored it. He didn't do anything to push it forward, and the bill never saw any more activity in the Senate.

That seems to demonstrate a serious lack of leadership. It also continues the pattern of McCain stretching the truth, distorting the facts and outright lying to get elected. "Journalists" need to do their jobs here. Explode this MYTH. McCain has stood for deregulation. His has not been a reformer on the economy. His tax cut for the rich is more of the same.

http://4thoffense.com/mc.htmlq

Posted by: BLAME DEMOCRATS OF COURSE | October 1, 2008 1:49 AM

One reason why the public so greatly opposed the bill was probably because they can't afford an increase in taxes and money being taken out of their pockets at this time. If someone is already struggling to make ends meet each paycheck, there is no way they could survive through a tax increase during a recession.
Also, the bill would pour more power into the hands of an already corrupt administration. Who knows what they would do with the money? It was too general a bill and would have left the people in charge entirely unchecked.

Posted by: e. g. | October 1, 2008 3:27 AM

There is an old saying, "Fool me once, shame on, shame on you. Fool me, you can't get fooled again"
There is also an old saying, "ask not what your country can do for you, ask what you can do for your country".
So, NO BAIL OUT please.

Posted by: nosheep | October 1, 2008 3:55 AM

It failed because 228 representatives listed to their constituents, like me, writing in to ask them not to pass the bill.

I favor government intervention to keep the credit markets liquid. I do not favor purchasing unsellable securities and putting more money directly back in the hands of companies that made poor decisions.

There are many many healthy lending companies. Allow cash to flow from the Treasury, as investments, to these companies that acted prudently and exercised sound judgment by not getting involved in the sub-prime market mess.

Also, force the struggling companies to rewrite and renegotiate their bad loans. The core issue is the inability of homeowners to make good on their loans as written. Force companies to make a bone fide attempt to refinance these loans before taking the securites off of their hands.

In my opinion, healthcare, the Iraq and Afghan wars, education, and clean energy are just several of the many issues more pressing than the current financial crisis. Why can't congress act with such urgency on these issues?

We need to solve this problem without rewarding the financial companies that gambled and lost.

I am urging my representatives to come up with a completely new solution.

Posted by: Andrew | October 1, 2008 4:02 AM

Let me make this "clear". This bill is not going to help people that are affected by this crisis by no fault of their own. There is only one good thing coming out of this bailout proposal, we are now going to see who actually are representing the people and who aren't. Now we are going to see who the bums really are and throw them out of office.

Posted by: jw360 | October 1, 2008 7:22 AM

What about the mark to market issue? That seems to have caused quite a few problems.
Here's a really good blog that talks about the problem
Forcing these financial companies to mark these illiquid securities to market each month is a totally arbitrary requirement that is A) a crucial factor creating this spiral and B) would cost $700 billion less than today's failed proposal to do something about.
Here's the link if you're interested:
http://www.greenfaucet.com/blogs/hanlons-pub

Posted by: Graham Colt | October 1, 2008 8:42 AM

Has congress thought about the ramifications to the future of our economy? Are we bailing out the whole United States? Today, the US government put up a $25 billion dollar loan to help the automotive industry. We are bailing out Wall Street; we are bailing out the banks. Where does it end and at what cost to our economy?

What about the little guy, the person who can’t afford their payments due to increases in the cost of living? People are trying to downsize, (i.e. http://www.buymyhousebeforethebanktakesit.com ) and are trying to liquidate their real estate without loosing their credit.

We as a country have to look at the bigger picture, our economy and the way we do business. We have been through this in the 80’s and the missing component to our country in production. We need to produce and export products and services. We have to create higher paying jobs so people can afford to pay their bills.

Posted by: Think before we act! | October 1, 2008 9:37 AM

Has congress thought about the ramifications to the future of our economy? Are we bailing out the whole United States? Today, the US government put up a $25 billion dollar loan to help the automotive industry. We are bailing out Wall Street; we are bailing out the banks. Where does it end and at what cost to our economy?

What about the little guy, the person who can’t afford their payments due to increases in the cost of living? People are trying to downsize, (i.e. http://www.buymyhousebeforethebanktakesit.com ) and are trying to liquidate their real estate without loosing their credit.

We as a country have to look at the bigger picture, our economy and the way we do business. We have been through this in the 80’s and the missing component to our country in production. We need to produce and export products and services. We have to create higher paying jobs so people can afford to pay their bills.

Posted by: Think before we act! | October 1, 2008 9:37 AM

Why didn't the government offer to "bail out" the working class people who lost their homes in shady sub-prime mortgages? The fact that this only became a crisis when it to hit the banks demonstrates that the current administration cares more about the corporations than about working people. And that is not a good image for anyone seeking re-election!

Posted by: Evan | October 1, 2008 10:33 AM

The bill failed becuase most Congresspersons don't actually understand the economy and act only on parochial interests.

An example is Congressperson Donna Edwards from Prince George's County in Maryland who clearly doesn't understand the economy and had the stupid statement that she voted against the bill because it wasn't good for taxpayers.

Maybe she should understand that it is the taxpayers in her District who lost money in their 401k plans, who won't get credit for a new car or to send their children to college. It is the taxpayers who will lose their jobs when small businesses can't get loans to pay them or credit to keep their businesses going in the tough times. It is the taxpayers who lose if we don't do the bailout.

Will some bigshots get a lot of money - of course they will- there were always welfare cheats on the other end as well- but the reality is that Prince Georges County like all small jurisdictions count on property taxes and capital gains taxes and sales taxes and when these all go down becuase people have less money to spend we will have to lay off or defer raises to policemen, firemen, teachers and every other state employee.

There is just a lack of understanding by people like Edwards on how our economy works. I will never again support her and hope the people of Prince George's County have the smarts to elect someone next time around who does understand what their real interests are.

Posted by: peter DC | October 1, 2008 11:28 AM

My Dad told me, when I became old enough to vote, that I should do as my conscience dictated. He also said that he was a Democrat because it was the party of the worker,and cautioned that I would probably never be "mean enough, greedy enough, or crooked enough to be accepted as a good Republican." Time and Republican politics have proven Dad right.Every time we have had a Republican administration, they tank the economy by favoring the rich and powerful, and to hell with the average American.
Bush's proposal was so obvious a gift to those who got us into this mess it was pathetic. Republicans,some afraid of the backlash at the polls, and some posturing for more concessions, rejected the bill. The Democrats, instead of manning up and defying the Republicans, gave them the concessions. Predictably, the Republicans still killed the bill, just to make the largely Democratic Congress look bad. So then unbelievably, the Democrats are offering these crooks even MORE concessions. Ross Perot's ideas for a centrist 3rd party is lookin' better all the time!

Posted by: Archie in NC | October 1, 2008 11:40 AM

The bill failed becuase most Congresspersons don't actually understand the economy and act only on parochial interests.

An example is Congressperson Donna Edwards from Prince George's County in Maryland who clearly doesn't understand the economy and had the stupid statement that she voted against the bill because it wasn't good for taxpayers.

Maybe she should understand that it is the taxpayers in her District who lost money in their 401k plans, who won't get credit for a new car or to send their children to college. It is the taxpayers who will lose their jobs when small businesses can't get loans to pay them or credit to keep their businesses going in the tough times. It is the taxpayers who lose if we don't do the bailout.

Will some bigshots get a lot of money - of course they will- there were always welfare cheats on the other end as well- but the reality is that Prince Georges County like all small jurisdictions count on property taxes and capital gains taxes and sales taxes and when these all go down becuase people have less money to spend we will have to lay off or defer raises to policemen, firemen, teachers and every other state employee.

There is just a lack of understanding by people like Edwards on how our economy works. I will never again support her and hope the people of Prince George's County have the smarts to elect someone next time around who does understand what their real interests are.

Posted by: peter DC | October 1, 2008 12:07 PM

CNBC trotted out the rich guys to explain that regular folk don't understand the BAILOUT plan. Although, T. Boone Pickens didn't even know the amt. of the bill which has been everywhere for the last week and 1/2.

We do understand and that is exactly why we are against bailing out Wall ST. gamblers and Foreign institutions that have a subsidiary in the US. We also understand the wording that says Paulson will "take into consideration" is total BS.

Let's see; this is from the same Bozo that told us 1) "it's contained", 2) "the markets are sound" and 3) "XX Bank is well capitalized".
I and everyone I know are overwhelmingly against his doomed 4th or 5th plan.

They are now "selling" this as an answer for credit seizing up on small businesses.....we'll see what lies they've conned the public into in the next 6 mos-yr.

Posted by: No to Bailing Out Foreign Banks w/ Our $$$$ | October 1, 2008 1:03 PM

As an outsider, it looks like the mid-term candidates who have ambitions to get re-elected looked at the prospect of getting thrashed by their voters for backing a monstrously unpopular plan - a plan that seems to be aimed at protecting a monstrously wealthy few from the consequences of their greed and incompetence.

Right, left or centre: actions have consequences, and this is a financial problem - how much REAL effect will this have on the sectors that actually create something of intrinsic value - like farming and manufacturing? That needs to be the primary focus: without them, you have nothing to generate wealth in the first place.

Posted by: Dave from New Zealand | October 1, 2008 4:24 PM

Maybe it failed because I phoned and e-mailed my Representatives and Senators. I told them no bailout.

Maybe I don't understand economics. But I do understand responsibility. You don't steal from the guy who didn't cause the problem and give to the guy who did. Simple as that.

Posted by: Mac Stevens | October 1, 2008 5:09 PM

My opposition to the bill is a response to corporate greed reducing new worker retirement benifits, limiting access to 401k plans, offshoring work, using semi illegal visa workers to fill departments, and hiring 1099s long term to support daily operations.

Even goverment institutions are doing this crap to there own people.

Peronsally I do blame the people with 401k's for the current job market situation and I generally refer to them as "baby boomers". Call me petty and bitter if you want but I like to think of it as "business ethics".

What goes around comes around.

Posted by: AngryYouth | October 1, 2008 6:29 PM

Is there a real financial crisis? With the cost of living, especially of staples like food and gasoline, up so high, and the US$ down against other world currencies, who could doubt that? These are effects all Americans can see, even if they haven't been personally hit by foreclosure or stock-market investment losses. HOWEVER, the fact that America (and, to judge by recent financial company failures in Europe and elsewhere, the world) is facing an economic crisis doesn't mean the $700 billion bailout is a good idea. In fact, the seriousness of the situation is what makes it all the more important NOT to blindly throw money at the problem. The idea that the people who created this crisis could possibly be relied upon to get us out of it is ludicrous; either they didn't know what they were doing, they deliberately created the situation in order to enjoy short-term benefits, or it's some of both, but in no case should Paulson, Bernanke, Greenspan, Phil Gramm, John McCain (read up on the Keating Five if you don't know why he's on this list) or anyone else who's been involved in creating this mess be considered a possible solution. The economic crisis is not going to be solved by the proposed bailout package, even if it's tweaked and has good ideas attached to it. Gravy on a steaming turd doesn't turn crap into meat -- it's just a waste of gravy.

Posted by: the Jack | October 1, 2008 7:30 PM

In my opinion let the people on Wall Street suffer. They are the ones that knew and willingly risked their money. The value of the dollar has fallen because it isn't backed by the gold standard. That was taken away so the government could actually tinker with the value of the dollar. High costs is partially an illusion, the value of the dollar has fallen because the government is doing what Germany did after WW1, print more and more money until the value depreciates so much they expect the citizens to surrender their rights and lives just so a few pigs can make their pork belly fuller of money. It's time for America to stand up for themselves and show the government you aren't willing to submit to their every whim.

Posted by: Jeremy | October 2, 2008 12:10 AM

Cause it smells like a Bush Payoff!

Posted by: Rick | October 2, 2008 4:10 AM

Look if there is No plan to bail the people out that need the money the most (Mid-lower class) and help me refinance my upside down mortgage to make it affordable. So why bail the Banks (Wall Street and so on) out. The Banks are not coming to rescue me anytime soon. There still waiting for me to miss a payment so they can force there terms on me!

Posted by: Richard | October 2, 2008 4:19 AM

The bail out will achieve nothing but keep some badly managed financial businesses alive. For too long our entire economy has been fueled by a housing market that kept growing beyond people's means-- it had to keep growing because it was the only thing in our economy showing any growth. Via overpriced mortgages and new home buyers who were not qualified to buy-- we lived with the impression our economy was growing. But it was only an illusion. The houses became so expensive no one could afford them. The bail out does NOTHING to address this problem. Number of jobs it creates? zero. Number of mortgages it prevents from defaulting? zero. It just keeps the fat cats fed for a few more months.

Posted by: mo | October 2, 2008 8:14 PM

It seems like all the politicians and people "in the know" are pushing this bailout pretty hard. I think it's a travesty that a bill can be defeated and then be rammed down our throats 3 days later. No ought to mean NO. It feels like a date-rape only this one's going to cost us a fortune, and it's going to take away some more of our freedom in the process.

If the measure isn't passed we're going to suffer losses in the market. Yeah thats true... but funny thing about the market...it has a way of coming back. People who invest in the markets know that there is a risk of losing everything. So now, just because the financiers created a huge mess and there are fears that the market may collapse; they aren't subject to the same rules everyone else is...they can recoup their money from the taxpayers?!? NO!

It's common knowledge that we were growing too fast, and that a correction was coming. My advice to congess is: don't exacerbate the problem by forcing taxes higher through increased deficit spending. Credit needs to slow down, banks need to draw in the reigns, and people need to start living within their means. Suck it up congress, your bad policies made a big crap-sandwich...tie on a bib and get ready to chow down.

Posted by: Tina | October 3, 2008 1:30 AM

You can Thank Obama for taking $1.6 Billion from Fannie & Freddie, and Maxine Waters & Barney Frank for refusing the requests of Republicans to Regulate & Oversight and there is a Video of this.
There is also evidence for the money Obama took from F & F as well as Chris Dodd taking the MOST money from F & F. Obama's Pal Raines that QUIT working as the head of Fannie/Freddie, after suspicions got too hot and heavy, and became Obama's Financial Manager of his Campaign, as well as Axelrod, he was working at F & F at the time Obama got all that Billions from F & F, and became Obama's Advertising Manager, and still is.
On Wall Street, the Big Shots are ALL FANS OF OBAMA, they early on, gave Millions upon Millions from Goldman Sachs & the Other Wall Street Big Shots involved in the $700 Billion Bailout. Yup, they GAVE TONS OF MONEY TO THE OBAMA CAMPAIGN!
And, the Rest of the Money, given to Extremely & Low-Income Minorities to Migrate them into lovely homes, NICE EXPENSIVE HOMES, by Jimmy Carter in 1977 and then again in 1994 By Bill'Slick Willy' Clinton, the Banks were threatened that they HAD TOO give a minimum of 50% of ALL MORTGAGES to low-income minorities.
There it is folks it's all over the internet, EVERYWHERE except on Huffington Post, but maybe it's even on there now.
So, when you go into Vote, remember, there's NO MORE MONEY for Obama to Raise Your Check Money, No More Low-Income Loan Money, for Existing Bills like the one that Pelosi started for Low-Income Minorities to buy homes up to $417,000 bucks on Monday, October 1st, 2008, the same time we were hearing about how much we Taxpayers will have to pay. SSI-Pays ZERO taxes, but they were getting alot of the Loans that broke the Banks & Wall Street. As well as Welfares, SSI, TANF's, they ALL got Houses, and NOW we have to pay it back, and they DON'T but Pelosi, had a NEW Bill HR-3221 started Monday, to let all the foreclosed homes, SOME OF YOU PEOPLE LOST be re-sold NOW to Low-Income Minorities with NO DOWN PAYMENT, 3% INterest rate for 40 years up to $417,000. I wonder if they will pay this time, or we will have to pay for these homes they are getting out of HR-3221! Gimme a Break Low-Income's will you!

Posted by: Grand Theft Democrats | October 4, 2008 11:06 PM

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