Bailout bill passes, Bush signs

Bloated with pork, the massive $700 billion bailout bill passed the House Friday and President Bush immediately signed the legislation into law, turning to taxpayers to save government and Wall Street from themselves.

The pork added at least $120 to the final tab and victory from the same House that turned it down earlier in the week proved that all it takes is arm twisting, promises and outright bribes to turn controversial legislation into law.

Proponents of the bill claim the bailout is necessary to avoid a deepening recesssion and perhaps even a depression but critics argue that the bailout is too late to do any good.

Like so many laws passed by Congress, those who voted for the bill have no idea if it will work. Many can’t even say what’s in the bill.

Reports The Associated Press:

With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.

The 263-171 vote capped two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act.

"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said shortly after the plan cleared Congress, although he conceded, "our economy continues to face serious challenges."

His somber warning was underscored on Wall Street, where enthusiasm over the rescue gave way to worries about obstacles still facing the economy, and the Dow Jones industrials dropped 157 points. The Labor Department said earlier in the day that employers had slashed 159,000 jobs in September, the largest cut in five years.

The historic vote was a striking turnaround from the measure’s spectacular failure earlier in the week, which had triggered a massive stock sell-off and prompted jittery lawmakers — fearing a crushing economic contagion that was spreading to their constituents — to reconsider.

"Let’s not kid ourselves: We’re in the midst of a recession. It’s going to be a rough ride, but it will be a whole lot rougher ride" without the rescue plan, said Rep. John A. Boehner, R-Ohio, the minority leader, as he prepared to cast his vote for the most sweeping federal intervention in markets in decades.

Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.

Comments

  1. gazelle1929

    CN:

    I kept reading your post and I kept thinking about Atlas Shrugged, particularly the part about forcing the banks to make loans:

    “If the government wanted to help they could have declared a banking emergency and ‘ordered’ banks that enjoy the Fed’s “discount” window to make necessary payroll loans, ag loans to farmers etc. or simply loose their charter! This emergency order would stand until the crisis abated concerning this housing market debacle.”

    I think you will have seen something I wrote elsewhen that said banks cannot lend money they do not have. Ordering banks to lend money is darned near communistic IMNSHO. Banks will lend the money they have to the people they deem deserving of it. Money sitting in a bank vault and not out at interest is a direct loss of revenue to the bank. What is happening now is that the banks are plain flat tapped. They have no money to lend since they had to write down their assets.

    Go ahead. Hold a gun to a banker’s head and say LEND LEND LEND. It won’t work. The pot’s empty.

  2. frank verismo

    Let’s address the ‘inherent uselessness’:

    “I pulled the plug on our retirement plans years ago, and I’m only 40. I know many others that have liquidated their 401’s and dropped out of the market.”

    That’s a good start. We’re way overdue for a boycott of the entire system. It doesn’t work. It cannot work. We need to ultimately turn our backs and walk away from the entire monetary system and all of its inbuilt injustice.

    An enforced abolition of the Fed would feel like a good thing, but it wouldn’t be anywhere near as effective as a complete refusal to take part. Because this refusal would be based on an understanding of the system’s inherent uselessness in providing for the World’s needs, it would make the return of any such system an impossibility. It would also result in the death of the predatory IMF and World Bank.

    Some steps I have already taken:

    My home has been tv – and thus corporate propaganda – free for 18 months now. I’m pleased to note this trend is becoming quite widespread. Mainstream media viewing figures are plunging. Awareness is rising in inverse proportion to this.

    I use cash and reject electronic money wherever possible. Once I’m debt-free I have vowed to never support the electronic credit system. I will continue to praise the virtues of physical currency in the face of well-funded propaganda campaigns to the contrary.

    The full and certain realization that political solutions are an impossibility. Being entirely uninterested in the latest theatrical performances of Obama, Palin etc frees up time and mental energy for more important things. Things which have their basis in reality.

    The monetary system, ruled by private banking families cannot continue to exist without our tacit support. The general population is more receptive to this truth than at any previous time. I’m getting the word out at any and all opportunities.

    ‘If it benefits the private banks – boycott it’.

  3. AustinRanter

    What’s all the Upset?

    Come on boys and girls. All the government did was to ask us all to sign another promissary note and to bend over just one more time…but this time they promised to dispense KY Jelly.

    Welp, they gave us the KY Jelly…mixed with gravel!

  4. griff

    You are not wrong, my friend. I pulled the plug on our retirement plans years ago, and I’m only 40. I know many others that have liquidated their 401’s and dropped out of the market.

    We always think it’ll happen to someone else. It’s the American Way. This is the same playbook we’ve been using around the world for decades to topple governments, and now it’s come home to roost.

  5. bryan mcclellan

    We’d be fools to trust the rope Strato, since it’s no doubt made in China, carpentry is a lost American art and because the illegals have us accepting shoddy/shitty work, we’d never get them up the steps of the gallows.

    I hear there’s lots of open ground for tents in Crawford TX. Griff.

    Soup sandwiches for all.Now that’s what the smirk is all about.He’s bailing with his golden chute ala Twiddle dee, hence the smile while trying to remember how to spell George.

  6. Stratocaster

    This is the last straw. I just went to buy groceries. Everything that was 99 cents a few days ago is now $1.19, That is a 20% devaluation of the dollar. Are they planning on compensating people living on fixed incomes? If people couldn’t make it before, how and the hell are they going to make it now? Just how and the hell is a devaluation of the dollar going to help the average American? And, when and the hell are they going to erect the gallows for Bush and Cheney?

  7. ekaton


    If the government wanted to help they could have declared a banking emergency and “ordered” banks that enjoy the Fed’s “discount” window to make necessary payroll loans, ag loans to farmers etc. or simply loose their charter! This emergency order would stand until the crisis abated concerning this housing market debacle.

    The second emergency level decree would be to order all institutions to reschedule their loans with folks that are going into foreclosure and to “outlaw” all loan types; ie., ARMS, sliding loans and every other highly creative loan instrument that has been hatched during the past eight years and mandate that home loans can only be of a “fixed” rate not to exceed 30 years in duration. All variable loans would be converted to fixed rate loans at their original struck price between the bank and the borrower. Tough for the whining, greedy bankers is all I can say. They have compound interest as their ally!

    This would have definitely alleviated the current “crisis”, and I cannot believe that this did not occur to at least a few senators and representatives. I believe they are either “in” on the “take” or subject to blackmail.

    NOTHING is as it meets the eye in this country anymore. NOTHING.

    — Kent Shaw

  8. Carl Nemo

    What most folks don’t seem to realize is that everything within our vision field has been constructed on debt; ie., massive debt!

    Take a drive through fancier noveau riche areas of your community and realize that few if any of the garish McMansions are mortgage free, the driveways loaded with fancy lease cars, boats etc. When they open their garage doors there’s no room for the cars because the triple garages are full to the brim with more “stuff” they didn’t need. There’s “stuff” crushed in the city dump that still hasn’t been paid off and is imedded in massive credit card debt of three Christmases or more past!

    America in these times is nothing but a “Potemkin Village”; ie., an llusion of cardboard thickness in terms of perceived prosperity.

    Rest assured little if any of the money from this monstrous aid package will ever do anything beneficial for the general public. It’s going to migrate into the hands of the knaves that have gotten this great nation into this current fix. Most of the major destruction has happened since the signing of Gramm-Leach-Bliley in 1999 courtesy of Bill Clinton. It was the green light for Wall Street and the commercial banks to go on a feeding frenzy of selling “debt”!

    If the government wanted to help they could have declared a banking emergency and “ordered” banks that enjoy the Fed’s “discount” window to make necessary payroll loans, ag loans to farmers etc. or simply loose their charter! This emergency order would stand until the crisis abated concerning this housing market debacle.

    The second emergency level decree would be to order all institutions to reschedule their loans with folks that are going into foreclosure and to “outlaw” all loan types; ie., ARMS, sliding loans and every other highly creative loan instrument that has been hatched during the past eight years and mandate that home loans can only be of a “fixed” rate not to exceed 30 years in duration. All variable loans would be converted to fixed rate loans at their original struck price between the bank and the borrower. Tough for the whining, greedy bankers is all I can say. They have compound interest as their ally!

    Of course many free marketeers would shout aloud this is massive interference with the market, but they surely didn’t care when it came to a taxpayer handout. Indeed so, but it’s a hell of alot cheaper than slapping almost another trillion dollars of DEBT on the public that will do little to no good and in the end and be as the little Dutch boy plugging a leak in the dike with his finger.

    The West and everyone that’s involved with us financially are going to go down, and go down HARD!

    Just one trillion dollars represents monumental debt, much less the 11 plus trillion of public debt hanging over heads, not including the 55 trillion in debt money for SS, Medicare, government pensions and other programs that are not funded, but which the government has made a committment to fund into the future?!

    One trillion dollars alone represents a debt that if we could pay it off with simple interest would take over 2000 plus years at the rate of 500 million dollars per annum, but that’s not possible because interest rates are compound in nature. If the nominal rate is 5 percent for all class of government debt then using the rule of 72’s by dividing 5 percent into 72 we’ll get a doubling of the principal owed every 14.4 years…! The original amount would have double at least 140 times in the period of time making it a number far greater than the estimated number of protons in the visible universe!

    The interest on our public debt is growing by a rate of 80-90 billion per annum and already represents a large portion of the budget. Within short order it will take the entire annual budget of the government to service just the debt leaving “NOTHING” for the citizens of this once great nation. Debt will ultimately be repudiated and/or rescheduled by our government.

    So what people need to get into their number challenged heads is that the amount of money that we owe to our creditors is absolutely “unpayable” even against as “little” as one trillion of debt much less the lala land levels we now owe due to the compound interest effect.

    The outcome will be a “Mad Max” type of world with remnant populations surviving on the detritus of our failed civilization. Barter will be the order of the day and the first specie to reemerge will be metals such as copper, silver and gold.

    The dollar is going to crash and end up like all fiat currencies throughout history; ie into the ashbin! All of China’s sweat equity with almost 50 percent of their national wealth invested in U.S. treasuries is going to go “poof” as well as every other modern currency that’s currently in circulation.

    Carl Nemo **==

  9. woody188

    That 20% is from the $1.8 trillion the Fed loaned out last week. The bailout has not even hit yet. Expect at least another 20% when it does. Congress has only succeeded in making the problem worse, requiring a larger, more painful correction in the near future.

    Look at Kraft American cheese. The package says suggested retail price, $3.49. The grocery price tag, $5.49. That’s for 24 measly slices. Kraft can’t change the packaging fast enough to keep up with inflation. Needless to say, I have stopped purchasing American cheese.

    I feel for the fixed income folks. Hope you have friends/family that will take you in. Sticking together is all we little people have left.

    People must have thought I was kidding when I wrote Pulling the plug on retirement, July 8th. Or people thought I meant someone else, not them. Or they just don’t bother to read my blog because who am I anyway?

    I only hope I’m wrong about the North American Union, but each passing day only re-affirms my fears. The United States of America no longer exists as we knew it. Apparently it only existed in pre-9/11 minds.

  10. griff

    Gallows? They’ve served their masters well. Nope – no gallows. Comfortable retirements in protective coccoons, far above the effects of their creations. No grocery worries.

    Money, Food, Energy – The Subjugation Trifecta. They’ve got it all now – while we wasted our time debating silliness. A shame, really.

    I heard an interesting interview with renowned economist Max Keiser the other day. He suggested massive boycotts as a means of fighting back. Dropping dividends is an effective tool – perhaps the only one we have.