Bailout bill failure has direct impact on state of Massachusetts. They were denied credit.

[beachmom]

There may be disagreement here like there has been everywhere, but make no mistake that the failure of that bailout bill yesterday is having scary consequences, and it's not about the stock market, but the credit market.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x7256498

The House Republicans were irresponsible yesterday, and as for our side, let's just say I agree with Nate Silver. Even if you disagreed with the bailout bill, there is no excuse for the behavior of many on the liberal blogosphere who thought the bailout bill was a fun political football to play with.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x7249839

[TayTay]

1. Agreed.

This is affecting small businesses and threatens the jobs and paychecks of millions of people. Wall St has a lot to answer for. That doesn't mean that working class Americans and owners of small businesses should have to bear the burden of the crisis while Congress dithers and some play partisan games.

There are waves to a crisis like this. The credit crunch in Massachusetts is but one of those waves.

Congress is playing with dangerous fire right now. The comments of some seem to indicate a lack of sympathy or concern for those who will get burned by this crisis. This is no partisan fight and there are no political winners possible here. Just victims and the sooner Congress acts responsibly and in a true bipartisan fashion, the sooner the interests of this country are served.

Not everything is a partisan pie fight. Some of the comments on this crisis have been deeply irresponsible. Real people are getting hurt here. This is no game.

[TayTay]

2. Senator Kerry's Statement on the Financial Crisis

BOSTON, MA – Sen. John Kerry held a press conference this afternoon to outline the urgency of passing comprehensive economic legislation to avoid the collapse of Wall Street from hitting families and business across the country.

Below is Kerry’s statement as prepared for delivery:

“This has been a volatile time for our financial system and our economy. But, I strongly believe that the Congress will soon come to an agreement on an economic rescue plan that will help restore strength and stability to America's financial system and overall economy. After the enactment of this plan, along with the recent actions taken by the Treasury Department and the Federal Reserve, our nation will have taken a critical step to address the current challenges to our economy.

“But make no mistake about it, the Congress must come together across party lines to address our economic challenges. We must put our broken politics aside and unite to restore confidence in our capital markets and our financial institutions. Today is a time for action, not for partisanship.

“The legislation that failed in the House of Representatives yesterday was not a bailout for Wall Street. It was developed to stop the ripple effect of the collapse of Wall Street’s major financial institutions from developing into an economic Tsunami sweeping across the country. It is an effort to protect businesses and families from a serious credit crunch. The stark reality we face is that without federal assistance, our financial system may collapse. Small businesses would be unable to obtain financing and jobs would vanish. Families would be unable to borrow for new homes or to send their children to college. Retirement funds could plummet. Those are the stakes.

“I support the compromise legislation to provide up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets from financial institutions. It will help restore confidence in our capital markets and our financial institutions. It will help our nation avert serious economic dislocation that could be the cost of inaction. Specifically, the legislation:

- Requires the Treasury to modify the loans they buy to help American families keep their homes and expands federal assistance to families facing foreclosure;
- Includes strong Congressional oversight, establishes a special Inspector General and allows Judicial review of the program;
- Requires companies that take advantage of this program provide warrants so taxpayers will benefit from any future growth of these companies;
- Includes important limitations on executive compensation for those participating in the program;

“In the Senate, I have been working to get at the root of our economic problems helping to ease the foreclosure crisis and increase access to capital for small businesses. I’m pleased that I was able to include provisions in the Housing and Economy Recovery Act that will:

- Help limit foreclosures by providing additional mortgage credit;
- Increase protections from foreclosure for our veterans;
- Provide additional funding for the Community Development Block Grant program, and;
- Create construction jobs and produce affordable housing by establishing the National Affordable Housing Trust Fund.

“A recent federal survey reports that more than 65 percent of banks have significantly tightened their lending standards for small businesses. As Chairman of the Senate Small Business Committee, I have held five hearings about the credit crunch and the Small Business Administration’s lending programs over the past two years. I introduced legislation to temporarily eliminate fees and double the loan limits for many Small Business Administration loan programs. This will help stimulate economic growth and job creation by increasing access to capital for small business.

“I urge the Congress to come together to enact legislation to protect our vital national interest in the continued health of our economy.”


###

[MBS]

3. a friend wrote to tell me that Paulson held a news conference for

wall street types BEFORE the vote, assuring them that, no worries, the various oversight provisions would NOT be honored.
Did anyone see this, or see any kind of confirmation of his actual words?? Although I do agree that something has to be done, the haste, and what seem to be hollow oversight assurances, make me very nervous. All too reminiscent of the Patriot Act and (as whome added), the IWR, for my taste. Granted that President Obama could do something to make the oversight provisions stick, but. . I don't like any aspect of this situation.

This is such a mess. Someone in GDP wrote that "28 years later, the Riverboat Gamble that was the Reaganomics Comes Home to Roost". I think the poster is correct: mixed metaphors and all.This disaster is the (easily predicted) end result of voodoo economics and related fantasies.

[beachmom]

5. Paulson was near collapse during negotiations last weekend.

I just do not buy the idea that he is some kind of mole for Wall Street tikoons to fleece the taxpayer. I think this is a major crisis spinning out of control, and Paulson feels his options are limited. I think he blundered with his original proposal, which fueled suspicion which you have articulated. But I do think he put forth this proposal to prevent a collapse. It is real, and it is happening now. And it has NOTHING to do with the Patriot Act or the IWR or the like. It is simply that BECAUSE of those things, nobody trusts Bush or by extension Paulson. The mistrust chickens have come home to roost as well. When you lie and mislead for 8 years, then when you have a REAL CRISIS to announce and want to fix, nobody wants to believe you.

[TayTay]

6. The Paulsen Plan is long dead

and gone. It is not what was on the floor of the House yesterday. The provisions that would have amounted to a giveaway to the very interests that helped cause this crisis have been greatly moderated.

Senator Kerry angrily stated today that he is not happy about this rescue plan or bailout. No sane human being is. The American people are being asked to come to the aide of a some people who foolishly and greedily let the crisis get to the point where the economy is greatly threatened. We cannot permit these people to profit from this bailout.

The money involved in this bailout comes from the taxpayers. Any legislation protects that interest. Any legislation makes sure that the taxpayers are paid back and that they are not buying just 'toxic loans.' There should be no "golden parachutes" for executives who screwed up badly enough to warrant this bailout in the first place.

The need is real. It is possible for Congress to come together to solve this crisis. It takes commitment, leadership and a willingness to be put aside partisanship and concentrate on what is good for the country and for taxpayers. It is a mark of just how badly government is broken right now that this needed effort causes so much suspicion in the minds of voters. However, responsible leadership stands up and explains what is necessary and shows people how to move forward and deal with the problem.

It is shameful that some people will grandstand on this issue. It really is a crisis, not a game. Real people could lose their homes, their businesses and their futures if this is not handled right.

[Inuca]

8. IMHO, it is not fully dead

The basic idea, that of the $700 billion is still there, though I agree that very important aspects of how and when these billions are going to be used did change. And I think that it is the basic principle of the $700B that so many react negatively to, from both right and left.

[YvonneCa]

9. Thank you for posting Senator Kerry's statement...

...on this. There is a lot of fear going around...and, if we are to be fearful, at least it should be about real concerns. His statement makes me more confident that these problems will be solved.

My oldest daughter has worked for one of the large (to remain un-named) banks for over ten years. She commented to me on this stuff over a year ago. She said it's not just sub-prime...and she was right. She also said the banks were all holding a lot of worthless paper...and none would disclose how much. But she said it was a lot. I believe her.

My other daughter worked for a builder. She was laid off a year ago...with no prospects to be rehired any time soon out here in CA.

I do have trust in our government to do what is right to get things back on track. I'd just feel a lot better if the election were already behind us and we could be assured that our Democrats were in charge.

I agree with you that "It really is a crisis, not a game. Real people could lose their homes, their businesses and their futures if this is not handled right." This is just like Enron...only on a national (or global) scale.It is my hope that our leaders understand that real people have already lost homes, jobs, businesses, pensions and futures...that's how we have known for a while that the economy was off track. It's just that these numbers, without a solution, will spin out of control. And that is frightening.

[Inuca]

7. I saw something about a conference call

along these lines somewhere in GD(P?), but did not read it carefully. I also have a knee-jerk negative reaction about all this for the very same reasons. But on the other hand, based on my limited understanding of what's going on, and primarily on statements by the few politicians I trust about the real seriousness of the situation, I am squarely in the "something must be done very quickly" camp. I cannot personally judge the appropriateness of the solutions suggested, and I am getting mad at those who have barely any better understanding than me, if at all, and make pompous and self-righteous statements. An example of what I mean (among a gazillion) was a statement by Kos yesterday, posted somewhere around here as well I think. He was basically saying that it is very good that the bill failed yesterday. I don't know his reasons because I stopped reading.

Also, I heard a bit of an Obama speech today in Nevada. He was repeating his support for the bill, giving very good and easy to follow arguments why this is not all about Wall Street, and also saying that if elected he will have a look at the bill, how it works, and what can be improved his very first day in office (figuratively speaking, I assume).

[beachmom]

4. A good diary explaining what is happening in the credit markets

Although the diarist is opposed to the bailout (I respectfully disagree), the info in the diary is quite good:

http://www.dailykos.com/story/2008/9/30/145921/604/559/615761