Drowning Duck Begs for Life Preserver
The WSJ reveals that–faced with the likely prospect that only five Republican Senators (presumably) would support giving Paulson the second half of the bailout funds–BushCo is trying to get Obama’s help to get to the funds.
A request for more TARP money now would come amid growing lawmaker criticism of Treasury’s implementation of its rescue program — including Treasury Secretary Henry Paulson’s decisions to forgo buying bad loans from distressed banks in favor of making equity injections in those institutions, and to not place stronger conditions on banks that receive government funds.
The existing bailout legislation does fast-track release of the next $350 billion of TARP money; Congress would have to pass new legislation to block the funding after a request is made. The president could then veto the blocking bill and force opponents to muster a two-thirds majority to override that veto.
But officials with the Treasury and the transition agree that the spectacle of even a failed effort to block the money could send financial markets into an uproar. One transition official said he was told Mr. Bush could expect only a handful of Republican votes — perhaps five — in his favor.
Can you say lame duck?
I understand Obama’s desire to avoid any affiliation with Bush’s failures. But I’m curious about the strategy behind the refusal to engage.
BushCo appears to be pitching for Obama’s help by claiming it will use the funds for foreclosure relief. Though the Bush team seems willing to consider only their crappy plans, and not Sheila Bair’s peg of new mortgages at 30% of an owners income.
Treasury and Fed staff outlined the three main ideas under discussion: A modification of the proposal being pushed by Federal Deposit Insurance Corp. Chairman Sheila Bair; a plan to help bring down interest rates; and a proposal championed by the Fed to buy distressed mortgages.
If it’s true that they still refuse to adopt the most practical response, then I would conclude they were still not acting in good faith. In fact, given that they blew off Dodd’s hearing the other day, I’d say it’s a good sign they’re still not acting in good faith.
At the same time, Democrats in Congress are screaming for foreclosure relief.
Of course, 50 Democrats + 5 Republicans only equals 55, so there’s no real reason for Obama to invest his own political will now. That math changes shortly to 58 (0r 59) + 3 to 5 (depending on whether those 5 include Norm Coleman or Gordon Smith). That is, even in the worst case scenario, that math presumably gives Obama 61 votes to chase with his political capital in January, as opposed to 56.
And by refusing to ally with Bush now, Obama refuses to give Republicans an opportunity to distance themselves from Bush’s economic failures, as they tried to do with the earlier bailout.
Thus far, the Republicans have proved able to claim that their ideology is not to blame for this crash. Will Obama holding off for a month and then quickly passing a stimulus change that?
EW, how did Gordon Smith get in this post? He conceded.
OK, I get it. Gordon Smith may be part of the 5 now, but once he is gone he is not part of anything.
Right. Presumably the 5 are people like: Collins, Snowe, Specter. But if Smith and Coleman are the other two, then we should be careful not to double count them in January.
I think Ian Welsh’s point– that Banks are not using their Bailout or TARP funds to extend credit, but are hoarding cash to buy smaller banks– is a telling one. I think Congress should open more hearings, call in the heads of banks to whom bailout money or TARP funds have been granted, and demand to know what the banks are doing (or not doing) with the money. With subpoena hand at the ready. Put’em on the grill, just like they did with Big Auto. And demand answers.
Bob in HI
Hoarding money to buy smaller banks:
Not a bug, it’s a feature.
What bank, with any prudence, would lend to any lender that is not overwhelming well capitalized in this environment?
Supply (in this case, a supply of money) does not create demand. GOP economics is, well, fucked up.
That Chicago window plant case is a perfect hook to hang those hearings on. The bank has money, and got money from the TARP, but cut the plant off (the plant says).
I’d love to browbeat those bankers under oath.
I think it is necessary to demonstrate the lack of faith that was entered into here.
B. Administration says we must have money or sky will fall. Makes sure there are no conditions for banks, just crossed fingers hoping they lend. Meanwhile people lose jobs and economy continues its downward spiral. This must be in the record. No more Tarp money for anyone without significant additional strings. Oh and can we retroactively put strings on the other guys? The whole thing sounded pretty vague to begin with. Maybe it is possible.
Hey scribe, if you have time or interest, here’s a link to today’s edition of KCRW’s “To the Point”, which I was fortunate to be able to catch on radio and found really fascinating; both in terms of those interviewed, and the range of topics covered.
The online feed is here: http://www.kcrw.com/news/progr…..ilouts_and
Title: Federal Bailouts and Double Standards
(This radio program was the first that I’d heard about this worker demonstration, which the radio program expanded into really an informative range of related topics: health care, competitiveness, too little focus on underlying technologies…)
Selby is leading the Herbert Hoover wing of the party.
Funny how the rules of the free market are sancrosanct to them, when the rule of law is not.
(Marcy: I’m fact checking an Oxdown diary. Is it accurate to say Judy had her writing privileges suspended at the time of her July 8th mtg w/Scooter? I’ve googled like mad, but can’t find your posts that discuss this. thx!)
She was on a project to explain why they found no WMD in Iraq, and the only other stories she published in that period was on Steven Hatfill and David Kelly, both tangentially related.
No one has ever confirmed she wasn’t allowed to write anything, but between Abramson’s refusal to pursue the “Plame as CIA insider” story and the reports that she had minders, it is fairly safe to say her writing privileges were heavily circumscribed. The change seems to have come when Bill Keller was named Exec Editor (which suggests Joseph Lelyveld was the one who put restrictions on her writing).
(thx! off to re-write…)
Her privileges were circumcised??
I agree with the January 21, 2009 calculus, as did a contemplative PVolker in a November 2008 interlocutory at DrewUniv in the third week of November 2008, seemingly, though always one to watch his own inclinations toward any hint of prognostication. Those remarks at soiree contrast compatibly with some of CCox’s SEC screed sent to the Helvetians memorializing what Cox would like to do to bolster the stockmarket in the tumult immediately after the BearStearns implosion; this link is a generous expository of topics on the table, as far as Cox was concerned, in end of March 2008, discussing mandatory liquidity, but skipping the derivatives side. My take is BObama is going to need guarantees that congress is willing and capable of examining the diaphanous paper which underpinned but failed to support the pressured market, in the form of a new Soxley rule, so the way forward is more solid. I think that is the most reliable way out of the current crunch, one Congress will be eager to accomplish as its contribution to stabilization. Cox aint going to talk about it very directly, as it was on his watch the profiteers munged credit, though one derives a sense he knew the bull was turning bearish way back. And, as yet, Paulson probably is wondering which associates will be looking at a new round of reorganization once the derivative Soxley is in effect.
Skipping the derivatives, eh?
Why am I not surprised…?
But lo, that is an intriguing little tidbit you allude to there; obviously the part they’re most anxious to gloss over as nothing to see here, move right along… derivative? swap? no biggie…
“Helvetians“… you are funny sometimes ;-))
is anybody else saving a shitload of bottle rockets and fire crackers for the celebration that starts January 20, 2009, at 12:00 pm EST ???
just me, Huh ???
Maybe you’re the only one actively saving them.
You’re not the only one who’s thought about it.
Light one for me when you do.
They are banned in Boston
you’re not alone,
and I’m putting Molly Ivins’ pots and spoons up on the top shelf in the kitchen
EW: Remember Obama’s convention speech? “It is time for them to own their failure”?
Welcome to the New Ownership Society. To Bush’s eyes, this must be the Bizzarro-world reflection of what he thought he was supposed to get….
Speaking of NY Times – they appear set to follow in Tribune Company’s footsteps.
http://ridingtheelephant.blogs….._next.html
Mainstream media being rejected by mainstream.
Go long blogs!
plunger, at the end of that radio program that I link to above, the last 10 minutes covered this problem of media giants going under — really, if you think over the long term, cataclysmically, suddenly: collapse.
I know (just enough) about cell biology, social anthropology, and the implications of what happens when ‘living organisms’ don’t have good communications. We call it ‘death.’ Societies are living organisms, so we should all be wary of what happens to our media.
A guest at the end of this program explains that papers receive only 1/20th the money/revenue for an online reader as they do from a paying subscriber to ‘real paper’.
Just because Judy Miller was a corrupt employee doesn’t mean every reporter is a tool; there’s a lot of human pain behind these headlines and I’ve seen some of it in the faces of longtime friends when their organizations downsized.
here’s a direct answer to your question:
NO, Obama will not change “that”
but let’s examine what “that” is
we’re talking about the repuglitards’ ability to “CLAIM” something
being able to “claim” something is a little different than actually having someone “BELIEVE” your claim
I could claim to be the king of Siam, doesn’t mean anybody believes me
I don’t see any evidence that the core of the repuglitard party has lost faith in their whinny assed titty baby strategy
the trouble is, America has seen that strategy before. The repuglitard arguments about health care ain’t gonna work. Socialized anything being bad is an argument that died in October of 2008
the repuglitards HATED the New Deal and FDR, so they recreated the conditions that led to the new deal, and the Democrats found their FDR junior. the repuglitards will answer Obama the same way the answered FDR and Truman, with McCarthyism
the repuglitards ain’t able to change course without some type of Truman-Dixiecrat warfare. The Democrats split while they were in the majority
I don’t know what happens to parties that split in the minority, but the whig party comes to mind …
that’s how i see it, for what it’s worth …
Yes Siam?
Good rant Freep… and no you’re not alone. I have a few boxes of m-80s I’m saving for the occasion.
A Few Boxes? Careful man, they’ll call out the bomb squad and the marines on you!
The entire frame of the WSJ excerpt says that Bush can ask and get the second $350 Billion under the existing legislation. Will he do it?
Have they said how much they need, how they would use it, and why they need it now instead of Jan 20?
So, it looks like Bush is pocketing Our $350B for his Cronies, and not sharing Any of It with US.
On top of that, he’s telling US that the Auto Bailout is On US, too – his share of the Treasury is Already Going to the Bankers Who Robbed Our Homes and Retirement Savings.
So, from Bush’s point of view, it does look like his Ideology is Winning.
However, let’s hope Team Obama can Make Sure Bush doesn’t get his grubby little hands on the second $350B, and thus put an End to the Illusion of Bush’s Unlimited Power to Pleasure his Backers.
OT alert:
Man, the USS Abraham Lincoln is having a tough week. First they spilled 10,000 gallons of jet fuel off the coast of SD, then today one of their F-18’s lost an engine during manuevers. It got diverted to Miramar and then lost it’s other engine on approach, where it promptly dropped on to someone’s house.
I do hope the strategy is to force Bush to came to an agreement, get off his bloody lying high horse and negotiate a deal. To expect that the Dems should get in there and give him and his damn cronies even more money to do with as they wish, without concession, is absurd and I hope the hell they do not do it.
I frankly I think he should only agree to help if Bush will agree not to pardon anyone. Or even better leave the damn stage early.
Thanks once again for an excellent post. You guys seem to be working overtime these days.
I get real tired of the logic of Dem leaders that We can’t to X, “because Bush will veto it,” or “because we don’t have the votes to over-ride a filibuster.”
Heck, let’s do X, and make them veto it or fillibuster it. Let’s see how they like having their names held up as the people obstructing the recovery.
How about some headlines like “Bush fiddles while country burns”?
And BTW I want to see some Congressional hearings with bailed-out banker’s posteriors on a hot griddle, with some subpoenas in their hands for documents, demanding to know what they’re doing with their TARP money. If they’re hoarding it to acquire smaller failing banks, let’s subject them to some hard butt-kicking cross-examination.
Bob in HI
Hear hear! The cowering act is really wearing thin. “But but but, he’ll be mean to us.” You’d think DC was grade school.
((((((((((((((bob)))))))))))))))))))
Well phrased, and it couldn’t happen soon enough iMHO.
When are we going to hear Senator Dodd and others use the term “restructure” when it comes to Wall Streets access to the Tarp $$$? When are we going to hear Senator Dodd and others demand resignation on Wall Street.
When these fat cats are begging for the taxpayers money why are there different rules applied these corporate welfare kings?
We can still throw tea, however.
but only 1 oz or less.
I believe you, freep. I just don’t know where Siam is located.
et esss a veeerry poor country, kind person. we’re so poor we can’t even afford a place on the map
all we can afford is a P O box, which I will send the address of, if you are interested in donating to our cause …
(wink)
I could be a sooooo be a repuglitard fundraiser …
Aw, c’mon — admit it. You used to be rich.
You’re only poor now because international financiers bought up all your ‘assets’, then swapped them for derivatives, the value of which they never actually put on their balance sheets.
But you can still watch football, so all is not lost 8^}