The House Republicans may have saved Nancy Pelosi and the rest of the Democratic leadership from a huge mistake. The Republicans' last minute proposal which derailed the talks on Thursday, only served to highlight the deep fractures the Paulson plan is creating across all the power structures.
Here's a snippet from Laura Rozen of War and Piece and Mother Jones:
As my Hill friend said yesterday, the bailout seems to be in more trouble than some earlier reports indicated. My two cent summary of his take, which is worth reading, was that there is a seriously underestimated gap between the White House and Congressional leadership on one side, and the Congressional rank and file on the other; and that the media reports suggesting a deal was imminent by and large were being informed by the former, who are more committed to a quick deal; while the Congressional rank and file is more informed by being overwhelmed with thousands of calls from screaming constituents who are truly outraged over the prospect of a bailout of Wall Street fat cats. Vulnerable incumbents may not feel they can vote for anything resembling a bailout until after the election.
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The entire post is here.
I read a few financial blogs and Mike Shedlock (aka Mish)has been pounding the table all week against the Paulson plan:
It is time to take back America from Wall Street and return it to Main Street USA.
Treasury Secretary Paulson is attempting to ram down the throats of US taxpayers, a $700 billion bailout of Goldman Sachs (GS), JPMorgan (JPM), Citigroup (C), Morgan Stanley (MS) and other many other banks that participated in questionable if not fraudulent mortgage lending schemes.
Those corporations have padded their own pocketbooks and handed out billions of dollars in bonuses and stock options over the past few years, all based on mythical profits.
Now those same corporations are asking U.S. taxpayers to bail out their bad lending practices to the tune of $700 billion. No Deal!
Shedlock is a libertarian of the Ron Paul school, but his economic analysis this year has been right on the money. Bonddad links to him, as do many others. Readers are indeed taking the time to fax, or phone or email their congress people:
<Your voice is being heard, possibly for the first time ever.</p>
Senator Barbara Boxer, Democrat of California, has received nearly 17,000 e-mail messages, nearly all opposed to the bailout, her office said. More than 2,000 constituents called Ms. Boxer’s California office on Tuesday alone; just 40 favored the bailout. Her Washington office received 918 calls. Just one supported the rescue plan.
Senator Sherrod Brown, Democrat of Ohio, said he had been getting 2,000 e-mail messages and telephone calls a day, roughly 95 percent opposed. When Senator Bernard Sanders, the Vermont independent who votes with Democrats, posted a petition on his Web site asking Mr. Paulson to require that taxpayers receive an equity stake in the bailed-out companies, more than 20,000 people signed.
"We certainly have never brought in 20,000 names in a day and a half," Mr. Sanders said, sounding astonished. "For us, that’s off the wall."
It is much the same on the Republican side. Aides to Senator Jim Bunning, a Kentucky Republican who has called the bailout plan "un-American," said the senator had received more constituent reaction to the bailout plan than to any issue since the immigration debate.
Ron Paul Says "Call Them"
If you have not yet done so, please read Ron Paul Says "Call Them!" Well don't just read it, Call Them! Let them know you are mad as hell and if they vote for this boondoggle you will vote them out of office.
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His is just one of manyvoices:
Calls to congressional offices are ``running 50 percent `no,' and 50 percent `hell, no,''' Democrat Paul Kanjorski told CNBC today. ``Out of 100 calls, you are lucky if one of them is positive.''
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This plan is reapidly becoming as toxic as the securities it proposes to buy. Voters are opposed.
Democrats could decide to go ahead with their plan without Republicans. While this would ensure passage, it would essentially saddle Democrats with responsibility for a bailout package that has stirred up strong resistance among both Democrat and Republican voters -- with elections just weeks away.
160+ economists including several nobel laureates are opposed:
Sept. 26 (Bloomberg) -- More than 150 U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.
In a Sept. 24 letter to congressional leaders, 166 academic economists said they oppose Treasury Secretary Henry Paulson's plan because it's a ``subsidy'' for business, it's ambiguous and it may have adverse market consequences in the long term. They also expressed alarm at the haste of lawmakers and the Bush administration to pass legislation.
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I am at a failure to understand why our Democratic leaders seem hell bent on moving this plan, especially if they might not have the backing of the membership. Maybe this all an elaborate "kabuki performance" at this point with the ultimate plan to picture the Republicans as obstructionists who put ideology above country. But make no mistake about it- this whole package is turning into a very high stakes game with the next presidency as the jackpot.