US Features
US voter anger sinks Wall Street bailout
Sep 30, 2008, 4:19 GMT
People walk along Wall Street past the New York Stock Exchange at the start of the trading day in New York, New York, USA, on 29 September 2008. EPA/JUSTIN LANE
Washington - A massive government rescue of the US financial system failed in Congress amid both doubts that Wall Street's dire straits would affect the lives of ordinary Americans, and outrage in any case that taxpayers should bail out corporate titans.
Government officials and congressional leaders from both parties warned that, however distasteful, it would take an unprecedented government intervention in the financial sector to keep the US economy afloat.
At stake is the availability of loans for everything from homes to cars to university educations, which leaders warned could dry up completely if banks were not provided with the money to continue providing credit to the average consumer.
The argument has inflamed US voters, who flooded their congressional representatives with phone calls and emails opposing a 700-billion-dollar bailout of greedy Wall Street investors.
Only five weeks before US presidential and congressional elections, the voter dissension was too much for many legislators to ignore.
Larry Lindsey, a former Federal Reserve governor, said that congressional leaders had failed to heed the concerns of backbenchers afraid of losing their seats in Congress. 'When you talk to rank-and- file members, it's easy to understand why (the bill) went down,' he told financial news channel CNBC.
A survey last week by the respected Gallup polling organization found that 78 per cent of respondents wanted Congress to pass some kind of plan, but only 22 per cent favoured a plan similar to what was eventually defeated on Monday.
The House of Representatives voted 228-205 Monday against the rescue package, which would have seen the government buying up mortgage-backed securities - loans made to individual homeowners, bundled and sold to investors - that have been at the heart of the credit crisis for more than a year.
Congressional leaders on both sides of the aisle had urged their members to swallow the bitter pill and vote for the measure after nine days of tough negotiations. Provisions were added that would require most of the 700-billion-dollar investment to be eventually recovered from Wall Street.
The bill was characterized both as something nobody wanted and yet the only means to stave off a collapse of the US economy. US stocks had one of their worst-ever trading sessions on Monday, amid widespread fears of more bank failures to come.
'As angry as (constituents) are right now, they're gonna get a lot angrier' if Congress fails to act, said Christopher Dodd, Democratic chairman of the Senate Banking Committee and one of the key negotiators of the bill.
Motivated perhaps by a mix of free-market idealism and populist politics, the House revolt was led by minority Republicans, though large numbers of legislators from both parties disagreed with the bailout.
Some argued that government intervention was inappropriate in a free market designed to let investors take the fall for unnecessary risks. Others doubted whether the plan would really be effective - 700 billion dollars could only be the beginning for a government already steeped in debt.
'Those who believe they can control the market's invisible hand will eventually be slayed by it,' Congressman Jeff Flake, a Republican from Arizona, said during a four-hour floor debate prior to the vote.
Others argued that social fairness required that the legislation offer more help to homeowners struggling in danger of default, including better bankruptcy protections for mortgage-holders. Plunging home prices have contributed to a record number of foreclosures over the last year.
At the heart of the matter were questions over whether the bailout would really be advantageous to ordinary Americans. In other words: if Congress fails to act, will the pain felt on Wall Street really trickle down to Main Street?
'This vote today, in my mind, was a vote between bankrupting my daughter and our kids and bankrupting a few Wall Street banks that made bad decisions,' Texas Republican John Culberson told CNBC.
As legislators headed back to the negotiating table, it was unclear just what new provisions could change enough minds in Congress. Despite the sharp ideological contrasts, politicians held out hope that they could still scrape together the 12 extra votes needed for passage.
'We've got too much work to do, and this is much too important to simply let fail,' said Treasury Secretary Henry Paulson, the original architect of the bill.
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Older Talkback
page: 1
finishing the job he started 8 years ago; ''Destroy America.....Mission Accomplished''!
if the common citizen honestly completely understands just what is going on with this mess. There has been so much finger pointing back and forth and everyone seems to have the answer to what to do albeit different in every way. Some think it needs more time to work it all out and others predict the U.S. will completely obliterate if something isn't done immediately. McCain was supposed to stay in Washington and refuse to debate because of the circumstances, so he could solve it all, then he rushed back after the debate to finish it...........? Well, now will Palin start saying she won't debate because the country needs to focus on the economy. Or will the party get smart and find a way to get rid of her gracefully?
This is SO great!
The people actually WANT Wall street to take a dive.
Oh, PLEASE let me rant and rave to my heart's content just this once...
Remember about fifty years ago there was that famous picture (in LIFE magazine, I think) of Soweto-grade Black slums in Washington with the dome of the capitol in the background? They just destroyed the slums, right? Nothing's changed. It just got... different and worse in many ways.
Remember for decades now we've been made to feel ashamed of ourselves whenever we hear about corporate fat asses voting each other unconscionable salaries and bonuses while more and more people, whole families in fact, wind up living in the streets? That big oil companies actually make record profits AND EVEN GET TAX BREAKS while we sink faster and faster?
That doctors and the other privileged few live hidden away in gated communities and won't even see you if you're poor, even if that means saving your life? The rationale here seems to be that life is only worth preserving when it's worth living, and it's only worth living if you're rich! Isn't it? ISN'T IT???
Is a rich man's very LIFE worth more than mine? Is it? IS IT?
Remember the cartoon about the crash in '29 where a banker commits suicide by jumping out the window of a tall building? Today's version should be an evicted family jumping out the ground floor window of a small bungalow, not even able to achieve the relief of death. That should partially answer the above question.
Big business has insidiously reached into every pocket of every citizen in America and stolen money from them, as usual much more from the poor than the rich. Big business has reached into every home in America and stolen some or all the heat from the hearth, or the home in its entirety.
Big business has reached into every heart in America and stolen its pride.
I say the hell with Wall street. The fat cats should be rounded up and tried for treason and sentenced accordingly. Nobody should be able to do such grievous damage to a whole country and just walk away, or worse, be bailed out!!!
But they will be bailed out. That's for sure. The parasites will live on to leech another day. Because the ruling class takes care of its own.
That's all it ever takes care of. Its own.
But don't worry. It'll 'trickle down' to you...
I'm BEYOND disgusted!
Spitfire
aren't you giving your expert advice to Washington, SP, instead of wasting your time here criticizing every one and every thing that isn't Republican or Bush/McCain (same thing)? We can point fingers till the cows come home, but that doesn't solve the immediate problem, and if it's as simple as you seem to think, why isn't it being taken care of? The common person wants to know what exactly is going to happen if a program isn't put into place soon, or if there is time to make more intelligent decisions. There have been countless ideas thrown around by Washington and every other expert out there, and I don't really think any one has a good idea of what will or won't happen in any case - excluding you, of course!
...I say what I like and that is good enough for me. Now, if I were a whining, sarcastic little pip squeak like you, I'd run to the cover of my sarcasm instead of offering something meaningful.
Try this:
Do nothing.
What would be the result? Massively shrunk credit lines? Foreclosed mortgages, credit card use frozen? The markets rebounded today....why?...there is no bailout...how can confidence go up if there is no change?...seems to me someone see's the light here....
Perhaps the GOP was correct in calling everyone's bluff...?Perhaps we should raise 700 billion for those institutions that BEAT the bank run, and let them saw up the one's who did not, and let them benefit from their success in operation, instead of feeding failure...whining about 'executive compensation' or the still-laughable 'mortgage assistance to holders' and other such nonsense?
Go, professor, and feed that into your calculations, if you have any...and be sure to get back to us with your empty prose, or at least a dirty limerick...
At least Spitfire has some intelligent reasoning to what has happened or might happen. I didn't say I have any answers, just that the ordinary person doesn't totally understand what should be done or what will happen if something isn't done immediately. You are always so busy, SP, putting everyone down, you can't see the forest for the trees like Grandma used to say. You definitely earn your sordid reputation here. Too bad, because when you might possibly have a decent comment, you ruin it by railing on everyone else about there's. And that doesn't make me wrong!
That's true. But I just didn't want to put the blame on a WOMAN!
I mean, geez! I don't want to look like a bully...
Spitfire
Why is your government not asking for anything in return for squandering such an enormous amount of the taxpayer's money .It has been the political credo of the GOP that you get what you deserve in life,everybody is born with equal opportunities,the american way,John Wayne riding into the sunset at the end of the picture....the great american myth in other words .
Now here is reality:the poor are given the blame for the crisis,home owners have borrowed above their capacities,the solution to the crisis,well simply knock down a few hundred thousand houses to jump start the real estate business or give your money to the rich that never paid a dime in taxes anyway without any compensation or control .Unless I am completely senile I read everywhere that Bush and Paulson say that this is not the time to analyze or look for responsibilities .Absurd isn't it ?It means of course that such a necessary condition will never be fulfilled.
Yet things could be easy and even profitable to the US taxpayer .Instead of simply giving a multi hundreds of billions of dollars blank cheque to the rich buy out the banks:give them what their shares are worth on the stock market and add to it control over the administration board as well as auditing rights .We did just that with Fortis yesterday,turning a crisis into an opportunity for the taxpayer .THe next day shares of Fortis already rose 8 percent,all profit for the taxpayer .On top of that the bank is now regulated .Simple and efficient .
No country should allow it's major resources to be looted by banks or corporate tycoons .
Better even would be to raise taxes on the enormous profits of the oil tycoons and use that money to buy out the banks,..Of course this will not happen.Ever wonder why such simple and efficient solution is not considered ?Ever wonder why the only solution offered is a blank check ?
The argument has inflamed US voters, who flooded their congressional representatives with phone calls and emails opposing a 700-billion-dollar bailout of greedy Wall Street investors. (M&C)
COURIC: 'Why should the government spend 700 billion dollars to bail out Wall Street instead of giving the funds to ordinary citizens?'
PALIN: 'Ultimately, what the bail-out does is help those who are concerned about the healthcare reform that is needed to help shore up our economy, helping the - it's got to be all about job creation, too, shoring up our economy and putting it back on the right track. So healthcare reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans.'
WOW.... BAILOUT EQUALS HEALTHCARE?...WHAT A GRASP OF CURRENT EVENTS!!
Somebody stole my shopping cart full of my valuables, I swear. If people in America are stealing from a homeless bum than it must be really really getting bad. At the public library where I bathe and go pee pee and poo poo they are having a one paper napkin maximum now. My cup with my life's savings.....GONE! At the same library they look at me weird when I use their computers and the Internet. Is it not a public facility?
page: 1
SP4: element of truthSep 30th, 2008 - 14:39:11
These representatives want the public to change their minds before they do anything to save the situation, in order to save their careers.
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