It is not a bailout! We need to change the frame!

[Nancy Waterman]

Bailout is a bad word because it makes people think we are bailing out the greedy people who made this happen.
The bill is actually a CREDIT PROTECTION bill. Without it, all credit dries up, businesses and consumers can't get credit, businesses go under, and unemployment skyrockets.That has already begun, and Congress should have passed it to get the credit markets moving again. This huge public reaction against the bill is based on a fallacy about what the bill it. We have to stop calling it a "bailout". It is a bill to maintain America's assets and to keep credit flowing so businesses can keep working and pay their employees.

[John Q. Citizen]

1. Why does all credit dry up without it? I was charging stuff on the card today.

What day will I no longer be able to use my card?

Can you name one employee who wasn't paid because their credit worthy employer couldn't get a loan?


Thanks!

[Joe the Revelator]

3. Give it a week or two.

[PBS Poll-435]

20. Your credit lines will be reduced and then closed.

Bank on it.

[anigbrowl]

62. Why all the fuss about global warming? It was cloudy today.

Why all the fuss about the economy? My atm card still works, woohoo.

See: argentinian financial crisis.

[maui9002]

64. I was thinking about an appropriate response to the post above

but yours was just too good to top. Well said.

[Newsjock]

2. You're absolutely right. It's a handout, not a bailout.

Change the frame!

This bill would have lined the pockets of the largest campaign contributors while doing almost nothing to prevent additional loss of credit and jobs. The huge public reaction against the bill is based on a deep personal understanding of the realities of today's economy -- realities that are worlds away from most of their elected "representatives."

We have to stop calling it a "bailout." It is a handout from the people in power to the people who keep them there.

[NoSheep]

6. Ding!

[scheming daemons]

11. 100% wrong....

Credit is drying up to small businesses and individuals as we speak.

That means loss of jobs in the near future.

[Newsjock]

15. And this bill would have done almost nothing to change that

A tragic situation, but this bill was not the solution.

[scheming daemons]

21. Yes it would. By removing the bad debt from the system, credit markets open back up.

[texastoast]

25. Remove it to where? n/t

[scheming daemons]

29. To the US Treasury... Because they can wait as long as it takes until the housing

market comes back. Even if it takes 10 years. They can hold the assets for as long as it takes to recoup the $700B.


Among the risky debt that they'd buy, some of it would be paid back. Some would default, and then the Treasury would own the properties...which they could hold until the housing market came back.

[msallied]

41. EXACTLY. If there is one investor that can hold this crap, it's the US Govt.

Then, as the market recovers, it can offer those assets up for sale. But the market won't recover while it's holding all of this bad debt right now.

[Raineyb]

31. Apparently to the taxpayers

Because we just love bailing out the banks after they rip us off.

And because there's no provisions to change any laws we can look forward to having the banks come back to us for another handout.

Yay us!
:sarcasm:

Regards

[texastoast]

40. That's the ticket!!

Give it to US. Give it to our children. Worry about it tomorrow. ;-)

[scheming daemons]

46. Read response #29

[maui9002]

66. If this bill is not the solution, then what is the solution?

Because doing nothing, in my view, is not a solution.

[texastoast]

4. Consumers do not need credit

They need to save more and spend less.

The huge public reaction is bipartisan and justifiable. It is CORPORATE SOCIALISM. Our country is just not set up for that.

Have you learned nothing? Any time Bush wants to push something through in a week, you best have alarm bells ringing in your head.

We need time to do this thing right. It will work out.

It is a bailout.

[NEDem]

7. In what universe?

We're living in the real world here.

[texastoast]

10. In the universe where America worked just fine without it

And in the universe where many, many people do not use credit cards today, having learned their lesson.

Credit cards are a relatively new thing, starting in the late 1950s with American Express and Diners Club who expected you pay off your bills in a month or two. The banks wanted a piece of that action and came up with "revolving" credit where you could pay less and they could charge you interest.

Stupid stupid to buy into that, but we did. And still we suffer.

[scheming daemons]

13. You're talking about individual credit..... where this hurts is BUSINESS loans....

It means people's jobs go away.


Soon.

[scheming daemons]

9. No... but their EMPLOYERS do.......

[texastoast]

14. Businesses need loans

so they can employ people, yes.

And lots of banks who didn't get into the secondary mortgage and subprime markets are still going to be just fine to lend to them.

[scheming daemons]

16. the subprime thing touched ALL banks, because the loans were bundled with other securities...

Lehman and Merrill Lynch weren't subprime mortgage houses.

[texastoast]

24. No, generally community banks are doing fine

It's the big bastards from what I've read and the houses that took on the easy money. What needs to be looked at is the effect of deregulation.

[scheming daemons]

30. Yes... we need to put the regulations back... but first, we need to put out the fire.

[msallied]

22. Study derivatives a little more and get back to me.

The loans were made part of securities packages and traded back and forth like smelly gym socks. Even to countries overseas. Now EVERYONE stinks as a result of it.

[texastoast]

27. Every bank in the world is going to fail?

Is that a fact?

[scheming daemons]

33. No... there will be 3 or 4 "SUPER" banks that come to dominate the world.... a cartel

That's not helpful.


See: Big Oil.

[msallied]

39. I'm not feeling too encouraged right now.

I've had to explain this to people about three dozen times today. And I've had to explain it to people who were miffed that the "voters" weren't being listened to about not wanting the "bailout." Christ we are screwed. People are confused. People are ignorant. People are misinformed. This is probably the biggest problem with this whole mess.

[msallied]

36. The biggest ones in Europe and the UK fell today. Asia is crashing too.

This is not an "American" problem. The dominoes are falling right now. No, not "every bank in the world" is going to fall. All of the little ones will fall and there will be about four or five "super banks." That's what's happening in America as we speak. Bank of America, JP Chase, and Citibank are the big 3 now.

[texastoast]

48. Community banks will fail? Credit unions will fail?

From what I've read neither of them are deep into the mess. Do you know differently?

[msallied]

55. Give it time. Apparently what you're reading is assuaging you with sheer delusions.

Nope, there is no problem. Nothing to see here. Move along. :eyes:

[scheming daemons]

56. People won't have any money to put into those banks.....

They will begin to fail too.

[anigbrowl]

63. It's quite possible. In the meantime...

remember that credit unions aren't insured by the FDIC. They, and small banks, are severely restricted in their scope of activities compared to large banks. They can do small community banking, but small community banking doesn't meet the needs of large companies. If you're an airline or a factory, you probably can't get the facilities you need at a small community bank.

[NoSheep]

5. Why isn't it a bailout? These are PRIVATE companies! Credit is what CAUSES

these problems! Yeah! We definitely need to reframe the debate. But I'm not sure it is in the way you suggest. I think we should see our way of life as self destrutive and unsustainable and we should rethink the whole way we operate.

[NoSheep]

8. Newsjock says why it isn't ;-)

[Raineyb]

37. It is a bailout

but if they call it a bailout then people would object. Better to trick people with an Orwellianly named bill so the pesky rabble won't catch on.

Regards

[Raineyb]

38. Dupe

I'm having issues with posting today

Regards

[Cha]

12. So you think the timing is right

to do something right now? And, then go back and fine tune it later?

Credit Protection Bill..if that's what it is then they should call it that.

[texastoast]

19. Bloody Orwellian

It's a bailout.

[DefenseLawyer]

17. You are wasting your time.

The mob will not be swayed. I mean, when someone says the world doesn't need credit and we should all put our money in the mattress, you aren't going to convince them of much of anything.

[PretzelWarrior]

18. it's CORPORATE WELFARE as it is set up now.

simple. corporate bailout may sound worse than Bush word meisters' "rescue plan" but it still doesn't quite capture how unfair this transfer of US taxpayer $$ to the wealthy really is.

[scheming daemons]

23. This affects ALL of us.... the wealthy least of all

tone deaf.


The wealthy will get through this just fine.


those living paycheck-to-paycheck will be S.O.L.

[rhett o rick]

26. Too much credit got us into this mess. We need to have manufacturing jobs.

Giving money to banks so they can continue their looting is outrageous. while the middle class has been losing hundreds of billions the rich have been scraping it off the top. Now they want more and more. It isn't a help to give the middle class more debt. We need to give the middle class the money to get themselves OUT OF DEBT. Hoover tried this stupid bail the banks out trick. It only postponed the depression and made it worse. NO BAILOUT of the wealthy.

[texastoast]

28. Ding! Ding! Ding!

When the bill is written correctly, I'm all for it.

[scheming daemons]

35. There will be no manufacturing jobs if companies can't borrow to open new factories

[Raineyb]

44. And our tax code which pays companies to move overseas has nothing to do with that?

Or the fact that we have tariffs so low that cheap imports flood our markets and put companies that manufacture domestically out of business. We don't make shit here and this bailout wouldn't change that even if it had passed today.

Regards

[scheming daemons]

45. You're right. But we need to put out the fire first.... THEN fix the causes.

[Raineyb]

71. But the bailout as it was written was the equivilence of giving the fire fighting equipment

to the arsonists then waiting for a report from said arsonists on progress of the fire fighting while neglecting to take the matches away from them in the first place.

I'm not saying there should be no bailout. I just think that substantial changes in how business is conducted should accompany any infusion of tax dollars into these businesses. At the least I don't think it's too much to ask that we taxpayers get a stake in the companies until such time as they get back on their feet and can buy out the taxpayers at a profit.

Regards

[rhett o rick]

47. Perfect, let the government loan them the money. Get the friggin banks the hell out of the way.

They will skim off most for themselves. Their way failed. They failed. We need something new.

[NoSheep]

59. There aren't any manufacturing jobs NOW! They're all in China.

The rich people with money invested in the markets sent them there. Remember?

[msallied]

42. And how do you think companies can create those jobs without capital from BANKS?

My god, but where do you think people get the money to open businesses? How many people are born with millions of dollars in their pockets?

[texastoast]

43. How about giving them the $700B

instead of the banks? See FDR.

[scheming daemons]

50. 700B won't be enough... the credit market is a $2 trillion market... but it WILL be enough to

buy the bad securities off of the market.

[rhett o rick]

52. Yes for now. In 6 months they will be back. Hoover tried this and it fails. nm

[scheming daemons]

57. No.. the problem is that Hoover DIDN'T try this.. Sweden tried it - worked. Japan tried it - worked

[rhett o rick]

73. according to Thom Hartmann it failed in both Sweden and Japan. nm

[jeanpalmer]

76. It failed in Japan

because the banks didn't use the money to make loans; they bought treasury securities instead.

[msallied]

58. Hoover tried this? Link?

[msallied]

53. This is to fix the global banking system that is clogged with bad debt.

Let's stay focused here. Are you suggesting that we let the global economy fail by giving people a bunch of money they can't really do anything with?

[rhett o rick]

51. The banks weren't doing it, why do you think they will with the bailout money?

The banks have been looting the system now they want more. In other countries the government is buying the banks and firing the bastards that failed.

[lostnotforgotten]

49. Well Said!

eom

[anigbrowl]

65. What is this obsession with manufacturing jobs

who's going to buy all this stuff if there's no money floating around to buy it with? There's a lot more to business than manufacturing, it's not the be-all and end-all of healthy economics. If you can't wrap your head around anything but the manufacturing sector, you don't understand economics.

[rhett o rick]

32. Cut defense spending. nm

[Hamlette]

34. you are exactly right, here's what's happening:

Simplistically:

Banks are required to have a certain amount of assets basically to cover deposits.

Bank loans me $100K to buy a house. The bank puts on its books that it has $100K in assets.

The value of my house goes down to $80K. The bank has to write down the value of that asset to $80K. (AICPA rule which is fairly new and not too popular right now) So, on the books, the bank has "lost" $20K. To meet the federal requirements of assets, it has to make up that $20K and it does it by holding on to that much in your savings account. Since it can't lend out the $20K, it can't make money on it and instead is just paying you interest on your savings (losing money).

Lather, rinse, repeat....until you are several trillion bucks sitting in a bank costing the bank money and NOT available for loans to businesses that need them to pay the payroll. So, the business lays people off. Those people can't make their mortgage payments and it spirals.

(My hubby was banking commissioner and is now a banking lawyer. He doesn't always agree with Barney, but he's on his side now. For my money, if Barney and hubby agree...its not only a miracle, it must be right.)

[rhett o rick]

54. Right, it was a giant pyramid scheme to begin with that had to crash sooner or later.

A bailout wont fix the problem only postpone the final collapse of the pyramid scheme. Mean while the bastards are looting hundreds of billions.

[Hamlette]

68. no, it is not a pyramid scheme...where do you get that?

its property values went down

it could have been anticipated...maybe...but the ppl who get hurt are you and me

(actually, not me, I work for the unemployment office. I get lots more work.)

[rhett o rick]

72. These so-called bubbles are just pyramid schemes. As long as property values go up

everyone shows profit (on paper) but as soon as they go down significantly, bingo, all the financial institutions that were "leveraged" go broke. Same thing happened with the tech stocks in the 90's.

[Hamlette]

77. no, that is a bubble, not a pyramid scheme

not sure it matters, but I can't see where you're going with this

A whole bunch of people are going to get hurt, not the rich fat cats on Wall Street, they are set with their 7 houses and 13 cars.

The people who are going to get hurt at the poor and the middle class.

But...I know that doesn't fit with some people's world view which is ... helping the economy sucks....or something.

[rhett o rick]

80. No what sucks is the attitude that helping the rich will help the middle class.

Classic Reaganomics. this "bail-out" has no guarantees that the middle class will get any relief. No oversight, token restrictions on exec pay, no provision for repayment to taxpayers.

[doc03]

60. Ah isn't that what we are doing bailing out

the greedy SOBs that made it happen?:shrug: I got a letter today from Citi Financial offering me $5000 on my signature.

[NoSheep]

61. Me too! The credit offers just keep coming...

[Rosa Luxemburg]

67. it effects all countries around the world

[That Guy 888]

69. Somehow I picture you guys in a chatroom...

desperately trying to come up with some new unsubstantiated argument about why this bailout plan is the greatest thing ever!

One of the same 10 or so people come up with some emotion based argument and the other nine show up to praise it.

[endthewar]

70. This bill is like the Palin pick. The rollout was actually worse than the product.

Bush should have framed it as a rescue plan from the start.

[Roland99]

74. It IS a Bailout of the fat cats. CREDIT was OPENED WIDE today and look what happened.

[dailykoff]

75. Baby Harp Seal Protection Plan works for me.

Save the baby harp seals!

[mhatrw]

78. Ripoff is a more honest frame. n/t

[jeanpalmer]

79. It's a bailout of WallStreet

by your kids. Because you won't pay the cost, but instead will add it on to the debt of your kids.

Also, there's no proof that your assertion is true that, lacking this bailout plan, "all credit dries up, businesses and consumers can't get credit, businesses go under, and unemployment skyrockets." It would be quite a stretch to attribute the cause of these events, if they occur, to the failure to pass this plan. There's a good chance they will occur anyway, given the weak state of the economy. It's very hard even for professional economists to make those kinds of causal connections.

[Cha]

81. Obama said basically the same thing

in his speech today in Reno, Nevada, Nancy.

Did you see it? It should come up on youtube a little later for those who missed it.

It was one of the best speeches he's ever given when we needed it, right now!