Sunday, September 28, 2008

And The Deal Is?

Congressional leaders say they've reached a deal on the federal bailout out of America's financial industry sector. The plan calls for the government buying at least $700 billion in distressed mortgage securities and other bad securities held by banks and other investors, $350 billion of which would become immediately available. A provision insisted on by House Republicans will encourage the holders of bad debt to keep the debt and take out insurance from the government to cover defaults. A tax on the financial industry could be triggered if the government fails to recover its investment after five years. Emphasis is being placed on trying to work out repayment plans for homeowners, such as reduced payment terms so they can keep their homes. The deal supposedly has provisions ensuring that taxpayers are first in line to be repaid. New executive compensation requirements are a part of the deal. There will be new limitations on executive compensation in general, no multi-million dollar golden parachute contracts for former executives and a requirement that bonuses be repaid for unfulfilled gains. Congressional deal-makers also removed the controversial plan by Democrats to divert 20% of any amounts recovered by the government to a housing fund that could be tapped by nonprofit groups for housing-related programs.


Vox Populi said...

I really hope everyone in Congress votes for this so it doesn't become a demagogue issue in the election. The American people oppose the "rescue plan" by big numbers, but I think it's one of those situations that they just don't understand the consequences and our leadership hasn't done much to explain it.

Kudos to the Democrats for making sure this isn't just a blank check, and if the House Republicans are actually onboard, kudos to them too.

Gary R. Welsh said...

It really doesn't matter what the Republicans do. It appears the Republicans will take the blame for the financial industry changes the Democrats insisted upon and President Clinton signed into law (i.e., Community Reinvestment Act) which brought on this mess. The Democrats are counting on the fact that a majority of the American electorate is clueless on such matters.

Downtown Indy said...

Andre Carson has been remarkably quiet about this whole bailout thing.

In fact, the only thing he seems to have said on the matter (beyond some witticisms fired off at the Republicans) has been "As negotiations progress, I will continue to call on the Congressional Leadership and Bush Administration to draft a more inclusive package..."

Why isn't he in their with his own sleeves rolled up and actively involved in a solution? It appears he literally is 'phoning in' his efforts to be a member of congress.

Gary R. Welsh said...

He's been busy bashing all the greedy Wall Street guys and big corporations. He sees no connnection between the people who financed his campaign (check out the big bucks his campaign raised the financial services industry at and how we got to this point. Typical hypocritical D.C. politician. So much for that bold leadership he was promising. He was bought and paid for by the D.C. lobbbyists before he was sworn in as a U.S. representative.

Covenant60 said...

All this will be right up Barack Hussein Chavez Obama's alley.

If he is elected, expect to see more of the same.

Buy gold, everybody.

Jeff said...

Gary, there are many factors leading up to this problem. As long we try to lay blame on one party or another the problem will not be solved. And I have looked and both sides have plenty of blame to go around. Now if you ever want to debate the actual economic issues that caused this that would be a great disucssion.


Anonymous said...

If this goes through, I vote radical fascists and socialists from here on out. I am going to chalk it up that Republicans are nothing more than billionaire and millionaire socialists dressed like conservatives. If we are going to become a socialist nation, it is high time we tax people like Pelosi and Bush another $10,000,000 plus a year. If your sitting on a billion dollars, middle class folks like me now want our cut. I will get nothing, jack out of this bailout of super rich idiots and idiots who purchased a home they couldn't afford. Had I know this would be coming, I would have purchased a $200K home on our $70K/year combined income. Instead, we are just pro-longing the end result. Unless there are true laws requiring x% down payments, a complete ban on ARM type loans, mandates that home mortgages _must_ be based on IRS reported tax returns, etc. etc., we will be back here in five or ten years. Bailing out these folks is the sickest thing ever. If republicans support this, I am no longer a republican. I will start supporting complete nationalization of energy, banking, investing, automotive manufacturing, health care, etc. etc.. I will vote people who will make Pelosi look like a Republican.

Gary R. Welsh said...

I wouldn't buy gold unless you are prepared to take physical possession of it. I understand a lot of people are holding pieces of paper which say they own gold which doesn't even exist.

Anonymous said...

Also forgot: Unless I get my cut of this bailout, in terms of real dollars, or I get my affordable mortgage interest rate reduced to lower my payment, my donations to charity got to zero the moment this passes. I also will not be spending one penny to help out this country. This means the $3.00 a month I spend on recycling our plastic waste will end. That stuff can do in a damn landfill so that the children of these bailout fools can deal with the mess that leaves. It means that if I have clothing that could be donated, it will go right into the trash because I will be damned if I will drop the $1 it takes in gas to drive to Goodwill. Anyone who ask me to donate will be given directions to the federal building, since obviously it is the job of the federal government to bail people out.

Obama gets my vote as a thank you give to Republicans who are embracing this madness instead of being out calling for its destruction. Hopefully in four more years we can vote for a socialist 10x that of Obama.

Paul K. Ogden said...

Having working in various aspects of the real estate industry, I would say the underlying problem is a wrong-headed philosophy that the United States should push homeownership on everyone despite their financial situation or whether they are in a stable work situation. That drives the adoption of government policies that made home mortgages much easier to get than even a car loan. For many people, because of limited income or an unstable job situation, renting is a better option. I hope we've learned that lesson.

Wilson46201 said...

1. Congressman Carson has received the least from the financial services industry of any of the 11-person Hoosier Delegation.

2. Congressman Carson is a member of the Financial Services Committee and has actively been involved in the processes underway on Capitol Hill. He has also made several statements to the public about these events including a C-Span appearance. Of course, he opposed George W Bush's $700Bn bailout scheme!

Gary R. Welsh said...

You mean the bailout deal Pelosi and the Democrats supported before the Republicans demanded changes? Your claim about the amount of money Carson has received from the financial services industry is simply untrue, Wilson. You can't compare him to members who have been collecting contributions over a several year period. In less than one year, Carson collected $137,400 from the financial industry, or more than 10% of his campaign receipts. That puts him at the top of the heap. Over 70% of his contributions have come from out-of-state political action committees. He's in the pocket of the financial industry just like his grandmother was. She didn't do a damn thing to protect consumers while she served on the banking committee. She supported deregulation, favoring credit card companies over consumers and passing a bankruptcy law that rewarded credit card companies for their loose credit practices.

Mark said...

"Having working in various aspects of the real estate industry, I would say the underlying problem is a wrong-headed philosophy that the United States should push homeownership on everyone despite their financial situation "

That's not the mentality of the United States. That's the mentality of the Democratic Party. A bum in a house is just a bum with a mortgage. If you're broke, and made bad decisions that put you there, or even if you're just unlucky, you don't deserve a house just for breathing, nor do you deserve a "better life". It's the pursuit of happiness that's assured by living in this great country, not the aquisition of it. Hard work and responsibility = home owndership. When that's not the equation we get what we've got now.

Downtown Indy said...

Watchdogs: Lobbyists' largesse added to crisis

"The lead committee on the bailout in the House is the Financial Services Committee, which includes two Hoosier lawmakers, Donnelly [D-2nd District] and Rep. Andre Carson, D-7th District.

Donnelly has received about $285,664 -- or 7.5 percent -- of his contributions from the financial services industry. Carson, who was elected to Congress in March, has received about $137,400 -- or 10.5 percent -- of his contributions from the financial services industry. A call and e-mail to Carson's office brought no response Thursday.

"The very lawmakers in Congress who are making decisions about the most massive proposed bailout of industry in history are those who have been wined, dined and sushi-ed by lobbyists in the financial sector," said Nancy Watzman, who directs the Sunlight Foundation's efforts to track fundraising events for members of Congress.

The group found 248 events this year for members of the House Financial Services Committee, some of them hosted by lobbyists for the finance, insurance and real estate industries.

The hosts for a breakfast fundraiser for Carson in April at a Washington lobbying firm included a lobbyist for the National Association of Real Estate Investment Trusts, according to a copy of the invitation that the Sunlight Foundation acquired.

Downtown Indy said...

The storied C-SPAN appearance

"If hard working taxpayers are going to front the bill we better ensure they reap the benefits"

-- Andre Carson

I fail to heard him opposing anything nor do I hear him offering any solutions of his own.

Downtown Indy said...

NPR interview Sep 24, 2008
Host: "What's your take on the
President's bailout plan? Are you planning to support it?"

Carson: "Well. You know. Quick answer: Yes. Not happy with everything that's in the language right now in the proposal, but we have to do it to help fellow Americans."