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First, President-elect Obama gives the Democratic weekly address on YouTube, something that will be a regular occurrence once he assumes office:
Next, Rep. Elijah Cummings of Baltimore tears into Neel Kashkari, head of the Wall Street bailout program, over reports of AIG handing out multi-million dollar executive bonuses even after AIG was nationalized:
Donna Edwards' statement on her bailout vote is presented in full, after the jump. But basically, what she says is that she switched her vote after Senator Obama promised to support providing financial relief to homeowners. She ran on the issue of homeowner relief here in MD-04, so this is in keeping with her campaign promises. Also, if the Maryland commenter I quoted in a comment to an earlier post was accurate in her assessment, this vote won't actually hurt Edwards among many (most?) older middle class constituents, who (apparently incorrectly) made a direct connection between this bankers' crisis and the stability of their stock market-based 401K retirement accounts.
The bailout bill stank to high heaven, so I still consider this unfortunate, no matter what good promises Edwards received in return for her vote. Congresswoman Edwards would also do well to remember that Senator Obama was against telecom immunity before he was for it, so he is entirely capable of changing his mind and going back on promises. She may well have to hold his feet to the fire to get him to keep his promise. Toward that end, she had better start assembling (or join up with) a caucus in the House NOW, to enforce this promise from Obama, since it will take more than a promise to a single Congresscritter to ensure that something favorable happens. As the FISA business showed, Obama can be flipped, depending on the exigencies of his immediate situation. Ain't nuthin' personal, just business as usual up there on the Hill.
UPDATE: Shoulda done a quick Internet "news tour" before hitting Save - bill has passed. Title updated, otherwise too busy now to tidy up original text accordingly; consider it a(n) historical diary/post, or something...
UPDATE #2: Just took a look at the roll call. In the Maryland CODEL, only Roscoe Bartlett (MD-06) stayed with his original opposition, voting against this new version as well. Previous opponents Donna Edwards (MD-04) and Elijah Cummings (MD-07) voted in favor this time. Ugh...
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As widely reported, some version of the "Bailout Bill" close to that passed by the Senate will likely pass in the House soon. There is a full-court press on for its passage, including personal calls from Obama to various Democratic Congresscritters. While some of the major lefty economists and economic populists still oppose the latest versions (Dean Baker, Ian Welsh, David Sirota, and William Isaac were among them, last time I checked), big names like Paul Krugman, Robert Reich, and Joseph Stieglitz are falling in line, though very unhappily so.
While the "Skeptics Caucus" headed by Brad Sherman (D-CA) and Peter DeFazio (D-OR) continues to voice opposition from the left side of the political spectrum, theirs is likely a lost cause for the time being. From Brad Sherman's Website comes a 7-page criticism (.pdf) of the bill; a decent alternative would have been nice, but given the breathtaking speed at which events have transpired, it would have been a huge effort to put something decent together in so short a time. These criticisms will hopefully be taken seriously and considered during the development of responsible legislation under what will hopefully be an Obama Administration.
To wrap up, here is a You-Tube video of Brad Sherman on the House floor (0:48), providing further indication of just how hard arms are being twisted up on the Hill.
The House bill that was voted down Monday wasn't great, by any means. Although it included a number of things that I thought were necessary to keep the bailout package from being simply, well, a bailout for Wall Street, the basic premise of the plan -- that the Treasury should buy up all the mortgage-backed securities that went sour, then sell them if and when the housing market recovers -- was intact. It's a flawed premise, especially with $700 billion on the line, but with the concessions made to congressional Democrats, I thought it was better than nothing. But, of course, the House voted it down, thanks, in large part, to a revolt from Republicans. Although many Democrats, including Donna Edwards and Elijah Cummings, also voted no, the divisions within the GOP have been much more significant, with the ostensible leadership of the Republicans, from George W. Bush to John McCain to John Boehner, unable to persuade enough of their rank and file that simpleminded free-market rhetoric won't get us out of this mess.
As for the "No Bailouts" plan put out by Edwards and other House progressives, I'm actually a little underwhelmed. For starters, it's less an alternative proposal than a list of things they would like to include in a financial rescue package. Second, most of the agenda items aim at speculation in financial markets, which I think has had little to do with the financial crisis. (Short explanation: short-selling and other speculative attacks may seem bad, but they only work if there are underlying weaknesses in the institutions under attack.) Third, I'm surprised that these progressives didn't propose outright nationalization of the financial sector, as was done in Sweden during its financial crisis in the early 1990s, and which has been endorsed by such worthies as Brad DeLong and Paul Krugman.
In the end, I don't think we're likely to see anything like an optimal solution emerge this week, as the looming credit crunch is likely to scare enough Congressmen into voting for a revised bailout plan. What we should hope for is that the final product can be revisited by the next administration and the next Congress; since it seems pretty likely at this point that we're going to have a Democratic trifecta next year, the important thing is that this bailout plan not permanently tie our hands.
From Tuesday afternoon's press conference by the House Democratic progressives caucus offering their bailout alternative, here's Donna Edwards (1:30):
From the Website of Peter DeFazio (D-OR), after the jump comes the text of a "Letter to (his) Democratic colleagues", and the text of the proposed Act itself. And, if you have the appropriate software - Real Audio, I think - you can watch video of today's entire press conference (57min) from DeFazio and cosponsors, via cspan.org - you can try this direct link to see if it works; since I don't have the necessary Real Audio software, I was unable to check out the direct link myself, to see if it works.
UPDATE: I finally got into Donna Edward's {house.gov} Website, as well as Elijah Cummings'; hopefully the House server continues to stay up. Here is a statement Edwards released yesterday on the bailout, and Elijah Cummings also released a statement yesterday; although relevant, they are separate and distinct from today's just-announced DeFazio bill these two MD Dems are cosponsoring (see below). Both announcements have been inserted in this post - after the jump, at the bottom...
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There has presumably already been a press conference on this (scheduled for 3pm today, according to Stoller), but I am TV-less, so here is the information from SEIU's Website:
New Plan Would Protect Taxpayers, Tighten Regulatory Safeguards
WASHINGTON, DC - The two million-member SEIU (Service Employees International Union) is backing the plan announced today by Rep. Peter DeFazio and other Members of Congress to restore confidence in the financial markets. The new bill, called the "No BAILOUTS Act" (Bringing Accountability, Increased Liquidity, Oversight, and Upholding Taxpayer Security), is being introduced by Rep. DeFazio (OR-04), with Rep. Kaptur (OH-09), Rep. Scott (VA-03), Rep. Cummings (MD-07), Rep. Doggett (TX-25), Rep. Holt (NJ-12), Rep. Edwards (MD-04) and Rep. Hirono (HI-02).
[continued...]
The rest of SEIU's announcement is after the jump (along with Edwards' and Cummings' press releases from yesterday)...
UPDATE: Bearing in mind that this may not be over yet - although it's over for today - here's the list of how Maryland's Congressional delegation voted today (from here; house.gov still down, or barely responsive). A vote of "YES" was in favor of the bailout, "NO" was against:
Maryland may be deep blue Democratic, but it ain't that progressive (as Eric's PVI map has shown). So, n* No big surprises here, I don't think. On the other hand, the bipartisan nature of the 'No' vote is fascinating.
*On further reflection, stricken due to glib irrelevance to the issue at hand, as Stoller's OL post shows.
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A blistering NYT editorial opposing the bailout in very populist fashion, while hammering Henry Paulson and his chums, comes from a very surprising source (at least to me) - conservative Ben Stein.
As noted in a previous post, Paul Krugman is still for it, though reluctantly. Although on the left side of establishment thinking, he is well within that establishment domain (e.g., he supported NAFTA, and in a couple online chat sessions, I've seen him ignore the more problematic aspects of that Clinton-era bill commenters asked about). And there's nothing recent on Robert Reich's blog, although he's probably getting plenty of media gigs of late, so my guess is he is on the TV and/or radio.
A number of non-establishment economists and economics-literate folks are urging a resounding NO!, including Stirling Newberry (also here), Dean Baker, and Ian Welsh. Of those, I would say Newberry's DKos post was most passionate, with Ian Welsh's FDL post being more analytical (but short in length), and Dean Baker describing this whole thing as a give-me-what-I-need-baby,-or-I'm-pulling-the-trigger scam (for Baker and Welsh, I linked to their author pages; scroll down and click to get to their most recent posts).
Non-economist, cultural observer types have also weighed in with some good commentary. Radio talk show host Thom Hartman offers positive advice on an alternative here, and filmmaker Michael Moore offers a somewhat predictable - and predictably powerful - indictment of the whole shake-down operation here.
I tried to reach some House Websites; the Internet seems to be slow all over, but I think the bailout-driven traffic has been more than the house.gov site could bear, since I've not been able to get in, even with my pretty good connection.
...Just before hitting {Save}, I saw over at Atrios' site - full time bloggers get to watch cable TV all day for a living, y'know - that the bill is currently failing in the House. IMHO, good! If there is a real problem - and it sounds like there is - let's fix it correctly, rather than giving away the farm and all the silverware to these well dressed crooks.
More here; for the moment, it has gone down to defeat. But it ain't over yet.
Although she hasn't said much publicly - not that I can find, at least, including on her official government Website - Donna Edward apparently is still part of Congressman Brad Sherman's (D-CA) caucus opposing the bailout, at least in its original form.
I haven't yet seen a lot of analysis online of Sunday's agreed-on bill worked out by the House leadership, at least at my usual favorite sites - no surprise, given that the bill just became public, and is over 100 pages long. It looks like Krugman is reluctantly signing on with the "improved bill", though with nose firmly pinched shut. Barry Ritholtz has compiled a long list of links to analysis and commentary here. We'll have to wait an see, as the experts read and analyze the 100+ page bill, whether they agree with Krugman that it is sufficiently better than Henry Paulson's original 3-page proposal to be worthy of support. And of course, how the members of the progressive caucus led by Brad Sherman respond will be of particular interest.
Matt Stoller has information on the position taken by Brad Sherman's caucus. See his post here, which includes the final page of the caucus' letter, showing the signatures of the caucus members, including Edwards. From Stoller's Flickr photo archives you can access small print but readable images of page 1, page 2, and page 3 of the caucus' 24Sep letter to Speaker Pelosi.
Brad Sherman is usually considered a moderate, from what I've read. However, his background is as a financial professional (accountant), and as one commenter noted, maybe he simply found this hubris and BS from Wall Street too much to bear, and as someone knowledgeable about financial practices, felt he needed to take the lead on this. If so, good for him.
The Baltimore Sunreported last week that calls to Donna Edwards from "hundreds of constituents" were entirely against the original Paulson proposal. There wasn't much specific in the quote she gave the Sun last week:
"Members on both sides of the aisle are hearing very similarly from their constituents. And I think it begs the question of how quickly we need to proceed. I think it's much more important to get it right than to get it done fast."
If the bill that is introduced on the House floor doesn't measure up, Donna Edwards and the other members of Brad Sherman's caucus will have to hold fast, in the hope they will be able to add to their ranks and get stronger, before too many Blue Dogs and similar corporatized Congresscritters gain an upper hand.
It appears that all the intensive weekend discussions have mostly involved Congressional leadership and the chairs of the relevant finance committees. When business opens on Monday, things promise to be interesting on the floors of the House and Senate.
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...The real significance of the bailout debate is that it lays bare the moral foundation of the conservative worldview about small government: that wealth is a sign of virtuous character, while financial mediocrity signals vice: laziness, sloth, an inability to set limits. Anything that interferes with the natural reward system for individual effort is, well, unnatural, and ought to be opposed...
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...Critics have cried "hypocrisy" at conservatives' willingness to throw a government lifeline to Wall Street while refusing to do the same for ordinary Americans. But calling free-market, pro-bailout conservatives "hypocrites" lets them off easy. In reality, there is a consistent worldview behind their position -- it's just not one most are willing to talk about: the reason government should aid the rich but not the poor is that the rich are presumed to use money more wisely -- after all, that's why they became rich in the first place. This belief is the cornerstone of trickle-down economics: the theory is that tax breaks to those with money -- individuals and companies--are more important than tax breaks to those without, because the investment savvy of the rich will trickle down to benefit the rest of us...
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...While trickle-down economics theory can be used to mask a raw power grab, it is also a philosophy of moral superiority which many conservatives have come to truly believe. It credits the wealthy not only with financial savoir-faire, but with character excellence: the rich are not just financially wise, but morally good, because they use their resources in ways that promote, instead of harming, the general welfare. With the meltdown of the Wall Street giants, it's time to admit that's just not so...
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...Whatever you think of the merits of the government rescue plan,... its moral underpinnings -- and thinly veiled class component that views the rich and poor as having grossly uneven desserts -- should be part of the conversation. Conservatives should get the chance to explain if they are hypocrites or just think they are holier than the rest of us.
Yep, it would appear we are in a new version of the Gilded Age.
Following up on his statements at Romenesko (Poynter.org) and Nieman Watchdog, former NYT economics/business journalist David Cay Johnston* has continued to beat the drum for journalists to do proud by their profession, rather than being stenographers, or fan boys/girls and cheerleaders for our national political leadership. I heard him on NPR's On The Media, and have seen him widely cited in various online forums.
*Some biographical information here; some links to his writings here and here.
DCJ is continuing this campaign over at TPM Cafe. He is up to part 3; I don't know whether more posts are coming. A listing (with links) of his posts at TPM Cafe can be found here. Following is a list of the individual posts:
Some of the comments over there are informative as well. A good example of providing comments and criticism without becoming a troll* is provided by commenter "Ellen". Here is an extended quote from her comment in the Part 1 post, following her quote (in italics from something in the post):
*(although she comes awful close sometimes, especially when she opts for being cryptic over being informative)
Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefiting only the Shareholders and Unsecured Creditors of Banks. Nouriel Roubini 2008-09-28 09:03:01
Roubini links to a timely IMF working paper[note: goes to a .pdf document/mg] which lists how governments bailed out their financial systems in 42 countries.
Only 7 purchased toxic assets: Mexico, Japan, Bolivia, Czech Republic, Jamaica, Malaysia, and Paraguay.
I'm sure that select club will be happy to let the good old U.S. of A. in; but if we've fallen that low, I guess I'm with Groucho: "I don't care to belong to any club that will have me as a member."
Not being an economist myself, but seeing this awful monstrosity moving so quickly, I've been desperate for information from honest analysts who could make some sense of it. I'm grateful to David Cay Johnston for coming out of retirement to sound the alarm, and also grateful to economists and those who follow them, for providing timely and useful analysis.
Major crisis! No time to examine the facts! Must act immediately, or thousands/millions will die/suffer!
Hmmm, seem to have heard this somewhere before (4:10)...
Note that this embeddable (sp?) You-Tube may be yanked at any time (my guess is soon); if that has happened by the time you click on it, you can see it here (FSP's Soap Blox software rejects the direct TDS video embeds, at least in my experience).
P.S. Something only marginally related to the diary, but too funny to pass up. Apparently in response to actor Matt Damon's comment that Sarah Palin's nomination for V.P. (paraphrasing) is like something from a bad Disney movie, some folks took action to make the trailer for such a flick (1:30). It's hilarious, and a surprisingly polished production. It can only be embedded at selected sites, unfortunately, so only a link is provided here. (It ran in very jerky fashion on my Firefox - Safari was better - but that may because I had so many windows/tabs open at the time in FF.)
