An un-hatched chicken headline ?

The Capital Debt Affordability Advisory Committee has reported that Vermont can borrow more than expected .

A little surprising that given the financial earthquakes and uncertain atmosphere within the big money world to read this article.After the last week of money news it amazes me that there aren’t more reservations around this

announcement.  

A new member of the panel was very enthused ……“It will go a long way to help with a lot of projects,” said Neale Lunderville, secretary of administration and a new member of the debt affordability panel.

MONTPELIER – Vermont can afford to borrow $64.65 million for capital projects this fall, $10 million more than originally recommended, a special financial advisory committee concluded Tuesday.

…..The unanswered question Tuesday was when the credit market might thaw. If the state tried to sell bonds today, it’s likely no one would buy – despite the state’s solid financial rating. Spaulding said some states have had to shelve bond sales.

…The debt affordability panel didn’t automatically conclude the state had extra borrowing capacity, despite a desire by the Douglas administration and the Legislature to borrow more to reduce the backlog of deteriorating roads and bridges and stimulate the economy. The group began its discussions in July, meeting twice before Tuesday’s 20-minute session to take a vote on its report.

http://www.burlingtonfreepress…

I understand the legislative process, and I understand why things are added to bills, and I understand this is used quite successfully to garner votes for a larger bill that would not be there for a smaller, more targeted one.

And in general I’m uncomfortably okay with that.

In the case of the Wall Street bailout, however, I think it is nothing more than offering bribes to help bankrupt the United States so wealthy investors won’t feel a financial loss.

President Bush’s plan to rescue U.S. financial markets is headed for a Senate vote Wednesday night after leaders there agreed to add tax breaks for businesses and the middle class and increase deposit insurance in an attempt to revive the legislation rejected by the House.

(Senate to Vote on Financial Rescue Plan, ABC News, 10/01/08)

I’ve read, heard and thought about the argument that we’re not talking Wall Street vs. Main Street … it’s Wall Street and Main Street.

I say bullshit to that!

First off there is no sign Wall Street is willing to accept any extra fees on their part to pay their way out of the mess they’re the primary cause of. Second off there has been no public contrition, payback or even apology from Wall Street … the wealthy investor class doesn’t believe they’ve done anything wrong. Thirdly (and most importantly) this pyramid scheme is not going to work for the benefit of Main Street.

While the wealthy investor class will see their investments made whole by the taxpayers (and the taxpayers’ children, grandchildren, great grandchildren, etc), people with “under performing” mortgages will lose their homes. While the banks get to re-capitalize so they can run out and make more loans, the working class will continue to see wages decline and jobs move to cheaper labor markets. While the wealthy investor class sees the value of their investment portfolios increase, the disappearing middle class will continue the recession it’s been in for the last thirty years (as reflected in stagnant or falling wages).

Nonetheless our wonderful Democratic “leadership” in Washington D.C. will push ahead … with full approval of Obama (it’s his vote that counts .. not what he says on the stump).

It’s a very simple process. Try by fear mongering and “but of course” arguments first, and when that fails (as it should) turn to bribery.

Some smart fellas figured out that they could stick a bunch of home mortgages in a box and sell unregulated securities based on them. Big financial institutions backed them so investors, including other big institutions, bought them. The institutions who created the securities got to say how much they were worth and no one checked.

No one cared. It was cash now for future returns on the interest generated by the mortgages. The securities went up and down in value like stocks. It was another fat apple pie and everyone wanted a piece.

They got so popular that investors wanted more, so mortgages became easier to get. Hell, a fellow could get a mortgage on a third house without even proving he had the income to pay for it. Lower income people could buy a piece of the American Dream. Low down payment, low interest, no documentation. Even drug gangs in the inner city could buy burned out shells to launder money. More houses were built, some folks got bigger houses, we scurried like ants building and consuming without regard for fiscal responsibility.

Wasn’t it great?

Everybody was happy, especially the Masters of the Universe. Many of the loans had adjustable interest rates. There was no risk that the owners of the mortgages could lose. If the interest rate went up, so would the interest on the mortgage.

Money was everywhere. Want an SUV? No problem. Need a short-term loan to make payroll? Done. Pay CEOs millions of dollars a year? It’s not fair, but who cares?

Wasn’t it great?

Everything worked great until the gas went out of the balloon. Wages did not keep up with inflation. The limit was reached on people who could trade up. The increased costs of surviving in America buried the dream in a mountain of IOUs. Bankruptcy laws were tightened, real estate values fell and people started losing their homes. The companies heavily invested in Mortgage-based Derivatives could not pay the massive debt they borrowed.

The economic pyramid scheme began to fall in like a house of cards. No one knew what the Derivatives were worth. Companies fell. Other firms consumed bear Stearns, Lehman Brothers and Merrill Lynch. AIG was too big to fail and was rescued by taxpayers. Smaller firms were handed over by the Treasury to other firms with the backing of taxpayer money.

Wasn’t it great?

The remaining financial firms are bigger than AIG. They are all afraid to lend money to each other, so the trickle down has dried up. Be afraid, America, the money you are accustomed to using is not available. No new car, no bridge loan to meet payroll, no money to invest in your ideas and plans for a better life.

You are now asked to mortgage the financial future of your children so the banks will have so much money to use that they will trust each other again. That’s called building confidence in the financial system. Don’t worry; you’ll get some or all of it back. Heck, you might even make money. Sometime.

Isn’t that great?

You must do this or all will be lost. Our President, who we all trust for his good judgment from his faultless reasons for invading a sovereign nation, says it will be a catastrophe if we don’t pony up $700 billion dollars right now. Don’t worry; we have a three-page plan that gives the Secretary of the Treasury unfettered control to do what’s right. Quick, before the market crashes and we have another Great Depression.

Our leaders in Congress fixed that all right, brokering a deal over the weekend to create a 100-page bill that became available to review Sunday night and a vote was held Monday morning. Damn that Pelosi for blaming the Administration for allowing this mess to happen. The bill failed and the market crashed 777 points. It came back almost 500 points the next day.

Wasn’t that great?

I’m no economist, but I can see that there is blood on the floor that needs to be cleaned up and that money moving around the world, market speculation and debt are necessary for our modern world to function.

I can also see that there are no morals in the financial system. Companies are legally bound to bring the maximum return for their shareholders. It used to be that ethics and basic human decency prevailed, but now we have to legislate common sense. I still wonder where the Security ands Exchange Commission has been all these years.

I listen incessantly to reporting on the aptly named Wall Street Bailout discussion and can’t get past wondering if there isn’t a better, cheaper way.

There are 51 million mortgages in America and some 3 percent are in danger of foreclosure or already there. What if we used the might of the taxpayer to guarantee those troubled mortgages? Wouldn’t that insure that the mortgages the derivatives are based on are sound? Wouldn’t that help keep families in their homes? Wouldn’t that help stimulate the economy?

Wouldn’t that be great?

If we are going to use government to invade the holy sanctity of the capitalist system, we should bail out the taxpayer.  

First it was Spain…. now it’s Hugo Chavez?

An anonymous Democrat attended John McCain’s economic forum and sent Politico.com this clip. *** Now Americablog is reporting on it. *** Here is McCain’s take on Hugo Chavez and that certain region he comes from.

 This is sad news. I think I first met Dave before he was the Capitol Police Chief, maybe when he used to do court security. Always friendly, good at knowing who might be looking for you in the building, or where the person you're looking for might be. Many GMD posters and readers spend a lot of time at the State House, and I'm sure that we'll all miss him.

A guest book has been established at the Times Argus.

Thanks to fellow blogger and State House habitue Morgan Brown for this tip.

Gaye Symington surprises with an uncharacteristically hard hitting, anti-corporate statement in response to the bailout failure. While Peter Welch and many other US House liberals voted bravely (and I believe correctly) against the package (and are now likely understanding the true meaning of the expression “be careful what you wish for” as all hell breaks loose), Symington comes out with a powerful slam that ties the Republican corporations-over-all agenda that got us into this mess around Jim Douglas’s neck and staples Entergy to his forehead in the process.

From the PR:

This weekend I saw one estimate of the cost of the war in Iraq and Afghanistan and the war on terror at $790 billion. That puts in

perspective the cost of the bail-out being discussed in Washington and it’s no wonder that Americans are balking, and the initial vote

failed in the House this afternoon. Remarkably,  in only a couple of weeks we are being asked to take on another liability that approaches in scale the cost of the conflicts that have diverted resources from our national priorities – our roads, schools and energy future.

In the wake of this collapse and bailout, Vermonters are asking “how did things get to this point?” While there are undoubtedly many complex factors that led us here, there’s a basic philosophy in gear that puts too much trust in large private interests over the public good.

Unfortunately, this “corporate America knows best” worldview is not just on display in Washington. Our own Governor has in several important instances shown the same blindness to the dangers of this philosophy.

If Governor Douglas had had his way, our lottery system would have been placed in the hands of Lehman Brothers, a Wall Street firm that no longer exists. When Jim Douglas proposed this idea last year, I questioned the wisdom of it and called in experts for a second opinion. It was clear from their testimony that the Governor had placed far too much trust in the numbers and logic of Lehman Brothers, and we were able to set this scheme aside and get back to considering more sensible policy options.

We also see Jim Douglas placing far too much trust in the owners of Vermont Yankee. Entergy has proposed to spin off five aging nuclear power plants under a new owner that will be heavily in debt. A majority of Vermont legislators, and senior officials in Massachusetts and New York where Entergy’s plan would have an impact, agree that this is a strategy to enrich the executives and stockholders of Entergy and it could cost states and their taxpayers dearly if this smaller company fails.

The decommissioning fund is hundreds of millions of dollars short of what is likely going to be needed to fully clean up after Vermont Yankee when it closes. That shortfall had been estimated to be at least $400 million before recent turmoil on Wall Street.

The Vermont legislature passed a bill that would have required Entergy to live up to its original promise to fund that clean-up if it goes ahead with corporate re-structuring. Jim Douglas vetoed that bill, leaving Vermont taxpayers potentially on the hook for another large bill unless we can trust Entergy to do what’s right for Vermonters, over the interests of their bottom line.

Well, all across America today we can see the results of that kind of poor judgment and misplaced trust.

Jim Douglas has to explain to Vermonters why – after all we’ve seen in the past several months – is he is still taking the side of Entergy instead of protecting Vermont taxpayers? Jim Douglas is taking the same gamble in trusting Entergy to handle the decommissioning funds properly as he did in trusting Lehman Brothers to handle our lottery system.

When I’m Governor, I won’t take that kind of gamble. I do not share the Republican philosophy that corporations always know best. I will do everything in my power to stand up for Vermont taxpayers and ensure that Entergy pays to clean up after itself

I was encouraged by the vote to stop the bailout plan today. It’s interesting to see how the roll call panned out, with the more… umm passionate members of both sides voting against the bill and most leaders of both parties supporting the plan to send $700 Biliion to Wall Street.

Seems like a stand by the rank and file members against the political powers that be, a bit of an uprising maybe, or am I reading too much into things?

I was curious to see how contributions by the financial sector paid off in this vote, see the results below…

Securities & Investment: Top Recipients

Candidate Amount Voted

1 Emanuel, Rahm (D-IL) $600,500 Aye

2 Shays, Christopher (R-CT) $362,720 Aye

3 Rangel, Charles B (D-NY) $329,850 Aye

4 Paul, Ron (R-TX) $313,129 Nay

5 Allen, Tom (D-ME) $277,640 Aye

6 Gillibrand, Kirsten E (D-NY) $269,050 Nay

7 Udall, Mark (D-CO) $249,568 Nay

8 Kirk, Mark (R-IL) $243,850 Aye

9 Kanjorski, Paul E (D-PA) $241,849 Aye

10 Bean, Melissa (D-IL) $207,100 Aye

11 Bachus, Spencer (R-AL) $206,900 Aye

12 Hoyer, Steny H (D-MD) $184,499 Aye

13 Cantor, Eric (R-VA) $176,800 Aye

14 Frank, Barney (D-MA) $176,400 Aye

15 Crowley, Joseph (D-NY) $171,550 Aye

16 Klein, Ron (D-FL) $166,700 Aye

17 Mahoney, Tim (D-FL) $166,040 Aye

18 Murphy, Chris (D-CT) $164,290 Aye

19 Murphy, Patrick J (D-PA) $154,750 Aye

20 Maloney, Carolyn B (D-NY) $154,325 Aye

A meeting of mostly retired economists and finance executives at the New America Foundation. Reported by the American News Project.

***

There goes that plan.

AP/Yahoo News reports:

The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.

Stocks started plummeting on Wall Street even before 228-205 to reject the bill was announced on the House floor.

Peter Welch opposed the bailout plan and said the following in a recent press release.

Washington, D.C. – Rep. Peter Welch issued the following statement in opposition to the Wall Street bailout.  Welch voted no on H.R. 3997, the Emergency Economic Stabilization Act of 2008:

“The economic crisis we face is real.  However, I voted against the bailout because it isn’t paid for and because I don’t believe it will work.

More below the fold.

First, the Paulsen plan does not offer a path to a strong economic future.  Quite simply, it is the biggest taxpayer bailout in American history.  It proposes to solve a problem caused by reckless borrowing and reckless lending by borrowing $700 billion more.

“Second, it is appalling that the plan is not funded.  It is yet another expense put on the taxpayers’ credit card.  Just as President Bush told us his tax cuts for the wealthiest Americans would pay for themselves, and Secretary Rumsfeld told us the Iraqi oil revenues would pay for the Iraq war, now Secretary Paulsen is telling us he can sell toxic debt securities that Wall Street can’t.

“Since the administration first proposed its Wall Street bailout, I have heard from thousands of Vermonters concerned about their hard earned tax dollars rewarding Wall Street’s reckless behavior.  Vermonters are furious about the financial crisis and they have every right to be.  They bitterly resent being asked to pay $10,000 each for a $700 billion Wall Street rescue.”

“Chairman Frank, Chairman Dodd, and House and Senate leadership did a good job making a bad proposal better, but it is still a bad plan.  I cannot in good conscience vote for a fundamentally flawed plan that puts so much financial risk on the backs of the already stretched middle class.

“There are responsible ways to accomplish stabilizing our markets without leaving the middle class holding the bag.  Many of us proposed to pay for an economic stability plan by establishing a financial stabilization escrow account paid for by a small transaction fee on security trades.  This would protect the taxpayer and give any plan the financial muscle required for success.

“Instead, total responsibility for this crisis is transferred to the middle class.  The risk of this proposal is simply too great.  The burden on Vermonters is simply too heavy.  Vermonters should not get caught in the undertow of greed on Wall Street.

“Resolving our economic problems will take more than a quick-fix, taxpayer funded bailout. It will take a return to the core truth Vermonters know: our economic policies must focus on building and preserving our middle class.  We must reward work and entrepreneurship, not speculation, market manipulation and corporate self dealing.”

There you have it.

( – promoted by JDRyan)

From CNN:

The fate of a controversial $700 billion financial bailout plan was in doubt Monday as a House vote turned against it.

The next steps were not immediately clear but supporters were scrambling to put it up for another vote.

What was supposed to be a 15-minute vote stretched past the half-hour mark as leadership scrambled for support. Investors who had been counting on the rescue plan sent the Dow Jones industrial average down as much as 700 points while watching the measure come up short of the necessary support, before rebounding slightly. The key stock reading was down more than 500 points.

The measure needs 218 votes for passage. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against. That left the measure with 206 votes for and 227 against.

US Representative Peter Welch is among those who have voted against the bill.

http://money.cnn.com/2008/09/2…