Don't look now, but stocks are down a whopping 1 percent in Germany and are flat in Britain and France.
U.S. markets are poised to open higher.
Most Asian stock markets are holding up well too. The Shanghai Composite closed down just 0.2 percent; the Hang Seng closed up 0.8 percent; Bombay's BSE 30 closed finished the day up 2.1 percent.
Flashback: "The US stock market could suffer a devastating crash with shares losing a third of their value this week if Hank Paulson's financial bailout plan fails, US Treasury officials have warned."
Are you seeing why it's wise to question what these Treasury officials say? As I posted last night, this is a very big deal and needs to be addressed quickly, but it is not quite to the level of panic-inducing hysteria that some think it is. Just keep calm, and pay attention to what's going on. We need the right solution, not the first one thrown out by the people who would most benefit from it.Here's a brief recap of the voting yesterday. The general consensus from House leaders was that the bill would probably pass. If all of the Dems had voted for it, they would have passed it. Even so, the Dem leadership figured if they could turn a net total of 12 Rep votes, they'd get their bill. It didn't happen, and wasn't particularly close, either. What happened after that was what I consider the quintessential problem with Congress.
House Reps took the microphone and whined about how Pelosi got up right before the vote in a hyper-partisan tirade that turned off some Reps. Seriously?? That's the best you can come up with?? That's got to be the lamest excuse I've ever heard! Sure, Pelosi took a potshot...what's new? She's an ultra-Left hack, and has always been an ultra-Left hack. If you expect anything better of her, you're an idiot. Yes, they were ill-advised and ill-timed remarks, but to suggest that it was her words that scared off that handful of (apparently spineless) Reps who were otherwise going to support the plan is to call all of us Americans complete idiots. You've got to be kidding me!!! With all the legitimate problems with this bill, and came up with this. It's pitiful.
Honestly, my opinion of House Minority Leader John Boehner has dropped by about 100% since Friday. He went from a defender of the American people to ridiculous and insulting. Very bad move (and I am not alone on that opinion). The Dems are rightfully mocking Boehner's suggestion, saying that they'd be happy to talk 'uncharacteristically nice' to the Reps if they'd come back and vote for the bill. Boehner is dead to rights on that one...it was one of the most stupid things I've seen Reps do for a long time.
Anyway, don't get me wrong, I'm not taking the Dems' side on this. Let the fact once again be made clear -- and I will repeat this as often as necessary to get the truth out there -- that they had the votes to pass this bill without any Rep support at all! This was their baby, no question about it. The fact that 95 Dems voted against it (a full 40% of the Democrats in the House) illustrates that Nancy Pelosi is either the worst Speaker in the history of the House because she failed to keep her party in line...or that she really didn't want this bill to pass.
That's right, I'm beginning to think this was a Democrat rope-a-dope. Here's the short version: they set up the bill, used the crisis for political advantage, bullied a bunch of Reps into supporting it, and are now out there blaming them for its failure. Keep in mind that this is all happening about a month before a major election, the primary concern of voters right now is the economy, and the media will continue to propagate the lie that it was solely the House Reps who killed the bill. It's at least plausible, is it not? Now, consider the fact that only 8 of the 44 Dems who are facing re-election in tough districts in November voted for the bill...then consider the fact that Barack the Obamessiah himself never truly came out (officially) in favor of the bill. Is this starting to look like a setup to anyone else?
Maybe I'm giving the Dems too much credit, but the numbers and results just don't add up to me. Something else is going on.
If nothing else, McCain is right about Obama's effect on this bailout in this statement:
"When Barack Obama released remarks today that praised the passage of America's economic rescue plan, just before his allies in Congress voted to kill it, it revealed just how out of touch Barack Obama has been during this crisis. As our country stares economic disaster directly in the face, Barack Obama has called for higher taxes we can't afford, more federal spending we can't afford and shown failed leadership we can't afford."This is something he needs to continue repeating, and he needs to find a way to drill it home in the upcoming debates. If he can do that, Obama will be finished in November.
The other thing that really irritates me is the way the Dems are portraying this. For example:
"Democrats are doing our part to improve the administration's flawed plan, but we will need the support of more Republicans to get this done," Senate Majority Leader Harry Reid, D-Nevada, said in a statement.
"With the stock market recording its largest point drop ever in the aftermath of this vote, it has never been more clear how important it is to put politics aside and come together to stabilize our economy for all Americans," Reid said. "I hope House Republicans will reconsider their vote and decide to put country first."
Okay, so Reid is calling Republicans un-American by voting their conscience. He's not the only one. Pelosi did it last weekend before the vote even occurred:Where is the outrage in the media? Where are the calls for resignations and apologies? Why is it okay for the Left to call the Right un-American or question their patriotism, but it's not okay for the Right to do the same with the Left? This is hypocrisy at its finest, on full display for anyone with an objective mind to see. Pelosi's quote also insinuates that Reps refused to attend this meeting when the fact of the matter is that they were not even invited. This is the hypocritical, lying, double standard that has become standard operating procedure for the Left.
Personally, I have no problem questioning the patriotism of the Left, and I sincerely hope more elected Republicans grow a spine and do the same.
Anyway, back to the bailout. I complain a lot about what the first bailout plan included, so what are my ideas for solutions? I've seen a few things that I believe would fix this mess in a hurry, and they include:
1. suspend capital gains taxes and reduce corporate taxes (temporarily, at least)
2. reform the mark-to-market rules of establishing value
3. pull the bad debt from failed mortgages under the FHA and establish insurance on it
Here are some details to explain those suggestions:
1. Suspend taxes: Duh. Eliminating taxes will suddenly free up private capital, which will flood into the market and provide instant liquidity. Even if the suspension is for only a year, it will have an immediate effect.
2. Mark-to-market:
Wall Street and the markets tend to fluctuate wildly based on emotion and speculation (both up and down), and as such are inherently inaccurate. Mark-to-market was implemented to try to stabilize that through a new way of establishing the values of assets based on the skepticism of a potential buyer rather than the optimism of the owner. Either way, asset values are tricky to assess, and subject to manipulation. The unintended consequence, then, allowed fraudulent corporate leaders (think Enron, Fannie/Freddie) to inflate their asset values well beyond what they were actually worth.
Presto. Up goes assets; up goes capital; banks can make loans again.
3. Insurance:
This is one of the House additions to the bailout plan, and could work very well for certain kinds of debt (bad mortgages). Financial guru Dave Ramsey seems to like mark-to-market in principle, but explains how it worked out badly in recent weeks:
Economist Wesbury is saying that if we change that one rule and don't force them to mark down to market value and just let them hold on to all the stuff, and say just on sub-primes for this period of time you can change that rule -- a temporary change -- that'll free the market up. It's seized right now; it's frozen. This will thaw it out and get it going again. He says that'll solve 60% of the problem ... and I think he's right.
He also offers this solution:I don't like giving them any money or any help with my tax dollars. But I'd rather see that than see the whole thing turn completely upside down in a fruit basket turnover than have a whole meltdown or something and freak out here in the middle of the election season. Why don't we just take the FHA insurance program and extend it across these sub-primes? What that means is that you and I are guaranteeing the lender that they're not going to lose as much or any money on those mortgages. Now I don't like guaranteeing them, but I like it better than buying them. In other words, instead of $700 billion in tax-payer debt going out there to bail out these companies, just extend the insurance out. You could probably do that for less than $40 billion. It's like a 95% savings!
If the government insured those mortgages, they would then be marketable. And could sell them. And the companies would stay afloat. And we, the people, don't have to get into the mortgage business. Now we're going to get in there a little bit because of the insurance on those getting foreclosed on. But foreclosures aren't causing this. This is being caused because these companies are frozen and seized up. We've got to let some of the steam come off and put some oil in there to get this thing moving again. We can do that without going into debt $700 billion.
I think that there are a lot of Americans that understand the basics - we've got to do something, and that probably means some taxpayer money on the line. Fine, we get that, and we understand that sometimes you have to spend money to make money. The rub, of course, is how much money taxpayer money is on the line. I am much more likely to get on board with $40 billion than $700 billion, and I think a whole lot of people would agree with me.What it all boils down to is a failure of just about everyone in Washington, for decades. Our political leadership has failed utterly, and is so disconnected with Americans that none of them are really trusted anymore. Personally, I trust the handful of people whom I know for a fact have stood for financial responsibility (Jim DeMint, Marsha Blackburn, Jeb Hensarling, Sam Graves, Tom Coburn, Mike Pence, and a handful of others), but they are depressingly few and far between. The constant stream of attacks from the Left in public office and the media has not only eroded the trust in Bush, but also in our entire political leadership. That lack of trust is a big problem that will have to be addressed for the future of our nation.
But, it is also a huge opportunity. Historian Victor Davis Hansen:
The stage is set for someone to play Washington, Lincoln, or Churchill. An entire generation of leadership is failing, as the world watches aghast.
Greedy Wall Street hot shots are worse than discredited.
Rep. Nancy Pelosi at the hour of national crisis proved why she may well be the worst House Speaker in the history of the Congress.
The more Sen. Dodd and Rep. Frank shout and demagogue in front of the cameras, the more desperate we know they are to talk their way out of their own past reckless and unprincipled conduct.
Lame duck President Bush is spent, tired and knows only that he will blamed for something he tried to prevent.
Sec. Paulson thought he could bark out orders at Treasury and expect underlings to snap to attention as they did once for him as Goldman Sachs. And when they didn't, in vain he went to one knee — arrogance to fawning in a matter of hours.
The utterly corrupt Left-wing members of the House who green-lighted the thievery at Freddie Mac and Fannie Mae that started the panic will be lucky if they are not targets of a special prosecutor.
Free-market Republican House members gave high-minded speeches and then panicked in the face of populist outrage just when the country needed their calm, hand-in-glove with Democratic House ideologues — the one claiming we are getting socialism, the other robber-baron capitalism.They are as captive to public outrage over the bailout now as they soon will be to the next phase of outrage over shattered retirement accounts.
Barack Obama is again voting present, clueless while trying to act cool, waiting for calls, and issuing hourly contradictory statements adjusted to perceived CNN punditry and Drudge headlines.
Can John McCain seize the moment and transcend the campaign?
Personally, I doubt it. Even if McCain wins in November, he's not exactly a favorite of the Right (he's only got his base of support due to Palin), and he is only barely tolerated by the Left (because he's not one of them all the time). Still, Hansen is right that the vacuum of leadership is gaping. There are a lot of Americans who want someone to step into that vacuum to provide compassionate, principled leadership on the economy, national security, and the promotion America as the greatest nation on the planet. Who will it be?
I hope we find out sooner rather than later.
There's my two cents.
Sources:
http://michellemalkin.com/2008/09/30/carnage-in-the-markets-carnage-in-the-markets-carnage-in-the-markets-oops-never-mind/
http://corner.nationalreview.com/post/?q=MTY3OTg4MzMwNTUxYzg5ZWJiY2EzMzJkODM1Y2VlM2M=
http://hughhewitt.townhall.com/blog/g/f59bcc0a-4d5d-44e2-91ed-b7dc006bcafa
http://hughhewitt.townhall.com/blog/g/0dd06a57-87f4-4c75-ac5f-71bdf80d7b18
http://hughhewitt.townhall.com/blog/g/b95e56cb-b4f9-47ff-9add-e8f582c334fe
http://hughhewitt.townhall.com/blog/g/f98279a6-002b-4577-98b6-f246e0d00d8d
http://www.necn.com/Boston/Politics/Pelosi-matter-of-making-a-decision/1222556313.html
http://poligazette.com/2008/09/28/democrats-play-public-pelosi-calls-gop-unpatriotic/
http://www.cnn.com/2008/POLITICS/09/29/bailout.fallout/?iref=mpstoryview
http://article.nationalreview.com/?q=ZTg5YTc0MWQ3NDM3MjcxYjVmYzI1ZjQ0N2Y5MmEyOTg=
http://article.nationalreview.com/?q=MTBjMWVlNjExZGI4ZDMwNzYzNzBkNDU3YmQ4MDU5ZTQ=
http://www.americanthinker.com/2008/09/the_trilliondollar_question_ar.html
http://righttruth.typepad.com/right_truth/2008/09/whos-un-american-whos-un-patriotic.html
http://www.daveramsey.com/etc/fed_bailout/economic_cleanup_10887.html
http://corner.nationalreview.com/post/?q=MTgxNDYxN2IzODE3NWM1MmIyMGUxMTY5ODQ3OGY2Yjc=
http://corner.nationalreview.com/post/?q=NWVkNmRkMjU0YTlhYmI0MjEyYTk3NGQ0ZmI2MGY0ZjU=
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