I'm just sayin...

If I have to hear one more report on what Nancy Pelosi said on the House floor yesterday, I'm going to throw a brick at the TV. It isn't important right now. And on that note, I'm taking my daughter to dance class.

NOTE: For the record, Pelosi's speech was stupid, useless, and was the beginning of the end of all the warm feelings I had about Congress' weekend of real, hard work.

Addressing the root cause

So here's what no one is reporting and DESPERATELY needs to be communicated to people: what is the root cause of the devaluation of mortgage-backed securities and why don't we address THAT problem?

Well, maybe not no one. NPR's Chris Arnold reports talks to several economists who think that we can be more productive in our bailout measures if we try to salvage securities by readjusting mortgages. Its not a new notion, but can someone explain to me why the GOP is opposed to restructuring mortgages for people who are able to pay them? FDIC chief Sheila Bair took that approach when her agency took over Indie Mac, and its been working.

Instead of bitching about how crap the Paulson bill was on arrival at Capitol Hill, perhaps we should all take the time to get educated on this issue and tell our elected officials how we want them to solve the problem.

And - seriously - please explain to me why we don't want to restructure these mortgages?

If it looks fishy even to the banking industry...

In our current crisis, here's a new rule of thumb: if even the financial services industry would suspect fraud and launch an investigation, its probably stinks.

According to The BRAD BLOG's reporting of the voter fraud case King Lincoln vs. OH Sec. of State and the testimony of GOP's cyber-security expert Stephen Spoonamore:

...control of Ohio's election system by [GOP IT Consultant Michael] Connell's firm, may have allowed for the compromise of election results as they were being reported. The structure of the system,as results were allowed to be first diverted to Connell's servers that night, would have been "cause to launch an immediate fraud investigation" in the banking industry.

Whether you think claims of voter fraud stem from sour grapes or valid concerns, as long as these cases have merit in our legal system, we need to keep them highly visible, get them resolved and have some strong vote security measures implemented on a national level if we want to restore our role in the world as a beacon of democracy.

Why the GOP rejected this bill

From Crooks and Liars » Barney Frank: Because Someone Hurt The Republicans Feelings They Decide To Punish The Country

(thanks, Rob)

Yeah, in an election where both Dems and Repubs couldn't get far enough away from Bush if they took a LEAR JET, it was Nancy Pelosi's insult of the Pres that kept the GOP from supporting this bill. Perhaps they have a bridge they'd like to sell us.

The problem: support for this bill was lacking on a bi-partisan level. You can blame one or the other party for not following through with whatever machinations could have gotten this thing passed, but the bottom line was that the electorate was not convinced that this bill was in THEIR best interests.

UPDATE: GIVE. ME. A. BREAK. This morning, Rep. Jim Moran (D-VA) is saying he is "incredibly dissapointed" that 2/3 of House Republicans voted against this bill when "60% of House Democrats" voted for this bill. Is there some psychology that says a number seems more positive as a percentage than as a fraction? Both parties balked. Suck on it, Moran.

In honor of the new christening

Have you heard about them but not sure what they are?

http://en.wikipedia.org/wiki/Exurbs

Paul Krugman's take on the bill - BEFORE and AFTER defeat

BEFORE:

Bailout questions answered

I'm being asked two big questions about this thing: (1) Was it really necessary? (2) Shouldn't Dems have tossed the whole Paulson approach out the window and done something completely different?

On (1), the answer is yes. It's true that some parts of the real economy are doing OK even in the face of financial disruption; big companies can still sell bonds (and have lots of cash on hand), qualifying home buyers can still get Fannie-Freddie mortgages, and so on. But commercial paper, which is important to a lot of businesses, is in trouble, and I'm hearing anecdotes about reduced credit lines causing smaller businesses to pull back. Plus there's a serious chance of a run on the hedge funds, which could make things a lot worse. With the economy already looking like it's headed into a serious recession by any definition, the risks of doing nothing look too high.

It's true that we might be able to stagger through with more case-by-case rescues ― I think of this as the "two, three, many AIGs" strategy; in fact, we might not be at this point if Paulson hadn't decided to make an example of Lehman. But right now it's not even clear who to rescue, and the credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)

On (2), the call is tougher. But putting myself in Barney Frank or Nancy Pelosi's shoes, I'd look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms ― basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary. That's what the plan should have looked like.

Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.

But such a plan would have had next to no Republican votes ― and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.

So that, I think, is why it had to be done this way. I don't like it, and I don't like the plan, but I see the constraints under which Dodd, Frank, Pelosi, and Reid were operating.

AND AFTER:

OK, we are a banana republic

House votes no. Rex Nutting has the best line: House to Wall Street: Drop Dead. He also correctly places the blame and/or credit with House Republicans. For reasons I've already explained, I don't think the Dem leadership was in a position to craft a bill that would have achieved overwhelming Democratic support, so make or break was whether enough GOPers would sign on. They didn't.

I assume Pelosi calls a new vote; but if it fails, then what? I guess write a bill that is actually, you know, a good plan, and try to pass it ― though politically it might not make sense to try until after the election.

For now, I'm just going to quote myself:

So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
As a friend said last night, we've become a banana republic with nukes.