Kari, thanks for running this diary. Great reminiscence of the "Gropinator." I'm worried that the Dem Congress and Obama are going to be forced into buying into a bailout that will push a half trillion bad debt onto the tax payers. A bailout of some sort may be necessary to avoid a total destruction of the banking industry, but how to do it so homeowners and working people keep their homes and savings while the gamblers on Wall Street have to take their lumps. The "free market" ideologues are now on bended knee begging for government to save them. Poetic justice there. Government hating, supply side, regulation phobic Reaganomics is dead. It's proven wrong. George Bush the first was right, "Voodoo Economics."

I wish my Governor would call people "girly men. . ."

Speaking of the economy and the stock market, I'd like to know what all those folks who support privatizing social security would say to the people who would be unlucky enough to be approaching retirement age right now with their retirement in the stock market. Haven't seen too much talk on this other than this article:

Another One Bites the Dust: What's Behind the Crash of Lehman Bros

Doesn't history teach us something about countries who become over-extended and burdened with debt. We are spending 12 billion $ a month in Iraq, all borrowed. Current national debt circa 7 trillion, current annual deficit is 400 billion. And now the Bush administration says we need to add another one trillion $ to our national debt do save the investment bankers. Aren't there some lessons here? When do the Chinese say, "no more" buying of American debt,and dump their dollars on the world market? When do we reach the point where no one wants to buy our debt any more? What happens then?

Why is it okay to privatize profit but socialize/nationalize debt? Investment bankers get their profit and American citizens get their debt.

Where would we be now if we privatized soc. sec.?

Why do we have the money to bail out investment bankers but not medicare or soc. sec.?

I say again, Voodoo Economics is dead. Government hating ideology is dead. Let's become a country again and stop trying to be an empire. Let's fix America and stop trying to fix Iraq and the Middle East.

Jack, I'm not an economist either, but you raise a great point. It's foolish to believe we can control all the factors involved, or even enough to have a predictable effect. Politicians always make hay while the sun shines, and point fingers when it doesn't. I'm not looking forward to all the blaming of Obama when things don't instantly turn around in the first month of his presidency. At the same time, "free-market" capitalism, as currently practiced, involves stacking the deck in favor of wealth accumulation by those who already have it. It doesn't "trickle down." It flows up (and often out of the country)until it can't anymore, and then the tax payer picks up the tab, or suffers the down turns without having enjoyed the up much. We can't regulate everything, but we need different priorities. Let's put country first, not corporate ceo first.

Here's Obama's statement in response to the Paulson proposal to buy out Wall Street debt:

http://blogs.wsj.com/washwire/2008/09/19/obama-tough-new-oversight-for-financial-institutions/

Summary highlights: "As I review the emerging details of Fed-Treasury proposal with my top economic advisors this morning I will be guided by four basic principles:

First, we cannot lose sight that we are in the midst of a broad economic crisis that also requires immediate action to create jobs and help support distressed homeowners and communities. For too long, this Administration has been willing to hit the fast forward button in helping distressed Wall Street firms while pressing pause when it comes to saving jobs or keeping families in their homes. Swift and unprecedented action to shore up Wall Street must come alongside equally swift and serious efforts to help struggling families on Main Street, create new jobs, and grow our middle-class once more.

Second, any taxpayer-funded support must have as its focus protecting our nation’s long-term interest in a stable financial market and a growing economy rather than rewarding particular companies or the imprudent decisions of borrowers or lenders. These extraordinary steps must be designed with only the public good in mind, not to enhance the personal gain of CEOs and management at taxpayers’ expense.

Third, this plan must be temporary and coupled with tough new oversight and regulations of our financial institutions. ..Taxpayers must share in any upside benefit that such stability brings.

Finally, this plan should be part of a globally coordinated effort with our partners in the G-20. "

Nobody knows exactly how the proposed federal bailout is going to work, but if the profits remain privatized while the losses are nationalized, this will represent the greatest fleecing of the American public since the days of the railroad barons and their clever trust schemes.

Perhaps this is inevitable and truly necessary to avoid economic collapse. I don't know. However, it is interesting to see how quickly politicians from both parties are rushing to the Wall Street bailout bandwagon - even before the details and costs are known to anybody. Looks like whatever else has gone wrong, the corporate lobbying industry continues to do its job very well.

Great statement and news conference just now on CNN by Obama. In short term supports emergency efforts to supply liquidity in the credit system to keep the economy afloat, long term does not support tax payer bail out of investment bankers. Awaits details of Paulson's proposals. It's great to have a political leader who can be conversant in economic matters and have an actual news conference where he responds in an articulate way.

I think this would be a great time for an open thread on the free market and government regulation. Let the trolls have at it. Perhaps a few of them will be overwhelmed by the cognitive disonance created by their remarks and lose their religion - market fundamentalism.

Wow! Per New York Times (Deal Book) article posted a few minutes ago, the overall cost could be in the range of 1.2 TRILLION dollars. That's money that has to be raised from somewhere - presumably by selling US Treasury Bonds to buyers located (primarily) outside the US. Regardless of whether you are red, blue, pink or purple, that's a boatload of money - and a boatload of future interest payment obligations.

Here's what intelligent and articulate leadership looks like in the middle of an economic crisis:(from today statement and press conference) http://www.youtube.com/watch?v=lEvdL-GPjFk&eurl=http://www.dailykos.com/storyonly/2008/9/19/123132/468/321/603771

Please... No more "girlie men." It's so last season!

We have lipstick for this political season in a wide array of colors.

pink lipstick Ideal for gun-toting anti-abortionists who want a populist, feminist look.

green lipstick Great for energy firms who need to transform LNG plants and pipelines into Save-the-Planet cheerleaders.

gloss Nothing says "superficial" better than gloss, and who knows that better than George Bush and Gordon Smith.

The biggest girlie men of them all: Wall Street bankers.

They rig the system in their favor, but when the system collapses, they start whining and get their well-connected buddies to bail them out.

The latest example: today's announced SEC rule banning short selling on financial stocks.

This is outrageous on so many levels. It was Wall St. geniuses who invented shorting, who practice it on everyone else, and now want to be protected from it. The nerve.

But I can't do justice to just how big a bunch of girlie men they are. This rant from a Wall Street blog does it better: http://dealbreaker.com/2008/09/i-need-a-moment-to-vent.php

Jack Roberts wrote:

...a trillion dollars isn't what it used to be.

On this we agree, Jack.

Why is it that government intervention to bail out foolish and greedy business is fine with Republicans, but regulation to prevent the greedy and foolish behavior that brings us to the brink of disaster is opposed as counter-productive government intrusion into the market?

I'm reminded of a Roman god.

Sexist language: girlie men. A term fraught with a variety of venalities, stupidity.

So: are you saying "gay" is bad, weak, helpless? Are you saying the aspects of Self that we genderize as "feminine" are bad, weak, helpless? And what are you saying about us women? Weak, helpless, had?

The best relationship partners I ever delighted in were deeply in touch with their manhood as we distinguish it in gendered terms, AND could shift through the dynamics their deepest feminine core, if we must gender the many aspects of psychosexuosocial identify and physiognomies. They brought out in me everything I own to offer!

Try again: in this season of women's issues, are you sure you want to use that phrase?

Thanks, Jack.

I inherited my grandfather's clippings--he was a county prosecutor in Michigan in 1933. Many of the laws we have now date back to what went wrong then. Once when I had a lot of spare time I sorted the big box of clippings by subject, and one subject was Bank Holiday-- that was FDR's response to bank failures, and Googling that term will give you the history. According to one of the clippings, Henry Ford pledged some of his own money to keep a particular Detroit bank from failing.

Yes, I understand why Congress was angry they were told what was happening rather than being consulted, but maybe time was of the essence. Hearings can be held to oversee and investigate.

One thing I do want to mention because it has already come up in the news coverage.

There were those of us in 1999 who thought it was a dumb idea to repeal the Glass Steigel act which kept a wall between banks and brokerages. Apparently since then there have been complicated "credit debt swaps", securitized something or other, etc. which were so complicated even the people making money off of them didn't understand them entirely. Sure they made money for awhile, but now the house of cards they built is falling down.

Yesterday I listened to an interview with a current US Senator who had voted against any version of the Glass Steigel repeal (known as "Financial Modernization" or Gramm - Leach - Billby [?]). From what I heard and then looked up last night, apparently there was more than one version proposed, lots of arguments about wording, some sort of party line vote on an original measure, then a conference committee report which passed with less than 10 Senators voting against. Don't let anyone tell you that the bill passed in the original version like a hot knife through butter.

Whatever one thinks about current candidates or current actions, perhaps those who voted against the Gramm bill in 1999 were the smart ones?

But then I never trusted Phil Gramm. I was never a fan of Reaganomics either. And I remember the S & L crisis.

Bush and Paulson are going to need a name for the biggest government intervention in financial markets since the Great Depression and the New Deal. Maybe we can help:

"Crazy Glue Deal" "No-Cue Deal" "Screw Deal" "Wall Street Eel Deal" "Prayer Wheel Deal"

Wasn't it a Republican who said, "If you have to ask how much this is going to cost, you can't afford it."

Will it be less painful if my family and I are fed to the multi-national corporate wolves by a bi-partisan consensus instead of by our Republican masters?

The one good thing that MIGHT come out of all this is the possibility that the Bankruptcy Code will be amended to give bankruptcy judges the same authority to cram down modifications to residential mortgages as they already have for other types of secured debt. That one change could really help middle Americans caught in the housing deflation. But somehow I am not counting on Ma and Pa Kettle receiving the same tender loving care as AIG received.

But somehow I am not counting on Ma and Pa Kettle receiving the same tender loving care as AIG received.

FYI, you and I now OWN 80% of AIG.

"So McCain, who now poses as the scourge of Wall Street, was praising financial deregulation like 10 seconds ago — and promising that if we marketize health care, it will perform as well as the financial industry".

Jack Roberts:

Did you get banned by Bogdanski, too? The skin's getting a little thin over there. He can sure dish it out, but can't seem to take it. I consider it a badge of honor for calling him on his borderline lunacy.