According to Gingrich and Dick Morris on Hannity and Colmes, McCain has killed the Paulsen bailout and will present his own version, which will require the government to lend, not give the money, and regulations will be reformed and taxes will be loosened to help them pay us back.
Both Gingrich and Morris were giddy. They both said McCain has shown that he will stand up to anyone--including the president--to fight for the country, and he's changed the argument: Now, the Dems support giving a trillion dollars to the Wall Street "fat cats," as they called them over and over, but McCain has refused, in the name of the taxpayer.
Both Gingrich and Morris said that McCain had utterly and totally pwned the Dems, who will be forced to support McCain's plan.
McCain will then go to the public and explain that Obama supported the bailout, but McCain crafted an alternative, despite immense pressure from the president and the Department of the Treasury
h/t Ace
Meantime Washington Mutual failed last night ans was taken over by the government and sold to J.P. Morgan Chase. Washington Mutual is the 6th largets bank in the US.
Way back when the immigration debate was going on I said you can't let the perfect be the enemy of the good. That's what's happening here. Republicans are standing on a principle now that they should have been standing on 5 years ago and instead. Now it's too late. It's like someone with HIV insisting that all their partners wear condoms because they don't want some dirty disease. Sorry man that horse left the barn about 2 infected buttloads ago.
More from Ace:
McCain appears to be siding with conservatives and House Republicans who question the bailout and its costs to taxpayers as well as government rescuing private lenders and perhaps taking ownership stakes in rescued banks.
The alternative plan allocates less public money and relies more on tax breaks, lifting regulatory barriers and using less bailout-oriented mechanisms to free up capital and credit. It also seeks to create a privately funded mechanism to ensure mortgages and mortgage-backed securities.
...
This plan? What is it, exactly? For one thing, it's a phonied-up claim of a "private solution" which is actually just a big government intervention. Explain to me how the government creating a "privately funded mechanism" to ensure mortgages and MBSs. What? The government's creating it, right? To ensure mortgages and MBSs? Who knows how long that will take and whether it will work, but this government intervention can be falsely labeled as a "free market approach" to be contrasted with the direct asset purchase, which, of course, is "socialism."
Everything else is a series of small levers. Decrease regulation? Um, sure, that could be... helpful. But I don't think that confidence in a system about to break down is going to be restored by less regulation. The big problem is that they need liquidity and don't have it. Regulations always allow them to have as much cash and liquid assets as they want; regulations prevent them from having too little. So, the problem is not that the laws prevent them from having more cash. Reality prevents them from having more cash. How is loosening up regulation going to get them more cash?
Tax breaks? These companies are going bankrupt; what tax breaks could they have in mind? The only one that makes sense is to afford a special very low tax rate on realized capital gains from purchases of this type of toxic asset.
I don't want to sound alarmist because I don't think the real actual underlying problem is as big as a lot of people think, but at the same time if people are scared and credit seizes the underlying problem doesn't matter. The system failure does. Right now I think we really are on the verge of a complete credit collapse, a lot of it caused by hysteria, and if we don't have an agreement by the end of today the markets will meltdown over the weekend. I hope I am wrong but since the futures are showing a drop of about 200 pts before the market even opens I am not optimistic.
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