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Friday, October 3, 2008

Back to the Bailout

posted by on October 3 at 9:35 AM

With the VP debate over, Biden the apparent winner, and no earthshaking Sarah Palin gaffes to speak of, attention today will turn right back to the House of Representatives, where a (second) vote on the Wall Street bailout appears imminent.

One interesting facet of the bailout debate that I haven’t had time to Slog until now involves the Democrats in the Washington State Congressional delegation. They’re split, and not in ways you might expect.

When the revised bailout bill passed the Senate on Wednesday, Washington Sen. Patty Murray, the mom-in-tennis-shoes populist, was in the majority voting yes (or yea). And Washington Sen. Maria Cantwell, who made her money in tech stocks and in general comes off as less of a main-streeter, voted no.

What gives? In a nutshell (because I’m running off to KUOW, where I think we’ll talk about this more), Murray endorsed the economic urgency theory for supporting a bill that she saw as flawed, while Cantwell dug in her heels and demanded an equity stake for taxpayers if they’re to be throwing money at failing firms.

On the House side, only one Democratic Congressman from Washington State voted against the version of the bill that went down earlier this week: Rep. Jay Inslee. He explained his thinking to me here:

It’s not that Inslee was worried about getting re-elected; he won 64% of the vote in the August primary and is expected to easily win a sixth term representing the First District, which includes well-to-do Seattle suburbs and the high-tech enclave of Redmond, home to Microsoft — an area full of people whose 401(k)s and stock holdings would likely benefit from a bailout. Inslee says that he simply felt the bill was being rushed. He describes the situation as the Bush Administration declaring, “Give me $700 billion in unmarked bills or I’ll shoot the economy in the head.”

Inslee also told me that he hopes to vote for the revised bill today—if certain conditions can be met. For a possible insight into his thought process, in the jump you’ll find a letter to Slog from an Inslee constituent who says she participated in a recent bailout conference call with the Congressman.

Dear Slog,

I was asked Thursday afternoon to participate in a conference call focus group with Jay Inslee to help him sort through his vote in the House on the bailout tomorrow. I was asked because I had sent an email before the first vote. Along with 19 other constituents, I voiced my concerns and thoughts about the economic situation we are facing.

Here are the important takeaways for me.

• Out of the total of 20 people, 2 are loosing their houses within 30 days. A third is in foreclosure.

•There were several small business owners, some of whom had been denied or limited in their use of credit this week.

•He doesn’t yet know how he will vote

•He believes that the sum total of the justification by the Fed is that ‘something must be done for psychological reasons.’

•The ‘experts’ have said that if it isn’t passed, something ‘worse’ will happen in the next few days

•He is genuinely worried.

Does it make things better or worse for me to pass these observations on to you? I don’t really know. I do know that as a participant in democracy, I have an obligation to do so. I have a deep respect for the man for taking this step to understand what is happening in the community he represents. He really wanted to know our insights. And he offered his staff’s assistance to those facing crisis.

He did a masterful job of giving everyone their say, respecting their opinions and educating us about the issues. I respect him for whatever vote he casts - he clearly is weighing all the elements and while I have an opinion, it is obviously no more correct than any other. He is making a difficult choice and I am grateful for his process.

It is remarkably disorienting to have this front seat to a crisis. May we all emerge with our spirits intact and our hearts whole.

Marit Saltrones
Bainbridge Island

RSS icon Comments



28% 126,908
70% 312,685
2% 8,112

Total Votes: 447,705


Palin: 47%

Biden: 45%

Draw: 8%

Total Votes: 499,258

Posted by asdfjkl; | October 3, 2008 9:54 AM

I'm growing my own teeth!

Posted by john bailo's tumor | October 3, 2008 10:00 AM

Most of the $700 billion we get back. Even toxic loans have some value. Devalued properties are not worthless properties.

Posted by Fnarf | October 3, 2008 10:03 AM

Thanks for those non-scientific multiple vote polls, @1. It just shows that the kind of people who believe that Palin is at all credible are ignorant in other matters, too.

Posted by Ziggity | October 3, 2008 10:27 AM

Listen to Fnarf dudes.

This is the big chance for the govt to take over part of a failed market sector:


Using public money we get assets (bad lonas) for cheap (they're quite distressed right now) and then later resell rerent remortgage or just wait till the panic is over and sell them in orderly fashion and make money in the process or at least prove that govt. intervention has such great secondary effects (calming panic, then values of these bad loans rise) that it's a good move.

This can give our new President Obama -- he's for the bailout, remember? Andhe'll be adminsitering all this buying of bad loans, remember? -- new moral capital plus an opportunity to totally REFRAME the total right wing frame that's dominated our policits which is a false frame and which goes as follows:

govt. bad. govt worth is zero. govt can only mess up. govt. just takes $$ govt does not make anything of value.

When you guys and other ultrraleftists call it a bailout as if it's just writing a check to rich guys you are FALLING INTO THE RIGHT WING FRAME becuz you're ignoring the facts that

(a) we get the freaking assets, folks

(b) when govt. intervenes in the market it can be a game changer.

So using this new found moral credit and new frame if not actual profits, our new PResident Obama will say

--we saved the finance sector now let's save the underlying economy. My plan for green investements means the govt. will guide the car companies and blah blah blah

--we saved the finance sector now let's save the health care sector. My plan for universal coverage is just like how we bought the bad paper, we're going to pool all the sick people together and force the "private" insurers to play and get everyone covered blah blah blah.

The fact that in response to this confusing post there are only a few replies and only one of substance (Fnarf's) shows Slog readers have no idea what to think of this so called bailout. This suggests STranger should spend a lot more time on this, this will totally define our economic futures.

Plus I see opportunity in chaos, dudes.

Also: Sweden did it in the 1990s. LEt's do what Sweden does, I say.

And yes there is some kind of equity stake with those warrants I believe it is called, and if there isn't just fucking fix that part later. Anything you don't like remember we can fix under PRESIDENT OBAMA AND HIW NEW TREASURY SECRETARY.

I nominate Buffet. Or Bloomberg. while I like that Clinton holdover guy who's been advising Obama we need a rock star in Treasury. So this program produces $500 billion in profit and within four years Obama can implement every other plan he has.

Posted by PC | October 3, 2008 11:58 AM

At fifty-eight years old next week, I'd call Patty Murry a granny in tennis shoes.

Posted by Seajay | October 4, 2008 8:34 AM

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