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Wednesday, October 1, 2008


posted by on October 1 at 19:42 PM

The $700 billion bailout plan, now newly saddled with $110 billion in tax breaks for “businesses and the middle class,” has been approved by the Senate. It’s now en route to the House, and the AP report merely hints to their having a “Friday” vote.

You’ll find this bit 13 grafs deep into the story:

It doesn’t designate a way to pay for many of the tax cuts, though


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Does anyone else feel the strong desire, once Obama is president and has a Democratic House and Senate, to just completely fuck over the red states in favor of the Urban Archipelago? We would have two short years to abolish farm subsidies, sugar import restrictions, oil subsidies, all the horseshit that funds the Republicans, enough to punish the K Street fuckers for decades? Then beef up the earned income tax credit, food stamps and Medicaid to make sure that Mississippi and the rest don't actually murder their citizens as they sink into the abyss. Seriously, they accuse us of class warfare? Then prove them right and let the war begin.

Posted by kk | October 1, 2008 7:57 PM

God...dammit. Seriously.

Posted by TheDeadlyShoe | October 1, 2008 8:02 PM

Hmm. According to Daily Kos, the 'tax cuts' are actually the Alternative Minimum Tax fix and the renewable energy tax credits. Just a heads up.

Posted by TheDeadlyShoe | October 1, 2008 8:07 PM

Raise taxes on the rich. Just fucking do it, assholes. Argh! Fuck, fuck, fuck.

Posted by keshmeshi | October 1, 2008 8:10 PM

But don't you see?

We have to give these despicable, swindling Wall Street crooks--who've been 100% wrong about everything up till now--this $700 BILLION DOLLAR jackpot so that Americans who are wiped out and can't make the massive payments on their loans can get more loans.


Posted by Original Andrew | October 1, 2008 8:11 PM

I think we're finally going to get to see what happens to a government's solvency when neither party is willing to ever raise taxes to raise revenue. Seriously, we live in an era where nobody is allowed to raise taxes to pay for anything. The two major parties are arguing over who intends to reduce taxes more even while they're hammering out a deal to spend an extra trillion dollars that we don't have.

This trend can't possibly last. We can see the edge of the cliff from here.

Posted by flamingbanjo | October 1, 2008 8:12 PM

"According to the Daily Kos" isn't exactly a ringing endorsement of credible reporting. I'm all for the tax cuts, the only part of this bill that I can get behind. I'm a breeder with 2 kids at home and I should get more.

Posted by Bob | October 1, 2008 8:14 PM

"Off with their heads!" --The Mad Queen

Posted by Andy Niable | October 1, 2008 8:30 PM

yes! i have a tax exemption for my wooden arrows designed for children!

fuck you Bob. Put the children to the plow and the plow to the field. and buy some wooden arrows. seriously. tax exempt from excise taxes now.

Posted by Bellevue Ave | October 1, 2008 8:35 PM

When the far right and the far left agree that the bail out is bad, it must be good.

Posted by elswinger | October 1, 2008 8:53 PM

Well it all seems very convoluted to me, but apparently all those tax breaks had already passed the House and Senate and the Senate had to find some bill that had already passed to attach the bail-out bill to, so they chose the tax breaks one. So, regardless of the bail-out those breaks were already a done deal. If you want a link that explains it I'll try and scrounge one up, but I'd rather not reveal how much of an Internet whore I am.

Posted by PopTart | October 1, 2008 8:56 PM

@ 10,

Just like the Iraq War vote, right?

Posted by Original Andrew | October 1, 2008 9:08 PM

If we are all lucky, the coalition of liberals and conservatives in the House, all terrified of bucking the will of 90% of their constituents, will say NO to this madness. If not, well, my kids can try to pay off the money.

And, kk, while there will be a Democratic Congress next year, it will include a fair number of rural-type Democrats. I hope that Republicans, once out of power, will remember what they like about small government, and that those Republicans and rural Democrats will have enough votes to filibuster truly out outlandish stuff in the Senate.

Posted by Fritz | October 1, 2008 9:09 PM

Have any of you called Jim McDermott's office (206-553-7171) and suggested that voting for 700B for Wall street is wrong. I hope so. It seems law makers in DC have perfectly working crystal balls and they know what the future holds should this bill not pass; doom and gloom. I call BS on that.

Posted by Sargon Bighorn | October 1, 2008 9:15 PM

ehhh - just print the money - then we don't owe it!

Posted by whatever | October 1, 2008 9:18 PM

Hyperinflation cures our debt blues...

Posted by Bellevue Ave | October 1, 2008 9:22 PM

Sargon Bighorn @ 14,

I've called the offices of Patty Murray, Maria Cantwell & Jim McDermott and demanded that they oppose this revolting payoff and support legislation that re-regulates the financial industry, nationalizes insolvent firms and gives taxpayers control of assets and profits, makes a massive investment in primary and secondary public education and eliminates the age restriction on Medicare so that all Americans have basic health coverage.

I haven't seen the roll call yet, but I'm sure they just rolled their eyes, whipped out the national credit card and said "how many zeroes are in $700 BILLION again?"

Posted by Original Andrew | October 1, 2008 9:22 PM

Fuck Obama. We know who he works for now more than ever. His vote on the telecoms gave me serious doubts, and now this. All the populist rhetoric is a brilliant gag. All we know about him is that he lies more believably than McCain. Great. The next election we get to vote for one of two corporate lapdogs. Fuck McCain too, but more. fuck. I'm so fucking angry and disapointed. How dare our government support these Wall Street crooks on our dime, and dare to use the word 'Main Street' to define us. We need to take our country back, and the Democratic process has been dismantled. Our wealth disparity is on par with fucking feudal monarchies for fuck's sake. So far it doesn't look like Obama is going to do anything about that, and so fuck him.

Posted by Pert Minus | October 1, 2008 9:26 PM

oh for the fuck's sake Pert, the wealth distribution is nowhere near feudal times. Your hyperbole is both laughable and ineffective.

Posted by Bellevue Ave | October 1, 2008 9:33 PM

Ok, my apologies to Maria who voted "no" and apparently gave a very important speech. I'll officially eat my bad words about her (tonight, anyway).

Patty Murray, on the other hand, gave in to her corporate masters.

Oh, and P.S. We're all communists now!

Posted by Original Andrew | October 1, 2008 9:36 PM

@1 for the win.

Posted by Will in Seattle | October 1, 2008 9:48 PM

Thank you for countering the total irrationality of late, BA@19

Posted by Non | October 1, 2008 9:49 PM

@1 and @21 -- definitely cut all corporate welfare, farm subsidies, etc. It would be lovely if that were the first order of business next year. Of course, there is the slight problem that Joe Biden has never met a corporation he didn't love. And, oops, Obama voted for the farm subsidies that should be cut. Damn. So it goes.

Posted by Fritz | October 1, 2008 9:55 PM

@19 Sorry. Got a bit caried away. Was more venting than trying to convince anyone of anything. I'm just really really mad right now.

%1 of the population own more wealth than %90 of the rest of the population.

%1 earn more per year than %50

And wealth has only become more polarized over the last 8 years.

The bailout has no mechanism for stopping the actual problem.

Do I not have the right to go on an angry rant, Bellevue? Do I not have the right to be beside myself with rage at how unjust my Government is?

I'll try to watch how ineffective I am. Thanks.

Posted by Pert Minus | October 1, 2008 10:01 PM

You can be mad, but your arbitrary definition of wealth and how it's unjust based on distributions isn't convincing or effective in showing the deterious effects of wealth concentration in the hands a few.

For the most part we possess many of the exact same material items of similar or effective quality as the super wealthy. The one thing we don't have and what needs to be reconciled is influence. The problem isn't that wealthy have more income, it's that they can work the systems of government in their favor with that wealth. and it wouldn't be any different if 10% had 75%, 33% had 50%. A system must be in place that policy of government is immutable by the power of money.

I'm for higher taxes on income, and reforming capital gains more effectively than simply raising them (make them their own form of income that has no bracketing correlation to regular income), but the power of money in politics is fundamentally the issue and problem we have right now. redistributing it won't change that fact. There will always be those on top, and so long as the rules permit them, they will dictate the course of government.

Posted by Bellevue Ave | October 1, 2008 10:19 PM

Murray voted for, Cantwell against. They both just got emails from me.

Posted by Andy Niable | October 1, 2008 10:35 PM

5% of the GDP, guys. Five. Frigging. Percent.

We are increasing the budget by 25% if we give it over all at once. Even less if it's staggered.

Saying we're bailing out Wall Street is naive-- they'll take the money and run no matter what we do, but at least in this case they have to endorse the check so we know exactly who benefits and who is on the take. We've socialized the assholes.

We've got them by the balls. Unless you get disgusted and let McCain weasel his way into office.

Posted by AJ | October 1, 2008 11:15 PM

Good for Murray. I'm through with Cantwell. She hasn't done anything for entrepreneurs like me.

Posted by Tony | October 1, 2008 11:15 PM

@ 27 & 28,

Um, yeah. Except that now the swindlers have no reason to think that they'll ever be held accountable for their actions, and that they can take even bigger risks in the future since they know that we--the taxpayers--will bail them out.

So except for that and the fact that the bill does absolutely nothing to address the causes of the crises, namely that Americans are drowning in a tidal wave of debt that they can't pay, so we'll probs be looking at an even bigger crash in the near future.

Posted by Original Andrew | October 1, 2008 11:39 PM

I hate when Original Andrew is right.

Posted by Will in Seattle | October 1, 2008 11:56 PM

BA @25: for all the shit I've given you, I have to admit that was a really good post.

Posted by gnossos | October 2, 2008 12:28 AM

@25 I have to call bullshit.

I should feel grateful that i'm not starving? Yes, the rich don't starve either. So we're equal?

At this rate I will never ever every own anything. And that's the plan of the rich. You turn your nose up at my anger. Passion gets things done.

It does make a difference what percent of wealth and property the rich own because in that few percent is oppertunity to save, to invest and to grow. The people that voted yes on this bailout are closing the door to prosperity behind them. In a capitalist society there will always be stratification of wealth. To what degree do you wish to make it impossible to move up? That degree is the separation between the haves and have nots. 90% of the population shouldn't be to poor to save up a bit. It matters a lot what percentage the rest of us gets.

I would love to raise the taxes of the rich, but I would love to raise the compensation of the poor for their work even more.

redistributing wealth would change everything. What are you talking about? If the middle and lower classes had a bit of time and money to breathe, they could support politics. The reason we have two corporate parties is that the middle class and poor have no money or time to support politicians.

Posted by Pert Minus | October 2, 2008 3:19 AM

For everyone who's thrilled that the old bill failed, please note that the new bill is substantially worse than the old one. The longer they wait, the more time they have to load this up with crap like this, and the closer we get to a major depression.

The Republican strategy is clear now: bankrupt government. It's the only way they see forward to get rid of the entitlement programs they hate: Medicare, Medicaid, and Social Security.

Get your good walking shoes on; we're all going to be hoboes in a minute.

Posted by Fnarf | October 2, 2008 4:56 AM


If'n we're all hobos, then can we all join jug bands and have hootenannys all day long?

Doesn't sound too bad.

Posted by Joh | October 2, 2008 6:12 AM

Its also going under-reported in the news but the big 3 automakers got to sneak in their "retooling" loans. Keep in mind it only applies to factories over 20 years old (thus preventing Toyota and Honda from taking advantage of the cheap interest rate loans) and continues to prop up giant, ailing corporations like GM and Ford. (GM had an electric car that was market-ready 10 years ago -- they don't need to retool. They need to go out of business for making poor business decisions) How long before giant airlines (Delta/Northwest) or a large retailer also join the lineup for government handouts? This new bill is far worse than even the original Paulson plan -- pork for everyone and responsibility for the mess with no one.

Posted by radix_point | October 2, 2008 7:21 AM

Its also going under-reported in the news but the big 3 automakers got to sneak in their "retooling" loans. Keep in mind it only applies to factories over 20 years old (thus preventing Toyota and Honda from taking advantage of the cheap interest rate loans) and continues to prop up giant, ailing corporations like GM and Ford. (GM had an electric car that was market-ready 10 years ago -- they don't need to retool. They need to go out of business for making poor business decisions) How long before giant airlines (Delta/Northwest) or a large retailer also join the lineup for government handouts? This new bill is far worse than even the original Paulson plan -- pork for everyone and responsibility for the mess with no one.

Posted by radix_point | October 2, 2008 7:21 AM

On Saturday, Congress sent Bush a $640 billion defense bill, that lifted the offshore drilling ban and the aforementioned auto industry bailout loans...

Posted by Just Sayin' | October 2, 2008 7:33 AM

@29: Can the high-flying "they'll never learn" rhetoric. Anyone who will steal from probably already has and will always steal from you.

This whiny "oh woe is us, we've been screwed again" BS is not doing anyone any favors. Young white folks will still drive demand up and minorities out of neighborhoods, values voters will continue to overextend the national credit lines to chase a politically gilded ideal and effete fauxgressives in the PNW will still spend with one hand and flip off the banking system with the other.

People want to know "what will change?" -- well, maybe fauxgressives will actually do something instead of slashing their wrists every time the government spends money on someone else. You know, like political activism, grassroots pushes for market reform, pressuring the market through manipulation of spending.

Posted by AJ | October 2, 2008 8:10 AM

Original Andrew is absolutely right. And he could go farther to describe the need to balance the federal budget. I'm no small government conservative, quite the opposite, but the debt that our government is just licking itself to make even larger is going to drag us down into the next depression.

At this point I don't expect our current monetary system, established in 1973 when Nixon abandoned gold convertibility, can withstand the stresses. This bailout is going to send international investors over the edge and potentially cause a run on the dollar. Why?

This money doesn't exist. Plain and simple, any money we could have used to fix Wall St has been spent blowing shit up in Iraq. Where will we get it? A small amount of it might be borrowed from the East Asian banks we've been borrowing from for years--but why would they lend to us? One of the remarkable things about this crisis is East Asia's apparent financial decoupling from the US. Lending an additional $700 billion would do nothing to enhance their good fortunes in that regard. Ditto to Dubai. And Europe is starting to see as much credit freeze up as we are here.

So if we can't borrow it, where will we get it?

Print it!

Who thinks a $700 billion cash influx is going to have inflationary results?

This bailout is fundamentally similar to lowering interest rates: inject cash into a broken system like WD40 and hope that keeps her clunking along. But the longer the bad system is acquiring unsustainable debt, the worse the inevitable crisis will be. If we slip into high inflation, we're going to see the return of early 80's/Reaganite interest rates--jacked way the fuck up to contain inflation but simultaneously containing any chance at recovery.

Fix the debt, don't create more. It's the only way out of this crisis.

Posted by tt | October 2, 2008 8:11 AM

@35 -- absolutely spot-on. The car makers got $25B of our money in order to correct their error in assuming that the market for Hummers would continue indefinitely.

So apparently the current concept is that no established American business should die because of boneheaded decisions. This is not going to end well.

Posted by Fritz | October 2, 2008 8:42 AM

So, instead of prison, the crooks who did this get seven hundred billion dollars to steal. Sounds like sound ecomnomic policy to me. Chicken Little Bush bulldozes common sense once again. Geez!

Posted by Vince | October 2, 2008 8:57 AM

@33 I think you might have something there. I'd forgotten until I read your comment about a report on NPR way back in 2001 shortly after the Bush inauguration. They were discussing what we might have in store with the Bushies and focused on a certain conservative think tank(don't remember the name)which was heavily influencing their policies. Bankrupting the government in order to get rid of all entitlement programs was top on their list of priorities. At the time I thought they were nuts and it would never happen. Hah!

Posted by woodsea | October 2, 2008 9:01 AM

oh for fucks sake, someone is advocating the gold standard and afraid of inflation right now. What evidence is there that inflationary pressures are in play here? Every economic indicator points to deflation at this point which is really bad once the psychology of a deflationary spiral takes hold.

Posted by Bellevue Ave | October 2, 2008 9:21 AM

@42 "kill the beast" is the doctrine here. the beast being gov't. the rich want no gov't oversight, no taxes. and they think it's their god-given right to do as they please with no accountability for it. and believe it or not, a large swath of the american populace agrees with this philosophy. but then they get no bailouts if they fuck up....hmmm.....maybe they'll have to rethink that one....

Posted by ellarosa | October 2, 2008 9:31 AM

And meanwhile we're all driving around drunk wondering how come nobody fixes the roads and why the library isn't open anymore.
The next major bridge to fall is probably going to be the 1st Avenue South bridge into South Park, which is the lowest-rated bridge in the country, and there isn't a penny anywhere to fix it.

The airlines are next; all US airlines put together have made a net loss since the beginning of time, and we're about two bankruptcies away from another massive bailout, which should be coming along about Christmas.

But you can cry about bailouts all you want; the fact is, we NEED the liquidity in the banking system to survive, and all this bogus populism that everyone's suddenly been converted to is KILLING US. You're cutting off your nose to spite your face, and you're bringing on the depression because of it.

Posted by Fnarf | October 2, 2008 10:14 AM

Thats the price of living in a democracy Fnarf.

Posted by Bellevue Ave | October 2, 2008 10:37 AM
Posted by tt | October 2, 2008 10:47 AM

You're treating a symptom with the bailout, admittedly a symptom with serious consequences. But until we make serious inroads in solving more fundamental problems of our economy it only delays an inevitable, more serious crisis.

This is the destruction part of the capitalism you love. Get used to it or let's make a revolution.

Posted by tt | October 2, 2008 11:00 AM

As for inflation, are you fucking insane, BA? Have you not seen the increases in food, gas, housing and health care costs?

Here's how the bailouts cause inflation:

And here's the uptick:

Their forecasts are optimistic, so all I can do is flatly contradict them and say that there's no indication that the current trend of increasing inflation will be broken. Expectations are adjusting upward.

I'm not some monetarist that thinks our primary focus has to be constraining inflation. There are plenty of other considerations that are equally or more important. But inflation is bad and I submit that Paulson and Bernake's efforts to contain it will probably fail and probably more quickly than any of us expect.

Posted by tt | October 2, 2008 11:08 AM

tt, did you look at the chart and table?

Are you actually following oil prices, gold prices, equity prices, housing prices at this moment in time? Do you know what occurs in situations where credit markets seize up?

We're headed towards deflation if this continues much longer.

Posted by Bellevue Ave | October 2, 2008 11:22 AM

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