The House of Representatives rejected the $700 bailout yesterday. Distinguished economists across the world have stated it would not have solved the problem at hand. However, we can potentially solve this liquidity problem at little cost to the taxpayer. I am proposing that Congress drop the Paulson Plan, and instead pass the No BAILOUTS Act. The No BAILOUTS Act provides an alternative to the Paulson Proposal to address the current credit crunch. Once Congress addresses the liquidity shortfalls in our financial markets, a Democratic Congress can turn to Democratic solutions to address the broader economic crises we face today. Specifically, Congress can work to resolve the housing crisis across the country and pass effective job stimulus, which is the response Main Street America expects and deserves.
While Democrats and Republicans may disagree on the underlying solutions to solve the economic crises we face, the No BAILOUTS Act – a regulatory based proposal – has the potential for significant bipartisan support.
The Paulson Premise Flawed
Simon Johnson, a former chief economist as the International Monetary Fund, stated today in the New York Times of Paulson’s plan, “It’s our view that this package, in a fundamental sense, will not solve the problem.” Other economic analysts noted yesterday that the credit markets around the world were almost entirely dysfunctional even when political leaders and investors assumed that Congress had reached a deal and would easily approve the bailout. There is no reason to believe Paulson’s plan will work.
Alternatives
We have credible alternatives to the Paulson/Bush $700 billion gamble. William Isaac, the chairman of the FDIC during the previous worst financial crisis in the United States during the 1980s, believes Congress can address the current crisis with simple changes to Securities and Exchange Commission (SEC) rules. Mr. Isaac points out that while we face serious financial challenges today, many banks are still in good shape. This allows Congress to take swift, uncomplicated steps to ensure the financial markets return to working order. After that, we can work to resolve the housing crisis and pass effective job stimulus.
Today I am offering an alternative to the Wall Street bailout that will correct the capital shortfalls experienced by many financial institutions and help protect the integrity and quality of the securities market. My plan could be implemented promptly meeting the demands of the Bush Administration to act immediately without putting the American taxpayer on the hook for billions of dollars.
No BAILOUTS Act
Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security
1) Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.
This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions.
2) Require the Securities and Exchange Commission to restricting naked short sells permanently
This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects.
3) Require the Securities and Exchange Commission to restore the up-tick rule permanently.
This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies “to protect the integrity and quality of the securities market and strengthen investor confidence.” This rule prevents market crashes brought on by irrational short term market behavior.
4) “Net Worth Certificate Program”
This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount “borrowed” as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program.
5) Increase the FDIC Insurance limit from $100,000 to $250,000.
The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry.
Sincerely
Peter DeFazio
Member of Congress
Call your congress person and demand they support this instead of George The Robber and Nancy the Fluffer’s giveaway to the rich. It’s your’s and your grandchildren’s money they want.
…..yeah, the revolution will not be televised. Indeed, there looks to be no revolution. With Barky calling for a non-vote Democratic Convention, he won’t get that predicts I, and McSame being…well, more of the same I suppose you could vote for Nader or Barr but neither are viable let’s face it. Sister Beezlebub still has a shot moreso every time Barky sticks his foot in his mouth and hops around going Uh…Uh…Muh! Currently the Bark-O-Meter has him at 1.5 hops per week. But enough of the cheap shots.
The real problem sits on ‘The HIll’ like a horrific knot of toads in human form. 535 elected representatives of the people.
Or not.
Yep, in situation, after issue, compounded by crisis we see that the legislative branch of our government is stuffed to the gills with folks who are one of three things:
Corrupt…the biggest faction. Politicians are trained early that it’s all about the Benjamins as our ‘system’ rewards those who get elected and under the current system you need lots of B’s to get elected…
Stupid…plenty of those after all if you’re buying a Congressperson you don’t need one that’s smart. Just one that loves to follow orders.
Nuts….Yeah, barking mad. These are the ones found in a hotel room with hookers and coke or an underage boy. Significant fraction….
So what to do. First up is very simple.
Get real.
Understand that the level of corruption is now at unprecedented levels. Levels no mere change in ‘party’ will fix. The job is a wholescale clean up similar to Hercules and the Augean Stables. Ever read that one? You should it’s not really about what it seems. Yeah, get real. No one candidate is going to ‘save’ us folks. Most adults realize reality don’t work that way but….
People want to believe.
Well…
Believe this.
If you and I don’t get off our asses and take back our government the future will be very bleak. The tipping point on many problems affecting our very survival as a society is near. I assert that the tools to fix those problems which threaten us most are also hand. Requiring only affordable amounts of money and some intelligent leadership. But with a government composed of the corrupt, the stupid and the barking mad we are not going to be able to use those tools.
What to do?
Look around join up with like minded folks. Stop talking and start doing. You will be noticing some changes around here as I ‘renovate’ my new primary residence. And no I don’t care what the Congressional mortgage lending ‘bail out’ bill says, it’s amazingly stupid go look it up, about how to treat ‘primary’ vs. ‘secondary’ residences.
One signpost to a new way is the widget in the upper right sidebar called: ‘Accountability Money Bomb’.
This takes you to a spot where you can contribute to a fascinating group headed by Jane Hamscher and a bunch of right wing folks. Yep, wingers and progressives…together. Seems there is common cause to be made by all Americans in the face of the Congress’s gutting the 4th Amendment. Here is the link to the statement of purpose from StrangeBedFellows the ad hoc group just beginning to get some traction. I will be blogging about this more as the idea of ‘Accountability for the Asylum (Congress)’ resonates with me.
Hope you will hang around as I am planning some extensive remodeling here and I hope you will find it interesting.
Howie, Donna, Miss Nancy, Senator Obama, ‘Fittin’ Harry Reid, Rahm ‘The Rabbit’ Emmanuel, Senators Schumer, Kerry, Kennedy, there is someone on the phone for you.
Sez it’s very urgent!
Yeah, something about don’t forget to pick up your ‘bag’.
A great post about just how the corporatist press works; or rather is given it’s marching orders. By way of Anglachel’s Journal we get a quote from Bob Somerby, a blogger I’ve known about for a while but really never got to know, who gives us a real look at just how certain misstatements or other ‘incidents’ become important while others….not so much.
Read the whole thing. It’s a little convoluted what, to do with modern politics…or old for that matter, isn’t. Bottom line we have, as many have pointed out, taken on the characteristics of that society we fought for so long. Yes, children I know you think the ‘Commies’ were some imaginary Boomer boogeyman but, in actual fact, they were not. They were a group who thought you could run a society of millions with the same top down authority structure our ancestors used to control a ‘troop’ of around 150 individuals.
You can’t.
But nobody told Cheney, Bush or the Evangelicals so here we are: The few trying without much success to impose their vision of reality on the many.
Not gonna work and it’s very bad juju for us as it’s taking us further down the road to a point of no return. A point where it will be too late to fix things.
In one case, according to documents displayed by Pentagon auditors at the hearing before the House Committee on Oversight and Government Reform, a cash payment of $320.8 million in Iraqi money was authorized on the basis of a single signature and the words “Iraqi Salary Payment” on an invoice. In another, $11.1 million of taxpayer money was paid to IAP, an American contractor, on the basis of a voucher with no indication of what was delivered…
The disclosure that $1.8 billion in Iraqi assets was mishandled comes on top of an earlier finding by an independent federal oversight agency, the Special Inspector General for Iraq Reconstruction, that United States occupation authorities early in the conflict could not account for the disbursement of $8.8 billion in Iraqi oil money and seized assets.
A billion here, a billion there…
And then check this out:
The mysterious payments, whose amounts had not been publicly disclosed, included $68.2 million to the United Kingdom, $45.3 million to Poland and $21.3 million to South Korea. Despite repeated requests, Pentagon auditors said they were unable to determine why the payments were made.
“It sounds like the coalition of the willing is the coalition of the paid — they’re willing to be paid,” said Mr. Waxman
And some more details:
In one instance, a United States Treasury check for $5,674,075.00 was written to pay a company called Al Kasid Specialized Vehicles Trading Company in Baghdad for items that a voucher does not even describe.
In another case, $6,268,320.07 went to the contractor Combat Support Associates with even less explanation. And a scrawl on another piece of paper says only that $8 million had been paid out as “Funds for the Benefit of the Iraqi People.”
But perhaps the masterpiece of elliptic paperwork is the document identified at the top as a “Public Voucher for Purchases and Services Other Than Personal.” It indicates that $320.8 million went for “Iraqi Salary Payment,” with no explanation of what the Iraqis were paid to do.
Whatever it was, the document suggests, each of those Iraqis was handsomely compensated. Under the “quantity” column is the number 1,000, presumably indicating the number of people who were to be paid — to the tune of $320,800 apiece — if the paperwork is to be trusted.
“…if the paperwork is to be trusted.” Now that’s funny. But the joke’s on us.
I was asked to post this by Janet Flint and am glad to do so. If you look over in the right sidebar you will find a new box labeled: Activist Central. We are going to be putting up links to folks who determined to change the corrupt, spineless anything for some greasy cash ‘Democrat’ Party into a progressive organization you and you children can use to build a better nation to live in.
Period.
No factionalism, just good old-fashioned grassroots work on the infrastructure of the party. I’ll be adding more links as we get going. Feel free to suggest one to a group which wants to change how and what is done rather than the face on the packaging.
Presented by the Grassroots Leadership Summit
Are you a blue-county Democrat who’s interested in supporting
Democrats running for office in “red” areas?Maybe you’ve considered
volunteering, but weren’t sure how effective you’d be?
Presented by the Grassroots Leadership Summit
Join us on Saturday, May 17, for a few hours and learn what it’s all about.
Hear from Bay Area people who’ve volunteered in rural campaigns
but I am going to ask you to take action. It seems our ‘Democrat’ Party lawmakers can’t even do that. Make laws that is without some outside help that is. Yep, the Telcos have stepped up to the plate to ‘help’ resolve the FISA crisis. I say send their CEOs and head legal counsel to the chokey. They all knew what they were doing and are still doing today was and is illegal. Totally illegal….
That’s why they want a get out of jail card folks. And guess who’s their to ‘help’ them ‘help’ the House. Our pals, our Democratic ‘Leaderscum’ Queen Pelosi and her faithful sidekick Steney ‘I love Money’ Hoyer. Here’s a link to tell Hoyer, ‘Hell no!’ on this. Here’s one to the House and here’s one to the Senate. Let ‘em know how you feel. And, no, I don’t care how polite you are these assclowns are obviously listening to the sound of big money and ya gotta really get fierce to be heard over that.
And as we approach the elections please remember that Sister Beezlebub, McSame and The Glass-Jawed Barry are not the only game in town. We’ve two very progressive candidates for Madame Speaker’s job and frankly I can think of no better way to send a message than to give her the boot. That may not be possible, no polling exists as far as I know, but at the least we can send her a message. Something along the lines of, ‘Shape up or Ship Out!’
Frankly, I’d like to see her go or lose her Speakership. She’s been, as have many others in the Dem caucus, much more Republican than Democrat and that is not what the citizenry wants. Of that I am certain sure.
So, stay tuned. McSame vs. Whoevah! is not the only game in town.
…they will just call downstairs and have more printed. And if you don’t think lots of cocaine, high-dollar hookers, booze, private jets and yachts don’t figure into this…
…yer just plain naive.
Have fun spendin’ that $30.00 worth of gas tax savings you are maybe gonna get.
Sgt. 1st Class David L. McDowell, 30, of Ramona, California died Tuesday in Afghanistan of "wounds suffered when enemy forces attacked using small arms fires." The San Diego Tribune reports, "He had been deployed to Afghanistan and Iraq seven times and was a recipient of two Bronze stars and a Purple Heart."
Seven Tours...for Bush’s and America’s vanity; Sick. Disgusting. Here talk to these people. I didn’t do this….And I will not be responsible for it!
Clik on the banner about to help rid the nation of
Democrats who don't know what the word
'Democrat' means.
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Barack is very disappointed with me!
I only scored 31 on the Obama Test
For a Blue Majority Now!
I, A.Citizen, believe candidates with strong, sound progressive stances deserve our support, particularly in primary races where they are opposed by folks who have been proven to be the opposite of progressive. Your early dollars can make the difference. Please make a contribution to this critical cause.
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Activist Central!
This widget will contain links to folks who are organizing together to Fight Back!
Folks determined to take charge of the Alameda County Democratic Party Central Committee as a first step to the State and the the whole enchilada!
Drinking Liberally
Drinking Liberally Oakland is a political social group which meets on the 2nd & 4th Wednesday each month at Luka's Taproom & Lounge, 2221 Broadway @ Grand Ave in Oakland (6-9pm).
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