The House has passed the economic bailout bill 263 to 171

http://money.cnn.com/2008/10/03/news/economy/house_friday_bailout/index.htm?postversion=2008100309

by eposts • 18 years ago

43 74 18 years ago

money.cnn.com

ajmoir• 18 years ago

Feckless bastards

josefresco• 18 years ago

We all are feckless actually, as they (the gov) represent us.

Hexstream• 18 years ago

or misrepresent us?

mynameishere2• 18 years ago

Maxine Waters:

When we buy up this toxic paper, we're in charge. We can do the kind of loan modifications we've been urging [the industry coalition]...

Here's a clip of Maxine:

http://www.youtube.com/watch?v=KN6s1KVFBNg

...she is making a threat to nationalize the oil industry, but flubs the word. The reporters basically laugh at her, and compare her to Hugo Chavez. Guess what? The imbecile wasn't that far off...

We have no real conception of how screwed we are, but we know one thing: The credit market is now fully subject to political constraints. To what degree is hard to say. But congress has already been forcing banks to give loans to unqualified people (a big part of the original problem) and so the same practice will likely continue. Except, banks know full well that every bad loan can be sold to the taxpayer at full price.

An unbelievable coup.

alecco4• 18 years ago

You seem to imply two false points. Chavez was elected democratically, twice. And Venezuela's oil was not nationalized.

I don't like the paternalistic and interventionist style he has but he isn't Fidel Castro. In many ways, he is quite a capitalist.

rbanffy2• 18 years ago

To put it shortly, Castro is a Communist and Chavez is an opportunistic populist proto-dictator.

Anyway, Venezuela is screwed.

mynameishere2• 18 years ago

"You"

Rather, the reporters did. And Waters was also elected democratically. And that's not the point; the point is the media's reaction to nationalization then and now.

patrickg-zill• 18 years ago

We will know in about what, 4 weeks, whether this actually did what Paulson claimed it would do. If not, then all we did was line Goldman Sach's and others pockets...

siculars• 18 years ago

we avoid fire and brimstone! but will pay for it forever! i want to see this "investment" as a dividend in my tax return.

nihilocrat• 18 years ago

They misspelled Howard Coble's name. They said "Howard Cobble".

gills2• 18 years ago

Pitckfork: $10

Torch: $15

Freedom: Priceless

P.S. This is a joke...

qqq2• 18 years ago

Torches are one copper piece which is much less than a pitchfork.

tectonic• 18 years ago

'use skill create torch' when in the outer-world, dumbass. Save your money in ING.

kqr22• 18 years ago

What's the main difference between this bill and the one that was rejected last week? Is it just the pork offerings including a tax credit for racetrack owners and makers of wooden toy arrows?

alecco4• 18 years ago

Goldman Sachs and Warren Buffet most likely bought billions in toxic assets during this week to sell for up to double the price to the taxpayer.

socmoth3• 18 years ago

You don't really know much about Warren Buffet. He is famous for paying unusually high taxes compared to his peers because he thinks it is the right thing for people in his position to do.

jws• 18 years ago

The arrow thing is popular with pork pokers, but what it is doing is correcting an accidentally applied tax.

In 2004 there was a small $0.39 excise tax levied on weapons. Unfortunately, $0.30 target arrows are considered weapons under the law so they got a 130% tax accidentally levied on them.

Any politician or journalist that grouses about arrow makers getting special handouts is either uninformed or attempting to deceive you. I recommend you ignore them as a source of future information.

socmoth3• 18 years ago

i wish there were wikipedia style discuss pages for legislation. especially for things like this.

kqr22• 18 years ago

I don't know the details of the bill, but wouldn't it have been better to reclassify the target arrows as non-weapons then? This way, the accidental tax would no longer apply.

DanielBMarkham2• 18 years ago

It may be correcting an accidentally applied tax, but do you _really_ want to start talking about how the tax code is broken. I mean gee, that conversation could go on for a long time.

They are not attempting to deceive anybody. The issue is the bank bailout, not arrows, not AMT, not anything else stuck in there to sweeten the pot. The fact that people are pointing out how much CRAP has to go into a bill to get it passed into law is germane and important to know.

jcromartie2• 18 years ago

Well actually, the bailout is what was tacked-on to a tax bill. That makes it $700 billion in pork!

mechanical_fish• 18 years ago

Last week it was presumed that the bill would pass. So there wasn't a big incentive for every credit-starved business and bank to spend time calling congresspeople and lobbying for it, or for something like it.

That changed over the last week, as articles like this one came out:

http://www.bizjournals.com/twincities/stories/2008/09/29/dai...

So there's been another week to form the consensus: The bill sucks, but the problem is real, and there's no clearly differentiated, politically viable, non-sucky alternative that will arrive in time.

The moral of this story, as with so many stories, is that the right way to deal with dire emergencies is to avoid causing them in the first place.

jd• 18 years ago

On the Daily Show, Jon Stewart reported that the main difference was an additional $150 billion in tax breaks.

mixmax2• 18 years ago

I would venture that a country whose most credible news source is a comedy show has some substantial problems with their meida.

bilbo0s2• 18 years ago

The quants are going to go to town on this one. This bill gives the SEC authority to suspend the practice of marking to market. Bad idea. That makes this bill just a big money giveaway in practice. Transfer of wealth basically.

Further, the FDIC is already running low on funds, we should be slow to make new promises when we are already uncertain with regard to meeting present obligations. Additionally, raising the limit on FDIC insurance will make it harder to determine when a bank is in trouble. Now I am not naive, I am sure that was the idea behind raising the limit in the first place. But the less educated among us actually believe this was done to protect their money.

Lastly, $150 billion in tax cuts? These people really need to get some cost accountants.

newt03112• 18 years ago

The SEC already had the authority to suspend mark-to-market accounting. This bill just re-affirms it. Furthermore, mark-to-market is an accounting technique.It may result in fraud but there is no "transfer of wealth" about it. Furthermore, if history is any indication, corporations can always cook their book if they really want to.

The FDIC is indeed running low on funds and raising the limit at this point in time is a bad idea. However, the FDIC limit does not hide the financial health of a bank or have any direct impact on it for that matter. The limit governs what happens to customer deposits after the bank fails. Having a higher limit may indirectly help troubled banks by placating their depositors and convincing said depositors that their money is safer.

About the tax cuts. The $150 billion is a drop in the bucket. If you really want to bring costs in line, take a very hard look at Social Security, Medicaid, Medicare, and Defense spending. Everything else (except now this bailout) is a rounding error compared to those.

nadim• 18 years ago

Here is a diff between versions of the bill:

http://www.govtrack.us/special/econstimbill/changes.xpd?id=4

Prrometheus• 18 years ago

Here's a rundown of the groups that switched:

http://reason.com/blog/show/129262.html

lkozma• 18 years ago

The main difference is the four days in between that has allowed insiders to buy up quality stock that was free-falling and that will presumably recover now.

eposts• 18 years ago

Here is the roll call: http://clerk.house.gov/evs/2008/roll681.xml

biohacker42• 18 years ago

My $0.02

The Good:

A non trivial part of the market freeze was due to the uncertainty about the bailout. Will it pass and if so at exactly what price will the Feds buy the toxic junk. Rather then sell, people were waiting. Perhaps now things can start moving again.

So this may be better then doing nothing.

The Bad:

The may be worse then doing nothing. We may spend a whole lot of money and not make a profit on it. Steal (by inflation) from all the people who save, to give to the bankers, and the bankers could still fail.

Many experts argue a better alternative would have been to pick a few winners re-capitalize them and then let everyone else fail. The core issue here is solvency not liquidity, the bailout addresses liquidity, which many consider just a symptom, not the disease.

More may have to be done, like re-capitalization, yet more may not be done because while this time there are no pitch forks in DC, there may well be next time. And thus, this could be worse the doing nothing.

'Ain't economics fun.

einarvollset3• 18 years ago

Right on the money.

jcromartie2• 18 years ago

If I may paraphrase a Redditor...

    "So is this good or bad for the economy?
    
    Bubble: bigger
    Collapse: inevitable
    Distance to fall: farther
    Dollar: worthless"

peakok• 18 years ago

This plan is a disaster that will be remembered as one of the worst error in History ever. The US shot its last bullet, and it aimed at its feets. Buckle up, folks, cause the future is even more incertain now for the world.

astine• 18 years ago

I dunno, It will be hard to top Smoot-Hawley.

rgr• 18 years ago

And I thought the democrats were the good guys... Now I really don't know whom to vote for. Wall St will get rich, but the political system has gone bankrupt.

jm4• 18 years ago

This is totally off topic so I'll probably get modded down. Please don't be too harsh...

Thinking the Democrats were the good guys is your first mistake. The sooner we all realize neither side is good, the better. They are both equally bad in only slightly different ways. The Democrats are mostly impotent. They do nothing. They talk a great game and have some good ideas, but they almost invariably fail to execute. The Republicans know how to get things done. The only problem is it's often in the interests of a very small, elite minority.

Thinking one side is the 'good guys' is a big part of the problem we have right now. Fifty one percent of the population thinks the Republicans are the 'good guys' and continue to vote party lines, despite 8 years of bad policies and low approval ratings, instead of voting based on qualifications and track records.

jobeirne• 18 years ago

I signed the wrong social contract.

(but it's not like anywhere else is preferable)

DanielBMarkham2• 18 years ago

Did you keep your receipt?

Maybe you could take it back and get another one.

lallysingh• 18 years ago

One of the meanest things a friend has ever said to me is "people get the government they deserve."

Part of me still hates him for that.

Chocobean• 18 years ago

a democratic people get the government they deserve.

those living under a monarchy or dictatorship get to say "Well I didn't vote for you~"

kingkongrevenge• 18 years ago

The nation's control over its form of government goes beyond voting. All people have the government they deserve.

speek• 18 years ago

I think we're going to be the largest and richest third world country in the world because of this. Lets hope I'm wrong.

michaelneale3• 18 years ago

This is a real low point for HN (comment wise), the subject matter is interesting but I would have expected some interesting comments.

davidw2• 18 years ago

Well, like you wouldn't want to read Paul Krugman's or Tyler Cowen's opinions on programming languages, most people here don't have much that's truly insightful to say about economics and finance, with the exception, perhaps, of economics as related to software. I guess there are a few people who work or have worked as quants and know more than a thing or two about finance, but how much insight does that give you into the system as a whole, which is what broke?

This remains the best thing I've ready so far, in terms of something brief and at the same time thoughtful:

http://www.marginalrevolution.com/marginalrevolution/2008/10...

michaelneale3• 18 years ago

Thats my thoughts exactly. I feel like I know less everyone else, as everyone seems to have an opinion or something to say, yet as I don't understand the system as a whole, I would rather just shut the hell up and contribute in some positive way (thats all we can really do at the end of the day).

So well said !

alex_c• 18 years ago

I would love to read what pmarca has to say about all this. Too bad he stopped blogging just when things got really interesting :-/

netcan• 18 years ago

I think the low quality of commentary (here & elsewhere) comes from (A) not understanding this relatively complicated & technical issue and (B) wanting to comment & discuss.

I'm not sure how I feel about it. I don't like to see discussions deteriorate like this. But on the other hand, I feel like participating in the discussion may be a good way of gaining an understanding ultimately bringing the level back up.

michaelneale3• 18 years ago

My thoughts also. Although I really feel unable to comment in a meaningful way.

I also think its frustrating for communities like this one, of relatively smart people, that there is something going on in the world that is effecting us that we don't fully understand (normally we are the ones doing the explaining to the lay-people !).

MikeCapone• 18 years ago

Damn.

marvin• 18 years ago

I thought this bill was the worst idea ever, until I heard Warren Buffett speak up for it two days ago. Buffett has both integrity and economic skills, and he probably understands this proposal better than any of us.

For instance, http://ph.news.yahoo.com/rtrs/20080924/tbs-buffett-bailout-7...

The US government has a pretty poor track record for "emergency proposals" and other decisions these last 8 years, so I understand the skepticism. I'd vote against it myself. But there's more to the story than what you hear in most inflamed internet postings. Buffett himself says that we eventually need to roll some heads, but that it shouldn't be our first priority.

  They shouldn't buy them at what they're carrying, what the carrying value is, necessarily.  
  They should buy them at the kind of prices that are available in the market.  
  People who are buying these instruments in the market are expecting to make 
  15 to 20 percent on those instruments.  If the government makes anything over its 
  cost of borrowing, this deal will come out with a profit.  And I would bet it will come out with 
  a profit, actually...

einarvollset3• 18 years ago

Fuck Warren Buffet. Who died and elected him grand master of the universe anyways?

Note that I'm not asking whether he knows how to make money - clearly he does: witness putting $5.000.000.000 into Goldman Sachs and then lobbying like hell for the bailout of ....... ..... (guess who?)

einarvollset3• 18 years ago

Is it the swearing that gets the downmods, or the contrarian view? Either way: Any of the downmodders have further thoughts now that the Dow is taking a beating despite the bailout?

The House has passed the economic bailout bill 263 to 171

Related Stories