5 ms·

"Congress has an obligation to ensure that effective solutions are implemented and taxpayers don't get stuck paying for a bailout," I wonder where Issa was when

by fleitz 16y ago

"Congress has an obligation to ensure that effective solutions are implemented and taxpayers don't get stuck paying for a bailout," I wonder where Issa was when bailing out the banks for $2 trillion.

watchandwait 16y ago
Issa voted against TARP http://clerk.house.gov/evs/2008/roll681.xml http://clerk.house.gov/evs/2008/roll681.xml
- jbooth 16y ago
  Only because it was clear enough people were voting for it that he could pretend to stick to his principles. You think if it came down to him, he'd actually vote for total financial collapse?
  - watchandwait 16y ago
    Wrong. He also voted against it the first time in the House, when the bill did go down and the Dow dropped 700 points. Plus, the "total collapse" argument was BS. We'd be further along if the feds had allowed the banks to fail (while protecting individual depositors) and reorganized them. We did it this way with the RTC in the 1980s and Sweden did it in the 1990s.
    - jbooth 16y ago
      Eh, maybe, although I kinda doubt it, there's an assumption to think that because we didn't have a collapse, there was no danger of one. Vanishing 1/3 of the banking industry overnight without an organized wind-down would likely have led to disaster even in retrospect. In the moment? Anyone who voted against that bill was either posturing or a madman. I mean, we got the money back anyways, most of it. Why play chicken?
      - hrabago 16y ago
        People arguing that there wouldn't have been a collapse reminds me of people who think the Y2K problem was a myth created by the software industry to drum up some jobs.
        jbooth 16y ago
        Well, something like 30% of the country still believed Saddam had WMDs in like 2006, and 25% of the country thinks Obama wasn't born in the US right now. Those are different than having a non-mainstream opinion on a hypothetical, but goes to show, people can believe whatever they want.
    - jeromec 16y ago
      Plus, the "total collapse" argument was BS. Wrong, and many well respected economists will tell you you're wrong.
      - tomjen3 16y ago
        Sources?
      - Mystalic 16y ago
        I'd appreciate a citation to back up your claims. I'm pretty sure I could also find plenty of economists on the other side as well.
        jeromec 16y ago
        Here you go... Economists agree: Legislation Reid led to passage prevented economic collapse Excerpts: Krugman: Government intervention helped avert "second Great Depression." In his August 9, 2009, New York Times column, Nobel laureate Paul Krugman wrote that governmental actions kept the U.S. from going into "a second Great Depression" ... Blinder and Zandi: Policies "probably averted what could have been called Great Depression 2.0." In July, former Federal Reserve vice chairman Alan Blinder and Moody's Analytics chief economist Mark Zandi issued a report citing analytic models to demonstrate that the "multifaceted and bipartisan" response to the financial crisis, including the Troubled Asset Relief Program and the American Recovery and Reinvestment Act - both of which passed the Senate under Reid's leadership -- had a "huge" effect on real GDP, jobs, and inflation, and "probably averted what could have been called Great Depression 2.0" ... U.S. Chamber president: Stimulus needed because "we thought we were days away from a global recession." ... AEI's Malkin: Policy response "averted" global depression. From a January outlook report by the American Enterprise Institute's John H. Malkin ... Nowakowski: Policies have "averted depression." In a September 13 column, David Nowakowski, director of credit strategy at Roubini Global Economics, wrote that the Federal Reserve's fiscal policies, "along with the fiscal stimulus," have "averted depression, reversed a short bout of deflation, and helped unemployment from reaching 1930's levels." ... Romer: Policies made difference between recovery and "second Great Depression." In her September 1 farewell speech, Christina Romer, outgoing chairman of President Obama's Council of Economic Advisers, praised the stimulus package and the Obama administration's use of TARP funds and said: "I am proud of the recovery actions we have taken. I believe they have made the difference between a second Great Depression and a slow but genuine recovery. http://mediamatters.org/research/201010220033 http://mediamatters.org/research/201010220033
jeromec 16y ago
The bank bailouts appear to be widely unpopular. I can only guess this is because people don't truly grasp what was happening, or what the alternative would have been. My congressman was one who initially voted against TARP, and I communicated to him that he needed to change his vote. Like most politicians he is not an expert in economics or finance, and he didn't take kindly to what was essentially the Bush administration "telling us the sky was falling, and putting a gun to our heads." But the sky was falling. The economy was in a free fall with millions of jobs being lost monthly, the stock market tanking, and credit markets -- a crucial cog in our economy -- freezing up. If congress had not acted the financial system would have collapsed. We would now be in a real depression. Imagine how bad people say the economy is now, and multiply that by about 100. I'm talking millions unemployed, homeless, tent cities, crime, and a feeling of hopelessness pretty much everywhere. That would have been the alternative to not bailing out the banks. In that context I don't think many would oppose the bailouts. Now, was the system set up incorrectly where we could end up in such a mess? Yes. But that wasn't the fault of any one politician or group of politicians at any one time. The problems leading up to the crisis built up in different ways over time. The financial reform President Obama has pushed through addresses some of these issues, for example, by allowing the government the power to break apart and unwind large "too big to fail" type entities without bailing them out with taxpayer funds. When you look at it this way, Congress and both the outgoing and incoming administrations did do what was best for the country, even if unpopular on the surface. This doesn't even get into the fact that a lot of that initial money has been, and continues to be paid back, and in some cases even turns a profit.
- jonpaul 16y ago
  I think there's a bit of FUD in your statements. I also believe that those who supported the bailout are the same who stood to lose the most i.e. the wealthy. I believe that the bailouts will only further encourage the same behavior and prolong the inevitable.
  - evgen 16y ago
    If the worst-case, or even most-likely scenarios had llayed out then the wealthy would have lost a lot and the poor and middle-class would have lost everything.

by fleitz 16y ago

"Congress has an obligation to ensure that effective solutions are implemented and taxpayers don't get stuck paying for a bailout," I wonder where Issa was when bailing out the banks for $2 trillion.

watchandwait 16y ago

Issa voted against TARP http://clerk.house.gov/evs/2008/roll681.xml http://clerk.house.gov/evs/2008/roll681.xml

jbooth 16y ago
Only because it was clear enough people were voting for it that he could pretend to stick to his principles. You think if it came down to him, he'd actually vote for total financial collapse?
- watchandwait 16y ago
  Wrong. He also voted against it the first time in the House, when the bill did go down and the Dow dropped 700 points. Plus, the "total collapse" argument was BS. We'd be further along if the feds had allowed the banks to fail (while protecting individual depositors) and reorganized them. We did it this way with the RTC in the 1980s and Sweden did it in the 1990s.
  - jbooth 16y ago
    Eh, maybe, although I kinda doubt it, there's an assumption to think that because we didn't have a collapse, there was no danger of one. Vanishing 1/3 of the banking industry overnight without an organized wind-down would likely have led to disaster even in retrospect. In the moment? Anyone who voted against that bill was either posturing or a madman. I mean, we got the money back anyways, most of it. Why play chicken?
    - hrabago 16y ago
      People arguing that there wouldn't have been a collapse reminds me of people who think the Y2K problem was a myth created by the software industry to drum up some jobs.
      - jbooth 16y ago
        Well, something like 30% of the country still believed Saddam had WMDs in like 2006, and 25% of the country thinks Obama wasn't born in the US right now. Those are different than having a non-mainstream opinion on a hypothetical, but goes to show, people can believe whatever they want.
  - jeromec 16y ago
    Plus, the "total collapse" argument was BS. Wrong, and many well respected economists will tell you you're wrong.
    - tomjen3 16y ago
      Sources?
    - Mystalic 16y ago
      I'd appreciate a citation to back up your claims. I'm pretty sure I could also find plenty of economists on the other side as well.
      - jeromec 16y ago
        Here you go... Economists agree: Legislation Reid led to passage prevented economic collapse Excerpts: Krugman: Government intervention helped avert "second Great Depression." In his August 9, 2009, New York Times column, Nobel laureate Paul Krugman wrote that governmental actions kept the U.S. from going into "a second Great Depression" ... Blinder and Zandi: Policies "probably averted what could have been called Great Depression 2.0." In July, former Federal Reserve vice chairman Alan Blinder and Moody's Analytics chief economist Mark Zandi issued a report citing analytic models to demonstrate that the "multifaceted and bipartisan" response to the financial crisis, including the Troubled Asset Relief Program and the American Recovery and Reinvestment Act - both of which passed the Senate under Reid's leadership -- had a "huge" effect on real GDP, jobs, and inflation, and "probably averted what could have been called Great Depression 2.0" ... U.S. Chamber president: Stimulus needed because "we thought we were days away from a global recession." ... AEI's Malkin: Policy response "averted" global depression. From a January outlook report by the American Enterprise Institute's John H. Malkin ... Nowakowski: Policies have "averted depression." In a September 13 column, David Nowakowski, director of credit strategy at Roubini Global Economics, wrote that the Federal Reserve's fiscal policies, "along with the fiscal stimulus," have "averted depression, reversed a short bout of deflation, and helped unemployment from reaching 1930's levels." ... Romer: Policies made difference between recovery and "second Great Depression." In her September 1 farewell speech, Christina Romer, outgoing chairman of President Obama's Council of Economic Advisers, praised the stimulus package and the Obama administration's use of TARP funds and said: "I am proud of the recovery actions we have taken. I believe they have made the difference between a second Great Depression and a slow but genuine recovery. http://mediamatters.org/research/201010220033 http://mediamatters.org/research/201010220033

jeromec 16y ago

The bank bailouts appear to be widely unpopular. I can only guess this is because people don't truly grasp what was happening, or what the alternative would have been. My congressman was one who initially voted against TARP, and I communicated to him that he needed to change his vote. Like most politicians he is not an expert in economics or finance, and he didn't take kindly to what was essentially the Bush administration "telling us the sky was falling, and putting a gun to our heads." But the sky was falling. The economy was in a free fall with millions of jobs being lost monthly, the stock market tanking, and credit markets -- a crucial cog in our economy -- freezing up. If congress had not acted the financial system would have collapsed. We would now be in a real depression. Imagine how bad people say the economy is now, and multiply that by about 100. I'm talking millions unemployed, homeless, tent cities, crime, and a feeling of hopelessness pretty much everywhere. That would have been the alternative to not bailing out the banks. In that context I don't think many would oppose the bailouts. Now, was the system set up incorrectly where we could end up in such a mess? Yes. But that wasn't the fault of any one politician or group of politicians at any one time. The problems leading up to the crisis built up in different ways over time. The financial reform President Obama has pushed through addresses some of these issues, for example, by allowing the government the power to break apart and unwind large "too big to fail" type entities without bailing them out with taxpayer funds. When you look at it this way, Congress and both the outgoing and incoming administrations did do what was best for the country, even if unpopular on the surface. This doesn't even get into the fact that a lot of that initial money has been, and continues to be paid back, and in some cases even turns a profit.

jonpaul 16y ago
I think there's a bit of FUD in your statements. I also believe that those who supported the bailout are the same who stood to lose the most i.e. the wealthy. I believe that the bailouts will only further encourage the same behavior and prolong the inevitable.
- evgen 16y ago
  If the worst-case, or even most-likely scenarios had llayed out then the wealthy would have lost a lot and the poor and middle-class would have lost everything.