Political Punch

Jake,
I'd like to hear your clarification on the post that states that this move will bail out foreign banks as well as US banks. Is this true and in what way? We are a global society but I don't see the US taxpayers footing the bill for the world--God help us!

While you're at it, please clue us in--why is it that politicians always deal with problems and crisis by creating more government? Do we need another regulatory group or do we need to fix the ones we have now?

Why is it that all the republicans are running from their leaders Bush & Cheney? Why are Republicans afraid to call themselves republicans? Lets hear a big round of applause for Bush & Cheney..... they've done such a good job since 2000...

mission accomplished

Leonard Peltier

Dear fool...go research.

You probably aren't worried because you don't pay any taxes from your basement room.

For the rest of us, the price tag for the Democrat's free-housing scan will be enormous.

And it will get a lot worse if the Obama-fool tricks enough voters to get elected.

So Obama hasn't been in Congress long enough to have experience, but long enough to cause a financial crisis.

He doesn't have the strength to stand up to foreign leaders but he is part of the Chicago mob.

He didn't get legacy'd in to Annapolis and a pilot slot after constant academic probation , have 11 houses and 13 cars but he is the elitist in this race.

Is Rove on vacation right now?

Obama blames the Senators for the financial mess. He is a senator. What did he do. He ran around collecting money from all the failed operations.

Obama is the PROBLEM not the solution.

cincyr, no I did not know that. Interesting to know more though. I guess Congress(both parties) are trying to figure this issue out. But so far only Obama has agreed to work with both parties, compared to McCains 'do this or else' idea. Troopergate is biting Palin in the butt, now McCains butt is being chewed on.

If Paulson gets his "clean" bill passed, he will become the de facto financial dictator of the world.

Did you know that under his proposal, foreign banks that do a lot of business here in the U.S. could also get bailed out? Paulson, today on "This Week" with Stephanopoulos, said "that's a distinction without a difference to the American people". What?

Our country is going crazy! This is crazy!

RL in Illinois, you forgot Turkey, our Ally, as well.
he dealt with the three countries diputing over water hoarding, and actually told Syrian/Iraqi in an open meeting to stop the hoarding. Obama's speech was about indiviual countries to drill for their own sources as well as share what they had now. I guess since all three countries has not had a 'table talk' in over twenty years, this makes Obama, more understanding of foriegn affairs than McCain. At least Obama has not commented on Spains anger towards McCains views of Spain. Read the newspapers, in Spain and other allies of the US.

Dear historyforgotten: Looks like you pretty much question everyone's info. Have you forgotten to research Obama's history on the Syrian/Iraqi money ties that possibly affected his stance on the Iraq war? You won't find it in the blogs. Re: 12:08:52 I pretty much find that your comments describe Obama supporters. You "follow" someone who has to make up a story about his own conception to get ahead. I guess if it fooled the Kennedy's.... His manufacturing himself started at birth. Baaaaaa

america*centric Thank you for at least checking some of the facts, and understanding that both candidates had issues here. But when you look at how much McCain recieved, in the long run, of his investments, he collected over 300,000 dollars of 'in and out' investing. Both parties should drop this case and focus, on the future.

america*centric needs a refresher course about vote in Congress. A Majority vote means both sides have to agree on it. That means Republicans also have their say in Congress. Just look at the Bill proposed and that failed from BOTH sides. It is an open record to view them. Research all sides, not just blogs. We have an education system. Take advantage of learning something other than one Opinion. That makes you a follower. A 'sheep' if you will. Wonder off on your own and explore you options. If you don't like Obama, vote independant, but don't vote Tycoonism.

HISTORYFORGOTTEN:
MCcain's was smaller by about $175,000 dollars.

Not that I think it was right that he took any.....

And yes, I definitely would never depend upon blogs... especially the ones in Jake Country!

"Sen. Christopher Dodd, the Democratic chairman of the Senate banking committee, has the gall to say in a Bloomberg Television interview:

"I have a lot of questions about where was the administration over the last eight years." asked Senator Dodd.

HE is a Democrat in charge of the
senate banking committee and,
along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton was one of the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 .

All were actively opposed to any aimed legislation aimed at reforming Fannie
and Freddie and, by virtue of their negativity,further weakened the existing structure of these mortgage banks.

Sen. Richard Shelby had led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole.

Senator McCain was also speaking up for the need for reform and oversight in 2005!

Meanwhile, Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

By the way, Obama came in second when tallying up the "takee's".... and he was involved for the shortest time!

(Chicago slime slides into a politician's blood real fast!

So when Obama screams that this whole fiasco was brought down upon us by the Republicans and we should blame McCain, he's just spouting.. actually, he's SHOUTING just another one of his smooth talking white lies!

MCCAIN AND PALIN!

COUNTRY BEFORE BROKEN DOWN DEMOCRATS!

It's called a Tycoon Take-over. When you deregualate a company, and cause a breakdown in those companies, your friends reap the most through take-overs.

-I'm hearing attacks on the Reagan years of deregulation...and the attacks on the repeal of many of the regulations that allowed for a more dynamic, effecient world economy.(Clinton also played a part in this...both parties "contributed"...so stop trying to pick one or the other...it was bi-partisan...all were "on the take".)-

eric, you are correct. Clinton allowed them to continue, and I voted against him. But the deregulations benifited Oil Companies from the beginning. That is why even Bush tried his hand at Big Oil. Remember that. And now those same Oil Tycoons are McCains lobbiests. McCain has turned me away from the Republican ticket, this year, because he has proven he is not a leader, but a follower of Big Oil Tycoons. He Flip Flops his ideas, to go along with what they tell him. Who benifits from a non-bailout. Well lets see. McCain and recently Palin has a large amount of stock in Oil. None in Greener companies yet. If the government chooses not to bail-out the morgage companies, the Tycoons can sweep them up, and then McCain, I'm sure would support Greener energy. Doesn't sound like a supporter to me, but a stock market follower.

I take the view that it was NOT the lack of regulations that caused the problems we face now, but rather, the belief in the markets that THE GOVERNMENT WOULD ALWAYS COME TO THE RESCUE, thus pushing the fear of risk into the background, as Wall Street pushed for more "reward".

(when you eliminate most of the risk, you create a very bad economic / investment model... a fantasyland.)

I'm for very limited regulations ...but that only works when it's made PERFECTLY CLEAR, that anyone "placing bets" / investing / whatever, will have to also bear 100% of the risk... let the buyer beware.

I'm hearing attacks on the Reagan years of deregulation...and the attacks on the repeal of many of the regulations that allowed for a more dynamic, effecient world economy.(Clinton also played a part in this...both parties "contributed"...so stop trying to pick one or the other...it was bi-partisan...all were "on the take".)

I'm not for more government regulations...but what I am for is that those who make mistakes, make poor choices, make bad judgements...will reap / bare all of the losses, of their actions (and all those who "rode" with them...that includes mom-and-pop investors...and maybe next time, the "masses" will be more selective, and weigh "risk/reward" as it should be weighed...there will be pain...but it would lead to better actions by investors)...

The government has skewed the balance of the risk / reward equation...IT NEEDS BALANCE, TO WORK !

eyes opening, I'm sure they opened up enough to show that McCain also recieved a kick-back. His was smaller, not by much, but because he didn't make the top three, few people realize he was also involved. Do not take blogs as proof. Just read the reports, and background check the candidates. Obama has been forthcoming about his issues. And like Palin, McCain denies, and denies untill he is finialy caught. Then he flip-flops. I do not vote for Lobbiests, who focus on their own pockets.

-Would be great, but that would necessitate an investigation. I would suggest investigation be added with possible indictment conviction of abusers of system for greed. I am familar with the corporate greed and decision making through out all of our systems even in medicine. Bailout does need to be approved with oversight and rules of anyone who is paid out over this.
Posted by: Sharonklim | Sep 21, 2008 9:51:24 PM

Then you understand Take-overs. The same people lobbing for McCain are the same ones who benifited from his deregulations years ago. Follow up with which companies will gain the advantage of this crash. His Oil groups, taht can buy up other Energy companies with morgages. 48 of McCain oil rigs just sank, after Ike. His lobbiest will continue to press for a quick recovery, of their losses. McCains Tycoons have been lobbing against greener fuels for years. My job at the factory, relies on a newer energy source. But McCains Tycoons have, caused lay-offs. Our Union has argued agaist not Republicans, but McCain only. These last six years has hit us hard. The deruglations of oil companies have allowed them to choose how much money goes into their pockets. Our Govenors proposals have been marked off by McCain, and Obama has Voted for only once. We'll take Obamas plan to bring back our jobs, over McCains Tyoonism anytime. Unions have not benifited from any tax cuts for our company, yet. But we did benifit from personal tax cuts. We push for Obama, this year. McCains plan is a revised version of Bushes in 2000. With a little Reagans thrown in. Change for McCain is 'lets go back in time'. Sorry but, NO. Lets look to the future. Obama has our vote for '08.

"John McCain warned the nation of disaster in 2005.

Now the Democratic Freddy Mac/Fannie Mae economy is being bailed out by the feds by maybe as much as one trillion (1,000,000,000,000) dollars in IOU’s to back up failing banks."

"In his short time in Congress Senator Obama received more campaign contributions from Fanne Mae than 48 other currently serving Senators had received in their entire careers.

Obama is a charismatic crook in the best Chicago political tradition."

YES, HE IS!

A vote for charisma is a vote for chaos!

Hey, I have an idea. Give the Tycoon Big Corps a tax cut again, so they can hurry up and head overseas to start businesses. It remains a win-win for them, so they can take over, the other energy companies they do not own yet. McCain is a genius. His friends that make money off of this deregulated issue, will give him a big cut. Lobbiests do not represt all Republicans. Just the Far Right ones. Corupt politics favor McCain, and has for over 10 years. The companies he want to deregulate, where Housing, and Oil businesses. The same ones who lobby for him. Did Obama get money for Fannie Mae? Yep. And so did McCain. Although McCain did not invest as much mony, so his return was in the middle bracket, that never gets reported. But the paper trail still shows is return. Try to understand what a Take-over implies. An inside person(McCain) can manipulate deregulations, years before the failure. As his Tycoon lobbiest hoard money from oil, they can buy out the Energy companies that have morgages, after the failure. Follow the history and understand business. Tycoonism, is the next government for McCain.

The only answers Republicans deserve is hearing the door slammed in their faces.

Would be great, but that would necessitate an investigation. I would suggest investigation be added with possible indictment conviction of abusers of system for greed. I am familar with the corporate greed and decision making through out all of our systems even in medicine. Bailout does need to be approved with oversight and rules of anyone who is paid out over this.

Lots of comments I see. No answer yet from Washington group if decision made. We can argue all we want - I will wait to make any comment until decision made. I do want answers why?? Want protection??? No big CEO/executive payouts!!

I think it should be pointed out that Newt needs to figure out something:
Before DC gets our money...etc,etc..
What he means is before DC adds more debt to what we the taxpayers owe...and as MrCoffee said what our children, granchildren and great grandchildren owe
The government gets it cut out of your paycheck before you do. If you look at their cut, you work until April to pay them before you actually start collectin "your" part!

Why is this needed? All the sudden Paulson says on Meet the Press today that " liquidity is frozen- this has to be done and be done soon to get things moving".

Why can't anyone get a specific answer- are several banks going to go under next week if this is not done- or are more big Wall Street firms going under this week. They all keep talking about main street but they are doing nothing for main street- those of us in the real world have known for some time that credit has practically frozen- investments are way down, etc. Have they been that asleep at the wheel? When is the media going to ask some hard questions and demand some real facts- why the urgency now?

notafool,

Reality seems to have little to do with your assessment of the situation. Do Republicans take responsibility for ANYTHING??? Like even the basic tenants of their financial philosophy of deregulation?? Somehow it is the Greedy Deregulating Democrats that did this.

This whole finacial mess results from the left gaming the system to get what they can't get at the ballot box.

No sane voter would agree to making loans to people with abysmal credit histories.....so Barney Franks and his fellow nuts used stealth government regulation to get it done.

The 1 Trillion Dollar Bailout is about what the taxes would have been if it had been done above board.

This is a small taste of what Obama will give you. Just wait for the "tax cut" for 95% of "Americans". Ever wonder why they don't say "for 95% of tax payers". Because 40% of taxpayers PAY NO TAXES. So the ephemeral tax cut is just another income redistribution scheme called something else to trick you, because you WOULD NEVER VOTE FOR IT.

And then, wait for "Cap and Trade".
And then, wait for American aid to the world.
And then.....and then....and then.

By the way, 1 Trillion is the total amount of Federal Taxes collected in 1 year. So the price tag, for those of you who actually pay taxes, will be a year's taxes plus interest. Sweet, no?

PaulWI,

Let me update you:

Obama's speech included seven specific stipulations for any bailout that happens.

1.) No blank check: Americans are going to be on the hook for almost $1,000,000,000,000. It's taxation without representation to just write blank checks without being accountable to taxpayers.

2.) Taxpayer money should not be paid to reward CEOs. Period.

3.) Taxpayers are incurring a great amount of cost and risk. The investments should be protected, and they should be able to eventually recoup the losses.

4.) THERE MUST BE A PLAN TO HELP HOMEOWNERS STAY IN THEIR HOME.

5.) Obama pointed out that this is a global crisis, and that other nations need to step in to help secure the financial market.

6.) REGULATE. REGULATE. REGULATE.

7.) This plan must work for Main Street, not just Wall Street.

I just don't know if I agree with Obama's answer to the $700B bailout. Here's the quote from this morning; "um, ah, um, well, ok, um, McCain, um, ah, well, dah! I know some of you think it was really clear but I just don't know.

What's really motivating Paulson's push for a quick new deal for the banks?

We need some answers!

Obama/Biden 08!

Why in god's name is anyone pretending that this money is going to Washington, when it is obviously going to Wall Street? The media is acting like there is a bunch of value that just "dissappeared", when the reality is that it was stolen!

Obama has really lacked any leadership during this economic crisis. I'm fearful this is how he would act if he were president.

Has everyone noticed that the republicans are so ashamed of their record since 2000 that you don't see Bush & Cheney ever mentioned here or lauded by them as having a superior administration.

pretty revealing...
mission accomplished

Captain America:
re: 'how did Obama, the community organizer, become one of the upper 5% in US wage earners?

he's smart enough to write books that people are interested in, and will pay to read... simple economics... you Republicans say you know about that 'stuff'.

A.L. McLeod,
The guy in charge, George Bush, signed off on any and all barrels of pork. He himself appointed all the chief money men in government. He totally and completely destroyed the Clinton surplus all the while. Now what party is this fellow Bush with? What party are you with? Hmmm, that's about what I figured.

Ron,
This has nothing to do with Carter and Clinton. The Contract on America crew, led by one Newt Gingrich, with a Republican majority in both congressional chambers, rammed through the remainder of de-regulation, beyond the damage that Reagan did. They opened the gateways for standard banking institutions to get into other sectors, including high risk investments. Bloggers, please try to recall at least five minutes of history before you speak.

This is one time I am with Gingrich all the way. Democrats need to be vigilant and not be scared into doing something stupid. The Bush administration is corrupt and that includes all the republicans who have followed like sheep and done nothing else. Gingrich is speaking with no political motive that he would have had if he were still in Congress. I want Congress to have oversight and act with all the authority they have to protect us.

Democrats have been whining recently over the details of the government bailout. The certainly rushed to the rescue of Chrysler in the 1970's..but when the President acts swiftly and responsibly to save our nation from economoc disaster (largely due to years and years of liberal pork barrel spending which has now come full circle to hit us hard), the democrats whine like little children. Their Lilliputian minds (notably Obama and Biden's) just do not grasp the enormity of the disaster and the fact They helped bring it about! Cut the deal..hammer out the details later..America cannot go down because of Socialist Stonewalling!!

D.H.,
You would like to see the taxpayers bail out both Wall Street and Main Street? We have met the enemy and they is us. Tell me exactly who would be the winners and who would be the losers in this zero sum game?

Clifton,
I doubt seriously that a) Gingrich supports Obama's point of view, and b) that Obama even has a valid point of view. If so, why wasn't Obama vigorously addressing this issue, and engaging in his prophecies even two weeks ago? After all he claims to have predicted the Iraq debacle when he was in the state legislature, right? Has he lost his Mr. Prediction skills of late? LET'S BE CLEAR: Both Obama and McCain were silent in both magnitude and scope of this mess. Is anybody in charge? Fact is, Sarah Palin may be the only one that is trustworthy because she hasn't been tainted as much.

I agree that the American people need answers before bailing out Wall Street and that aid should be included in the bailout package for main street as well.

JohnTX,

McCain's flag pins are his broken shoulders and melonoma on his body due to excessive sun exposure as a POW.

This isn't the time to assign blame to the presidential candidates. Paulson is about to transfer $700 billion from the taxpayers to the banks. And they want it NOW so there isn't time to think about the details. Why not close the markets, like after 9/11, until this is sorted out? There is a right way and a wrong way, and we are about to go the wrong way.

Jimmy Carter, America's least competent President, signed the Community Reinvestment Act "CRA" in 1977 and Bill Clinton revised it in 1995. The idea was to force lending institutions to loan money in areas and to people who had previously been considered too high risk to loan to. These actions were the seeds of the current financial meltdown. We need LESS government interference not more in our markets. As President Reagan said "The solution isn't government, the problem is government."

Ron Paul saw this financial mess coming

It's not like there wasn't anybody who saw the economic woes of the week on the horizon.

On Sept. 10, 2003, U.S. Rep. Ron Paul, R-Texas, testified before House Financial Services Committee, which was holding hearings regarding special privileges extended to government sponsored enterprises (GSEs). Think Fannie Mae and Freddie Mac. In his testimony. Paul criticized such privileges in general and warned of the potential for disaster posed by government involvement with Fannie and Freddie specifically.

Paul noted that according to the Congressional Budget Office, housing related GSEs received $13.6 billion in indirect federal subsidies in fiscal 2000 and had a line of credit with the United States Treasury exceeding $2 billion. That line of credit Paul said was an explicit promise by the Treasury to bail out GSE's in times of economic difficulty. (Sound familiar?)

"[The line of credit] helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy," Paul testified. "Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt."

As Paul saw the situation some five years ago, the government backing isolated GSE management from market discipline. If Fannie and Freddie were not underwritten by the federal government, he told the committee, investors would demand the institutions held to higher management and accounting practices.

"Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market," Paul predicted. "This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

"Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing," Paul went on. "Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

"I hope today's hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers," Paul concluded. "Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market."

On the same day, Paul introduced the "Free Housing Market Enhancement Act." The legislation would have removed government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board. The bill had no cosponsors; it stalled in the committee process.

A plan at ready
The past few days, major party presidential candidates have scrambled to come up with a solution to the financial crisis on Wall Street and members of Congress and the media have been searching through the thesaurus to find synonyms for "greed." Writing in "Forbes" back in March in an op-ed entitled "the Rapidly Approaching Economic Meltdown," Paul proposed a four-part plan calling for lower taxes, less spending, a sound monetary policy and regulatory reform. His plan would:

• Make the Bush tax cuts permanent, repeal the estate tax, end taxes on Social Security benefits, end taxes on income from tips, end taxes on forgiven mortgage debt, and end the income tax and abolish the IRS;

• Reform spending by first cutting back on "our trillion-dollar overseas budget" and shore up the "programs Washington has forced so many citizens to depend on," while enabling young people to opt out of these programs and save for their own retirements and health care needs." Veto any unbalanced budget.

Paul argued that lower taxes and less government spending put more money in working people's pocket — pretty standard Republican line. But he also opined for bolder out-of-the-box actions calling for a sound monetary policy to increase the value of money and drive down the cost of living and a regulatory approach that is the inverse of what we're hearing from presidential candidates John McCain and Barack Obama. Paul proposed:

• Requiring more transparency at the Federal Reserve Board and legalizing competing currencies. He cited the historical evidence of the inevitable failure of paper money systems. However, "I believe that for our economy to be secure in the long term," he wrote, "Congress must reassert its authority and end the unconstitutional Federal Reserve."

• Undertake regulatory reform and revisit the myriad federal regulations that "have stymied the innovative spirit of the American people." At the top of the list Paul put Sarbanes-Oxley (SOX) — regulation imposed after the spate of corporate scandals earlier in the decade.

In his Forbes article, Paul noted three studies. A survey by Financial Executives International put the average cost of compliance with SOX at $4.4 million. The American Economics Association estimated SOX could cost American Companies as much as $35 billion in aggregate. Wharton Business School found that the number of American companies delisting from public stock exchanges nearly tripled the year after SOX became law (198 firms "went dark" compared to 67 the year before).

"One of the best things Congress could do for the American economy is to repeal this damaging legislation," Paul wrote.

Economic lifeblood
In short, Paul's message is that money is the lifeblood of any economy, and control over a nation's currency means control over its economic well-being. Fed bankers quite literally determine the value of our money by controlling the supply of dollars and establishing interest rates. Their actions can make us richer or poorer overnight, in terms of the value of our savings and the buying power of our paychecks. How's that been working out for you lately?

Paul concludes his piece with a call to return to principle that is, perhaps, even more fitting today than earlier in the year.

"Unless we embrace fundamental reforms, we will be caught in a financial storm that will humble this great country as no foreign enemy ever could," he wrote. "We can find safe harbor in our ideals. Reclaiming our historic legacy of principled commitment to liberty will, once again, unleash the innovative spirit that propelled our nation to the heights of prosperity."

Or, we could keep putting lipstick on a pig.

Ron Paul saw this financial mess coming

It's not like there wasn't anybody who saw the economic woes of the week on the horizon.

On Sept. 10, 2003, U.S. Rep. Ron Paul, R-Texas, testified before House Financial Services Committee, which was holding hearings regarding special privileges extended to government sponsored enterprises (GSEs). Think Fannie Mae and Freddie Mac. In his testimony. Paul criticized such privileges in general and warned of the potential for disaster posed by government involvement with Fannie and Freddie specifically.

Paul noted that according to the Congressional Budget Office, housing related GSEs received $13.6 billion in indirect federal subsidies in fiscal 2000 and had a line of credit with the United States Treasury exceeding $2 billion. That line of credit Paul said was an explicit promise by the Treasury to bail out GSE's in times of economic difficulty. (Sound familiar?)

"[The line of credit] helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy," Paul testified. "Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt."

As Paul saw the situation some five years ago, the government backing isolated GSE management from market discipline. If Fannie and Freddie were not underwritten by the federal government, he told the committee, investors would demand the institutions held to higher management and accounting practices.

"Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market," Paul predicted. "This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

"Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing," Paul went on. "Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

"I hope today's hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers," Paul concluded. "Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market."

On the same day, Paul introduced the "Free Housing Market Enhancement Act." The legislation would have removed government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board. The bill had no cosponsors; it stalled in the committee process.

A plan at ready
The past few days, major party presidential candidates have scrambled to come up with a solution to the financial crisis on Wall Street and members of Congress and the media have been searching through the thesaurus to find synonyms for "greed." Writing in "Forbes" back in March in an op-ed entitled "the Rapidly Approaching Economic Meltdown," Paul proposed a four-part plan calling for lower taxes, less spending, a sound monetary policy and regulatory reform. His plan would:

• Make the Bush tax cuts permanent, repeal the estate tax, end taxes on Social Security benefits, end taxes on income from tips, end taxes on forgiven mortgage debt, and end the income tax and abolish the IRS;

• Reform spending by first cutting back on "our trillion-dollar overseas budget" and shore up the "programs Washington has forced so many citizens to depend on," while enabling young people to opt out of these programs and save for their own retirements and health care needs." Veto any unbalanced budget.

Paul argued that lower taxes and less government spending put more money in working people's pocket — pretty standard Republican line. But he also opined for bolder out-of-the-box actions calling for a sound monetary policy to increase the value of money and drive down the cost of living and a regulatory approach that is the inverse of what we're hearing from presidential candidates John McCain and Barack Obama. Paul proposed:

• Requiring more transparency at the Federal Reserve Board and legalizing competing currencies. He cited the historical evidence of the inevitable failure of paper money systems. However, "I believe that for our economy to be secure in the long term," he wrote, "Congress must reassert its authority and end the unconstitutional Federal Reserve."

• Undertake regulatory reform and revisit the myriad federal regulations that "have stymied the innovative spirit of the American people." At the top of the list Paul put Sarbanes-Oxley (SOX) — regulation imposed after the spate of corporate scandals earlier in the decade.

In his Forbes article, Paul noted three studies. A survey by Financial Executives International put the average cost of compliance with SOX at $4.4 million. The American Economics Association estimated SOX could cost American Companies as much as $35 billion in aggregate. Wharton Business School found that the number of American companies delisting from public stock exchanges nearly tripled the year after SOX became law (198 firms "went dark" compared to 67 the year before).

"One of the best things Congress could do for the American economy is to repeal this damaging legislation," Paul wrote.

Economic lifeblood
In short, Paul's message is that money is the lifeblood of any economy, and control over a nation's currency means control over its economic well-being. Fed bankers quite literally determine the value of our money by controlling the supply of dollars and establishing interest rates. Their actions can make us richer or poorer overnight, in terms of the value of our savings and the buying power of our paychecks. How's that been working out for you lately?

Paul concludes his piece with a call to return to principle that is, perhaps, even more fitting today than earlier in the year.

"Unless we embrace fundamental reforms, we will be caught in a financial storm that will humble this great country as no foreign enemy ever could," he wrote. "We can find safe harbor in our ideals. Reclaiming our historic legacy of principled commitment to liberty will, once again, unleash the innovative spirit that propelled our nation to the heights of prosperity."

Or, we could keep putting lipstick on a pig.

Zank,

"the government is doing away with our capitalist system and is nationalizing the mortgage industry, the banks and wall street."

That is what Bush means by reform. Get it? The most ironic part of this is that the right-wing conservative radio has been calling Obama the socialist, marxist, communist. As it turns out, those terms are best applied to this Republican administration and their followers.

Obama/Biden 08!

All the idiots that helped cause the mess are now going to find a solution that is good for us taxpayers????
I don't think so.

This all smells like a scam.
In the financial world, someone loses and someone wins. Who won in all this???

The liberal Democrats must be in heaven over this - just think, the government is doing away with our capitalist system and is nationalizing the mortgage industry, the banks and wall street.

lm sez:

Obama praised the bailout Friday. McCain and Palin have been against from the start.
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McCain and Palin don't know WHAT they think. It all depends on what day it is.

Here are the facts. President Bush attempts to reform Fannie and Freddie

From 2001 to 2008 republicans have been asking for reforms. In 2008 alone, the President call for reforms 17 times.

In 2005-- Senator John McCain partnered with three other Senate Republicans to reform the government’s involvement in lending. It failed!!!!

Lots of blame to go around.

Rush, rush, rush!!

U.S. Secretary of the Treasury, Henry Paulson is a Republican. He was also the CEO of Goldman Sachs, the company that forced Lehman into bankruptcy by illegally manipulating the market with short-selling and rumor-mongering. Lehman is the only company the Bush regime forced into bankruptcy while all the other Wall Street gang gets a bail-out.

Paulson has worked for Republicans his entire life -- as far back as the Nixon administration.

The Republican SEC Chairman, Christopher Cox was not asleep at the wheel. He deliberately left Lehman, Fannie and Freddie to fight off the rest of the Wall Street gang by NOT enforcing current laws on short-selling and other illegal activities. When forced, he put in place some new rules that should have been made permanent. Instead, he let the rules expire. During the expired month which left the market unregulated, Lehman, Fannie and Freddie all failed. Immediately following these beat-downs of these companies, Cox made permanent the rules that would have saved them.

This is no coincidence. This is the Republican machine and cronism working as intended.

Just like in physical war, when it comes to financial battles, the Republican machine is as vindictive as ever. They have no shame. You're either with them or they will crush you in the name of protecting you, the tax payer.

Lord help us if the Republicans "deregulate" any other major industry and bail them out when the bubbles burst at taxpayer expense.

The Bush regime needs to be investigated thoroughly!

Obama/Biden 08!

Oh, and as for Obama-Biden, go ahead, make my day, push for goods under the Christmas Tree. And, Obama, since you are supposedly capable for healing the earth and lowering the rising seas, why don't you reach into your wallet and pay for the grievance mongers. Just exactly how did Obama, the community organizer, become one of the upper 5% in US wage earners?

Rest assured, Congress critters, Americans are not amused by this and will be watchful of how you handle this crisis without needlessly pushing your own agendas. The likes of Dobb, Binny Franks, Chuckles Shumer, and Co. would be embarrassed, that is, if they had a conscience.

Biden shouldn't speak for me about Patriotism and my contributing more tax dollars for the "middle class". NO TAXES ON ANY GROUP is the only way to go in a soft economy. If we tax the small businces owners and investors in this country, as Obama wants to, our economy will surely go in the toilet...faster than you've ever seen.
NOBAMA NO WAY!
Bush was shut down 17 times by Democratic Congress in addressing Freddie and Fannie. Look to the gridlock in this Congress, just as they are to blame for our current gas situation too. McCain/Palin the only team that will do something about our energy problem....NOT TALK(BO), BUT ACTION (McCain).

Gingrich the adulterer is correct. We do deserve an explanation, but I believe Ron Paul has already explained it well. I also agree with Ron Paul that we should not bailout these corporations. Let's get this recession going so we can get on to financial sanity again.

Obama's advisors Raines and Johnson caused this mess.

As American taxpayers, it isn't OUR job to bail out Corporations. As a self governed nation, it is OUR job to force Congress to hold hearings as to why this happened and hold the appropriate people responsible for their own actions, arrest some and put them on probation, fine some and put the rest behind bars!

Businesses doing "shady business" in this country need to start being held accountable for what they do and how they handle the public's money and trust. If found to be involved in illegal or even remotely illegal business practices, these entities deserve to go belly up and have their assents distributed evenly to the people they intentionally screwed!

Obama praised the bailout Friday. McCain and Palin have been against from the start.

Obama donors from Freddia and Fannie support the bailout. Biden and Obama received more donations from the mortgage lenders than anyone.

PS. You people aren't doing your home work. Just google deregulation. As I said in another blob, I learned that Jimmie Carter deregulated the airlines, the trucking industry, railroads and oil. Under the Clinton administration, he initiated the deregulation of the financial institutions. He created Fannie Mae and Freddie Mac and put two of his administration members in charge... Jim Johnson and Franklin Raines who managed to cook the books and pay themselves hefty salaries and bonuses totaling $126 million each. They were forced to leave these institutions after this was uncovered and then were hired by the Obama campaign. Johnson had also worked for the Lehman Brothers.Stop trying to assign blame. McCain even tried to pass a bill to tighten their regulation in 2005. This is provable if you do your homework.

Newt Gingrich is right on!

Somebody doesn't read the news. Obama supports the bailout altho he may not be happy about it. John McCain is not happy about it either. But since there is deep democratic involvement from the get-go, you can bet Pelosi will stonewall an investigation. It will come home to roost on their doorstep.

Damn right Obama is against this bailout.

This isn't even a bailout. It's a one-way transferral of wealth from every American citizen to corporations, brokerages, and foreign nationals.

What bailout? If you lost your house, you're already out on the street. Why does your lender need to be bailed out? What good does that do for you?

Just as with the Iraq war, when all of Washington lined up behind the pied piper of WMD, a snap decision was made to enter a war that cost 4,126 Americans their lives and left a $1 Trillion dollar mess that will burden us for 50 more years. Obama studied the problem thoughtfully, and concluded simply: "No. I support war when needed, but I don't support a dumb war".

Here we are again. The most massive attempt at government corruption and wealth transfer in the country's history is being hatched behind closed doors today, the congressmen on both sides of the aisle taking pains to list every friend and relative in the beneficiary list. Bush calls it "Bold". McCain calls is "Couragous". Obama says "No".

Gingrich hit the nail on the head. This kind of decision requires thought, not a one-week circus that will leave us with 20 years of additional economic burden.

When Newt Gingrich supports Barack Obama's point of view and methodical approach to solving national crises, that says something about which of our candidates has the judgement and temperment to lead this nation.

There is a simple solution for this problem. The trading of stocks, bonds, and commodities should be taxed. With the volumn and value traded every day, the tax would amount to fractions of a penny but it would be enough to pay for the cost of bailing these companies out of trouble and the cost of the SEC to regulate these bunch of crooks. Congress should just adopt the SEC laws and rules that were in place to pre 1970 with a few changes to account for the new technology.

These are the industries that caused the problem, they should be the industries that pay to fix the problem.

dl, you and I have disagreed before, but I am with you 100% on this one, my friend. Gingrich is right. This is just election year pandering by both parties, and what they do for their own political convenience this week will leave a 20 year economic mess that will outlive half the members of congress.

To this $1 Trillion dollar bailout, I say NO WAY. Even without this, smaller innovative, efficient companies will pick up the mess left by the elephants.
We do not to socialize this country just to make our presidential candidates look good in an election year.

So Obama said today that he is against the bailout, wait I thought the other day he was for it, Jake are you going to report on his flip-flop.

The architect of de-regulation is now wading in. Gingrich should be ashamed. The history books need to call it clearly, Gingrich led the "Contract to Do in America!" and he succeeded beyond belief. The financial damage done by Gingrich and Company even exceeds the financial damage by Bin Laden. We need some straight talk for a change.

Shifting this much burden to the taxpayer is like creation of medical insurance for pre-existing conditions and that requires progressive income, wealth and estate taxes as the premium otherwise we are just sticking it to the many to protect the wealth of a stupid and/or greedy few.

MAIFME-My A%% It's Free Market Economics