Bail-out questions

[chunksmediocrites]

Okay. After reflection and discussion here and in the hinterlands I have come to agree with godfrey n. glad and ChuckF and others in saying that this is basically just another cash giveaway to the rich. A couple interesting questions come up from different sources regarding the bailout:

Questions

What guarantees or oversight can be made to insure that the ex-CEO of Goldman Sachs and now Secretary of the Treasury Henry Paulson isn’t manipulating markets in favor of Goldman Sachs? David Cay Johnston points out that The bail-out of AIG has a huge upside for Goldman Sachs, since AIG owes Goldman Sachs $20 billion. Are there to be any rules that require the counter-parties be listed to tell U.S. taxpayers who all is being bailed-out?

Why are we proposing to bail-out corporations that purposely incorporate in off-shore tax-havens to avoid paying taxes in the U.S? Why are there no stipulations requiring any bailed-out corporations to move their incorporation back to the U.S.?

Does it make sense that the five-member oversight committee be composed of the Treasury Secretary, the Chairman of the Federal Reserve, the Head of the SEC, and two other executive branch members? (I’ve seen other lists, I’m not sure what the accurate list or what bail-out 2 lists)

Where does the U.S. find money for infrastructure, energy independence, or anything else after passing this $700 billion dollar corporate bail-out?

According to the conference call from the Treasury to analysts, regarding bail-out bill 1, (thanks pinecone) there would be no action for a few weeks after the bill supposedly passed. What does this say about the urgency of jamming this bill through without detailed review because the sky is falling?

From the same source, why does the bail-out not affect the massive incomes and golden parachutes of current contracts? It appears the only stipulations on CEO pay involve new contracts taken on during the oversight period.

Why does bail-out bill 2 include these items:

SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO PUERTO RICO AND THE VIRGIN ISLANDS.
SEC. 309. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.
SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS RACING TRACK FACILITY.
SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY REFUNDS.
SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN.

Bail-out 2 also includes:
$3.3 billion in rural school aid
$78.8 billion extension of protections of middle class families at risk of being levied under the alternative minimum tax (I don’t know what this is about)
$14 billion in business tax breaks
$3.8 billion (over five years) health-care provision requiring insurers to cover mental health care the same as they do other medical costs

Increases the costs by additional $105 billion for next year, according to the Congressional Budget Office estimate.

Why not pass this bill as a separate bill instead of adding 300+ pages to the house version and bury billions of additions and completely unrelated x-mas tree ornaments? What does this also say about the back-room deal-making, the business-as-usual, and the supposed urgency surrounding pushing this bill down the throats of the public?

I know that's a lot of questions, sorry if that's too much for one post. I'm also asking one last question- what's the chance the bail-out won't get passed?

[viscousmemories]

Originally Posted by chunksmediocrites

Where does the U.S. find money for infrastructure, energy independence, or anything else after passing this $700 billion dollar corporate bail-out?

It doesn't. That's why John McCain has promised that if he's elected he will freeze all government spending for a year. We don't need no stinking social programs - our rich friends need our help!

My guess is there's no chance in hell the bill won't get passed on Friday.

[freemonkey]

I've been thinking so much about this this week. There is just so much to take in. I'm skeptical about most of the plan, the intentions of the players and the future results.

I'm feeling a bit paranoid about the future.

[freemonkey]

Originally Posted by viscousmemories

It doesn't. That's why John McCain has promised that if he's elected he will freeze all government spending for a year. We don't need no stinking social programs - our rich friends need our help!

I think his plan doesn't take into consideration all the people who would be put out of work, causing even more ripples.

I know I've mentioned this before, McCain wants to privatize most government services. This would probably be phase one in implementing this. He would have a lot of support from the average Joe who thinks government employees across the board get paid too much and do too little.

But it would be a very bad idea. In places where they've tried it, private contractors end up costing the taxpayers more money for less services. The employees earn less and have fewer benefits. Its a lose/lose situation. Except for the contracting company.

[chunksmediocrites]

One of the reasons I am skeptical about the bail-out is that as companies grow increasingly shaky they appear to be snapped up by stronger and more solid companies, with the lucrative parts kept if not the whole. So why not let the capitalist market eat itself? If the alternative is having the taxpayers eat $700 billion, how again is that a better deal, and for whom?

I also find the "this is potentially the great depression all over" to be an unlikely scenario, considering FDIC insurance.

[freemonkey]

I know not everyone is a fan of Michael Moore, but he's got a plan which I like much better than the current one.

Don't reward bad behavior

here are the first 3 points of his 10 point plan:

1. APPOINT A SPECIAL PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED TO THIS COLLAPSE.

2. THE RICH MUST PAY FOR THEIR OWN BAILOUT.

3. BAIL OUT THE PEOPLE LOSING THEIR HOMES, NOT THE PEOPLE WHO WILL BUILD AN EIGHTH HOME.

[Ensign Steve]

Yeah, if only.

[chunksmediocrites]

If Michael Moore's plan got enacted I would be very happy and enjoy watching the nation get back on its feet while the wealthy stroked out.

[godfry n. glad]

One suggestion that has been floated around here is a "securities transaction tax" of 0.25%, which has been estimated at producing in the realm of $100 billion a year.

That way, Wall Street could pay their own way out of the mess they got themselves into.

Here's an interesting analysis I picked up from a blog run by a tax law professor.

[Crumb]

So why aren't the people with the good ideas the ones in charge?

[godfry n. glad]

Too much of a hurry.

[seebs]

I would guess that such a tax would noticably reduce the rate of trading -- maybe not inherently a bad thing, but it might not be great.

Figure this: That $100B would be a pretty sizeable chunk of money to the people paying it. If they had $100B to spare, would we be having this conversation?

[godfry n. glad]

Originally Posted by seebs

I would guess that such a tax would noticably reduce the rate of trading -- maybe not inherently a bad thing, but it might not be great.

Figure this: That $100B would be a pretty sizeable chunk of money to the people paying it. If they had $100B to spare, would we be having this conversation?

Time is of the essence.

The idea is that that get the $700 as a loan, or series of loans, for NOW, to keep your firm afloat. Transactions continue throughout the industry, only now everybody pays every time a security changes hands. Yes, you are right, it should slow transactions. That might induce some stability, particularly as the really bad toxic stuff is written off over time (rather than here and now) and the marginal stuff is saved, where possible, and payoff on the transactions tax can be longer...more like a mortgage loan.

Plus, I understand is one of few market countries which does not impose a security transactions tax. One quarter of one percent? Shit, I leave a 15% tip, a transaction gratuity, not even a tax, to my waitress or waiter. These schlubs can't pungle up one quarter of one percent, o.25%, on those hot stocks that are going to make them bazillionaires?

Well, fucking cry me a river with your alligator tears.

I sure hope these people don't have too much of my money...I like to put my money in stocks for a long period of time...y'know, invest. Not speculate on making a bundle overnight. Who would lose on a reduction in the speed of transactions? Brokers.

Boo-hoo.

[godfry n. glad]

Well, I dun writ my congresscritter.

I told him 'zactly wut I think.

I told him I expected a result that included a securities transactions tax, by which the financial industry could pay off the indebtedness incurred by the loan. The revenue from the tax should go directly to retire the loan. I recommended that firms who take the assistance should immediately dismiss the current executive ranks as having proven their ineptitude. Replacement executive should be provided public sector equivalent remuneration and it should be pegged to the lowest paid employee, with no executive increases without commensurate employee increases.

I also demanded that a legislative act of such importance should not be sullied by business as usual, with the attachment of unrelated riders and earmarked funding proposals....Everything except that which deals with the financial market crisis in the United States now....should be stripped from any such legislation. This is much too important.

[erimir]

Originally Posted by seebs

Figure this: That $100B would be a pretty sizeable chunk of money to the people paying it. If they had $100B to spare, would we be having this conversation?

I don't see how money from a .25% tax can be a pretty sizable chunk of money. That's a tiny, tiny tax. It's far lower than sales tax. If it's a $100 billion from a .25% tax, then it comes from $40 trillion worth of transactions. They have $40 trillion of transactions a year, but $100 billion is too much money?

And yes, we would be having this conversation. Because when the choice is between getting $700 billion from Congress if they can, and getting $600 billion and supplying $100 billion themselves, you know which one they'll choose if they can get it to pass.

[Dragar]

Originally Posted by chunksmediocrites

I know that's a lot of questions, sorry if that's too much for one post. I'm also asking one last question- what's the chance the bail-out won't get passed?

I'm going to hold out a little faith for democracy - the bill won't be passed Friday.

The American people are being lied to - again. Just like Iraq and the WMDs. There is a supposed crisis, a desperate need to act, and so people are hurried and pressured into making decisions that have huge ramifications without due thought. Maybe the bill is a good thing, but I really don't like the idea of a $700 billion bail-out being written up and passed within a week under a false sense of urgency. It stinks of recklessness and worse. I think the Democratic party, who are voicing no opposition, are really letting the American people down at this point.

[1Samuel8]

Originally Posted by chunksmediocrites

What guarantees or oversight can be made to insure that the ex-CEO of Goldman Sachs and now Secretary of the Treasury Henry Paulson isn’t manipulating markets in favor of Goldman Sachs?

I am sure they have some sort of guilty conscience.

Originally Posted by chunksmediocrites

Where does the U.S. find money for infrastructure, energy independence, or anything else after passing this $700 billion dollar corporate bail-out?

Same way as it always did. It rights itself an other check.

[Dingfod]

Originally Posted by Dragar

The American people are being lied to - again. Just like Iraq and the WMDs. There is a supposed crisis, a desperate need to act, and so people are hurried and pressured into making decisions that have huge ramifications without due thought.

Sounds just like my last automobile purchase.

[godfry n. glad]

Well...I found out my congresscritter and I are on the same wave length.

The daily bOregonian was dissing him today for voting 'no' on the earlier package for very similar reasons to those I listed.

I certainly hope that somebody digs into this legislation when it passes and hunt down all the superfluous riders and earmarks that got stuffed into this thing and baldly embarrass the perpetrators. Hunt them down, display them and then force them out of office. Public indignation should be encouraged.

[yguy]

Originally Posted by freemonkey

I know not everyone is a fan of Michael Moore, but he's got a plan which I like much better than the current one.

Don't reward bad behavior

here are the first 3 points of his 10 point plan:

Why limit it to them? How about people in Congress who did the same?

Why?

[Crumb]

Because it makes more sense then bailing out people who are losing their companies.

[yguy]

Originally Posted by Crumb

Because it makes more sense then bailing out people who are losing their companies.

Actually the opposite is true, because when those companies go down, so do the jobs they provided.

[wei yau]

So, now you're for the bailout?

[Dingfod]

Originally Posted by yguy

Why?

Compassion. Of course, that's not something you would know much about.

Originally Posted by Dingfod

Compassion. Of course, that's not something you know about.

Seriously, why even respond to this nothing?

a) If it's just a troll, then it's a very unoriginal one

b) If it's genuine, then it isn't worth the materials that make up its inadequate frame

Either way...