News reports this morning are that some members of Congress are attempting to attach earmarks to the bailout legislation being negotiated. But even more disturbing is the reported attempt by the Republican caucus in the House to add a capital gains tax decrease to the bailout language being drafted.

Maybe it's just "politics" to take advantage of a situation where legislative action is desperately needed to tack on other, extraneous items that are personal "favorites" of legislators or groups of legislators, knowing that the proposals won't pass on their own.

Our system is broken and needs to be fixed.

Originally Posted by Villages Kahuna

News reports this morning are that some members of Congress are attempting to attach earmarks to the bailout legislation being negotiated. But even more disturbing is the reported attempt by the Republican caucus in the House to add a capital gains tax decrease to the bailout language being drafted.

Maybe it's just "politics" to take advantage of a situation where legislative action is desperately needed to tack on other, extraneous items that are personal "favorites" of legislators or groups of legislators, knowing that the proposals won't pass on their own.

Our system is broken and needs to be fixed.

Again you post and ONLY use the name Republican in a negative manner. Why dont we wait and see until we begin to use the party system to critique.
You say REPORTED...by whom and when...who wants to attach earmarks ?

You make sense in general but have to add the party affliation always ! And that would be fine if you had some back up instead of "reported"

Originally Posted by Villages Kahuna

News reports this morning are that some members of Congress are attempting to attach earmarks to the bailout legislation being negotiated. But even more disturbing is the reported attempt by the Republican caucus in the House to add a capital gains tax decrease to the bailout language being drafted.

Maybe it's just "politics" to take advantage of a situation where legislative action is desperately needed to tack on other, extraneous items that are personal "favorites" of legislators or groups of legislators, knowing that the proposals won't pass on their own.

Our system is broken and needs to be fixed.

Actually the House Republicans want no taxpayer money spent...instead they want the free markets to takeover. To help with this they want to slash regulations and extend a tax cut.

To me that seems like just more of what got us into this mess. I hate the bailout but....WuMu went down yesterday. Who is next?

especially when there is a "fast mover" under way.
The unfortunate aspect is the so called riders, hitch hikers or earmarks are what too much of the debating is about.
So when no agreement is announced one needs to be smart enough to ask, what disagreements remain.
Some how that is just not of interest or news worthy....an, ambiguous, attention getting headline like....$700 Billion Package Fails to Get Agreement....
is so much more effective for the sheeple.

BTK

From what I can garner, Cologal is pretty close to accurate. I just wish I could understand more so I could take a side on this. If the bailout is not essential in the sense that taxpayers MUST bail this thing...then why not let the free enterprise system work and make those who got into this get out with help.

I dont know for sure.....Democrats and the President say it has to happen..along with many Republicans...I sort of lean toward not having the taxpayers pay and from what I heard HELPING the firms work it out on their own.

Amazing to hear those who complain about taxpayers paying for Wall St woes NOW supporting a bail out with taxpayers paying

Originally Posted by Villages Kahuna

News reports this morning are that some members of Congress are attempting to attach earmarks to the bailout legislation being negotiated. But even more disturbing is the reported attempt by the Republican caucus in the House to add a capital gains tax decrease to the bailout language being drafted.

Maybe it's just "politics" to take advantage of a situation where legislative action is desperately needed to tack on other, extraneous items that are personal "favorites" of legislators or groups of legislators, knowing that the proposals won't pass on their own.

Our system is broken and needs to be fixed.

Members from both parties are attempting to add riders to this bail-out bill, and this is a common practice. Singling out this one instance may be accurate in facts, but limiting as to all of the facts. What other pork may find itself attached at the end, if the bill does get passed, may be shocking to all of us.

The alternative to such action is the line item veto. Presidents want it, Congress doesn't want to authorize it, and even if passed by Congress, the Supreme Court may weigh in and throw it out. So, the line item veto would need probably need a Constitutional Amendment (very unlikely to happen) to occur.

That's the system - and that's how to fix it.

Personally, I'm all for a capital gains tax decrease. I think it would help.

opinion bases. One is the general public, which we hear a lot and to which the media plays and repeats.

The other is those whose portfolios (the average Jack n' Jill USA not Buffet or Gates or Pelosi or Kerry) that have lost major value....as a result of the turbulence......who we don't seem to hear much from or about.

Hmmmmnnnn, now I just wonder why that would be???

BTK

The way I add up the numbers, we can't afford any tax decreases. In fact, we probably need a tax increase. In addition, we need some major league spending reductions--cuts that would effect every single American every single day. Even then, our grandchildren will likely be paying off the debt we ran up during our generation. And I'm sure they'll be saying, "What were they thinking?"

Originally Posted by Villages Kahuna

The way I add up the numbers, we can't afford any tax decreases. In fact, we probably need a tax increase. In addition, we need some major league spending reductions--cuts that would effect every single American every single day. Even then, our grandchildren will likely be paying off the debt we ran up during our generation. And I'm sure they'll be saying, "What were they thinking?"

After 2 hours of viewing C-SPAN and listening to Sen. Bryon Dorgan (among others), I'm beginning to understand how we got into this economic mess, how we may get out of it, and MOST IMPORTANTLY how to make sure it doesn't happen again (or it will!).

I suggest to all to read the Gramm-Leach-Bliley Financial Services Modernization Act, Pub.L. 106-102, (GLBA for short) enacted the end of 1999. This act (can be found at http://thomas.loc.gov/cgi-bin/bdquery/z?d106:SN00900:|) basically stripped away the protections to the public placed on the banks and other financial institutions in 1933 by the Glass-Steagall Act which, among other things, created the FDIC, demanded that bank officers and employees could not work for other financial institutions (such as stock brokerages), and basically kept banks at arms-length from other types of financial insitutions to protect their solvency.

As was explained by Sen. Dorgan, The GLBA set the framework for the mega-financial institutions (which are now going broke) to exist, and gave them legal license to get into the same mess which was part of why the 1929 crash occurred. There was "good" money to be made prior to the 1929 crash with free-wheeling financial houses, and we didn't learn from history (or were too ready for a quick buck)

Sen. Dorgan is in no hurry to YEA any bailout without full recognition by Congress and the Administration as to why we are in this mess, and guarantees that the GLBA be tossed so that we return to the protections of the Glass-Steagall Act. If we don't kill the GLBA as an integral part of any bailout, we can bet the farm this mess will happen again, and soon.

It made sense to me, and I don't claim to have any banking experience. But it does match to basic troubleshooting: 1) confirm the problem; 2) isolate the cause; 3) fix the cause; 4) test the solution; 5) implement. There is no solution that does not include root cause identification and matching fix of the root cause.

What's even more interesting is reading the legislative history of the GLBA, who voted for/against it initially, when it passed, and the final for/against vote list in the House and Senate. I wonder what the campaign contributions, sweetheart loan deals, etc. came into play between the time the bill was submitted until it was passed, and who collected what from which institutions over the years? That will be fun research when I get back to DC.

GLBA set the framework for the mega-financial institutions (which are now going broke)

I lived as a banker trying to make a living with a big bank which was constrained by Glass-Steagall. The legislation dated back to the post-depression years and really were badly out of date. Yes, the elimination of Glass-Steagall permitted commercial banks to compete in businesses otherwise prohibited, like stock brokerage, securities trading, etc. But even with the elimination of the "protections" provided by G-S, the big banks are still heavily regulated by the Federal Reserve.

The end result, even until today, is that very few, if any, of the big commercial banks have failed as the result of the new businesses which were permitted by GLBA. Lehman, Bear Stearns, Merril, etc. all failed or had to be taken over. But they were investment banks and never were regulated. Washington Mutual is thought of many as a "bank", but really is a savings and loan association and not regulated in the same way as the commercial banks.

I'd disagree, Steve. The enactment of GLBA in 1999 has had more of a favorable effect on our banking system than negative. If you'll notice, none of the big commercial banks are reported to be participating in the proposed bailout as the result. In fact my former bank, JPMorgan Chase, is strong enough to have purchased both Bear Stearns and WaMu (at a deep discount, of course), thereby avoiding the need for the Fed or FDIC to take them over and liquidate them.

Originally Posted by Villages Kahuna

GLBA set the framework for the mega-financial institutions (which are now going broke)

I lived as a banker trying to make a living with a big bank which was constrained by Glass-Steagall. The legislation dated back to the post-depression years and really were badly out of date. Yes, the elimination of Glass-Steagall permitted commercial banks to compete in businesses otherwise prohibited, like stock brokerage, securities trading, etc. But even with the elimination of the "protections" provided by G-S, the big banks are still heavily regulated by the Federal Reserve.

The end result, even until today, is that very few, if any, of the big commercial banks have failed as the result of the new businesses which were permitted by GLBA. Lehman, Bear Stearns, Merril, etc. all failed or had to be taken over. But they were investment banks and never were regulated. Washington Mutual is thought of many as a "bank", but really is a savings and loan association and not regulated in the same way as the commercial banks.

I'd disagree, Steve. The enactment of GLBA in 1999 has had more of a favorable effect on our banking system than negative. If you'll notice, none of the big commercial banks are reported to be participating in the proposed bailout as the result. In fact my former bank, JPMorgan Chase, is strong enough to have purchased both Bear Stearns and WaMu (at a deep discount, of course), thereby avoiding the need for the Fed or FDIC to take them over and liquidate them.

However, the number of banking mergers and acquisitions during the past few years have been very surprising. Mergers and acquisitions occur for a number of reasons, but so many large banks have been merged, indicating that the main reason is not the classical "elimination of competition," but pyramiding upward was happening (which eventually runs out).

The "big fish swallowing distressed littler fish" seems to have been the M&A policy, and we're now running out of "big fish" to do the eating. WaMu is a good example, as not that long ago one of the others (BankAmerica, Wachovia, Citicorp, etc.) would have acquired WaMu, another logo change would have happened, and the signmakers and business-card printers would have had a happy time.

Glass-Steagall may have been tight handcuffs, but it matched the philosophy that 95% of people don't need laws over them, but that 5% need all the controls in the world. GLBA worked fine for probably that 95% of the industry population which didn't try to scam the system. However, that 5% has hurt everyone.

WaMu is now toast. Wachovia is looking for a dance partner. And who is going to be next?

GLBA brought a lot of activity in that industry, but the loopholes in it were definitely exploited. So, any bailout without closure of those loopholes is a recipe for a repeat bailout need sometime later on.