"The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

Over at The Volokh Conspiracy, Ilya Somin spots Rep. Mike Pence (R-Ind.) making a hell of a lot of sense on the bailout:

"I must tell you, there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot," said Rep. Mike Pence, R-Indiana. "The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

Comments

[joe]

Anyone see the Martin Scorcese/Tin Fey American Express ad?

"I've got this great deal on a time-share. But you have to act now!"

[James]

I know libertarians hate Naomi Klein, but her book 'Shock Doctrine' seems to apply here, Paulson and Bush wanted this thing done overnight, with a blank check, and the powers of a dictator. They were trying to screw us, the longer we wait the better deal the taxpayers will get on this.

[JW]

I saw these collectible plates for sale the other day. They were of child stars of the 80's; Webster was so cute!

They promised me that they would only appreciate in value! They also said to call now as demand will be incredible!

[Episiarch]

What would be nice is if they were to explain why this has to be done fast. What? It doesn't?

[Lost_In_Translation]

The "act now" argument is also used when someone is trying to throw out a solution without knowing the consequences. That way, if the deal turns sour, they can always come back with "you should have acted sooner"

[Pro Libertate]

The $700 billion bailout--As Seen on TV! Act now! Our operators are standing by.

[smacky]

"I must tell you, there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot," said Rep. Mike Pence, R-Indiana."The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

That's what I've been thinking all along! Intellectual property theft! Police!

[jtuf]

Act now! Limited time offer! Only 50 undeveloped lots left! If you call in the next 20 minutes, we'll throw in a 3 car garage free!

[ChicagoTom]

They were trying to screw us, the longer we wait the better deal the taxpayers will get on this.

I thought the same thing about FISA "reform" -- and look how that played out.

Something tells me that no matter how long the delay is taxpayers are gonna get screwed and the people who got us into this mess to begin with are going to make out like bandits.

[joshua corning]

"I must tell you, there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot," said Rep. Mike Pence, R-Indiana. "The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

Global Warming?

[ChicagoTom]

What would be nice is if they were to explain why this has to be done fast. What? It doesn't?

I thought I heard Paulson say that if we dont do the deal NOW!!!!1111!!!! we might all be eating dog food by Monday.

But I my memory might be innacurate

[henry]

Now its devolving to 9-11 analogies to fan the hysteria. What a country. I would say it deserves its fate if I did not live here.

[Tim]

If we don't do this now the terrorists win.

[JW]

You don't want to bail out the economy? Why do you hate America so much, son?

[Hank Paulson]

Look, bud, if it were up to me, I'd lower the price to $500 billion. But I don't have the authority to do that. Hold on, give me a few minutes to go to talk to the president--maybe he can do something for you.

[Dello]

"I must tell you, there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot," said Rep. Mike Pence, R-Indiana. "The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

Now that's politics I can believe in!

[joshua corning]

If we don't act now the world will be destroyed by catastrophic climate change!!!

[DarkRail]

Kind of reminds me of how we got the Patriot Act: HURRY!!!! Chuck your freedom [or in this case Capitalism] out the window now or it'll be your demise!

[Don the libertarian Democrat]

When the Bush Administration says this, it usually means that there's going to be a disaster.

[ceanf]

this is the so called 'better part of the deal'

'Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.'

i am a non-violent person and not really an advocate for violence but somebody needs to put a hole in paulson. quick.

[Russ 2000]

Something tells me that no matter how long the delay is taxpayers are gonna get screwed and the people who got us into this mess to begin with are going to make out like bandits.

Yep. We can "act now" before anyone knows how badly they're gonna get screwed. Or we can wait so that other leeches can pile on.

[zig zag man]

"The $700 billion bailout--As Seen on TV! Act now! Our operators are standing by."

Read in a fast TV announcer voice or like the Monster Truck guy

Show your pride in America, with each bailout you get a free American flag lapel pin and magnetic ribbon to show the world that you care. Act now! Quantities are limited!

Read really fast

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Offer does not apply to American taxpayers or their families.

[JP]

Yeah, just like when somebody says, "DONATE NOW!"

Why now, Reason?

[tarran]

I know libertarians hate Naomi Klein, but her book 'Shock Doctrine' seems to apply here,

Except for her main thesis that neoconservatives are aching for crises to bring back freemarkets, and her painting of Friedman as being the intellectual wellspring ef neocons (their philosophy is actually a direct descendant of Trotskyism with it's emphasis on global revolution), ... yeah.

The fact is, people have long known that governments use crises to increase their power and to hoodwing the citizenry. The only thing unique about Naomi Klein's thesis, that the neocons are advancing free markets is total crap.

If Naomi Klein has any stature, it's because she's hanging down from the shoulders of giants.

[herbert hoover]

we can wait

[D.C. Boogie]

They're in a hurry because the show's over if the value of our mortgage derived investments falls below the value of our national debt. The domestic mortgage market is the only market with enough volume to hold our ongoing colossal federal debt. That's why our hopelessly indebted government is at panic stations. A reckoning for our domestic mortgage market will put an end to the age of debt on which our leaderships' (both parties) imperial ambitions rest.

[joe]

If we don't act now the world will be destroyed by catastrophic climate change!!!

Let's do a little back-of-the-envelope calculation.

If global warming has been debated for 20 years...

And the bailout has been debated for a week...

Then joshua corning's comparison fails one thousand and forty times over.

[Neu Mejican]

joe,

The first references to global warming start in the 1950's...so let's use 1958, 5 decades or 2600 weeks.

[Neu Mejican]

Of course, the AGW argument says...we have 50 years to solve this...the bailout has to happen by monday...

So take the 2600 weeks on both sides to compare to the 10 days for the bailout...

yadda yadda

[thoreau]

Actually, Arrhenius first raised the possibility of global warming as a result of fossil fuel combustion in the 1890's. So this line of inquiry has been going on for a while. Yes, it picked up more steam recently, but it's not like there's been a shortage of time to consider alternative hypotheses.

[Boston]

When McCain had apparently wrapped up the nomination i had heard this guy being tossed around for VP.

Odd.

[matt]

Boston | September 24, 2008, 7:29pm | #

When McCain had apparently wrapped up the nomination i had heard this guy being tossed around for VP.

Odd.

Pence? If only. People were saying Jim DeMint was a dark horse candidate, too. If they were asked at all, they said no quickly, as did every other right-leaning republican except Sarah Palin, apparently.

[PFJ]

[quote]I know libertarians hate Naomi Klein, but her book 'Shock Doctrine' seems to apply here, Paulson and Bush wanted this thing done overnight, with a blank check, and the powers of a dictator. They were trying to screw us, the longer we wait the better deal the taxpayers will get on this.[/quote]

Well, she is clearly right that most change happens in a time of disaster. The problem is that in this case, we are moving away from free markets and during the depression we moved away from free markets. This would actually be disaster socialism (interventionism?), which is the exact opposite of the point she tried to make. That and the whole "corporate welfare=free market" point she tries to make undermine her.

[Neu Mejican]

thoreau | September 24, 2008, 7:28pm | #
Actually, Arrhenius first raised the possibility of global warming as a result of fossil fuel combustion in the 1890's.

Yeah, I knew that...but it seems like the discussion regarding alternatives really didn't get going until we had the nuclear power option. By the 1950's the idea of global warming as a result of fossil fuels was entering mainstream thinking to the degree that it was part of science education for the masses. I used 1958 since that is when Frank Capra's TV specials on science raised the issue for the public.

http://www.youtube.com/watch?v=0lgzz-L7GFg

Of course, there have been discussions regarding the dangers of government entanglement with markets for quite a while as well...

[John]

He is not saying a god damned thing. Yeah, usually when someone says "act now" they are taking you to the cleaners, except when they aren't. Once in a while, "act now" really means "act now" or get hit by a truck. Which is this? I don't know and neither does this guy or Reason.

The quality of thought and analsys of this whole issue in Reason has been pathetic. There hasn't been one serious post made. Just snarky bullshit like this. Contrast what is written here to what Megan McArdle, someone who unlike the Reason staff actually knows something, has written over at the Atlantic. I am not saying Megan is right about the subject, but she at least is trying. The Reason staff ought to be really embarassed by the quality of posts on this subject.

[J sub D]

joe | September 24, 2008, 7:07pm | #

If we don't act now the world will be destroyed by catastrophic climate change!!!

Let's do a little back-of-the-envelope calculation.

If global warming has been debated for 20 years...

And the bailout has been debated for a week...

Then joshua corning's comparison fails one thousand and forty times over.

Neu Mejican | September 24, 2008, 7:14pm | #

joe,

The first references to global warming start in the 1950's...so let's use 1958, 5 decades or 2600 weeks.

Of course the debate about governmental intervention in markets has been going on for far longer than the one about anthropogenic global warming.

But you both knew that.

[J sub D]

I see Neu already acknowledged the point.

I'd read to the bottom of the thread before posting but then I'd forget what I wanted to say.

Damned Alzheimer's.

[Henry Paulson]

My fellow Americans, I know you are skeptical of this plan. But my years in the financial industry making three quarters of a billion dollars have taught me that when times get tough, the government must hand out as much money as possible as fast as possible. But far more important than that is that we make absolutely sure the entrenched powers controlling our financial system stay in power, and continue to skim money off the savings of those who worked so hard for this illusion of an economy. In fact, if my friends on Wall St. are not finding new ways to fuck you over by the end of the month, we will have failed. Choose your next actions wisely, you have been warned.

[alan]

He is not saying a god damned thing. Yeah, usually when someone says "act now" they are taking you to the cleaners, except when they aren't. Once in a while, "act now" really means "act now" or get hit by a truck. Which is this? I don't know and neither does this guy or Reason.

The quality of thought and analsys of this whole issue in Reason has been pathetic. There hasn't been one serious post made. Just snarky bullshit like this. Contrast what is written here to what Megan McArdle, someone who unlike the Reason staff actually knows something, has written over at the Atlantic. I am not saying Megan is right about the subject, but she at least is trying. The Reason staff ought to be really embarassed by the quality of posts on this subject.

Anyone else offended that a guy who ridiculed Ron Paul's warnings of financial meltdown last
Winter is pretending to take the high road now?

[Joe S.]

Hey Paulson!

'Decisions by me pursuant to the authority of myself are non-reviewable and committed to my discretion, and may not be reviewed by any court of law or any goddam administrative agency.'

[TrickyVic]

""""The $700 billion bailout--As Seen on TV! Act now! Our operators are standing by."

Read in a fast TV announcer voice or like the Monster Truck guy"""

You have to say billion three times and end with muuuudpit.

[John McCain]

As a former POW, let me just say one thing: I'll have what Paulson's drinking.

[Gilbert Martin]

"The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

Yeah - just like the last time that social security was "saved" by raising taxes.

And by the way all those politicans who are wringing their hands with faux concern about the balout's $700 billion burden on the taxpayers are all complicit in covering up a much larger burden on the taxpayers - the unfunded liabilty for entitlement programs like social security and medicare becuase they don't keep the governments books on an accrual accounting basis.

The liability slammed onto thee taxpayers for those programs makes this bailout look like pocket change.

[Somebody]

I think the Commonwealth Foundation is onto something...

http://cfpolicyblog.blogspot.com/2008/09/did-dwight-schrute-write-paulsons.html

[MINISTER OF TREASURY]

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO [e-mail] SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

[Anonymous]

I know libertarians hate Naomi Klein, but her book 'Shock Doctrine' seems to apply here

Yep, she's the only one who called out the communists trying to use crisis to push their big-government agenda. It's too bad they didn't listen in France and Venezuela, but we still have a chance!

[Lost_In_Translation]

He is not saying a god damned thing. Yeah, usually when someone says "act now" they are taking you to the cleaners, except when they aren't. Once in a while, "act now" really means "act now" or get hit by a truck. Which is this? I don't know and neither does this guy or Reason.

The quality of thought and analsys of this whole issue in Reason has been pathetic. There hasn't been one serious post made. Just snarky bullshit like this. Contrast what is written here to what Megan McArdle, someone who unlike the Reason staff actually knows something, has written over at the Atlantic. I am not saying Megan is right about the subject, but she at least is trying. The Reason staff ought to be really embarassed by the quality of posts on this subject.

Nobody knows because either Paulson won't tell us or doesn't know. The best analysis I've seen (assuming the source has the facts right) is that essentially the money the Fed has loaned out is backed by the collateral of toxic assets the Fed is trying to buy off the investment banks using taxpayer dollar. The other two options are for the Fed to declare bankruptcy after the companies that have the collateral do...or print money to devalue the loan to cash ratio, causing an inflationary spiral. The Fed is apparently overexpended itself and is trying to hide the fact by offering a bailout to the companies that owe it money.

[Raja]

What exactly is the form of the bailout? I know the Dems have suggested that it be a stock buy, at least in a limited fashion. Is the administration suggesting we simply give the money away? Buy up the subprime mortgages?

If it were me, I'd propose (as a compromise - I believe in the free market, but it wasn't entirely the free market that got us here) that the bailout take the form of loan insurance directly from the federal government for mortgages in the categories where we're seeing the highest default rates, such as subprime and jumbo loans, at a heavy discount from normal insurance rates. The administration's stated goal of taking the bad loans out of the market is unnecessarily broad, when it'll suffice to provide a known and survivable loss floor.

[Lost_In_Translation]

What exactly is the form of the bailout? apparently whatever Paulson does with the money after congress approves the bill to give it to him.

[Theresa K]

Here's a thought.

If there are really no buyers for these morgage backed securities, then their "market value" is ZERO.

Why pay anything at all? They should just hand over the securities and we'll give them a big tax writeoff next year.

[Lost_In_Translation]

Theresa,

Because then the Fed would have no money, have to admit they have no money and all hell would break loose...or not...

[Anonymous]

If there are really no buyers for these morgage backed securities, then their "market value" is ZERO.

Yes, and it was government legislation that "encouraged" them to create these securities, under the impression that there was a market failure. Well, there wasn't.

The socialist drumbeat of usury isn't the problem, the constant intervention in the name of those poor, stupid proles is the problem.

Now, that doesn't mean that just because it's the government's mess that they should be doing this to clean it up; that fits the nationalizing agenda as well. On the other hand, I don't have a solution. I'd rather just choose to not participate in any of this, if possible.

[Caleb Rackliffe]

I have life insurance policies with AIG, and I still didn't like that bailout. Why would I want the government to prop up a company that has put me at risk? Sell my policies to a company that can take care of itself! It's already underwritten!

If they want to do anything, they should just facilitate auctions of the assets. And, companies with bad mortgages should negotiate payment reductions for their borrowers privately. How is a bankrupt company going to go kick you out of your house, especially when there are no other buyers? They would rather have some income than none...unless...they are holding out for a bail-out.

Wait, that makes sense if the government is buying a huge company every other day....

Geez...

[bundt]

joe ... does Obama's dick taste like chocolate??
And ... you have zero credibility on this issue. You are on the wrong side of history on this one ... your frequent ridicule of Paul's prescient warnings serve as evidence of this. There comes a time when you should just shut your mouth, watch, and learn ... and pal, for you, this is one of those times.

[Anonymous]

But Caleb Rackliffe! Renegotiating!?

That would be tantamount to seeking profit and managing risk. Isn't that what government is for?

Citizens don't have the information to manage risk. The market doesn't provide it. Just look at this terrible debacle that wasn't at all caused by government regulation!

And profit is just another way of saying oppression. After all, wealth is fixed and accumulating it takes away from the less greedy!! If market risk leads to profit, then risk must be elimitated.

Then we can frolic in the forest on the sea without money and achieve Wilde's true image of the human soul under socialism: free of risk leveraged against us and free of unequal profit! (Also known as death.)

[joe]

bundt,

Your tears are so yummy and sweet. Ha ha!

[I\'m joe.]

I'm Eric Cartman.

[joe]

I'm joe, and my wife is, too.

[Bronwyn]

Now I'm wondering, How long 'til they get Billy Mays to promote this deal?

[John]

The problem with doing nothing is that credit dries up. For example, caterpillar and Honda America, two profitable companies, just issued bonds and had to issue them at 400 over prime. That is fucking amazing. If Honda has to pay that premium for money, ordinary companies are not getting anything. No debt, no expansion, no expansion no growth. The whole economy will go in the tank without credit and stay there for God knows how long.

What does the bailout really do? It takes a bunch of worthless paper off the books, pumps money into the credit market and gives the government an ownership share in the banks in return. Once the banks get back on their feet, which they will after they are relieved of their bad debts, the government sells its stock in the banks and gets its money back.

Whatever the plan is, it is not socialism or nationalizing the banks in any meaningful sense. The danger of the plan is that you create a moral hazard that bankers will continue to act irresponsibly figuring the government will bail them out. That is a real hazard and worth considering. But the mother of all recessions that will happen if we don't do something is also worth considering.

I have never seen such uniformed conversation about a subject on this site. No one here including the Reason staff knows their ass from a hole in the ground about what is going on or what the stakes or the issues are.