D.C.'s Famous Pander Bears: No Longer Popular

It's probably too early to figure out the politics of all this, but given the bill's vast unpopularity, and the pressure that put on the House of Representatives, I think we can state without fear of contradiction that Tim Cavanaugh nailed this between the eyes in his August/September magazine column:

In a political season simply oozing hope, change, and historical firsts, here's something that might actually be encouraging: a widening gulf between promised election-year giveaways and the expressed desires of the populace on the receiving end. Has shameless political pandering become one more item on the long list of services Washington can't deliver?

Specific to the housing-finance crisis, Cavanaugh, noted,

Americans never wanted a mortgage bailout of any kind. In March Rasmussen found that Americans opposed bailing out homeowners by nearly a 2-to-1 margin (53 percent to 29 percent), and were even more strongly opposed to bailouts for lenders. […] In May, during consideration of a mortgage-rescue bill sponsored by Rep. Barney Frank (D-Mass.), Rep. Kevin McCarthy (R-Calif.) told the L.A. Times that his constituent mail was running "50 to 1: 'Don't bail these people out.'"

Is McCarthy just another aloof Republican? For his sake I hope not: His district, Bakersfield, ranks eighth nationwide in the number of foreclosure filings per household, according to the foreclosure-tracking company RealtyTrac. Now this great country is not lacking in areas that have been designated "foreclosure epicenters." Yet even in Bakersfield, which may actually deserve that title, bailout supporters are as rare as hens' teeth. So who is for this thing?

That would be, first, the media[.]

Read the whole thing here.

Comments

[Roger Maltz]

I don't know who first said this, but there is an incredible amount of wisdom in the idea that because George W. Bush, the idiot, supports a bailout then it should be violently opposed just on these grounds.

[Paul]

As soon as we're educated that deregulation and The Bush administration's constant 'gutting government' caused this, we'll come around.

[Pro Libertate]

Mrs. Libertate, who is not particularly political, thinks the idea of bailing out the lending idiots and/or the borrowing idiots is stupid.

[The Extispicator]

Rule #1 for "I Told You So's" is to let someone else point it out for you, so you don't pull a muscle patting yourself on the back. Nice job, Cavanaugh.

[Paul]

Dudes: http://seattletimes.nwsource.com/html/businesstechnology/2008195054_apfinancialmeltdown.html

I haven't felt this good in two weeks.

[The Extispicator]

I am a corporate attorney who was working on a deal today with a bank on the other side. In discussing among our own side certain issues, I wanted to make the point that the bank would not "miss" something in their review of our documents that some in the room hoped they would overlook. I said, "Listen, banks aren't stupid ..."

Before I could get to the part after the ellipsis, the room burst out in laughter.

[Gorgeous Gus the Wonder Dog]

"Is McCarthy just another aloof Republican?"

Maybe, but Rep. Barney Frank is certainly one aloof Democrat. He acts and speaks as if he's not to blame. Well they're not buying that crap in Boston.

http://news.bostonherald.com/news/opinion/op_ed/view/2008_09_23_Better_not_bank_on_Barney_Frank:_He_brought_the_(fiscal)_house_down/srvc=home&position=recent

[Paul]

Open letter to Pelosi:

The stock market is not the economy.

As a digital screen in the House chamber recorded a cascade of "no" votes against the bailout, Democratic Rep. Joe Crowley of New York shouted news of the falling Dow Jones industrials. "Six hundred points!" he yelled, jabbing his thumb downward. The decline was about 530 points shortly before the close of the trading day.

[...]

"What happened today cannot stand," Pelosi said. "We must move forward, and I hope that the markets will take that message."

[Episiarch]

Pelosi has to be the most feckless, clueless House Majority leader in a long time.

[Paul]

More than a repudiation of Democrats, Frank said, Republicans' refusal to vote for the bailout was a rejection of their own president.

Finally, I think Frank is juuuust beginning to wake up. Nice to have you back with us, Mr. Frank.

[Gamble]

"Pelosi has to be the most feckless, clueless House Majority leader in a long time."

But she's the first woman Speaker. Bet we won't see another any time soon.

[BDB]

The biggest loser is John McCain.

Earlier today he was bragging about how the bill was going to pass because he rallied the Republicans.

[Guy Montag]

Pelosi has to be the most feckless, clueless House Majority leader in a long time.

Epi, how can you be so sexist?

I think she has a pretty smile and wears such nice clothes.

[dmoynihan]

Somebody was saying Donna Edwards (D-MD) voted against this bill.

Her district includes most (all) of PG County, the wealthiest county in the nation with an African-American majority, and one of the hardest-hit by the whole foreclosure thing.

Van Hollen, her neighboring D in Montgomery, voted for, as did most of the Maryland delegation, so I'm pretty sure Edwards made her ballot after hearing from constituents...

[R C Dean]

The biggest loser is John McCain.

I don't see how he (credibly) spins his failed intervention in the negotiations any other way. Would it have been so hard to say he was in favor of the bailout, so long as (insert base-friendly poison pill here) was included? That's just elementary political ass-covering.

[Dennis R. Costa]

I am vehemntly opposed to any bailout to these financial institutions that have been allowed to play yo-yo with consumers and small businesses for years. 1st they practically give away money, some to people that they knew couldn't afford these loans, but as long as their pockets were being lined it was ok. Now when it bit them in the ass they pull back and now people who legitimatly qualify for loans can't get them, They are now making us pay for their inconsistencies and bad business practices while thousands of people have lost their homes. If ther is gonna be a bailout, lets help those that were bilked by these financial institutions. I also note that the same industry that wants us to bail them out have barely lifted a finger to help those that

[egosumabbas]

@Dennis R. Costa

You blame the financial institutions, but it was the government that instituted policies which the financial institutions merely responded to. Bill Clinton passed regulations requiring that lower income people be given loans. G.W. Bush pushed his "ownership society" on top of that. Throw Alan Greenspan's lowering of interest rates to 1% a while back and you had a recipe for disaster.

If the market had simply been left to its own devices, the financial industry would have continued to give out 20% down payment fixed rate mortgages like they have been for decades.

[ed]

The biggest loser is John McCain

I thought it was the role of the majority to bring legislation to the floor for a vote, but only after they had determined they had enough votes for passage. The majority being the Democrats, I'd say Nancy Pelosi (Botox-Calif.) is the biggest loser here.

[egosumabbas]

I also should add that had government actually enforced one of the few legitimate powers it had (the swift prosecution of fraud), despite all the other dumb policies implemented, this crisis could have been avoided.

There was *massive* fraud going on in the housing industry (which then distorted the financial industry). Most state/local/national governments looked the other way as long as taxes and bribes campaign contributions came rolling in.

[Nancy Pelosi]

This is all the Republicans' fault

[House Republicans]

Fuck you.

[Citizenry]

!?

[HEY MATT WELCH]

The Dr. Himself

[Neu Mejican]

If the market had simply been left to its own devices, the financial industry would have continued to give out 20% down payment fixed rate mortgages like they have been for decades.

So, the question for me becomes this...if the problem comes from ARM's that became unaffordable after the adjusted rate kicked in...why not just "unadjust" the rate back to the rate the homeowner was able to afford when the loan was given?

Can't a systematic approach to the ARM's make a big dent in this without things turning into a bailout?

Or is the problem not the ARM's, but the way the mortgages were sold, bundled, resold, rebundled?

The bailout seems to be premised on the problem stemming from the bundling, not the ARM's, per se.

What regulation changed that allowed for the bundling and passing-the-risk-buck to someone else to occur? When?

[Fluffy]

Apparently as the bill was going down to defeat, John McCain was telling a rally audience in OH that he personally had saved the country by making sure the bill passed, and that he deserved all the credit for making sure the deal got done.

[BDB]

Nancy Pelosi WOULD have been the biggest loser had John McCain not "suspended" his campaign and come in on a white horse to "save" a bill that failed.

[BDB]

I see fluffy beat me to it.

[HEY MATT WELCH]

Sorry. Bad link.

Try this one.

[Bingo]

Apparently as the bill was going down to defeat, John McCain was telling a rally audience in OH that he personally had saved the country by making sure the bill passed, and that he deserved all the credit for making sure the deal got done.

Oh my god, the youtube footage of this will be glorious.

[Paul]

The bailout seems to be premised on the problem stemming from the bundling, not the ARM's, per se.

Neu, it's both... actually it's many things.

The fuse was the ARM, the explosive was the complex way in which these mortgages were rebundles-- into MBS's or "mortgage based securities". It was exacerbated by some of the arcane accounting rules, and further exacerbated by continuing to sell 'profitable' mortgages to people who clearly couldn't afford when the sharks were already in the water. A collapse of this many financial institutions can never be blamed on one thing, be that:

Dregulation.
Teh shrub administration!11!
Clinton.
MBS's
Interest rates.

The list goes on. It takes a series of events to set off the collapse. Once it starts, you let it collapse and rebuild-- organically-- hopefully on a better foundation.

[Bingo]

Honestly I'm a little disappointed in todays events. Now I don't have an excuse to max out my credit cards on food, ammo, booze, and gold bullion in preparation for the inevitable collapse.

Oh well, there's always Fallout 3...

[Neu Mejican]

Paul,

Clearly it is complex, but the bailout seems aimed at the problem created by the bundling.

No?

The reason the bundles are hard to price is because of the bundling. If there were no ARM's bundled with good loans, then the solution could be aimed at the ARM's and would look a lot different.

I am with you on the general idea that picking up after things collapse is a workable approach. There is no reason, it seems, however, to wait for the collapse before the rebuild begins.

To use an architecture analogy. If you discover that your foundation is collapsing out from under your house, it will be cheaper (often) to spend money to shore it up in the short term to prevent a collapse while ALSO addressing the underlying cause than it would be to wait until it collapses and build a new house.

[Episiarch]

Now I don't have an excuse to max out my credit cards on food, ammo, booze, and gold bullion

Why do you need an excuse? And don't forget the coke.

[Kolohe]

Why do you need an excuse? And don't forget the coke.

semi serious question - does cocaine store well? Most drugs lose their potency in the span of a few months due to chemical decomposition.

[Episiarch]

semi serious question - does cocaine store well?

Don't know. I never let it sit around for that long 😉

I'm going to assume it stores pretty well, being a powder.

[toddb]

Interesting numbers: congress.org shows that emails through their site to senators and congressholes is running 92% against the bailout vs. 8% for...

[P Brooks]

So, the question for me becomes this...if the problem comes from ARM's that became unaffordable after the adjusted rate kicked in...why not just "unadjust" the rate back to the rate the homeowner was able to afford when the loan was given?

I have no first-hand knowledge, but...
The securities backed by those mortgages would have been priced based on the projected stream of income, including the upward adjustment of interest payment. In order to modify the loan terms on the homeowner's end, I believe it would be necessary to find (a problem in itself) the holders of the securities and get their approval.

If the loan were being held by the original issuer, like the bank down the street, you might have a shot.

[Kolohe]

Don't know. I never let it sit around for that long 😉

You're not quite groking this 'stockpiling' thing are you?

OTOH, maybe you are.

[Nick]

Bob Barr "wins the day" at Politico!!!

http://www.politico.com/gameday/

[SIV]

We are probably all missing some wonderful opportunity of a populist left/right fusionism revolt against the center here that could make a significant advance/return of liberty. Fuck it all.