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Monday, September 29, 2008
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Tracking the Bailout
The bailout is largely going forward.  Though the law has expanded from it's original three page proposal to 110 pages, the intent, cost and power grab remains largely unchanged.  John Washburn has some good analysis of the potential power of the original bill, and then shows how nothing has changed with the latest version.

So far however, it does not look like a bipartisan deal.  It's still hard to track right now because Leader Pelosi has decided to reuse an existing bill number for the Emergency Economic Stabilization Act of 2008.  You can track it right now on GovTrack.  The bill summary still shows the old bill which had to do with amendments to the Internal Revenue Code.  But you can see that the latest actions are regarding the new bill.  Whether she did this on purpose to make it harder to track is for you to decide.  I don't know how common that is to do.

The original noises I was hearing was that Pelosi wanted to see 100 - 110 Repbulican Aye votes to see this go forward.  So far, the procedural votes to bring it to the floor do not make this likely as they have fallen mostly down party lines 220 - 198 (with 15 not voting).  I put in a call to Jim Sensenbrenner's Office on Friday demanding he vote no in no uncertain terms.  I also sent him correspondence to that effect, along with suggestions for an alternative solution which includes:

  • Eliminating the Capital Gains tax for at least two years.  This would provide immediate relief to companies to cover losses or illiquid assets.  This would put the responsibility on companies to determine the proper cost of those assets and hold them responsible for it, as opposed to having the Treasury do it (under th current plan) and encourage corporate gamesmanship.
  • Cut Corporate Income Tax.  This would help insert to capital into the economy to get other sectors up and going.
  • Order the SEC to suspend "mark-to-market" rules.  This has forced many firms to under price their balance sheets based on what they could sell all their assets for today.  This is extrodinary unrealistic, and when things go south, it encourages prices to drop even faster.
  • Get rid of SOX.  Its provided a lot of cost, for no benefit.

I have asked for a reply from him, but as of yet have heard nothing.  His two votes today were Nay, and he has promised to continue to vote No on his website.  Call your Congressman, and call your Senators.  Make sure they understand that you don't want this bailout.  Make them understand that your vote in November will reflect their vote today.  If it's true that nobody on Main Street wants this bill, then a Democratic government should reflect that reality.  If those who say they know better really feel it's that important, than their first duty is to convince the American people of that before hand, not after the fact.  So far their tact has to demand our trust (which they never had to begin with) with the promise of further information later.

You can find out who represents you here.

Update:  It failed to pass in the House!  No word yet on the roll call... but here is a weird set of quotations from Paul Ryan:

With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of the world and the markets on Congress, said Republican Rep. Paul Ryan of Wisconsin. Without the bill, Ryan added, "the worst is yet to come."

"We're in this moment, and if we fail to do the right thing, Heaven help us." he said.

As Democratic and Republican leaders hunted for votes, leaning on lawmakers to take a political hit for the good of the country, Ryan said, "We're all worried about losing our jobs. ... Most of us say, 'I want this thing to pass, but I want you to vote for it - not me.' "

Either this is a misquote, or Ryan no longer get's that bottle of single malt.  He wants it to pass but just doesn't want to be held accountable for voting for it?  Am I misreading that, was he misquoted, or is he just speaking very poorly off the cuff?

Update II:  WTF?!  Sensenbrenner voted against it, and Ryan voted for the bailout!  Roll call here.  Bottle of single malt goes to Jim... boy that's going to be a tough bottle to deliver.

# Posted at 10:28 AM by Nick  |  Comment Feed Link 3 Comments  |  No Trackbacks

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Monday, September 29, 2008 1:39:27 PM (Central Daylight Time, UTC-05:00)
Don't forget to eliminate the income taxes on all forms of savings interest.
Monday, September 29, 2008 5:18:02 PM (Central Daylight Time, UTC-05:00)
Eliminating the Capital Gains tax for at least two years. This would provide immediate relief to companies to cover losses or illiquid assets.
How does this make sense? People don't pay capital gains on assets they sell at a loss.
Tuesday, September 30, 2008 10:23:12 AM (Central Daylight Time, UTC-05:00)
This isn't necessarily about covering the companies that did lose out. But it does allow companies that didn't make bad investments to retain more money to grow larger, and cover those companies that did through merger or aquisition. Otherwise what you're doing through the current plan is to take money away from companies that invested well (through capital gains) and transfering it to companies that did not (through the bailout).

Sorry, I was unclear about which companies would do the covering in my original post.
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