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and why it will probably fail on Thursday or Friday's vote.

http://biz.yahoo.com/ap/080930/meltdown ... .html?.v=1

Quite, and they were perfectly entitled to do so, that was their right and what the houses of Congress are for.

However, the problem remains and will not go away tomorrow or any tomorrow soon, allowing the entire banking sector to fail (which is what is going to happen if this sitaution keeps going the way it has been) will also send the econony into freefall, and that is an unpleasant reality, no matter so as Lenin once famously asked "What is to be done?"

I like how the author seems to imply that to do exactly what his job requires - to represent the wishes of his constituents - is really cowardice in disguise.





The pressures those lawmakers faced was summed up by Rep. Don Young of Alaska, an 18-term lawmaker and the state's only representative in the House. Currently under an ethics cloud, Young voted no mostly because an overwhelming majority of the constituents who called his office were against the bailout.



Such a massive government takeover, he said, was a step toward socialism and a philosophical leap he could not make.

"Alaskans have asked me to do what I did," he said. "We are a reflection of the people, and we always have been."



Like Young, lawmakers who had the most to lose risked the least on Monday.

Why on earth do they think this is a step towards socialism? This is a right wing administration desperately trying to get taxpayers to get them out of trouble. Socialism comes from below not from an elite trying to survive a crisis of their own making.

It's good for american democracy though surely? Seems all congress used to do was just rubber stamp what they were told. Wish our MP's would get a backbone as well.

Suppose this guy is the closest thing you have to a socialist in the states.

http://www.michaelmoore.com/words/messa ... php?id=236

gmc;1002701 wrote: Why on earth do they think this is a step towards socialism? This is a right wing administration desperately trying to get taxpayers to get them out of trouble. Socialism comes from below not from an elite trying to survive a crisis of their own making.
Whatever it is, it's theft. But I agree it's not socialism.

These may be dumb questions, especially asked here with the above intelligent and articulate gentlemen. But I'll ask them anyway.........

Is there any thing that the Banks can to do help themselves ...like make financial cuts and sacrifices within their organizations? Why do we as taxpayers have to pay and make financial sacrifices for their misdeeds?

These questions, "cries in the desert" if you will, are the reason why the bailout has failed. Simply put, when you do wrong, you are supposed to be penalized, not rewarded.

House prices are lower than they were. People can hand the keys of the apartment they paid $200,000 for to the bank and stop paying off the mortgage. It's as though they'd rented. The bank's left with selling the house at auction for $120,000. The bank loses $80,000. Nobody else can sell their houses at a decent price because the market's flooded with bank auction properties so the prices dip even further, it's a vicious circle. The sensible prudent bank would have given 80% mortgages and avoided the equity trap. It wouldn't have given a mortgage to people who would have to strain to breaking point to make the repayments. It wouldn't have given introductory low rates for the first three years and then a built-in huge hike in repayments. Those are all tricks which work if the housing market keeps inflating but it didn't. The banks that played too hard for business have ended up actually owning millions of homes that are worth far less than they, the banks, handed over to the builders. If the bank's depositors get queasy and there's a run on withdrawals then the bank's got nothing worth selling to hand over to the depositors. The bank crashes.

The bailout allows the banks to sell the mortgages to the bailout organization for what they mortgaged it at when the property was worth more, before the market fell. That gives the bank good money to hand over immediately to the depositors, so there'll be no run on the bank, so it won't crash.

The other thing the bailout organization can do is pay part of extra repayments for some people who can't afford it, in exchange for their not walking away and disowning the house. That has the same effect.

along-for-the-ride;1003077 wrote: These may be dumb questions, especially asked here with the above intelligent and articulate gentlemen. But I'll ask them anyway.........

Is there any thing that the Banks can to do help themselves ...like make financial cuts and sacrifices within their organizations? Why do we as taxpayers have to pay and make financial sacrifices for their misdeeds?

These questions, "cries in the desert" if you will, are the reason why the bailout has failed. Simply put, when you do wrong, you are supposed to be penalized, not rewarded.


Any changes the banks could make would take years to kick in - even a sell off or a rights issue (not that that would work in the current climate) would take months to arrange.

The problems will bring a bank down in a matter of days - once the bank has lost the confidence on its investors or the other banks it will loose liquidity almost immediately.