Thursday, September 25, 2008

The Big Bailout: Example of why I do not support The Progressives

Even Barack Obama and Democratic leaders in Congress recognize the need to address the current financial crisis. They may not agree on all of the details, and there may be a fair amount of pontificating on all sides since this is an election year, but there does seem to be some consensus emerging on the overall shape of a bailout and that despite widespreadh misgivings on all sides, approval of a modified plan is very likely very soon. The administration has already agreed in principle with some of the "demands" of Congress. Meanwhile, what are The Progressives doing? They are staging rallies to "say 'NO' to the Bush Bailout plan." Do they at least acknowledge that there is a problem that needs to be resolved immediately? Nope. Do they acknowledge that with congressional modifications it is no longer "Bush's" plan? Nope. Do they acknowledge that the plan was not created or put forward by President Bush, but by Treasury Secretary Paulsen and Federal Reserve Chairman Bernanke? Nope. Do they offer an alternative plan for the immediate crisis? Nope. Their only goal seems to be to exploit the crisis for partisan political gain.

Here is the email letter I received this morning from Democracy for America (a Progressive group):

Supporter -

Since Monday, progressives around the country have been calling their Senators and Representatives to say "NO" to the Bush Bailout plan. Congress is starting to get the message.

We can't stop now.

Today at 5pm, America will say NO to the Bush Bailout -- and we need you to be there.


The Bush Bailout is still a new tax on every American that would amount to a $700,000,000,000 check to bail out Wall Street. The Bush Bailout would be the largest giveaway of public money in American history.

Our friends at True Majority are leading the way for over 20 different groups including MoveOn, USaction, and ACORN to name just a few. They organized the events, now we need to turn out and help make the events a success.

Rallies held over the last two days in cities across the country have received a lot of coverage already. These events have helped back up the phone calls, emails, and letters against the Bush Bailout that Congress has been receiving all week.

Now, with a nationwide coordinated action with hundreds of rallies on the same day, we will amp up the pressure and make sure Congress hears the message loud and clear: America says NO to the Bush Bailout.


I signed up for the rally near me. I hope you will sign up too.

Thank you for everything you do,


Jim Dean, Chair
Democracy for America

Literally, there was no mention of an alternative plan or any effort to improve the current proposed plan.

Truth be told, it appears that The Progressives would prefer that the U.S. economy fall into a deep recession so that they can then blame Bush and then blame McCain using guilt by association.

Lucky for us, there are still quite a few sensible centrists and even sensible moderate liberals in Congress who understand that by working with Paulson and Bernanke they can jointly craft a very sensible bailout plan that actually does advance the aims of centrist and moderate Democratic liberal principles.

In any case, this useless and counterproductive "Just say 'NO' to the Bush Bailout" campaign illustrates perfectly why I oppose the left-wing Progressives and why even though I will probably vote for Barack Obama, I cannot give him or his Progressive supporters any of my support.

But, by all means feel free to let your elected representatives know specifically which terms of the bailout you do object to and which terms you do support, and how you would like to see the plan changed. But hurry, because the rough details are likely to be put in place very soon.

My own personal biggest concern is to make sure that we buy mortgage assets at a steep enough discount that we have a good shot at being able to re-sell mortgages or defaulted properties at a modest profit. That may be a 10% to 25% discount to "full list price". The banks might object, which is fine, but I doubt that any financial institution will really have any serious problem if they escape from this mess and "only" get 80 cents on the dollar. Bernanke wants to buy assets at full price rather than "fire-sale" prices to assure that the banks are well-capitalized and healthy, but I would argue that true fire-sale prices would be down under 50 cents on the dollor or even 20 cents on the dollar, so offering 75 to 85 cents on the dollar would seem quite fair to the banks. Besides, if they really can argue that assets are worth more than 90 cents on the dollar, why would they need a big government bailout?

-- Jack Krupansky


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