The Washington Post reports on A sense of resentment amid the ‘For Sale’ signs. “The bailout doesn’t smell right to the people” and “this may be a Main Street bailout backlash in the making… the central fact of the matter hasn’t been lost on anyone”.
The taxpayers are on the hook for the bad judgment of others. And they say they don’t like it.
They didn’t break it, but now they’ve bought it. Political leaders and financial titans say the bailout is necessary to save the economy, but on the ground, … people think that the bailout will reward the wrong people…
The anti-bailout sentiment appears to cut across class lines.
Meanwhile, the bailout is growing bigger. The NY Times reports Terms are set as bailout debate begins.
Financial companies were already lobbying to broaden the plan. And the Bush administration did indeed widen the scope by allowing the government to buy out assets other than mortgage-related securities as well as making foreign companies eligible for government assistance.
That’s right, American taxpayers are being asked to bailout foreign financial firms. From the Treasury Fact Sheet:
Asset and Institutional Eligibility for the Program. To qualify for the program, assets must have been originated or issued on or before September 17, 2008. Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.
As Calculated Risk remarks that not only does this taxpayer “bailout covers any securities issued on or before last week… but the second sentence is even more surprising: eligibility has been changed from ‘financial institution having its headquarters in the United States’ to ‘significant operations in the U.S.’ – and even ‘broader eligibility’ if Paulson so decides.”
The NY Times headline reads the Two presidential candidates back bailout, but with caveats, but McCain “would press on with his plan to extend the Bush tax cuts and to cut others. Contrary to the warnings of fiscal analysts” and Obama “would press ahead with his plans to overhaul the health care system to insure more people, make college tuition more affordable, give a tax cut to the middle class and raise taxes on those making over $250,000 a year.”
This kind of talk is silly in light, as The Hill reported on Friday, the Wall Street bailout could ‘cripple’ federal budget. “This cripples the domestic policy priorities of the next president, whoever it is, because it soaks up so much cash,” said Jim Cooper of Tennessee, a senior Democrat on the House Budget Committee and a former investment banker.
Throw in that Peter Orszag, the head of the Congressional Budget Office, said “The nation is on an unsustainable fiscal course.” The CBO assessment made before the current surge in bailouts was announced. So taken together, any promises made now are about akin to the big stinky pile of crap that is the U.S. financial system.
Four at Four continues with the American Dream alive and well in Brazil, Viktor Bout’s extradition hearing, and the stealthy creep of conservatism on college campuses.