Wall Street’s cheering the Paulson Plan - a multi-billion-dollar taxpayer-funded effort to contain the credit market crisis. But a backdraft is underway in the blogosphere. Strategist-blogger Barry Ritholtz lays it out here in The Big Picture:
We now see that the grand experiment of deregulation has ended, and ended badly. The deregulation movement is now an historical footnote, just another interest group, and once in power they turned into socialists.
Comments rolling into Calculated Risk are uniformly negative, with the two presidential candidates coming in for some scorn for supporting the asset relief plan.
A temporary ban on short-selling from the SEC is drawing some arrows as well from Zac Bissonnette in BloggingStocks:
It’s clear why the SEC is now banning it: this isn’t about leveling the playing field or making the market more fair or efficient. This about the SEC using its power to manipulate the market upward.
Some close to the Street were critical of the ramifications too. “Wall Street has discovered a great business where the upside is potentially unlimited, but the downside is ultimately put on the taxpayers’ tab,” Cary Leahey, economist and managing director of Decision Economics told Reuters.
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We had a Coup D’état and now we have a “revolutionary Junta” (The Federal Reserve) ruling the country. We have two moronic candidates that have no clue of what is happening and a president that was probably drunk during all these few days. The end result is that we rescued all the financial geniuses of Wall Street and now my grandson’s grandsons will have to pay for it. Fantastic I am so Happy.
- Posted by RickThis fiasco was brought on by the Republicans under Reagan admin when they decided to DE-regulate the financial industry. The fact is, it is the U.S. government that is asleep at the wheel on so many issues, this only being one. It is far time that the AMERICAN PEOPLE reclaim what is rightfully theirs. The U.S. is no longer governed by and for the people, but rather by and for a bunch of corrupted individuals who are only out for themselves and their friends. I am an American and I love my country, but I am ashamed at the greed and tactics that so many in the U.S. stand by. Like the empires of Greece,Rome, and Britian, we soon will be a “has been” nation as a result of such destrutive decisions and policies both domestically and internationally. I travel extensively and things look MUCH different when you are looking from the outside in. I suggest Americans take more time to travel and to see the REAL world. It is time for REAL CHANGE!!
- Posted by JohnWhen is anybody going to stand back from all this nonsense about which party is to blame and ask the question, “What is the hidden agenda?”
The guys at the top never seem to end up unable to pay their mortgages, privately educate their kids, miss out on health care, drive round in a broken drown truck.
Why not?
- Posted by AlisonThe government and financial leaders are claiming the market meltdown is like a weapon of mass destruction. It is so bad cannot take a chance to let it happen even though the market is up significantly over the last 10 years. They want us to act very fast so there can be no reflection as to how bad the idea actually is and who is to blame. The bail out would actually gives massive power and funds to unelected officials who were primarily at fault for the problem to begin with. No massive government program has ever worked as planned, ended as soon as announced, cost as little as estimated nor saved tax payer money. It will only save the super wealthy that have benefited from the problem all along and crush regular Americans with a collapsing currency, hyper-inflation and oppressive taxes. Why have elected officials if they abdicate to bureaucrats at the moment of great crisis and cower like little children?
Conclusion: The bail out plan is nothing more than a plan to pay thieves to stop stealing. As Americans, we should take our pitchforks down to D.C. and demand they all resign.
- Posted by Ron MorseIf Enron was the poster child of what was to come, derivatives should have been checked at the door back then while the foundation was still somewhat intact. Some one needs to police those whom can not police them selves before the lynch-mob shows up. You need only ask the average American what he thinks and it’s the same answer; Lynch em!
- Posted by J. David FalkI think it will be interesting to see what the realities of this bring in the coming administration. This might divert pandemonium today but what about next month? I’m not holding my breath.
One can only imagine what would have happened to Social Security if these clowns had their way a few years ago.
- Posted by Rich HoffmanTo the poster who says “both sides are to blame,” I call BS. One side has had control of the presidency for the last eight years and Congress for six of those years in addition to six years under president Clinton. One side could have done something to clean up this mess but chose to let the foxes guard the henhouse in exchange for lobbyist money and a complicit corporate media.
To be fair, the other side, unfortunately, relented far too many times in giving the people in power what they wanted, but make no mistake, this is a Republican disaster and Republicans need to own up to their own failures.
- Posted by BrianIt’s cumforting to know that the rich man will as God intended it to be, always a little more richer with each day.
- Posted by JimRepublicans and Democrats have been running this country into the ground for decades. They are dinosaurs that should be extinct. Why do Americans keep voting for these entrenched political machines? If you really want a change, vote both parties out of Washington for good.
- Posted by AlanTo Dave’s point, I agree with you that the party divide is different sides of the same coin, however, the point of an election year is that you can only punch one ticket. The Republicans had the presidency and congress for 6 years and their policies are taking root. Voters need to take a long hard look at the long-term implications of their elected officials’ platforms.
This election is not about taxes.
- Posted by CJThis is really the end of the Regan Revolution, which was a *neo-liberal* revolution support by each administration since. The blame shouldn’t be placed on one party, or on “conservatives.” Hopefully, those who espouse a “conservative” philosophy will no longer believe that this philosophy is embodied in the Republican party.
- Posted by Bob ValiantRepublicans should just rename their party(neocons?) and come up with a new agenda. Its so sad watching old school fiscally responsible republicans(ron paul etc) try to carry on the torch. Republicans try to say the left is socialist, yet they are the ones supporting socialist polices.
- Posted by mattDeregulation is one of the republican party’s primary selling points. It ties directly to the old “smaller government” argument. Deregulation simply doesn’t work. Look at both the airline industry and the railroads. They are both in horrid staights because of deregulation.
But the current condition of the economy is not entirely based on deregulation. Bush and his cronies use a form of economics called supply side economics. This was used by Ronald Reagan during his administration, and failed miserably then as well. Bush’s policies have mirrored those policies used during Reagan’s term, leaving us with a huge deficit and a badly damaged economy.
Some of you may remember when Bush Senior was running for office, he made the pledge “No New Taxes”. This is similar to what McCain is pledging. But Bush Senior came to realize that Reagan left him with no choice; either raise taxes or watch the economy crumble.
Bush senior’s raising of taxes set the stage for the prosperous years of the Clinton administration, but they were so unpopular that Bush lost his chance at a second term. The necessary steps that the next administration takes may well leave them without a second term as well.
We will have to see if responcibility and a sound economy are more important to our next leader then popularity and a second term.
- Posted by Patrick” Republicans (everyone of them) live and breathe deregulation of business”
until their fat cat friends get into trouble
- Posted by oberstThe stakes are high and the timing is favorable for Wall Street to push the government into action. In my perception its unusual for an outgoing administration to propose such sweeping legislation before and election. Ultimately its still a leverage game its just that the assets have changed. Political capital has replaced the dollar. Congress will be asked to act on legislation prior to the new administration being elected due to the timing of these dramatic events. If the Democratically controlled congress fails to act in a timely manner the Dems get whacked for letting the economy slide into the dumper. If there is action, the new administration is saddled with incredible, I mean unprecedented unimaginable debt. These Wall Street guys all contributed to electing Bush. This is the last chip they are going to drag out of him for the investment in his Presidency. Not a bad insurance play.
- Posted by ChrisAgain our leadership has shown it has 20-80 hindsight and no foresight. Too much pork in the diet and dangling from the lobbyist strings. Even when a crash was inevitable there was no action. How many other things will crash before we put an end to this nonsense and get some people in office who can run the place.
- Posted by Fred BelzAmazing how everyone knee-jerks to blame one side of the political divide, when BOTH sides are to blame. They’re all to blame. If anyone is convinced their party is blameless, they are either stupid or ignorant. Do your own research. You may change your mind. You may end up skipping the election entirely also.
- Posted by DaveThe conservative Republican model of governance is now as dead as Soviet communism. The complexities of a 21st century economy that spanned continents was simply too much for them to handle. In truth, they didn’t even try to handle it. Theirs was a hands-off mindset that had more in common with the Victorian era than it does with our inter-twined world. Smaller government they cried. Less regulation and self-policing of the markets was their mantra. And it all sounded so good until you looked under the hood. Now it has failed miserably. The irony is that the same people who mismanaged the country for over 16 years are now trying to reinvent themselves as reformers. That’s understandable. If blame is to be assigned where it is due, they would all be thrown out of office, and possibly far worse. But, they have little to fear. Never underestimate the stupidity of the American electorate. If the past is any guide, McCain and that devil in bifocals at his side will be running the country next year. And it will be business as usual.
- Posted by Robert FosterIt’s said if one doesn’t learn from history then they are destined to repeat it, Republicans (everyone of them) live and breathe deregulation of business. If you vote a Republican then you have learned nothing from history.
- Posted by JimThis is more garbage from an administration that has had its head in the sand far too long. These problems manifested years ago and became evident long ago, but they were in denial and told us the economy was strong and fundamentally sound. I believe if Paulson is lucky, he will end up teaching at a Community College somewhere, but is probably destined to serve lunch out of a drive-thru window. Hopefully the next administration applies some effective efforts towards healthier times.
- Posted by Scott