$700 Billion Bailout Signed Into Law

Many readers reminded us of what no-one can have failed to hear: that the Congress passed and the President signed a $700B bailout bill in an attempt to avert the meltdown of the US economy. The bill allocates $700 billion to the Treasury Department for the purchase of so-called "toxic assets" that have been weighing down Wall Street balance sheets. This isn't particularly a tech story, though tech will be affected as will virtually all parts of the economy, and not just in the US. Among the $110B in so-called pork added to the bill to sway reluctant legislators are extensions of popular tax benefits for business R&D and alternative energy, relief for the growing pool of people subject to the alternative minimum tax, and a provision raising the FDIC's ceiling of guaranteed deposits to $250,000. Some limits were also imposed on executive compensation, though it's unclear whether they will be effective.

Comments

Re:Biggest Con Ever

[Anonymous Coward]

Bush may have signed the law, but the Democrats voted to pass it. It failed to pass the first time because so many Republicans voted against it.

Same FUD strategy than in Irak

[diegocgteleline.es]

Well, people should not be surprised. It's not the first time Bush proposes a plan and uses FUD to approve it. It's exactly the same thing he did in Irak.

In 2003 the excuse was that Irak had MDW and had helped to plan the 11S. This time the excuse was "If you don't pass it we'll have financial panic".

It's the same Fear Strategy. And just like in Irak, everybody believes it and Democrats, with Obama leading (after all, this proves what he has been saying about too-free market being evil, doesn't it?), help him to pass it. This time even Europe, who is also very very happy to hear bush admit that capitalism is evil, supports Bush.

Re:why do europeans have a hard-on for Obama?

[kz45]

"so why the love for obama?"

It's because he's a socialist and a marxist. Which pretty much describes the type of government in most of the nations in europe, where taxes are > 50%.

Obama isn't about change, he's about bringing back nearly all the ideas from our beloved ex-president.....Jimmy Carter.

A better question is why do terrorists and actual evil dictators love Obama? It's a question nobody seems to want to know the answer to.

Re:You realize, of course, that you've left a lot

[jabster]

Where's Jim Johnson?

Hmm.....

You also forget that groups like ACORN essentially used Jessie Jackson like tactics to threaten banks to make bad loans.

And democrats blocked regulation reforms.

Do work for the Obama campaign?

Or do you just worship him?

Re:You realize, of course, that you've left a lot

[unassimilatible]

You realize, of course, that you've left a lot out?

Yes, it is Saturday and I (am trying to) have a life.

You realize, of course, that the CRA did not force banks to make loans to individuals who couldn't afford them? What it did do was say that you could not refuse credit based on location or area (redlining) and instead had to base your loan evaluation on the INDIVIDUAL, and upon the individual's ability to pay. (Try reading the bill and not the Wiki.)

You realize the politics involved in the enforcement of this law? The collusion between the Clinton administration and race-baiters like Acorn and Rainbow Coalition? Read The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities to see what really went on with CRA and then tell me it was a harmless, fairly-enforced policy. PLEASE, IF YOU READ NOTHING ELSE, READ THIS ARTICLE.

You realize, of course, that the vast majority of the subprime loans that are going belly-up were made by financial institutions like CountryWide... which are not banks, and as such, WERE NOT COVERED BY THE CRA IN THE FIRST PLACE.

The CRA is but one of the problems I listed. Like Freddie and Fannie's effects on credit and the housing bubble? While the GOP attempted to reign in the FM's, Dems said "if it ain't broken, don't fix it" to.

You realize, of course, that in early 2005, the Office of Thrift Supervision (under GW Bush) implemented new rules that substantially weakened the CRA, and as such, its impact on credit markets?

Good! Of course you'll give Bush credit for this? But there was still a decade of this shit going on prior to 2005.

You realize, of course, that a good portion of our current crisis [wikipedia.org] is caused by the Gramm-Leach-Bliley Act, introduced by Senator Phil Gramm (R-TX), which in 1999 repealed part of the Glass-Steagall Act, opening up "competition" among banks, securities companies and insurance companies. Which in turn lead to our current set of mega-institutions that are so large and intertwined they can't be allowed to fail?

Wrong wrong wrong! That "deregulation" actually helped mitigate the crisis by allowing prudently managed banks like Wells Fargo to diversify their portfolios and products in other areas (like mutual funds, etc) besides home loans. Had they not been able to do so, the bailout would have been a lot bigger. Wamu was stupid, but some banks took advantage of the law. And the securities companies (already massive and trading in derivatives long before 1999) failed because of the credit swaps, not because they were "competing" with banks. It was buying the already shitty mortgages that killed them. In other words, they were very often a customer, not a competitor.

The same Phil Gramm, BTW, that was John McCain's presidential campaign co-chair and his most senior economic adviser. The same Gramm that in July explained the nation was not in a recession, stating, "We have sort of become a nation of whiners."

And Gramm was exactly right. We were not in a recession, which is two consecutive quarters of economic contraction. We didn't even have one.

And we have turned into a nation of whiners. There was a time when people did not blame the government for their bad decisions and fortunes, like taking out loans they couldn't afford, then blaming big bad lenders. A time when just about every economic, social, and educational indicator was much lower than today, yet people complained less.

Now, people just want to bitch and have government be their mommy, then bitch again when government predictably screws it up. The government shouldn't be a mommy because 1) adults should be responsible for themselves and 2) Britney Spears is more qualified for the job than Uncle Sam.

Do you work for the