Bailout: Rogue Republicans

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Failure to pull together a bill by Sunday Night, the opening of Asian markets, will have a trigger effect on international banking. How bad, how deep, and how fast the domino effect will occur remains to be seen. But, the obstacle is the Rogue Republicans insisting that private investors (friends and lobbyists of theirs) get a piece of this discounted real estate pie that could produce handsome profits down the road.

The White House, Senate Republicans (Shelby excluded), Democrats in the House and Senate, and moderate Republicans in the House, had a deal between them that the tax payers will reap the profits of buying discount properties off bank's balance sheets, holding them for a time when real estate valuations rise again, and permitting tax payers (government) to reap the profits upon selling these properties. The Rogue Republicans however, will have none of that if they can help it.

Here is the Rogue Republicans plan. Private investors buy these property mortgages at a substantial discount instead of tax payers. But, they insist that the tax payers pony up the insurance premiums to insure that these private investors do not lose money on the deal. That's right. They are demanding that if these properties produce a profit, private wealthy investors reap those profits. But, if these properties after a period of time can't be sold for what investors bought them for, they insist the tax payers (government) make up the difference in writing these properties off at a loss (selling them at a loss). In a nutshell, these Rogue House Republicans are insisting on lose lose plan for tax payers, and a win win plan for private wealthy investors.

This is precisely what the public DOES NOT want the bail out to do. Reward the wealthy at tax payer's expense. Yet, these Rogue Republicans, at this point in time, are preventing a rescue, bailout plan from going forward as they dig in their heels threatening to vote against the bail out if they don't get their way. Rep. Roy Blunt and Sen. Richard Shelby are leading this group of Rogue Republicans who would rather the global economy collapse if their lobbyist wealthy investor friends don't get a piece of this pie.

Ironically, Rep.Jeb Hensarling, is spinning the Rogue Republican's stand on MSNBC as I type, as insisting on Wall Street paying for this dilemma. That is their way of spinning their insistence on private wealthy investors getting their hands on these discount real estate properties. It is a ruse. A sham. And everyone would do well to consider what happens if this rescue plan fails to reassure central banks and private banks around the globe that the bottom of the credit markets is not going to be yanked out come Monday Morning.

Do Republicans really want to bear the responsibility for the economic consequences of failing to get this rescue bill passed? Some, apparently are willing. Sen. McCain met with these Rogue Republicans, (he would no doubt call them Mavericks) to be their spokesperson. It appears, somewhere between that meeting with the Rogues and the White House meeting with Pres. Bush, McCain decided to dummy up on carrying their message to that meeting with the President. That may be the smartest decision McCain has made since deciding to run for President and magnitudes better decision than his VP choice.

While all eyes are focused on the bailout, the Senate passed a 634 Billion dollar spending bill
which gives $25 Billion in loans to the auto industry and lets the ban on offshore oil drilling expire. Pres. Bush is expected to sign measure. The vote was 78-12 in favor.

The Wash. Post also reports:

The House overwhelmingly approved a resolution yesterday [Sept. 24] to continue funding the federal government until March 6, a stopgap measure needed to avert a government shutdown because Congress has not approved the 12 appropriations bills pending on Capitol Hill.

The measure, passed 370 to 58, includes provisions to lend as much as $25 billion to help the U.S. auto industry build more fuel-efficient vehicles; $2.5 billion more than was spent in 2008 for home heating assistance for the poor; additional money for Pell Grant tuition assistance for low-income students and money for the 2010 census, among many other measures.

Not that anyone cares about such piddling sums anymore, with $700 billion on the table.

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This page contains a single entry by David R. Remer published on September 27, 2008 4:31 PM.

Politics or Country. Politics Wins Rnd. 2 was the previous entry in this blog.

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