House Fails to Pass Huge Bailout Deal
By JULIE HIRSCHFELD DAVIS ,
AP
posted: 19 MINUTES AGO
WASHINGTON (Sept. 29) – The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.
Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.
When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.
Here is the full story.
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Who is responsible for the current crisis?
The Democrats screwed this up. Nancy Pelosi made things worse because of she wanted to play partisan politics. This is why the house has 12% approval rating.
And the Democrats have screwed America again! What more does it take for the “Blue” states to realize this??? I suppose being in a “blue state” means your brain is frozen.
But, you Dem’s got what you wanted….you thwarted both Republicans and what was best for America. Afterall, that’s your plan….anything to go against Republicans while the “limosine Liberals” have nothing to worry about except…
Re-election.
McCain/Palin 2008
Americans certainly did this. Get your act together over there!
Looking for an ultimate culprit is like looking for the flaw that lost a game. One can look at the last move which allowed checkmate or a killer fork, but really the flaw was earlier and deeper – a cramped position, a backward pawn, a badly misplaced piece, time wasted moving some piece, etc.
In this case, the fundamental flaw can be traced back to when loans/mortgages were written. Originally mortgages were felt to be good long term business. Mortgages allowed people to buy and own homes. This act helped to build communities and raise overall economic value and growth in many towns and cities. The USA still has one of the highest percentage of home ownership in the world. But what happened? Both the lenders and borrowers started making deals for reasons other than the intrinsic reasons. Loans were once made with a 20-30 year time line and both the lender and borrower were in the long for the long run. So there was a lot of self-interest to find qualified borrowers and loans with reasonable terms in the long run. But look at what happened in the last few decades. Borrowers started to flip homes or to plan on staying in a home for only 5-7 years – that is either never really making the home a domicile or staying only so long and make a small profit turning it over. This generated those odd interest only loans or loans whose payment structures would balloon after a few years – at a time, the borrower never expected to be in the home or in that loan. The lenders started to package and move the loans as commodities – they made their money not in the long run on a good mortgage but in the short run churning the paper – from the points and fees. So the cumulative effect was that neither the lender nor the borrower had any vested self-interest in a good long term mortgage. No wonder things went bad – no one involved had any vested interest in looking at the deal from the long term; everyone was figuring that someone else would be holding the bag or that real estate prices would stay high and buffer everything.
treetown
ano 1 and 2, blah, blah, blah, blah… Republicans with the top Bush leading them screwed up everything. Lack of financial oversight, foreign relations, environment, etc. and will pay heavyly in November. Obama will win in a landslide and Republicans will loose A LOT of seats, deal with it:))
When the ASEAN country suffer a similiar problems in late 1990’s…US demand that there should be no bail-out from goverment of the ASEAN countries to save their multinasional companys…this time we are watching what the great Uncle Sam will do to their own country!?
treetown – good analysis but one thing is missing.
in the quest to get more people into homes (people who can’t afford it under normal rules), lots of restrictions on lending were removed.
many people got homes they really couldnt afford. so when we say people are losing the homes they shouldn’t have had them in the first place.
everything got worse from there.
Using my taxpayer dollars to buy bad mortgage backed insecurities from people who paid too much for them, thus bailing them out, is at best an INdirect solution.
The idea is that once bailed out, those blameworthy institutions will be able to loan money again.
The Fed Gov should provide liquidity Directly.
To anon 2:32 and 3:24.
You obviously haven’t read the numbers
133 Republicans voted against, as did 95 Democrats. So your claim that the Democrats somehow stopped this is pure rubbish.
Had the 133 Republicans had any faith in this most lame of all lame duck administrations, the vote would have carried.
It’s time to quit trying to blame the Democrats for everything thats wrong, and admit the truth.
Here is the short version, Martin. Bush and McCain were trying to avert this disaster as far back as 2001. The Democrats stopped them.
I’ll take McCain’s foresight over Obama’s smile anyday.
For anon of 5.08 – you are right that changes in oversight and regulation clearly played a role – but individual greed and lack of sense all played a role – lenders were underwriting loans with nothing down, and barely any background check. Borrowers were taking on huge loans (10-20 times yearly income) and were anticipating that the house and loan would be dealt with before the loan comes due.
This is just the biggest manifestation of a deeper worrisome problem – so many people have little saving and are heavily in debt borrowing to fuel a lifestyle beyond their means. Their view of life has been so affected that their sense of happiness or accomplishment in life is tied to buying objects: big house, fancy cars, giant screen tv, etc. This is something the whole USA will have to face. Ironically if even a small portion of the US population takes a different view of life and happiness, the economies of the world which have been built on exporting those goods to feed this appetite will sustain a recession.
Chess is a good example of this difference. While there is a chess economy based on books, software, tournaments and equipment, the most important part of chess is the least tangible – that is chess skill. One can buy lessons and hire a coach, but the actual learning still takes personal effort. Chess fans all admire great chess skill yet it can’t be bought.
So what you are saying Jack, is that for 6 years although the Republicans controlled both the White House and Congress, and Bush and McCain were trying to avert this problem, they were unable to ?
That sounds to me like total garbage, typical blame shifting when people run out of ideas.
If they seriously wanted to avert a crisis they had seen coming, 6 years of Repulican control wasn’t enough?
That suggestion yields two possibilities, one that it is total bull, or two that McCain and Bush are impotent as politicians. We all knew Bush was, but McCain too huh?
That is correct, Phil.
Bush first proposed the oversight agency in 2001. Thanks to Jumpin’ Jim Jeffords, the Senate was controlled by the Democrats.
In 2005, the Republicans did control the House and Senate. However, it was a very slim majority. Senate legislation requires 60 votes, not just a majority, to end debate and move the bill to a floor vote. McCain’s bill did make it out of committee, on a strictly party-line vote. There was no chance that it would get the 60 votes required to move the legislation past a Democratic filibuster.
Let’s blame Ralph Nader.
He is a complete loser anyway.