HOUSE FAILS ECONOMIC RESCUE PLAN

Today in a stunning defeat of HR 3997 - the famous Paulson $700 Billion dollar rescue plan - we saw clear proof of loss of leadership of George Bush and John McCain.

This led to the DOW dropping 777 points !



The final vote came down as follows





The Republicans immediately put out their childish statement by resident idiot Eric Cantor (R) from Virginia:

"Right here is the reason I believe why this vote failed," Cantor said, "and this is Speaker Pelosi's speech that frankly struck the tone of partisanship that frankly was inappropriate in this discussion."

This astounds me as the most ridiculous statement that demonstrates a clear lack of accountability and responsibility!

Barney Frank (D) NY summed it up best:

"Because somebody hurt their feelings, they decided to punish the country."

"Give me those twelve people's names, and I will go talk uncharacteristically nicely to them, and tell them what wonderful people they are, and maybe they'll think about the country."

Let's be honest here, they didn't have the votes because they put their own jobs and political ideology on the line. They are cowards, because they knew that they would be voted out of office if they voted for this measure.

We are already seeing credit impacts with two European Banks failing - Belgium's Fortis and Britains B&B banks have both been nationalized.

Only time will reveal the full impact. My personal opinion is that this was a BIG mistake by the House Republicans.

Biggest Loser is John McCain, given his political gimmick of going to Washington DC last week to "rescue" the bailout plan

From the NY Times:

Senator John McCain had intended to ride back into Washington on Thursday as a leader who had put aside presidential politics to help broker a solution to the financial crisis. Instead he found himself in the midst of a remarkable partisan showdown, lacking a clear public message for how to bring it to an end.
At the bipartisan White House meeting that Mr. McCain had called for a day earlier, he sat silently for more than 40 minutes, more observer than leader, and then offered only a vague sense of where he stood, said people in the meeting.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/26/AR2008092603957_pf.html

From the Washington Post, Jonathan Weisman provides an insiders look into what happened in that meeting:

Pelosi said Obama would speak for the Democrats. Though later he would pepper Paulson with questions, according to a Republican in the room, his initial point was brief: "We've got to get something done."
Bush turned to McCain, who joked, "The longer I am around here, the more I respect seniority." McCain then turned to Boehner and Senate Minority Leader Mitch McConnell (R-Ky.) to speak first.

Boehner was blunt. The plan Paulson laid out would not win the support of the vast majority of House Republicans. It had been improved on the edges, with an oversight board and caps on the compensation of participating executives. But it had to be changed at the core. He did not mention the insurance alternative, but Democrats did. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, pressed Boehner hard, asking him if he really intended to scrap the deal and start again.

No, Boehner replied, he just wanted his members to have a voice. Obama then jumped in to turn the question on his rival: "What do you think of the [insurance] plan, John?" he asked repeatedly. McCain did not answer.

One Republican in the room said it was clear that the Democrats came into the meeting with a "game plan" aimed at forcing McCain to choose between the administration and House Republicans. "They had taken McCain's request for a meeting and trumped it," said this source.

Congressional aides from both parties were standing in the lobby of the West Wing, unaware of the discord inside the Cabinet room, when McCain emerged alone, shook the hands of the Marines at the door and left. The aides were baffled. The plan had been for a bipartisan appearance before the media, featuring McCain, Obama and at least a firm statement in favor of intervention. Now, one of the leading men was gone.

This play at leadership by John McCain was clearly not there. McCain will probably lose politically from his gamble, and as we all know, McCain loves to gamble.

Mavericky McCain

When McCain announced that he would be suspending his Campaign to go back to Washington to lead the Financial Crisis and the vote on the Bailout, it reminded me of this cartoon by Tom Toles of the Washington Post.

McCain thinks he is just being a Maverick, but I don't think he has a clue that he just looks erratic. I think he just doesn't get it, that during a time of crisis, that Americans value stability more than surprises.

Obama had earlier captured a quote from Tom Tole's cartoon where he satirized McCain shouting to the White House:

"Watch out Mr. Bush. With the exception of Economic Policy and Energy Policy and Social Issues and Tax Policy and Foreign Policy and Supreme Court Appointments and Rove Style Politics, we're going to come in there and shake things up".

The Crash of 2008: Wall St Melt Down

Well this past week has been an avalanche of shock for Wall St, Main St, and pretty much all around the world.

Monday news of Lehman Brothers going bankrupt, then Merrill Lynch being sold off to Bank of America, and then today's news of the Fed's loan to keep AIG afloat cost Dow Jones another 450 points. This week we've seen the steepest drop since 9/11, about $700 billion dollars in investments disappeared in one day.

What's interesting is the change in tune of McCain, who before was a champion of deregulation, yet is now on a mission to clean up Washington and Wall St. To take on the "good ole boys" and put an end to fat cats on Wall St.

I am in disbelief, and so should you. I don't know who McCain is fooling, and it's clear he's so desperate to be President he doesn't care that he looks like an idiot.

"Earlier this year, for example, when the economy began showing signs of trouble, McCain promised voters “specific proposals to address our economic challenges.” However, he also promised that “they will be based not on big-government intervention, and not on raising your taxes, not on increasing government regulation but unleashing the forces of the free market and capitalism.”

A decade ago McCain pushed unsuccessfully for a moratorium on all federal regulations. Asked about that by the Wall Street Journal this spring, McCain said, “I’m always for less regulation. But I am aware of the view that there is a need for government oversight.

“I am fundamentally a deregulator,” he told the Wall Street Journal. “I’d like to see a lot of the unnecessary government regulations eliminated, not just a moratorium.”

That approach borrows a lot from the philosophy of McCain’s close friend and economics advisor, former Treasury Secretary Phil Gramm. As a U.S. senator, Gramm was widely considered the architect of our largely deregulated financial system that helped create this mess."

http://www.ajc.com/opinion/content/opinion/stories/2008/09/17/marketed_0917.html

What was Gramm's contribution to all of this? He is responsible for introducing a nifty piece of legislation - the Gramm Leach Bliley Act which essentially cancelled the Glass-Steagall Act which was put in place by FDR during the Great Depression to separate commercial and investment banking.

Deregulation of Telecommunications, Energy, and Banking industry has been increasing since the Reagan administration. You would have thought we would have learned our lesson after the disaster of Enron, MCI, and World Com, but clearly the Republicans love affair with deregulation is never ending.

Although the Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, was signed by Clinton, it was pushed through by a Republican Controlled Congress. This law effectively deleted the prohibition on commercial banks owning investment banks and vice versa. The problem is that the investment banks were not held to the same stringent capital requirements as set for normal banks. Oh and by the way, Gramm was the brilliant campaigner for McCain who said that we were "a nation of whiners", and that we were suffering only from a "mental recession".

This year's housing crisis with the bad subprime mortgage loans proved too much for the investment banks, and now we find ourselves in this nightmare of a situation.

Yet John McCain's answer is to put together a commission - like the 9/11 to figure out what went wrong!

If this isn't a wake up call for America, I don't know what is. McCain is clearly unable to take leadership and outline a plan for what needs to be done. Other than to spout off tough talk about knowing how to handle it.

In two new television ads Wednesday, McCain asserts that he is the right leader to keep Americans' savings safe.

"I'll meet this financial crisis head on," he says in one ad. "Reform Wall Street. New rules for fairness and honesty. I won't tolerate a system that puts you and your family at risk. Your savings, your jobs — I'll keep them safe."

Really Mr. McCain? If you know what to do, please stop bragging, and tell Bush what to do then!

Obama's speech at a rally in Golden, Colorado provides a stark contrast in leadership and vision.