The bailout bill went down to defeat in the House of Representatives this afternoon, with the Republicans trying to pin the blame on Nancy Pelosi for making a speech that they say drove away Republican votes. It’s good to see that the Republicans still have the presence of mind to try to spin some political points out of the imminent meltdown of the world economy, but I scarcely think that Pelosi’s speech had anything to do with it. The Republicans are trying to have their cake and eat it too by voting down this bill. Their sudden insistence on “free market principles” was nowhere in sight as they bailed out Fannie MAE, Freddie MAC and AIG, but now they don’t want to be seen handing over the keys to the gate long after the horses have already left the barn. The fact that the general public is still about 3-to-1 AGAINST a bailout bill probably has a lot more to do with it. Even the Dems didn’t all vote for it, which I think is worth noticing. The leadership needed to pass a bill, so they took the least-terrible set of compromises they could come up with, but they still couldn’t get everyone on board. Dennis Kucinich, for example, voted against the bill. So did my Congressman, John Tierney Here’s the complete roll call.

It’s not hard to find a lot of well-qualified people who are ready to line up and say that the original Paulson bill was unacceptable, but even the “compromise” bill worked on over the weekend has seen nothing but tepid support. At this stage, not passing the first thing to hit the floor is probably the best thing that could happen. Another bill will have to push a little bit more, even if the Republican reluctance is a cynical ploy. The weak-willed and useless Democratic leadership should be looking for something more than an overnight solution, since they’re going to be the ones still in control of Congress after November. George Bush has achieved the one thing he set out to do: set the whole world on fire and then sneak out the back door to let someone else handle the hard part. Nancy Pelosi, Barney Frank, Harry Reid, Chris Dodd, et.al. won’t have the luxury of walking away.

Last week I mentioned that Vermont Senator Bernie Sanders was calling for a completely different approach to this crisis, and now he’s elevated that call to the status of an actual petition. Sanders’ petition acknowledges what many of us believe will happen: the arrival of a significant depression to rival or exceed the scale of the Great Depression of the 1930s. And, borrowing from the way Franklin Roosevelt acted to alleviate some of the personal misery that befell so many people, Sanders’ proposal is simple, direct, and aimed at the average person, not the Wall Street arbitrageur whose portfolio shrank from $400 million to only $350 million. His proposal is thus:

1. Ensure that middle income and working families are not the ones who are paying for this bailout by
* Imposing a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue over five years;
* Ensuring that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and
* Requiring that taxpayers receive equity stakes in the bailed-out companies so that the taxpayers’ assumption of risk is rewarded when companies’ stock goes up.

Taken together these three provisions will substantially reduce the likelihood that this bailout will end up on the backs of average American taxpayers.

2. Include a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy. Further, we must protect our must vulnerable families from the very difficult times they are experiencing.

3. Repeal the disastrous de-regulatory legislation that facilitated this crisis.

4. End the danger posed by companies that are “too big to fail,” that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist. We need to determine which companies fall in this category and then break them up.

The first point addresses the reality that it is the rich who stand to benefit the most from any bailout plan. As a society, we must stop enabling the rich to steal again and again from the pockets of the middle class. There are many calling for a flat tax that would similarly place the burden of financial obligation on those who have benefitted the most and manage to contribute the least due to tax loopholes, legislation that favors the wealthy, and other systemic iniquities. I think the surtax described here, temporary and focused on the wealthiest, is a better idea.

But it is Sanders’ second point that needs the most support. Economic recovery WILL NOT HAPPEN by saving the fortunes of the wealthy. As a society we have to disabuse ourselves of the warped view that we have adopted toward the distribution of wealth. It may have worked for a few of decades after the Second World War, but since the 1980s the concentration of wealth into such a tiny percentage of the population has become pathological. We are going to pay the price for that as businesses start to go belly up over the next year or two, and we are not well-equipped to do so. The fedferal government can and should prepare for the mobilization of unemployed workers in a second New Deal that seeks to restore the infrastructure of the nation, reinvest Americans in their own communities, and create new structures for business in the future than are less dependent on the failed model of credit capitalism.

Sign the petition, but take it to the next step and communicate this to your congressional representatives, particularly if they voted for the bailout today. Congress CAN do something if they aren’t rushed by the Bushies to take any deal they can get. We need a good deal, a new deal to move forward.

The Stock Market Crash of 1929 was the triggering event for the Great Depression, but today we tend to forget that it didn’t all happen at once. Catastrophic bank failures, widespread panic, and the dispossession of millions of Americans happened in a series of waves that occurred through most of the 1930s. The inaction of the Hoover administration swept the Republicans out of office in 1932 and ushered in a dozen years’ duration of the administration of Franklin Roosevelt. FDR spent his entire first term dealing with the aftershocks, only to scarcely have time to move the nation forward before the Second World War would engulf us and become the engine of the national economy for the rest of his time in office.

Given the behavior of John McCain this week, all I can say is imagine if Roosevelt had decided to call “time out” to stage some pointless photo opportunities and make some political hay over the survival of this country. Even as the corporate leaders of the day attempted to organize a coup to steal the government away from President Roosevelt and replace it with a fascist military dictatorship during some of the bleakest times of the Depression, Roosevelt was not deterred. Critics of FDR make many good points about his pushing the envelope on Constitutional issues (though with the exception of the “court packing” scheme, what Roosevelt did isn’t even in the same ballpark with what Bush and Cheney have done), and the Supreme Court did eventually push much of the New Deal back in the closet (though not until the worst was over). The argument that extraordinary times may require extraordinary means is worth considering and even acceding to, as long as the people who take on those extraordinary measures do so with some degree of transparency and an absolute committment to the resolution of the crisis — NOT the indefinite extension of the crisis to extend that power, NOR for the political benefit of one party.

In 1933, the country was gripped by bank failures and panic runs that became so widespread and severe that the President declared a “bank holiday”, which temporarily closed the banks and gave the government time to review the status of all the banks in the country. The “holiday” lasted one week, and then banks were re-opened in a staggered mechanism depending on their relative security. It was an unprecedented move in American history and remains so even now. Roosevelt decided to address the nation via radio, thus inaugurating his famous “Fireside Chats” that would be his most direct communication with the public for his entire time in office.

Here is a recording of the first address, which explained the situation and the plan for the return to operation of the nation’s banking system. Compare Roosevelt’s remarks to Bush’s speech on Wednesday night, which tried to deflect any focus of criticism on the greed of the investment banks or the quarter-century of deregulation that undid the system of protections that Roosevelt’s administration enacted to prevent another meltdown like 1929 from happening. As Jon Stewart so astutely observed, Bush is reading from the same script that he used in 2003 to scare people into going along with his plan for the Iraq War. If Roosevelt’s address is a bit condescending (and it is), that stems in part from the greater psychological distance between average Americans and their government in those pre-media-saturation years, but in the fina analysis he makes a cogent explanation of the situation and the plan and offers an optimistic branch for people to grasp onto in the middle of what was a very frightening time. Bush, on the other hand, tells us that we’re all going to lose our homes and our jobs if we don’t do what he says and right now, not unlike the way he told us Saddam Hussein was going to kill us all with his weapons of mass destruction.

The two candidates for President have given us some significant insights into how we might expect them to respond to this crisis, which will surely outlast Bush and might even outlast them. Barack Obama has comported himself better than McCain, but has failed to demonstrate any initiative or real leadership, letting events simply go along as they will, controlled by the actions of others in Congress and Treasury Secretary Paulson. McCain, on the other hand, once again demonstrates his unsuitability to lead this country in a time of crisis; his flip-flopping on the very issue itself is disgraceful and blatantly cynical and his grandstanding demonstrates a complete lack of insight into the severity of the hardship that will befall the majority of Americans.

We are being failed by our political leadership at every level and on both sides of the political divide. Seventy-five years ago we were lucky enough to have as a national leader a man who understood the need to use political power for the greater good rather than personal gain or for the advantage of his supporters. Now we are saddled with a lame-duck president trying one last time to wrest power from government and hand it to a few powerful unaccountable figures and with two men, one of whom will definitely BE president in less than six weeks, but neither of whom has demonstrated where their leadership might take us.

Ohh. Emm. Gee.

As Jon Stewart said the other day, for those of who who have been living under a rock…CONGRATULATIONS We should all be so lucky right now.

Must have been a helluva day at CBS yesterday. Letterman sounded like he was going to walk down to the Evening News set and punch McCain in the snoot on live TV. But the real piece de resistance was Katie Couric’s interview with The Stupidest Woman In Alaska America.

Watch her seriously defend her “I can see Russia from my house” claim to foreign policy experience:

Then read the transcript of the slightly testy exchange over coming up with specific examples of John McCain’s non-existant record of fighting against deregulation:

Couric: You’ve said, quote, “John McCain will reform the way Wall Street does business.” Other than supporting stricter regulations of Fannie Mae and Freddie Mac two years ago, can you give us any more example of his leading the charge for more oversight?

Palin: I think that the example that you just cited, with his warnings two years ago about Fannie and Freddie - that, that’s paramount. That’s more than a heck of a lot of other senators and representatives did for us.

Couric: But he’s been in Congress for 26 years. He’s been chairman of the powerful Commerce Committee. And he has almost always sided with less regulation, not more.

Palin: He’s also known as the maverick though, taking shots from his own party, and certainly taking shots from the other party. Trying to get people to understand what he’s been talking about - the need to reform government.

Couric: But can you give me any other concrete examples? Because I know you’ve said Barack Obama is a lot of talk and no action. Can you give me any other examples in his 26 years of John McCain truly taking a stand on this?

Palin: I can give you examples of things that John McCain has done, that has shown his foresight, his pragmatism, and his leadership abilities. And that is what America needs today.

Couric: I’m just going to ask you one more time - not to belabor the point. Specific examples in his 26 years of pushing for more regulation.

Palin: I’ll try to find you some and I’ll bring them to you.

She’s a complete moron! She’s not qualified to be Senior Class President, let alone Vice President of the United States, or even Governor of Alaska…a job she already has! Are people in Alaska in general so fucking stupid that they could choose this woman as competent to run their entire state? Or does it just not matter to them and they were glad to give the job to the babe with the nice rack?

John McCain is a disgrace, but this woman has no business in public life whatsoever. If you vote for these two people in November, you should be ashamed of yourself.

First, the entertainment portion of our program:

It is a damn good thing that the Bush Administration chose to announce their agreement to pay the $700 billion ransom demand made by Wall Street over the weekend. If this had happened during the work-week, the pressure on Congress to Just.Do.Something. would have been overwhelming, especially after Ben Bernanke used the “nuclear option” on Congress to tell them just how serious this problem is. And, given that Nancy Pelosi and Harry Reid bend over for Geroge Bush more than a Greenwich Village tranny during Fleet Week, they would have gone along in a snap. But the weekend gave every pundit known to humanity a chance to take a deep breath, sort out the details, and come to the conclusion that the bailout plan, as proposed, is FUCKING WACK.

If the Bush bailout plan were put into place without modification, you might as well cancel the November election, because Hank Paulson would be the de facto Ruler Of The Free World. With a blank check, zero accountability, and virtually unlimited authority to do whatever he wants to the American economy, and thus by extension the entire world, he might as well declare himself King Henry the First and be done with it. It was apparently not enough to hand over a trillion dollars to Halliburton, not to mention $9 billion (UPDATED: make that $23 billion) IN CASH to the gang posing as the Iraqi government, but with less than six months remaining in their administration, they needed to make sure that Paulson’s buddies on Wall Street got their welfare checks AND the option to buy up all the failing banks in America at a deep discount.

You know it’s a bad idea when even such Republican lickspittles as William Kristol go on record in the New York Times as calling it a duck. I have been collecting links all morning to the various and sundry politicians, pundits and other bloviating gasbags and here’s the lineup I have so far of people who have said the bailout is a Bad Thing:

• Paul Krugman called it “Cash For Trash”
• Robert Reich says no blank check without some conditions, and even has a suggestion for a totally different sort of plan
• Vermont Senator Bernie Sanders offers a proposal that warms the cockles of my sclerotic pinko heart: Make the rich pay for the bailout, bring back strict regulation to the financial sector, and stand ready to roll out a Second New Deal to rebuild American infrastructure and put millions to work. (In a perfect world, I would be voting for a Kucinich/Sanders ticket come November…)
• Speakng of Kucinich, he has picked up on Krugman’s “Cash For Trash” line, and says he will introduce a counter-proposal to distribute the remaining good assets of the failed banks to each and every American citizen to the tune of the $2,300.00-per-person figure that has been bandied about as the per-capita cost of the bailout.
• Meanwhile, Kucinich’s chief economic adviser from his primary campaign, University of Missouri Professor Michael Hudson, spoke about the crisis in this interview last week (pre-bailout announcement) with DemocracyNow.org (video here if you’re interested). He doesn’t even think the AIG bailout is a good idea…and he’s right.
• This post at DailyKos has a quick roundup of punditry, including Krugman. Even the Wall Street Journal isn’t too keen on the plan
• Politico.com’s round-up adds University of Chicago School of Business Professor Luigi Zingales (who wrote the 2003 book “Saving Capitalism From The Capitalists”), Mitt Romney’s financial adviser Harvard Economics Professor Greg Mankiw, Time Magazine’s Justin Fox, annd Conde Nast Portfolio writer Felix Salmon.

Meanwhile, the Financial Times is one of the few places where you’ll read anything good about the plan, and even their recommendation is lackluster, and some of their columnists are even less certain about it all. Then there’s this moron writing in Time, who seems to think it’s 2002 all over again by declaring us the “United States of France” for even SUGGESTING a bailout plan.

Then there are the side effects to consider:

Jason Rosenbaum at The Seminal, is quick to point out that while Hank Paulson is shoveling out the contents of the U.S. Treasury to his former co-workers at Goldman Sachs, John McCain STILL thinks it’s a good idea to deregulate the health insurance industry the same way he voted for deregulating the investment banks over the last 25 years. And let’s not forget that McCain LOVES the idea of creating private retirement accounts instead of funding Social Security, so that we can hand over our hard-earned money more efficiently to Wall Street.

At least Barack Obama isn’t ready to hand over all the money so easily, but he isn’t exactly stepping up to the plate yet either. The Boston Herald reports that he spent some time this weekend meeting with Warren Buffet, Larry Sanders, Paul Volcker and a bunch of other Serious People to get a better handle on the situation and maybe come up with something. But, seriously, Barry, you need to pull something out of your ass that isn’t just some rhetorical flourish on top of a wishy-washy do-nothing plan like the rest of your platform. Somebody tell me again why you think he’s better than McCain, because I still just don’t feel the love for him that you do. Running on “I’m not John McCain” isn’t much of a change, you know.

Much has been made of this e-mail from an unnamed Democratic congressman who isn’t too happy with the events of the last few days. He’s ready to vote for anything that “…would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling… That would just be petty and childish, and completely in character for me. I’m open to other ideas, and I am looking for volunteers who want to hold the sons of bitches so I can beat the crap out of them. I think he’s on the right track myself, but over at MetaFilter the user named “Pastabagel” has a very salient reminder about spreading the blame for all this around. While I feel the Congress-critter’s pain, Pastabagel has a very valid point: we gave the Democrats back the majority to take care of this bullshit and they have let us down immensely. Republicans and Democrats alike need to be thoroughly beaten with sharp and pointy objects for their complicity in this clusterfuck.

And the general public? Well, we’ve been enjoying our bread and circuses, of course. The Pew Research Center’s weekly analysis of news content says that in the week of September 8-14, which is the week before the market tanked and people started to get nervous, 42% of all news coverage was devoted to some aspect of Sarah Palin, with nearly 25% of that coverage being about the “lipstick on a pig” comment, while the crumbling economy got 4% of the newsmedia’s attention. Forty-two fucking percent of their seemingly limitless time thrown away on some white-trash “hockey mom” who can “see Russia from her house”, while the millionaires line up for their bags of money taken directly from our pockets. We, the people of this country, also deserve a full measure of blame for this. And we’re going to get it. Soon.