House Republicans and the Bailout
Okay, on the Bailout, I’ve been silent for a while. Mainly because it’s not the same from day to day and my thoughts change a lot… Also, John McCain decided he should get in the mix, although Americans seem to have disagreed, and confused the whole thing… But today I heard some things that prove the Republican party, specifically the House of Representatives’ Republicans, are complete and utter idiots.
House Republicans say the potential losses for the taxpayer are excessive. Rather than purchase bad assets, one alternative would be to extend government-backed insurance for the securities with industry paying a fee for the added coverage that could improve their value.
Okay, geniuses, what are you going to charge for this magical insurance? I don’t have to remind readers that there is no way to determine this… If one could know what “insurance” like this would cost then they would know what the underlying securities were worth. Oh, and let’s not forget that the same person who would have to use this authority, Hank Paulson, thinks it’s useless..
“Frankly, he said, ‘If that was added as an option, it wouldn’t hurt, but I couldn’t use it,’” the chairman said of his discussion with Paulson. As for Frank himself? “I wouldn’t mind, but it doesn’t do anything. It’s useless but not harmful,” Frank said. “The problem was in displacing the other stuff.”
Oh, and these same stupid partisan arch-conservatives cited Fannie and Freddie as proof that mortgages can be insured… Need an educated person, with even a minimal knowledge of finance and current events, say anything more?
My favorite, though, is how the House Republicans, just like the Underpants Gnomes, want to suspend the capital gains tax so that the economy can recover (“Step 1: Remove Capital Gains Tax, Step 3: Economy Fine”)! What do they say?
“By encouraging corporations to sell unwanted assets, this provision would unleash funds and materials with which to create jobs and grow the economy,” an outline of the proposal said. “After the two-year suspension, capital gains rates would return to present levels but assets would be indexed permanently for any inflationary gains.”
Someone needs to tell these free market champions the definition of the word “gains” …
To be sure this is a complicated problem. However, having idiots running around pandering to their base with senseless proposals that are counter-productive complicates things further.
As for the other provisions? Well, I think one needs to step away from their “Wall St.” hat here and look at what’s best for everyone… For many reading this blog I anticipate that’s a hard thing to do. In general, oversight is something I support. I also think that companies that want to avail themselves of public money should give the taxpayers some upside and assurance that they won’t be rewarding people who were responsible for this problem in the first place. How does one implement those things? Seems like the consensus bill being reported gets closer than the other proposals… We’ll have to see what emerges.