The bailout has passed. There is rejoicing all around — well, OK. I’m being facetious.
At best, this is a flawed plan, a rather massive give-a-way to the financial sector that may have only limited psychological impact.
Even before today’s vote, there were some in the financial community who were “already wondering: What is being left out and what will have to be done next?”
The rescue package may be missing measures intended to offset shrinking bank balance sheets, free up capital for non-financial companies squeezed by the credit crisis, or prevent the possible collapse of a $58 trillion unregulated market in loan insurance policies — known as credit default swaps — written by a variety of firms, say financial experts.
Most urgently, the short-term lending system remains largely frozen, endangering the ability of everyone from small businesses to universities to General Electric to finance day-to-day operations. The financial rescue package will not fully thaw it.
“The market for commercial paper issued by a large number of corporations has essentially shut down,” said Mohamed A. El-Erian, co-chief executive of Pimco, an investment firm with about $800 billion under management.
The market for commercial paper, which companies use to borrow money, shriveled by $94.9 billion, or 5.6 percent, to a seasonally adjusted three-year low of $1.6 trillion for the week ended Oct. 1, the Federal Reserve said yesterday. With banks, insurers and other investors shying away from corporate loans, the amount of outstanding commercial paper has dropped by more than $600 billion since hitting a peak of $2.223 trillion in July 2007.
Peter R. Fisher, a former Treasury undersecretary and former senior New York Federal Reserve official, said that in buying troubled loans, the new agency created by the legislation would attack the credit crisis “indirectly . . . by trying to lighten the load on the balance sheets of the banks, but it is unlikely to do enough to change the propensity of banks to shrink their balance sheets from here to year-end.”
That means less lending by banks and tight times for Americans who need to borrow money.
And that doesn’t account for the lack of assistance to homeowners in the bailout plan.
Here is U.S Rep. Dennis Kucinich (via John Nichols, on The Nation) detailing the problems with the bailout:
Some people will ask of this Congress, what were we thinking? Why did we give $700 billion bailout to Wall Street without fixing what caused the problem in the first place? Why did we rig the free markets for security fraudsters? Why didn’t we explore alternatives to let Wall Street solve its own problems? Why didn’t we have money to save millions of homeowners, create millions of jobs, and a green economy? Why didn’t we stop the speculators? Why wasn’t there accountability? Why didn’t we take time to make an intelligent decision?
Why? Why? Why?
The Wall Street mess has obscured other bad economic news, explain succinctly by this headline from The New York Times: “U.S. Sheds 159,000 Jobs; 9th Straight Monthly Drop.”
This is a dark time, indeed.
Hank Kalet 
Hank, buddy… a little short? Need to borrow a couple of bucks? … I have a few right here in my mattress.
Isn\’t Reagonomics and Bushonomics great? Grover Norquist is having orgasms of delight over this economic meltdown. It means that if McCain wins then he will have an excuse to totally gut Medicare, Medicaid and Social Security, the GOP wet dream. Norquist, who was big buddies with Abramoff, is the right wing governmental/economic guru who hates government and wants to shrink it down to the size where it can be water boarded in the bath tub. Oh wait, but GOP dominated government will always find enough tax payer money to bail out Wall Street and the economic royalists. The only question is, are there still enough stupid Americans to put McCain in office for 4 or more years of GOP economic rape? Obviously there are enough stupid Americans who think Palin is qualified to be president. Jaysus!!!
OH yes, and those pure of heart Democrats had no role in any of this?http://deepbackground.msnbc.msn.com/archive/2008/10/03/1489413.aspx*** begin quote *** Tucked into pages 262 and 263 of the bill, for example, are provisions that will aid the manufacturers of \”certain wooden arrows designed for use by children.\” The bill will exempt the arrows from an excise tax of 39 cents. There are also tax breaks for race-track owners, for rum imported from Puerto Rico, for worsted wool makers, Hollywood film and television production companies and on and on.*** end quote *** Maybe this will be a wake up call to Get Rid of Incumbent Politicians (GRIP)?But, I\’m sure this is caused by the supposedly free market and all those libertarians in gooferment.Remind me again how perfect Medicare, Medicaid, and Social Security area? I wasn\’t paying attention to WELFARE for rich people was supposed to work. And, we need all those gooferement \’workers\’ to staff these programs! I was too busy watching Washington and Trenton rob me blind!Hank, you might be better off with a few GOLD COINS in your mattress after the coming inflation. I like to recall that my deceased Father-In-Law, a nice guy factory worker who always voted as if FDR was running, carried a fifty dollar bill in his wallet from 1945 to his death in the 90\’s. He didn\’t realize that it went from something valuable capable of buying a week\’s groceries to being worth a lot less. Smarter folks than I predict, and I agree, we\’re going to see a lot worse than that soon. It\’s called Austrian economics. And, Ron Paul mentions it from time to time when folks will listen.But it\’s all the hated GOPers fault. Nothing wrong with the whole concept of what happens in Washington and Trenton!
Lovely libertarians. Just let tens of millions, MILLIONS of the elderly and disabled rot and die in the gutter. There has to be a place in hell for libertarian lack of compassion and empathy.