Hank Kalet

There were 25 “no” votes on the Wall Street bailout, most of whom were Republicans. But as with the Monday vote in the House, nine Democrats and one independent balked:

• Maria Cantwell, of Washington
• Byron Dorgan, of North Dakota
• Russ Feingold, of Wisconsin
• Tim Johnson, of South Dakota
• Mary Landrieu, of Louisiana
• Bill Nelson, of Florida
• Bernie Sanders, of Vermont (the independent)
• Debbie Stabenow, of Michigan
• Jon Tester, of Montana
• Ron Wyden, of Oregon

Here is Feingold on the bailout, from The Nation:

“It fails to offset the cost of the plan, leaving taxpayers to bear the burden of serious lapses of judgment by private financial institutions, their regulators, and the enablers in Washington who paved the way for this catastrophe by removing the safeguards that had protected consumers and the economy since the great depression,” said Feingold. “The bailout legislation also fails to reform the flawed regulatory structure that permitted this crisis to arise in the first place. And it doesn’t do enough to address the root cause of the credit market collapse, namely the housing crisis. Taxpayers deserve a plan that puts their concerns ahead of those who got us into this mess.”

And here are Sanders’ comments:

“The bailout package is far better than the absurd proposal originally presented to us by the Bush administration, but is still short of where we should be,” argued Sanders. “If a bailout is needed, if taxpayer money must be placed at risk, if we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from President Bush’s tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation who should pick up the tab, not ordinary working people.”

These 10 joined with 15 conservative Republicans in tilting at the Wall Street windmills.

Alabama Senator Richard Shelby, a Republican who has been a key player on banking issues and who actually had the wisdom to oppose the deregulation moves of the late 1990s that helped create the current crisis, told senator Senate were in the process of having “failed the American people” by acting hastily.

“I agree we need to do something,” said Shelby. “[But] we haven’t spent any time figuring out whether we’ve picked the best choice.”

This odd coalition defeated the bailout in the House and may again — though the so-called “sweeteners” might draw just enough Congressmen to drag the bailout to passage.

Ian Welsh’s piece on Firedoglake raises legitimate questions about the plan being approved, 75-24 in the Senate as I write this, while asking voters to go out and demand that Congress consider the alternatives being proposed by members of the House Progressive Caucus.

Here is his brief, but on-the-mark critique on the bailout:

On the substance of the matter at hand, of course, it isn’t much changed. Increasing how much the FDIC insures is good, but something the FDIC could have done itself at Presidential order, it has the authority (and IRAs were already insured to $250,000). As “concessions” go, that’s very very little since Obama or Bush could have just said “make it so”. Adding in letting the FDIC borrow infinitely from treasury is also good, but it’s an administrative detail, the guarantee was already there.

There’s still no bankruptcy protection for ordinary people. The treasury secretary can still spend money on any asset he wants, pay whatever he wants, sell it for whatever he wants and doesn’t have to take an equity or bond share if he does, and if does do it can’t take voting stock but must take non-voting stock. Executive compensation restrictions are a joke, just “pay a little bit more tax on your pay” and overall there’s nothing in here, nothing at all, which would stop banks from continuing to engage in the same practices as got them here. That’s insane. This isn’t even closing the barn door once the horses are all out, this is buying new horses and deliberately leaving the barn door open.

Bottom line: a bad bill which has been larded up with various legislators pet bills to get the votes necessary to pass. Everything I’m hearing says it will easily make it through the Senate. The real fight remains in the house.

As for the alternatives, he says this:

There are currently two bills being worked on in the House as alternatives to the Paulson-Obama bill. The first is the DeFazio bill, which is intended to fix the banking system by providing, not a bailout, but insolvency relief. The second is being put together by Rep. David Scott and Rep. Doggett, with the aid of economist James K. Galbraith, and is intended to help ordinary people by creating a modern version of the Home Owner’s Loan Corporation (HOLC) to take over mortgages and keep people in their homes with reasonable serviceable mortgages. Also working to turn
these bills into something that helps all Americans are Rep. Elijah Cummings and Rep. Lloyd Doggett.

Each bill by itself is incomplete, together with some work they could make a good, complete, humane solution to financial and economic meltdown which is also acceptable to enough Republicans to pass.

I want to mention the coverage of the deliberations, which has left the alternatives out of the discussion and has spent most of its time talking about the politics, the process, the game of partisan manuevering. Even liberal TV personalities like Keith Olbermann and Rachel Maddow have lost sight — to some degree — of what this bailout really is and have ceased asking whether the alternatives might work better.

Donald Payne, the Democrat from Newark and one of the House of Representatives most progressive members, outlines what he thinks needs to be included in a bailout plan. According to PolitickerNJ, Payne, who voted against the $700 billion package joining 94 other Democrats, said

he would need to see significant changes benefiting low income Americans
and workers before he could support it on a second pass.

“We have not extended unemployment benefits or mortgage relief,” Payne said
moments ago in an appearance on MSNBC.

The veteran congressman acknowledged there is no question the economy is in
crisis mode, but insisted on seeing stronger bottom up measures.

“This is still in progress,” he said.

The comments from plan opponents like Payne and U.S. Reps. Peter DeFazio, of Oregon, Marcy Kaptur, of Ohio, and Steve Rothman, of Bergen County, make it clear that the supposed concensus did not break down only because of concerns from conservatives. Any bailout needs to be structured so that the prime beneficiaries are average folk.