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Topic 2 of 8. The Financial Bail-Out
TOM: It’s a disaster, it doesn’t even seem to be working, it is saddling our grandkids with over a trillion of debt. Would have instead put a moratorium on home foreclosures, readjust mortgages in danger of failing, would not have “bailed out Wall Street.”
DEBBIE: (I’ll be thorough here since this response was controversial – V) The problem starts with our DEBT, which we need to get rid of. The two things most of us know very little about are energy and finance, and it’s very important for all of us to get a handle on how our gov’t finances things. I don’t think we had an option here for how we responded to this crisis. (I think I can say that is an admission that she would have reluctantly voted for it – V) We had a $66 TRILLION of CREDIT DEFAULT SWAPS. They are like a house of cards. When those start to go, everything will go, and we WILL be in the Second Great Depression. So I have empathy with those who are trying to undo this mess. But I’m also as angry and frustrated as everyone. Because I’ve played by the rules, I’ve always been a massive saver and never gone into debt.
But we have people in Washington who have not regulated this mess. In 1999 the industry hired armies of lobbyists to get rid of regulation, and they did. And then that created the ability to create these ARTIFICIAL INSTRUMENTS that don’t have any wealth. Real wealth comes from nature. Real wealth is an asset. It’s not a piece of paper that (???) And so we have this fake wealth that they’re trying to prop up, and we need to get back to real wealth and what real wealth means. And so while I understand that we should definitely try to keep this house of cards from collapsing, I’m also very concerned that it could collapse, and where do we go from there?
ERNST: We are rewarding bad behavior. If I make mistakes the gov’t’s not gonna bail me out. Not the FG’s job to protect banks or homeowners who take out loans they can’t afford. FG is the problem, FG needs to get out of the way.
DANA: I voted against the bailout twice. It was Debbie who first opposed it and then changed her position – She “flip-flopped!” And on her first important decision she had to make! [Then, afflicted with ADD, he started in on CO2 again - CO2, nuke-ular plants, and the trade deficit with China.] It was a sin against the American people to give over 700 billion to the Treasury Secretary with no strings attached (hard to argue with that) when we don’t even know who the next one will be. One thing we could have done instead was to increase FDIC insurance so that it would cover all savings accounts for at least a limited time.
TOM: Also claims to be confused by Debbie’s answer, although he adds that he was unaware she was already a Congressperson with a vote to flipflop on. (laughter and applause) Perhaps all four of us agree that we’re against the bailout.
DEBBIE: … I did not “flipflop” because I have always supported the government stepping in to regulate this industry. I don’t know what would happen if the banks collapsed. I do know how it’s affecting my citizens in my community, where nobody can get any kind of loan. I know how it’s affecting the company that my husband works for, where they can’t get any loans to buy products or any resources they need to turn into product.
And that’s what it really is about. Don’t allow someone else to frame this for you as a “Wall Street Bailout.” The banks have already gone bankrupt or they’ve already written down those assets (? not sure) So what does that mean to us? … Whether you’ve lost 20%, 30% or more of your own retirement benefits. Whether you’re having trouble getting a student loan so your kids can go to college. All of those things are affected by the liquidity in the market.
And this issue with the CREDIT DEFAULT SWAPS, this is what they’re really worried about. And it’s a very difficult issue to understand, it’s an artificial, engineered thing that’s been created that never should have been created, and so I see America getting back into something like what happened in the Great Depression if we did not step in to protect the banks. Or what happened in Japan where they had a Decade of Stagnation, because they had the same thing where they did not step in to try to resolve this. There really are no winners in this. But if we allowed this to collapse, we’d be bigger losers than if we stepped in and tried to solve this issue. And it’s not a 700 billion bailout, it actually is more. But there’s also the opportunity here to actually GET BACK some of this money. So, while obviously I didn’t have an opportunity in Washington to get involved in the vote, I think the gov’t does have a role to play in regulation. (again, sounds like reluctant support of the bailout, with a lot of detailed explanation – V)
ERNST rebuttal: I think the bailout is a sin, and the bad effects that would have happened without it are going to happen anyway, only a matter of time. We’re rewarding bad behavior. No bank’s gonna worry about giving a loan because “the gov’t's gonna bail me out.” Also the gov’t shouldn’t be insuring loans that it knows nothing about.
DANA rebuttal: I don’t think Debbie answered the question. I saw several quotes from her in the paper early on where we were both against the bailout, and now she’s in favor of it – that’s a FLIP-FLOP! You’ll always get just a YES or NO answer from me! They forced us to vote in 48 hours – I wasn’t gonna go along with it. People said I’d “get it now from the big boys” When they try to scare you, don’t rush into things, look into the issue, they wanted us to give TOTAL DISCRETION on 700 billion dollars to people we didn’t even know, and since that time, they’ve even changed the approach they’re gonna take. Now they’re gonna buy debts and buy into banks rather than buying toxic paper? This is a democracy, it’s Congress supposed to make that decision. I’m not gonna give your money away, and I’M NOT GONNA GIVE YOUR MONEY AWAY TO PEOPLE WHO COME HERE ILLEGALLY FROM ANOTHER COUNTRY! (laughter and cheers)
In part 3, I’ll attempt to get thru the other 6 topics a lot more briefly, but through the rest of the debate Dana continued to change the subject – not only to the “illegals” – but also back to Debbie’s either “flipflop” or “refusal to answer the question” on the bailout. Both of which can’t be true, because if she flip-flopped then we know what her position is – which is obviously, reluctant support.
Also I’ve been thinking more today about the relationship between Dana and Tom. Tom attacked Dana mercilessly throughout the debate and Dana just grinned and chuckled and referred to “my good friend Tom.” I just now realized that that was not so much statesmanlike equanimity, as it is Dana thinking that the stronger Tom attacks Dana, the more votes Tom will take from the more substantial Debbie who is Dana’s real threat.
I’ve refrained all these months from writing what I know about where my wayward friend Tom got his money to get on the ballot – let’s just say it wasn’t from the Green Party. There’s a long tradition of the Republicans helping get Greens get on ballots to drain away votes from Dems, and I’m sure the Greens have no problem rationalizing taking money from anyone to get their message across. It was also at Dana’s insistence that third party candidates be included in the debate, and I’m always for as many voices as possible. On the other hand a Dana-Debbie debate would have really shown voters how stark their choice actually is.
This is not a race or a year for spoilers. Listen to, learn from, and enjoy what Tom has to say, then when you go into the booth think if we really want two more years of Dana representing us.