Pelosi: The legislation may have failed, the crisis is still with us

"The Democratic side more than lived up to its side of the bargain. The legislation may have failed, the crisis is still with us," said U.S. House of Representatives Speaker Nancy Pelosi (D-Calif.) during a press conference on the rejection of the Wall Street bailout plan by House Republicans.

According to Pelosi the bill was bipartisan. Democrats had put in language about capping CEO salaries and protecting about-to-be foreclosed homeowners keep their homes, and steps were taken to provide for congressional oversight.

Pelosi said that although the majority of the House Democrats heeded Secretary of Treasury Henry Paulson and President George W. Bush's warnings regarding the need for the bailout plan, the House Republicans did not.

"We extend a hand of cooperation to the White House and to the Republicans so that we can get this issue resolved for the benefit of America's working families, to strengthen our economy and therefore strengthen our country," said Pelosi.

Chairman of the Financial Services Committee Barney Frank (D-Mass.) said that some members of the House had advised Paulson to make sure that his proposal was acceptable to both Wall Street and to the House Republicans, but that Paulson had not properly done that.

Frank said that the Bush administration should take the initiative to change the stance of the House Republicans.

The Democratic leadership disagreed with insinuations that the plan was derailed due to a partisan speech by Pelosi.

"I am appalled...We have come together on a bill to alleviate the crisis, and because somebody hurt their feelings they decide to punish the country? I would not have imputed them that degree of pettiness and hyper-sensitivity," said Frank.

He went on to joke,

"There were 12 Republican members who were ready to stand up for the economic interest of America, but not if somebody said someting? Give me those 12 people's names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are, and maybe they'd now think about the country."

The plan was supported by 60 percent of the House Democrats and 67 percent of House Republicans voted against it.

Comments

[Bob Kalk]

Once you get past the chaff, thrown out by both sides in the House of Representatives, two historical facts become abundantly clear.

1 The no-doc and low-doc loans that are at the heart of the current financial crisis have been known throughout the real estate and banking industries, for well over a decade, as liar loans. These, are often coupled with valuations that are routinely inflated, through appraisal firms retained by sub-prime lenders. Even though the numbers are false, the practice of qualifying the unqualified was so pervasive that any honest due-diligence effort would quickly reveal just how bad such an investment would be for anyone buying such paper.

2 The seriously distorted 'mark to market' valuations that are the underpinnings of our entire financial system are derived from precisely the same scheme to defraud that Jeffrey Skilling used at Enron. When the market price can not be objectively or readily determined, either because of distortions or because there is no real day-to-day market available, assets get 'marked to model' using estimated valuations derived from financial modeling. As it is with liar loans, anyone in the industry knows this often equates to a “marked to fantasies' system of accounting.

Even though we have recent experience with Enron, WorldCom and others who failed to maintain the illusion, management by delusion has remained a matter of national policy. It was only by means of the criminal negligence or forbearance of our executive and legislative branches of government that our entire economic proposition has been placed squarely on a such a plane of unreality. It is only with the complicity of the ultimate scofflaw, the Supreme Court of the United States, that the no-accountability culture thrives.

Now, the guy that hid his cash in the mattress because he didn't trust bankers is being asked to compensate not only the investors that failed in their own duties of due-diligence, but also to prop up the integrity challenged executives that betrayed their fiduciary trust. It is reverse Darwinism on a grand scale; survival of the wholly unfit for an estimated cost approaching ten percent of the total U. S. economy.

How is it that presidents and senators can point an accusing finger at the leadership failures of anyone else when they enable such malfeasance through corruptly and otherwise poorly crafted legislation. Consider this little gem quoted directly from the political payback machine: “.01 Section 475(a) of the Internal Revenue Code requires dealers in securities to value their securities at fair market value as of the last business day of the year. Section 475(e) allows dealers in commodities to elect this same mark-to-market treatment for their commodities. Section 475(f) allows traders in securities (and traders in commodities) to elect mark-to-market treatment for positions held in connection with the taxpayer’s securities trading business (or commodities trading business, as the case may be).”

The Paulson/Bernanke Plan is yet another blatant effort to defraud the U. S. Taxpayer. It calls for a new obfuscation and political payoff program rivaled only by the tax code. It is for reasons such as those stated that the Citizens of the United States should throw out any lawmaker voting to buy into the tainted brief or purchase any of the bad paper held by those unjustly enriched through their unmitigated selfishness and criminal activity.

The citizens of the United States should accept nothing less than preferred stock at fire-sale prices. In the alternative they should require a super-priority interest on the assets of any company taking a loan from the Treasury. It is the stockholders of those companies that are responsible for diluting the value. For in each case they are the ones that failed to discipline their self-serving management. In no case should you, my fellow citizens, extend any form of unsecured assistance to the uncharitable parasites that have infested our financial system. And I would hope you would join me in helping to flush the political cesspool that created such a no-accountably environment. You can do so by visiting www.IncumbentOut.org and expressing your views. — Robert H. Kalk