HUNTER: “RESCUE” PACKAGE WON’T RESCUE ECONOMY

House.gov ^ | 10/1/08 | Duncan Hunter

[pissant]

Washington, D.C. – Congressman Duncan Hunter (R-CA) released the following statement regarding the financial “rescue” package under consideration by the U.S. Senate today:

“Bill Isaac, former head of the Federal Deposit Insurance Corporation (FDIC) during the turbulent Savings and Loan crisis decades ago, well instructed the nation with his practical plan to resolve the current credit crunch without spreading huge amounts of cash to institutions around the world.

“Isaac reminds us that the banking network is a $15 trillion system, providing a huge forest for the Administration’s $700 billion of taxpayer money to get lost. When asked how the credit crunch would be affected by moving the cash to institutions around the world in return for their toxic debt, Isaac replied that the effect would be negligible.

“He then recommended practical moves that the U.S. can make now to get money moving again:

1) Banks are reluctant to move loans to fellow banks because of the fear that recipient banks might fail.

Solution: The FDIC should guarantee the depositors, creditors and bond-holders of all U.S. banks that they will be fully protected in the event of bank failure. The FDIC has the power to make this guarantee and should now invoke it without limit.

2) Credit is presently restricted because asset evaluation to date has been constricted by “mark-to-market” or fire sale pricing. While the Securities and Exchange Commission has issued new rules, they are somewhat vague and should be clarified to reflect “mark-to-hold” value. This realistic evaluation of assets would free billions of dollars for new loans.

3) Net Worth Certificates could be issued to institutions that have been analyzed by the FDIC and found to be financially sound. The certificates would be delivered in exchange for junior notes, which would not displace depositors or share holders.

“Isaac’s three-point plan solves the credit crunch without socializing the system. It assigns the proper role to government in a free market… ensuring that our citizens have a secure place to put their money and banks themselves also have a secure place to put their money.

“The Isaac plan is practical and protective of depositors and taxpayers alike. Moreover, he is widely credited with successfully guiding our banking system through turbulent times in the 1980's. Let’s go with a quarterback who knows how to win.”

[pissant]

A man amongst socialists.

[pissant]

Ping

[cardinal4]

Hey pissant, do you have a list of those were bought by wooden arrows?

[grandpa jones]

It might be very hard to get any money moving for several weeks as the credit derivatives from Fannie, Freddie, and Lehman are unwound. LINK

[Carling]

Oh, I agree, Rep. Hunter. Too bad our own candidate for President disagrees with us.

[Fichori]

American Patriot bump!

[21twelve]

Now all Hunter has to do is add about 399 pages of earmarks and it would be good to go.

[pissant]

Search FR for keyword “bailout”. I posted the roll call vote article earlier today

[DoughtyOne]

No matter what the plan is that our leaders have chosen, we need to give the plan a chance.

At the beginning of the week it looked like no bill was going to be implemented. You know what, I was fine with it, as long as we all got behind it and talked up the economy. I had reservations, but go with it if that was the consensus.

At the present time Cavuto is planning a vivisection of the plan tomorrow morning. Politicians seem poised to come out and trash the plan. Tell you what folks, whatever the plan is that they are going with, I hope it soothes the financial markets and we get back on track.

The alternative is to see our nation go through some serious trouble. Consumers, depositors, investors, lenders, we all need to run with it. Shouting from the mountaintops that we are doomed, isn’t the way to go here.

If the populace is convinced that is true, we are in serious trouble. Even in the best of times, if you can convince the public we are in serious trouble, then we are. I don’t care for that game.

Right or wrong, the decision has been made. The grand opportunity for me to look back twelve months down the road and say I was right, doesn’t sound that appealing to me. I’d rather see confidence in the market, than play into making some prediction more likely to play out.

[supercat]

The more I think about the bail-out, the more I hate it.

Fundamentally, many of the participants in the market made transactions which would be sound if and only if the government were willing to buy assets at more than their worth. In other words, they were betting that they could scam the government. Can any reasonable government allow people to win such a bet, at any price, much less $700B+?

[pissant]

Yakking about it is only so powerful. Investors can see socialism and boondoggles no matter what the polticians say.

But I, for one, ain’t going to talk up this crap. I’m going to continue to damn it til the day I die.

[pissant]

The Senate took care of that.

[supercat]

The alternative is to see our nation go through some serious trouble. Consumers, depositors, investors, lenders, we all need to run with it. Shouting from the mountaintops that we are doomed, isn’t the way to go here.

How about saying that there will be some major market corrections which nobody will like, but which were bound to happen anyway, and that once we get through those we would be fine? It makes me very sad to see all the misery that's going to be caused by the (bleep)s in Congress.

[DoughtyOne]

I don’t expect you to agree with it. I don’t expect you to talk it up. I wouldn’t talk up the failure to pass a plan. Whatever the action that is chosen, I’m simply going to hope it works.

I would think that is what we all should be hoping down deep inside.

If you are compelled to continue to talk about it and trash the plan and state that it will never work, I support you doing it. I’m just not convinced in the long run that will be best for the nation.

[FFranco]

I am convinced this was caused by Commie Democrats. They are destroying America’s economy so Obama will be elected and he can turn America into an Islamic Republic. If Obama is elected and we get a Democrat House and Senate, that’s what will happen. They will create a Depression so they can make Anerica a Communist Muslim state.

[pissant]

I AM convinced socialism is evil and stupid. I thought FDR’s screwing with the economy would have been proof enough.

[DoughtyOne]

The sad thing about the passage of this bill, is that if it does enhance liquidity and things balance out, some folks will never quite believe that it worked. They’ll believe that the market corrected despite this plan.

IMO, within weeks we would have seen serious problems that far exceed what people who were against the plan thought they would see.

Thanks for the opposing opinion SuperCat. I’m sure not convinced what was done is the right thing to do. I’m not convinced no government measure that didn’t involve an influx of massive funds was the proper alternative either.

Take care.

[gwilhelm56]

**Too bad our own candidate for President disagrees with us.**

It wasn’t the FIRST TIME that’s happened!

[DoughtyOne]

I might not buy into all that, but I’m in agreement on enough of it. I do believe the Democrats screwed us into the ground on this one, and I’m not referring to the bailout.

[roamer_1]

A man amongst socialists.

Indeed. But never fear. I am sure there will be a raft of RINO enablers coming along any moment to explain the error of his ways...

[DoughtyOne]

I am as well PissAnt. If the funds wind up ‘given’ to the lending institutions rather than a purchase of paper that well see the government reimbursed, you probably have a case here. If the government hands out some of those funds and is later reimbursed fully or to a large extent, this may turn out to be more of an exotic vehicle or real estate loan. That wouldn’t be socialism.

You and I agree that FDR and Johnson saddled us with some terrible programs that should have been addressed years ago. Hopefully, this isn’t that.

If it turns out to be, I am going to agree with you that it was a terrible idea.

[Rick_Michael]

The primary problem as I see it is within the instruments used for Mortgage Backed Securities (and the investors lack of confidence in them).

I’m not sure anyone is suggesting anything on that. The politicians actually need to invite investors and economists in....it’s like the blind leading the blind right now.

[ASOC]

I am glad to say my ENTIRE House Delegation voted NO on this Socialist tripe.

[supercat]

I’m not convinced no government measure that didn’t involve an influx of massive funds was the proper alternative either.

If a patient is hemorrhaging badly from a limb that is shredded beyond recognition or repair, and is consequently getting insufficient blood flow to the brain, would proper therapy be to inject a heart rate stimulant to increase blood flow and/or use a limited supply of blood to give a transfusion? Or would such immediate courses if action be totally stupid?

Before we spend any money on bailing anyone out, we need to stop the bleeding. Start prosecuting people who have committed loan fraud and securities fraud, and freeze the assets backing soon-to-be-insolvent credit default swaps. Such measures would not only do more to inspire investor confidence than bailouts ever could--they would also allow money injected into the market to circulate without being bled out by crooks.

After that is done, then a stimulant or transfusion might very well be needed; if necessary, one can be given. It is foolish, though, to try to increase blood flow before the bleeding is stopped.

[SoConPubbie]

But I, for one, ain’t going to talk up this crap. I’m going to continue to damn it til the day I die.

Couldn't agree with you more.

Never compromise with evil, and socialism, in whatever form, is evil.

[supercat]

Many of the biggest loans were outright fraudulent. Congress didn’t want the bubble to burst in 2005, so they threw open the floodgates to monster-sized NINJA loans. I would be surprised if the default rate on NINJA loans of $300,000 or more is under 99%, or if the recoverable value is over 50%. In many cases, it’s probably under 25%.

[BigFinn]

I am convinced this was caused by Commie Democrats. They are destroying America’s economy so Obama will be elected and he can turn America into an Islamic Republic. If Obama is elected and we get a Democrat House and Senate, that’s what will happen. They will create a Depression so they can make Anerica a Communist Muslim state.

....with the new currency called the Amero.

[cardinal4]

There is no way this bailout for wooden arrows will come without a major tax increase, I dont care what anyone says. If my family has to pay an additional 10% in taxes, I wont be able to pay my mortgage. I make a fair wage, and it provides sustenance, but an additional 10% will kill us-Im not going to get a raise anytime soon. So in effect, I could lose my house, while paying for some else to keep theirs. And all the while the CEOs keep their parachutes, while congressman who steadfast against it, last week, voted yea for 30 pieces of silver. We are poor and accept it, and am always working to getting our financial house in order. The whole thing just sickens me..

[Kevmo]

Very Good place to bump this thread... B4DH

[TheFourthMagi]

Hunter would have been a great nominee. He and Mike Pence are two of the most principled people in the House.

[DoughtyOne]

Whether it is true or not, Republican Congressmen today were talking about small businesses back home that had been contacting them over the last few days telling them that short term cash loans for day to day business transactions were becoming hard to come by.

California is a tough state to go by, but evidently several other states are hanging out there trying to function in what they term a situation where operational credit is hard for them to come buy.

There is so much subterfuge that gets spread around at times like this. You mention that it would be good to sort things out, then take rescue measures. My thought is that I don’t want things to be allowed to happen now, that will make it more difficult to handle later on. If the failure ball gets rolling any harder, it’s going to be nearly impossible to stop.

Do we need to clean things up? I believe we do. The public is very angry right now. I would urge folks to contact your Republican Congressmen on Capital Hill and tell them we want the Democrats outed for what has taken place.

I don’t honestly see perfect plans out there right now. This is a mess and it’s not going to be simple.

SuperCat, I do understand where you are coming from. You could be absolutely right here. Sorry we couldn’t agree in total. You take care.

[Califreak]

> They will create a Depression so they can make Anerica a Communist Muslim state.<

That’s one of the things that scares me.

If a communist muslim state isn’t hell on earth, I don’t know what is.

[Califreak]

A new “Black Friday”

When black friday comes
Ill stand down by the door
And catch the grey men when they
Dive from the fourteenth floor
When black friday comes
Ill collect everything Im owed
And before my friends find out
Ill be on the road
When black friday falls you know its got to be
Dont let it fall on me
When black friday comes
Ill fly down to muswellbrook
Gonna strike all the big red words
From my little black book
Gonna do just what I please
Gonna wear no socks and shoes
With nothing to do but feed
All the kangaroos
When black friday comes Ill be on that hill
You know I will

When black friday comes
Im gonna dig myself a hole
Gonna lay down in it til
I satisfy my soul
Gonna let the world pass by me
The archbishops gonna sanctify me
And if he dont come across
Im gonna let it roll
When black friday comes
Im gonna stake my claim
Ill guess Ill change my name

[DoughtyOne]

Actually $300,000 loans are not that big here in the Los Angeles region. About four years ago my wife’s aunt sold what I would term an older clean but definitely no frills home in San Fernando, Valley for $500,000. In the rest of the nation, your terms are probably more accurate of course.

I believe where the super sized paper came in was when the loaning institutions bundled a lot of paper and sold it to other institutions or used it for collateral for still more loans.

The fact is though, Congress facilitate this mess by demanding poor loans be extended to people who couldn’t service them. Once the lending institutions had that type of paper, they treated it like any other paper. The problem is, that paper was a house of cards.

Honestly, some heads should role in Congress. Janet Reno should be hauled into court to answer for what she demanded of the industry.

It’s a mess what we allowed the socialists to get away with. And now they want to blame it on CEOs. That really pisses me off.

I learned today that Fannie Mae had upwards of 49 to 60% of its loans made up of questionable loans in certain years. Reno and Congress had demanded Fannie Mae extend these loans. And now they want to blame the CEOs for making them.

[TomasUSMC]

How dare Duncan Hunter doubt the Bacardi Bailout!

[TomasUSMC]

The alternative is to see our nation go through some serious trouble.
////////////////////
We cannot afford to see our nation be raped by our own representatives in Government. We must fight this bailout. They have gone against the will of the people and have not even called ONE expert witness to testify.
...
“Robert Owens, a co-author of the Federal Reserve Act, later testified before Congress that the banking industry had conspired to create a series of financial panics in order to rouse the people to demand “reforms” that served the interests of the financiers. A century later, JPMorgan Chase & Co. (now one of the two largest banks in the United States) may have pulled this ruse off again, again changing the course of history. “Remember Friday March 14, 2008,” wrote Martin Wolf in The Financial Times; “it was the day the dream of global free-market capitalism died.”

Americans must take their money out of banks and stocks...show congress that they must listen to US not the “financial industry”.

The only language Congress understands is fear and we must make them fear US more than the banks. The banks are full of money, they just don’t want to lend it out. I guess they know if they hold out, they won’t suffer but instead just have to wait for the NEXT BAILOUT.

Why won’t we just go along with the next bailout too, especially if the market continues to dive?

[DoughtyOne]

Thomas, you and I share a lot of disdain for our Congressmen.  I'll bet we would agree that Janet Reno and other players who pushed the indistry to make loans to poor prospects, should just about be taken out and strung up.  The question is, how do we react to this mess?  We're certainly in agreement that anyone promoting these loans should be prosecuted.  At least I would think we would be.

When it gets to advocating institutions fail, or we take our money out of the banks, I can't sign on.

Look, if we talking about regional institutions of moderate size that could be eaten up by larger fat cats, I'd probably agree.  Instead what we are talking about are massive institutions whose own colapse would not only sink regions, or depress national markets, but also cause failures internationally.  These are cataclysmic events.  They effect nations as well as lending institutions, and as these entites are pressured, they cause ripples throughout the entire global  economic system.  Let them go and instantly the availability of credit is impacted.  Lending institutions, banks, businesses, and governments have already been impacted by what is taking place.

Even in times when financial institutions are healthy, what happens when you have a run on the bank?  In short order that bank closes it's doors.  It cannot fork over the full amount of deposits, or anywhere even remotely near that amount.  That's in a healthy environment.  We are not in a healthy environment.  If we had a national run on the banks, this nation would be on it's knees in days.  The ripple effect would smack your family and every other family up side the head within weeks.

I know folks mean well who want to stick it to banks, financial institutions, the government, and whatever else.  I can understand why they are angry.  I am too.

I still don't advocate anyone try to get back at these institutions.  Folks, like it or not, we may be able to hurt them, but as soon as we do it would be us whose jobs, homes, and families would be destroyed.

This mess was allowed to come about.  We don't like it, but we're going to have to find a way to urge our officials to fix what caused it, and forget about teaching lessons.  1929 is the ony lesson we need to know.

[Grams A]

Not sure if this is the place to bring this up but a friend emailed me an article from December 2006 by Dr. Chris Martenson of Financial Sense University indicating that the total fiscal eposures totalled approximately $50 TRILLION, almost 4 times our GDP, an increase of $20 Trillion in just 4 years. link is www.financialsense.com/fsu/editorials/martenson/2006/1217. html. How bad do you think it is now?

[TomasUSMC]

A run on the banks would cause a lot of upheaval, true. That is what a revolution does. That is what is needed IMO. When a government does not listen to 80 percent of the people they are supposed to represent, that is bad. When it involves giving away more and more hundreds of billions of dollars week after week, that is worse.

When we are giving it away to foreign banks in countries who are our ideological enemies..... that is treason.

If American run on the banks Monday, and Wallstreet has to shut down because of a 1400 point drop, and has to stay closed most of the week, only opening a couple of hours here and there, that would show Congress that their Bailout was a failure and wrong.

Those tough Patriots in Congress who were not scared by the banks and Fed and Tres. would then be listened too. Then we could get rid of this plan and implement one that did not cost 800 plus billions of dollars. And of significant importance, it would send a message to the banks that there would be NO MORE BAILOUTS.

Then the world would see the real strength of a Great People - the American People coming together and standing like a “Stone Wall” against the tide of prophetic dooming accounting numbers and theories. More importantly, the pervasive pain experienced by so many would be worth the education it would impart to future generations, a learning experience that would last longer than any regulations and soon to be forgotten jail sentences ever could.

Finally it would remind THIS and many a future Congress, that this government in THIS country is a “government of the people, by the people, for the people......................................................... .”

AND.....THAT....... “The people cannot be all, & always well informed. The part which is wrong will be discontented in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions it is a lethargy, the forerunner of death to the public liberty.” Thomas Jefferson.

I am not looking for a financial resolution
I am looking for a “Revolution Before Morning”. -Andrew Jackson.

shall not perish from the earth”. Abraham Lincoln

[mkjessup]

Whatever the action that is chosen, I’m simply going to hope it works.

The last investors in any Ponzi scheme have the same hope, and it is admirable if misplaced.

What Duncan Hunter has pointed out is a real example of what is called an inconvenient truth: a banking system of approximately 15 trillion dollars is going to gobble up this so-called bailout cash like the shark from Jaws gobbled up unsuspecting swimmers. The only thing that has been accomplished with this disgraceful action by lawmakers is to postpone the day of financial reckoning, and that day will still arrive, and sooner than we think.

The message being sent to us from Washington is that the free market and capitalism no longer work, and that we should all embrace socialism (Communism).

[DoughtyOne]

Thomas, I understand where you are coming from.  It is my take that as complex as our society is, causing banks to go under would be so extremely destructive that it would be more suicidal than corrective.

If you cause your bank to go under, it isn't going to come back next week.  It's gone.  If we were to cause all banks to go under, the resultant collapse would cause total anarchy.

Perhaps you or others could explain how you see that being helpful.  I sure don't see it.  That's doesn't mean you're definately wrong, but I sure don't see any upside to this type of action.

        I am the all powerful Genie of Karnak.

        Your first wish was that Free Repubic would remain a Conservative resource.
        As you have requested, so shall it be done.  Click on my being and follow the directions.

[DoughtyOne]

If that money is provided and the taxpayers never get it back, then your comments regarding socialism could be deemed reasoned IMO. If the government provides funds and those funds return, it amounts to a complex loan.

I know this business has folks up in arms over it. I’m not convinced you are wrong. I think there is a strong possibility you are. I also think there is a good possibility I am wrong. Time will tell.

Thanks for the opposing viewpoint.

[Herakles]

Dear Genius (Hunter);

It's not meant to fix the economy, it's meant to keep some sort of credit available so people can buy food and gas and maybe stay employed.

People are over leveraged to the point that their signatures and word is worthless; just remember, government didn't put a gun to their heads to buy $50,000 cars and $500,000 houses at the same time leveraging themselves into a negative savings rate.

Now they can't pay what they owe back, banks are on the verge of collapse; blame the greed of the American people if you want to blame anyone.

The government is merely trying to keep the institutions alive the American gluttons use because they thought money was free. They thought they were financial geniuses because they could sign loan papers.

[TomasUSMC]

If you cause your bank to go under, it isn't going to come back next week. It's gone.

Well my friend, this is the way I see this REVOLUTION BY MORNING playing out. Monday morning Americans Run On The Banks, sending a message to the spineless ones in Congress that they should listen to Main not Wall Street. The Dow Crashes through 9000, and the President declares a “BANK HOLIDAY”.

...... The United States Bank Holiday of the Great Depression took place in 1933 when Franklin D. Roosevelt closed the banks from March 6 to March 10 to keep depositors from bankrupting the banking system by withdrawing all their money.

Banks were allowed to reopen when they could prove that the money in their reserves was greater than or equal to the money that had been deposited in. If the banks were unsound they would stay closed or could apply for a government loan in order to keep from declaring bankruptcy.

This would work, it wouldn't take but a few days, and it would be worth every penny every hour and the inestimable value of our Liberty. I will read your answer and I will have to sleep. Thank you for your time and reasoning. Semper Fi

[DoughtyOne]

If the banks were unsound they would stay closed or could apply for a government loan in order to keep from declaring bankruptcy.

Tomas, you do see the irony in what you propose here don't you? Going by the standard I've been reading here, that would be a massive conversion to Socialism wouldn't it?

I'm not trying to play gotcha so much as just trying to understand why this would be different than the bailout.

[DoughtyOne]

BTW, good night Tomas. I appreciate the conversation.

I also appreciate the service to our nation. Take care.

[wgflyer]

“The alternative is to see our nation go through some serious trouble. Consumers, depositors, investors, lenders, we all need to run with it. Shouting from the mountaintops that we are doomed, isn’t the way to go here.”

Neither is supporting this plan. It is a bailout not of the system but of key players in the system, both inside and out of Congress, who got us into this mess in the first place. And it merely passes the disaster on to a future date, at which time it will have worsened exponentially. This country needs to take it's lumps now and let the dead weight be cast aside. We also need to vigorously prosecute those “key players”.

[mkjessup]

We’re all in the same water filled rowboat here FRiend, we’re all wondering how Congress thinks that by drilling holes in the bottom of the boat that the water will actually start draining OUT.

[DoughtyOne]

I’m all for going after those key players on Monday morning. Probably 25% of Congress would be incarcerated on the first day, more to follow. Janet Reno would join them. A couple of Presidents would get an adversarial review.

Let me ask you this. Would you agree to these stern measures if you and your wife were to lose your jobs? Would you agree if your home would also be lost in six months?

What if this put you out of work, homeless, and living in your car? What if you brother and his wife lost their jobs and home? What if you folks were to lose their retirement funds, and couldn’t work, and lost their home?

What if it only meant you would lose your jobs, but you could manage to keep your home, but it would only be worth 10% of what it was last year?

What if 75% of the supermarkets in your town closed, and it was hard to get food? What if you couldn’t buy gas at any price for weeks at a time as part of the pain?

What if these types of conditions lasted for the next ten years?

Would that tough love approach you seem to approve of be worth it?

I don’t know that this would be the end result. I do not think it would be totally out of the question.

[mkjessup]

The government is merely trying to keep the institutions alive the American gluttons use because they thought money was free. They thought they were financial geniuses because they could sign loan papers.

Kinda like you thought that by signing up on FR, that it made you a real political 'genius', eh? LOL