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Monday, September 29, 2008

Dent Votes to Reject Bailout

Lehigh Valley Congressman Charlie Dent is among those who voted to reject the $700 billion Wall Street bailout today.

“I spent this past week meeting with experts, other members of Congress and the Administration to discuss the details of this legislation. I also sought counsel from our local community bankers and listened to my constituents. I heard good arguments for and against this legislation, but ultimately determined that this package was not something I could support.

“I believe that Congress needs to take steps to stabilize the financial markets and bolster consumer confidence. However, this bailout plan would have exposed taxpayers to a risk of $700 billion to buy toxic assets at inflated prices. The Treasury would then sell those same assets to investors at possibly lower prices. It seems to me that under this plan Wall Street would benefit at the expense of the taxpayers. That is not acceptable. This proposal was a Wall Street insider solution to a problem created largely by bad business decisions on Wall Street, at Fannie Mae and Freddie Mac, and elsewhere.

“Additionally, this legislation could have resulted in billions of dollars being used to buy the toxic assets currently held by foreign investors. Again, this is unacceptable to American taxpayers.

“This legislation would have granted the Treasury Secretary unprecedented authority. I was not prepared to grant this much power to this or any other Treasury Secretary.

“Furthermore, this legislation failed to reassure depositors that their money is safe. I believe one immediate step Congress should take is to increase the FDIC limits from $100,000 to $300,000 so all Americans know that their money is protected and backed by the full faith and credit of the United States Government.

“As was stated in a letter by nearly 400 economists questioning the fairness of the plan, the proposal was ‘a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. The government can ensure a well-functioning financial industry… without bailing out particular investors and institutions whose choices proved unwise.’

“Although this legislation failed, I am committed to working with my colleagues to pass measures that will stabilize the markets, restore consumer confidence, and protect taxpayers.”


Anonymous said...

This isn't over yet!

Didn't Dent Support Giuliani:

Giuliani’s Law Firm Seeking to Profit from Banker Bailout

Associated Press
September 29, 2008


Anonymous said...

Remember we can write In anyone we
like; it doesn't have to be a candidate on the ballot.

This election is wide open until the end.

Bill Hall is looking very good to me
as well as Drake Minder.

Anonymous said...

Good for Dent! To H with Wall Street! Work the problem Chuck. Gutsy move that might backfire IF we do go down the drain! Risky business..

Anonymous said...

I just checked the Morning Call online and they're only reporting from their AP feeds. THANK YOU, Bernie, for your blog, which seems to give us the true local perspective more quickly than we can get elsewhere.

Anonymous said...

Dent votes to let markets plummet...

Anonymous said...

thanks charlie.

Anonymous said...

Dent is right on this one. He studied the issue and made the right choice. It should not be the taxpayers responsibility to bail these institutions out, and socialize our banking market.

Blue Coyote said...

I'm not an economist, but here's a stupid question: Is the market plummeting or self-correcting?

If/and/or when we get out of this mess, if congress get's it act together, I don't think a politician would dare deregulate again, for fear of what just happened.

Anonymous said...

To the “Dent is right” commenter- Tell that to the 58 year old pre-retiree who saved in his 401k for 25 years just to see it nearly wiped clean by the end of this week. It’ll help the taxpayers alright, only it will be Charlie who ensures that they continue working (instead of retiring) and will continue ADDING to his taxpayer base

Anonymous said...

Thanks Charlie, I guess I'll have to work until I'm 80 now. Wall Street isn't going to be taking too kindly to this in the weeks to come. You lost my vote.

Brad Moulton said...

Charlie got it right...

Why should those of us who spent within our means and saved have to bail out those who didn't? This isn't a D or R issue... It's an economic issue.

Yes, there will possibly be some short term pain for those close to retirement; but I ask: Why did you have your money in the stock market given (a) you're close to retiring and (b) the market conditions over the past 18-24 months?

Anonymous said...

Any word from Bennett's camp? I'd wager she had two press releases ready, criticizing Dent for voting either way.

I think Charlie made the right call and I give him credit. It sucks, and people are going to be hurt by it (as outlined in other posts here), but less people will be hurt by coming up w/ a better plan than signing off on a bad one.

For example, there needs to be a public auction component to the purchase process, let private players bid against the Fed (good way to establish a value instead of just making one up). And I absolutely agree w/ Dent on increasing FDIC insurance levels - and potentially to even higher levels for retirement accounts.

This was too big to move too quickly.

The Banker

Anonymous said...

A vote this important needs more time for thought. We are talking about many billions of dollars worth of questionable assets to be purchased by the federal government( on our dime) to assist the institutions that made the bad loans. How did it happen? How can we prevent a reoccurrence? The answers to these questions need to be incorporated into the new “bailout bill”.
Thanks Charlie for giving the house to time to do it right.

Scott Armstrong

Bernie O'Hare said...


Bennett's camp did issue a press release, but I think it came out before the vote. She supported the bailout. She was following Obama's four point outline. I will post tomorrow. I would have done so today but was besieged much of the day by that spam attack.

Anonymous said...

I feel bad for the Republicans who voted against this. They said if Ms. Nancy had not have been so mean, she might have had the votes. It's not nice to be a meany Ms. Pelosi; you hurt the Repub's feelings.
As can be read in the posts here. The idea that this was purely about some sub-prime borrowers is pure BS or as they say in reality land pure Fox Noise.
While money was to be made all enjoyed the flood of new federal dollars. The greed came in all shapes and sizes.
Now if Mr.Main St. suffers so he can be taught a lesson by the very group who let this debacle continue, so what.
What does not destroy you, will only make you stronger. Hear that sound, it is the sound of Reagan Democrats saying goodbye to the Republican Party.
Now I must cook some books for my Real Estate friend who made big commissions selling houses to people who couldn't afford them. The great thing is you don't give those commissions back.

The Baker

Anonymous said...

To Anon 6:36:

Tell you what, the next time that Goldman Sachs is having a fat quarter, and they decide to kick a $1000 my way for the sheer hell of it -- that's when I'll be cool with throwing them $2300 of my money.

Until then, they can piss off.

Dent voted the right way.

Anonymous said...

Baker --

What great leadership Nancy P. showed, huh? Why not rub their faces in it one last time, right?

I think all that botox must have gotten into her frontal lobes.

Worst . . . Speaker . . . evah!

She couldn't lead ants to a picnic.

Spot her both hands and a flashlight and she still couldn't find her own derierre.

This isn't even a partisan thing --she's just really bad.

Anonymous said...

7:06 and 7:07 should be embarrassed to admit they're so poorly financially managed. At 58, one's portfolio should not have been nearly risky enough to be substantially effected by the current crisis. Perhaps the poster was greedy and stayed in high-risk-high-return investments and is paying per the old rule that pigs get slaughtered. And Charlie is wrong for not protecting this/these dopes from their own stupidity and/or poor judgment? Get off the nipple and grow up.

Anonymous said...

“Act in haste, repent at leisure”
Elmer Fudd

I’m a Democrat but on this bailout I agree with Charlie Dent.
But besides the good reasons being given I can’t help wondering if there was more to the House Free Market Republican’s decision not to support this bailout.
This current proposal would have taken away golden parachutes and severely curtailed CEO compensation, expanded government over site and basically handed control of Wall Street over to the Fed.
I have a feeling these weighed more heavily on their decision no to support than protecting the middle class investor and tax payer.
Sorry, I just cannot see Free Market Republicans actually caring about middle class Americans since we are not their base.


Anonymous said...

"I'm going to have to work until I'm 80 . . ."

Boo-goddamn-hoo. My father worked until he was 72, until he hit the mandatory retirement age at the plant he worked at. He also fought in World War II.

I know this about him, he wouldn't piss on one of these huckster CEO's if the guy was on fire, let alone agree with giving him tax money to bailout his stupidity.

Toughen up for christsakes.

Anonymous said...

Actually, Dent said that the CEOs at these companies should be fired.

He's right about that too.

Bernie O'Hare said...

" At 58, one's portfolio should not have been nearly risky enough to be substantially effected by the current crisis."

I'm 58. What the hell's a porfolio?

Anonymous said...

Bernie --

A portfolio is a collapsible folder that you put your artwork into when you go to try and get a job.

You can also keep parking tickets in it.

The Artiste

Anonymous said...

Hmmmm. Should I vote for the celebrity, or the party whose president gave us a 7-year war and brought us to the brink of depression? No matter how many times you point fingers at affordable housing advocates, your chickens have come home to roost.

Bernie O'Hare said...

Artiste, I need a frickin' suitcase for my parking tickets. But I've been very good lately.

Anonymous said...

I thank you also Artiste.
I thought a portfolio was one of those fancy French toilets.
Come to think of it though, that pretty much were most portfolios are right about now!


Anonymous said...

Give me a friggin break.So charlie sought advice from his local bankers.Now theres the direct line to the answer.Bet they were thrilled about the feds cutting their salary.Maybe next year Charlie can fill in for Sam and hand out rakes.With Mcain handing the election to Obama seems like the GOP is in for a tough future.

Anonymous said...

By the way,Bernie ,have heard Pam Varkonys loss of the mayors race cost her the vice presidency.

Anonymous said...

Dent or most of his Republican friends will change their vote by week's end. I am sure the 777 slide of the dow made them realize this isn't a game. If their feelings were hurt by Pelosi they need to grow some balls. Fact is this bailout will happen and the
Republicans will find the votes needed. They have no choice. They set this financial nightmare in motion by their anti regulatory attitude. They will get calls from all of their donors making sure they don't srcew the vote up again, believe me. Their ain't no way this bill isn't passing Kimosabe..Believe it..

Anonymous said...

You jest 10:57.. She was on the short list because she has more foreign policy experience than Palin. But Palin has better legs..

Anonymous said...

"Republicans will find the votes needed."

If this really is the end of the World (ooohh, scary) then the Democrats don't need a single Republican vote to save us all from what lurks.

They have over 230 members. It only takes 218 to pass this sucker.

So c'mon Democrats, Barney Frank says you need to do this, so does Nancy Pelosi.

So just get it done you toothless wonders.

Anonymous said...

News from Sam Bennett for Congress

For Immediate Release: September 29, 2008

Contact: Gary Ritterstein, (610) 770-3280

Statement from Sam Bennett on the Emergency Economic Stabilization Act of 2008

The Wall Street meltdown is affecting all of us, and has the potential to cause even more damage to our economy in the future. Nearly eight years of “anything goes” Republican policies brought us to this point, and the events of the past weeks only highlight the need for change in Washington.

The Emergency Economic Stabilization Act of 2008 is a patch, not a permanent fix. I support the bill because it meets four key criteria:

This is not a blank check for the Bush Administration, the plan provides for oversight and transparency as taxpayer money is spent.
It contains major efforts to prevent foreclosures that threaten home values, including expanded eligibility for FHA refinancing programs and loan modification.
It limits excessive compensation for the executives who got us into this mess.
Taxpayers will be protected, with financial institutions sharing the burden for losses and ensuring that taxpayers will benefit from any future growth that companies participating in the program enjoy.

This plan is only the first step toward stabilizing our economy, and we need new leadership in Washington to ensure we follow through. Congressman Dent has taken over $643,000 from the financial sector in just four short years. People in the 15th District know that the policies of George W. Bush and Charles W. Dent have not worked. Not only is Congressman Dent out of step with his constituents, but he owes his political career to the very people who created the meltdown.


Dent takes $643,009 from financial sector (Banking, Insurance, etc.) - Money and Votes Aligned in Congress’s Last Debate Over Bank Regulation, Massie Ritsch, 9/23/08 [http://www.opensecrets.org/news/2008/09/money-and-votes-aligned-in-con.html]


Gary Ritterstein
Communications Director
(610) 770-3280

725 N. 15th Street
Allentown, PA 18102

Bernie O'Hare said...

Anon 11:25, The Bennett camp sent me that release this afternoon. I intend to post it and think it unnecessary for you to do so as a comment.

Bernie O'Hare said...

Anon 11:08, Let's refrain from remarks that might be construed as sexist. You don't do anyone any favors with that, least of all yourself.

Anonymous said...

Dent takes $643,009 from financial sector (Banking, Insurance, etc.) - Money and Votes Aligned in Congress’s Last Debate Over Bank Regulation, Massie Ritsch, 9/23/08 [http://www.opensecrets.org/news/2008/09/money-and-votes-aligned-in-con.html]

So Dent gets money from the "Financial Sector" and then votes against giving them a bailout.

Is Bennett's campaign trying to help Dent with this?

Anonymous said...

Charlies vote was correct.

Now these politicians need to blame what should be blamed. A failed Big Government policy that promoted poor loans which were guaranteed by the federal government.

14 years later, voila, here we are.

Limited Government politicians must go on the offensive against failed liberal Big Government policies (which too many Republicans supported based on polls) and put the blame where it belongs.

I fear they won't and instead they will parse their position - based on polls. A recipe for failure.

But, on the other hand, I hope that politicians like Charlie Dent will step forward and provide the necessary LEADERSHIP to fix the problems that created this problem.

I await....

Anonymous said...

I told you it wasn't over!

Dents a bum, he knew it didn't matter.

Fed Pumps Further $630 Billion Into Financial System (Update3)

Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.


I'm writing in my vote for other; who I know would not support this bailout or con us in anyway.

My vote will not be going to any Republican anytime soon.

Other Parties and Democrats not chosen from rank and file.

Anonymous said...

Since some here are slow and are
more than willing to sell there
neighbor down the road for a buck.

I included a little lesson.


Learn to strengthen your own cultural; Cultural hegemony in the valley is what is hurting us from
growth and quality of life.

Anonymous said...

9:53 Pm- Blaming the victims...

Anonymous said...

The following was written by a friend of mine. I think he has some points well worth considering in the current debate of the Bailout vote. His post is long but worth the read.


There will be lots of smoke and mirrors on the current crisis and multiple elements to this tragedy - but the huge, powerful forces that created this nightmare should not be missed amid all the carnage. Perhaps no one will agree with everything anyone has said on this emotional topic - but here is one view of reality. If you don't like it - just throw it away and ignore it - you will be in good company.

1. The Government created two huge and financially powerful entities - Fanny and Freddie - and gave them unlimited funding and government guarantees to take on market risk. Private share holders profited if they were profitable and the government promised to take on risk if they failed. They were two of most heavily regulated entities on Wall Street - not the least regulated. Congress had direct control over funding and the government appointed the leaders. President Clinton was responsible for appointing the leader for most of this recent period - and then Senator Obama hired him to pick his VP (after he took $90 million in bonuses upon leaving).

2. The Government assigned Fannie/Freddie the job of buying up sub prime mortgages - originally to end "red lining" and then to meet affirmative action lending goals. Red lining was real and a structural barrier to fixing inner city blight. Additionally, affirmative action lending to increase minority home ownership was broadly support from both sides of the isle - it directly benefited Democrat constituents and turned renters into taxpayers, pleasing republican leaders. (What was there not to like ?) The government bragged about the growth in minority and high risk lending (5X that of corresponding white loans by 1999) and continued to fund these giants despite obvious financial reporting problems. (editors note: don't blame low credit borrowers for trying to realize the American dream, but at the same time, don't deny that affirmative action lending has played a critical role)

3. If Fannie/Freddie had been private firms they would have gone under when the auditors failed to issue opinions since the financials statements were known to be junk (see Enron and other examples of publicly traded firms for how this happens). The Democrats blocked numerous votes for reform on straight party line votes. The Congressional Black Caucus was assigned the role of the "moral leaders" of Fannie/Freddie by the Clinton appointee and organization's president (his words not mine). Despite obvious financial reporting problems the execs in these "Public/Private Partnerships" were paid bonuses and the firms continued to get funded. By this time in Enron's life cycle the execs were arrested. To the best of my knowledge, not one single leader in either of these organizations has ever been arrested or even charged with any misdeed. (I expect a full government cover up to avoid any accountability. I expect the cover up will take the form of blaming "unregulated wall street recklessness" for these problems, .leading to increased congressional power.)

4. Due to guaranteed government backing and the full faith and credit of the US Taxpayer, the marketplace did it's job and supplied these financial giants with the mortgages they wanted to buy, regardless of the risk or lunacy of the loan. New mortgage origination companies popped up over night. I met an used car salesman who made multiple millions with 17 offices in just several years writing mortgages and selling them as fast as he wrote them. Main Street and Wall Street both profited as the taxpayer silently dug deeper and deeper into debt. Main Street profited as realtors, mortgage bankers, contractors, developers, homeowners, land owners, city tax collectors, and everyone else involved in real estate earned record profits. Wall Street profited by packaging the mortgage paper and selling it all over the world, and of course to Fannie/Freddie when no one else would buy it. The lack of audited financial statements helped hide the problem and the willingness of congress to continue to fund these flawed institutions - to paper over the defaults - allowing the problem to progress to monumental proportions in both public and private institutions.

5. When housing prices turned south and family budgets were squeezed by high energy prices defaults rose to levels that were no longer sustainable. At that point it was - ball game over. By this time many bad loans had been "bundled" into mortgage backed securities and were spread to international banks, pension funds, etc. No one knows exactly where all the bad loans are and that is a huge problem by itself because it creates a climate of fear and uncertainty in the financial markets. No one knows what financial institution is at risk of failing next because the financial reports don't accurately measure where the garbage paper is hidden and post Enron accounting rules dictate drastic reduction in reported asset values based upon market valuations of these securities. Many believe the post Enron "reforms" are making this problem worse.

6. The taxpayer is ALREADY ON THE HOOK. The current action in Congress is not putting the taxpayer on the hook - that happened years ago. I am not going to sugar coat this - the question now is how to avoid a full fledged financial melt down and international depression that would surely follow such a meltdown if we cannot restore liquidity to the financial markets.

7. The Congressional leaders who helped create this mess now want to blame deregulation of the markets in a feeble attempt to shift blame and get out of the spot light. The free market would have shut down these entities when they lost their auditors and financial statements. Senator Obama has clearly jumped on this band wagon of populism - with apparent support of the main stream media.

8. Many believe The Great Depression had three primary causes. You can decide if history is repeating itself. I put my observations on current development in parenthesis.
A. Over-leverage to buy assets (stocks then, real estate now) that subsequently became worth much less, leading to deflation and lost LIQUIDITY in the financial markets. (so far we are right on track)
B. The government raised taxes to further slow down the economy (Senator Obama has campaigned on his promise to repeal the bush tax cuts and to increase the earnings that are subject to FICA withholding - everyone, except the main stream media, recognizes that is a tax increase)
C. Congress killed international trade with populist protectionist trade polices to "protect American jobs" (Senator Obama has promised to "re-do" NAFTA and Democrats in Congress just killed the Columbian trade deal)

9. The worst possible reaction to an economic crisis is populist political leadership. Unfortunately we seem to be headed in that exact direction.

Anonymous said...

So Mr. Browning's friends' great post is just an expanded version of everything else we have read here or heard on Fox.

blah..blah...blah....blame Democrats.....blah....blah....loans to the poor....blah....blah...blah........government crooks....b;ah...b;ah...Obama...blah...blah.... .

I think I covered the most imporatant parts.

Anonymous said...

Anonymous@11:25 PM
from the comments on your "opensecrets" link...

DreamCatcherSS said:

"A look back at that debate, which was over the 1999 Financial Services Modernization Act, reveals that campaign contributions may have influenced the votes of politicians who, a decade later, are now grappling with the implosion of the giant banks they helped to foster."

Here's what I've found out about "opensecrets" and their counting of money contributions... they count even those from your lowly bank teller who probably has no ulterior motive. When individuals are "investigated" to find out how high they are in the company then I'll take more stock in what "opensecrets" says.

One example I can make is taken from a counterpunch article titled "obama's money cartel". See they looked at the lobbyist, CEO's and top executives and what they donated, as opposed to the lowly teller.

"The congressional vote on Gramm-Leach-Bliley in November 1999 was not close. "

Here's the thing...

S. 900 [106th]: Gramm-Leach-Bliley Act:

Sen. Phil Gramm [R-TX]

Introduced Apr 28, 1999
Reported by Committee Apr 28, 1999
Amendments (15 proposed)
Passed Senate May 6, 1999
Passed House Jul 20, 1999
Differences Resolved Nov 4, 1999
Signed by President Nov 12, 1999

So, The "November 1999" vote was when both bills were put together, NOT the original bills which passed the Senate with 54 Ayes, 44 Nays, 2 Not Voting...
a mere 10-12 votes. In the house the votes weren't even recorded (on the original bill). Which I why I think ALL VOTES SHOULD BE RECORDED NO MATTER WHAT.

Your entire article is based on a "differences [between the house and senate bills] resolved" not the original bills. Once the originals passed then the ones in congress who opposed the originals had little choice other than to say either "yes" the differences are resolved or "no" the differences are not resolved. Your article is misleading.

The thing about the 1999 legislation is that while the were little to no regulations (depending on who you believe) the Government was still subsidizing ("propping up") the companies. In a true free market that wouldn't have happened, they wouldn't have gotten so big and become such a big threat to our economy.

If you really want to trace it back to the possible original roots it goes back to our fiat money (not backed by anything tangible like gold) then back even further to the unconstitutional Federal Reserve. Of course you can trace the "pushers/makers" of that back even further if you wish.

All of this is what those like Ron Paul have been talking about when talking about a TRUE free market. NO gov. subsidizing/funding and little or no regulation, but obviously if you're going to have the first then you have to have the second to some degree... maybe not as intrusive to the general public as it sometimes tries to go, like in 1999 when the Gov. tried to make it law that the banks had to keep really personal/private records on their customers.

Incidentally Ron Paul was against the original bill and was absent for the Nov. 1999 vote. Here's an excerpt from one of his speeches in Nov. of 1999 about the original bill:
"My main reasons for voting against this bill..." so, he didn't vote for it even though you say he got a lot of money from them. :)

"...entire article is based on a "differences [between the house and senate bills] resolved" not the original bills. Once the originals passed then the ones in congress who opposed the originals had little choice other than to say either "yes" the differences are resolved or "no" the differences are not resolved. Your article is misleading."

Anonymous said...

TOPIC: current financial crisis in the USA

SIZE: 31Mb

TIME: 2:57:54

DOWNLOAD LINKS: http://www.mediafire.com/?bmidn2dlaix

STREAM LINK: http://www.zshare.net/audio/19567742730aee73/

Anonymous said...

My vote will be going to -

Write In:

Drake Minder
He never would have voted for this bailout period.