There is such a misconception about how the American People feel about the mortgage/credit crisis Wall Street bailout. Of course everyone hates it. Who wouldn't? But the American People know the problem must be addressed. The latest WaPo poll demonstrates this:

Most Americans see the current financial situation as a "crisis," and there is overwhelming concern that the failure of the House of Representatives to pass the economic recovery package will deepen the problem, according to a new Washington Post-ABC News poll. . . [N]early nine in 10 expressed concern that the failure of the bill could lead to a more severe economic decline.

From a purely political perspective, something must be done. But what? Here is where the Democratic leadership should grab their chance to enact a progressive proposal. The WaPo poll says:

The Dow had its worst drop in two decades today -770 points. I don't have any investments, but my mother has a modest amount that is used to pay for her nursing home care. Last week her account was dropping thousands a day, except for the day it was announced an agreement had been reached. Today, she lost many more thousands.

That strikes me as pretty serious. I do believe the market comes back eventually, but how much more can people afford to lose?

Just after midnight on Saturday, House Speaker Nancy Pelosi announced a bailout deal has been reached.

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

More...

Murray Waas has a new article in the Atlantic on the infamous Ashcroft hospital visit during which the ailing Ashcroft was pressured to sign off on Bush's warrantless electronic surveillance plan. Murray says:

"According to people familiar with statements recently made by Gonzales to federal investigators, Gonzales is now saying that George Bush personally directed him to make that hospital visit. "

More...

President Bush tonight:

“The government’s top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold,” Bush told the nation. “More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.”

Bush and McCain are as in sync as Henny Penny and Chicken Little:

One day when Chicken Licken was scratching among the leaves, an acorn fell out of the sky and struck her on the tail. ‘Oh,’ said Chicken Licken, ‘the sky is falling! I am going to tell the King.’ So she went along until she met Henny Penny. ‘Good morning Chicken Licken, where are you going?’ ‘Oh, Henny Penny, the sky is falling and I am going to tell the King.’ ‘How do you know the sky is falling?’ asked Henny Penny. ‘I saw it with my own eyes, I heard it with my own ears, and a piece of it fell on my tail!’ said Chicken Licken. ‘Then I will go with you,’ said Henny Penny.

This is how we got the Patriot Act. Memo to Congress: Act in haste, repent at leisure.

VastLeft at Corrente has two You Tube videos of Bill Clinton on The View. The video below includes an interesting discussion of the repeal of the Glass-Steagall Act, which I discussed here. I think Clinton gets it right. An interesting discussion and kudos to Bill for not patronizing the audience of The View. He treated them like adults.

By Big Tent Democrat, speaking for me only

I have friends who are far more financially savvy than I am, and they say they are very frustrated with this bailout procedure. They say no one is asking the government what percentage of the dollar they are going to pay for these non performing assets? Is it 100%.....or 20 %? what is it? They say this is very important.

Does anyone know the answer?

One more thing: The AP reports:

"The government could contract with private companies to manage the assets it purchased under the rescue" The proposal does not require that the government receive anything from banks in return for unloading their bad assets. But it would allow the Treasury Department to designate financial institutions as "agents of the government," and mandate that they perform any "reasonable duties" that might entail.

The bailout, as we've mentioned before, would be sheltered from court review. There's something wrong with this picture. Care to fill in what it is?

Remember in 2003 when Vice President Dick Cheney began asserting that the Vice President is not part of the executive branch? He's been using that ever since as an excuse to be relieved from preserving documents under the Presidential Records Act.

Today, a federal judge told Cheney to preserve his records.

The decision by U.S. District Judge Colleen Kollar-Kotelly is a setback for the Bush administration in its effort to promote a narrow definition of materials that must be safeguarded under by the Presidential Records Act.

The Bush administration's legal position "heightens the court's concern" that some records may not be preserved, said the judge.

More...

First and foremost, the repeal of the Glass-Steagall Act had nothing to do with it. Lehman Brothers' financial free fall resulted from its position in the mortgage backed securities market. As an investment bank, Lehman Brothers followed the lead of Salomon Brothers, that invented the non-Fannie/Ginnie Mae mortgage-backed securities business:

An ambitious mail-room clerk named Lew Ranieri worked at S[a]lomon Brothers and saw an opportunity in the mid 80s. S[a]lomon Brothers was hiring rocket scientists to create a new breed of mortgage-backed security, a collateralized mortgage obligation (CMO), designed to more accurately predict the prepayment speed of the mortgages backing the bonds they sold. Lucky Lew ran around the country preaching God, motherhood, baseball, and a CMO in every portfolio. Lew convinced the WORLD investment community that the American homeowner was a damn good bet.

More . . .

Even someone with as little knowledge of stocks and big business as I have knows that this is another failure of the Bush Administration's economic policies.

• Lehman Says It Will File for Bankruptcy (pdf)
• Bank of America to Buy Merrill Lynch
• A.I.G. to Plan Restructuring and Asset Sales
• After Frantic Day, Wall St. Banks Falter
  
• Banks Fear Next Move By Shorts
• SEC Sunday Night Press Release
  

Can anyone explain for those of us who are economically challenged what this means to our day to day lives and pocketbooks?

It's outrageous that school districts would import teachers from the Philippines rather than paying a sufficient salary to attract American teachers.

[Baldwin County, Alabama] district officials went around the world last year, with expenses paid by a teacher recruiting firm, and brought back Michel Olalo of Manila and 11 other Filipinos to teach along the shores of the Gulf Coast and Mobile Bay and in the communities in between.

The minimum starting salary for an inexperienced teacher in Alabama is $36,144. That's ten times better than a teacher is paid in the Philippines. That's good for Filipinos who may well become excellent teachers, but shouldn't our schools pay enough to make teaching an attractive job for Americans?