Newt gets it: Let the financiers sort themselves out

Republican Newt Gingrich: "You have an administration which, in my judgment, has lost its mind." And I agree wholeheartedly.

President Bush is so worried about his legacy - he is so afraid of being looked at as Herbert Hoover - that he is doing the very things that Hoover did: Intervene, intervene, intervene. He should do what Ronald Reagan did in 1981 and 1982 and 1987: Let the market play it out.

From the Atlantic Journal-Constitution, Gingrich wants Hank Paulson canned and Gingrich said, "They may have to, in the end, tolerate some of this. Because in the end, you have the Democrats desperate for socialism now. You have an administration which, in my judgment, has lost its mind. That gives you two big elements. And you have Senate Republicans desperate to go along. I'm just being truly candid. Because I think the country ought to know what the pressures really are like.

"And you've got the House Republicans and John McCain prepared to stand on as much principle [as possible] - but in the end, I don't think they're going to be prepared to do nothing. Because they understand that next week, as long as the current situation. stays the way it is, you're going to have a genuine credit crisis."

Either Republicans start behaving like conservatives or they can kiss it all off. Look for the return oif the '70s and it ain't very pretty.



Replenishing ACORN's Account: Keeping the Housing Mess Going

Like me the WSJ thinks it's outrageous that the Democrats are trying to find money in the bailout to keep their friends in ACORN well nourished:
Acorn has promoted laws like the Community Reinvestment Act, which laid the foundation for the house of cards built out of subprime loans. Thus, we'd be funneling more cash to the groups that helped create the lending mess in the first place.

This isn't the first time this year that Democrats have tried to route money for fixing the housing crisis into the bank accounts of these community activist groups. The housing bill passed by Congress in July also included a tax on Fannie Mae and Freddie Mac to raise an estimated $600 million annually in grants for these lobbying groups. When Fannie and Freddie went under, the Democrats had to find a new way to fill the pipeline flowing tax dollars into the groups' coffers.

This is a crude power grab in a time of economic crisis. Congress should insist that every penny recaptured from the sale of distressed assets be dedicated to retiring the hundreds of billions of dollars in public debt that will be incurred, or passed back to taxpayers who will ultimately underwrite the cost of the bailout.

Update from Clarice Feldman: Tom Maguire catches how outrageous the Dodd payoff plan to ACORN is:
Jim Lindgren points out multiple problems with Chris Dodd's original draft. My only reassurance - the current plan has moved beyond that. I had derided the Dodd approach to equity stakes last week but Lindgren has more trashing from a different direction.

And his insight on the housing slush fund is an eye-opener -- the original Dodd language called for 20% of the profit on each sale to be diverted to the Dem slush fund; this is far different from 20% of *net* profits. In a net profit scenario, losses on some sales would offset gains on others. Under Dodd, any profit is immediately subject to diversion, regardless of whether there are other, greater losses. That is not taxpayer protection. What it is is absurd

Source. More on ACORN here


They've Reached a Deal on Bailout

House and Senate negotiators have reached tentative agreement on a financial rescue plan after a marathon Capitol negotiating session that started Saturday afternoon and stretched into early Sunday morning. House Speaker Nancy Pelosi (D-Calif.) and Sen. Majority Leader Harry Reid (D-Nev.) said their "breakthrough" still had to be "committed to paper," a process that was expected to continue through the night. "We have something verbal," said Rep. Rahm Emanuel (D-Ill.).

Republican Whip Roy Blunt, the chief negotiator for House Republicans, said he was "looking forward to what we're going to see on paper" and was optimistic that it would be something House Republicans could support.

Said Treasury Secretary Henry Paulson: "We've been working very hard on this and we've made great progress toward a deal which will work and will be effective in the marketplace and effective for all Americans . . . .We've still got a lot to do to finalize it, but I think we're there." The plan would likely give Paulson a relatively free hand accessing the first $350 billion of the $700 billion he sought. It was not clear when the remaining $350 billion would become available, but Treasury apparently agreed that a future Congress could block its release though a joint resolution signed by the president.

The agreement would also include much greater oversight than the Bush administration had initially proposed; an opportunity for the government to take an equity share in the companies it helps, either through warrants or options to buy stock; and a provision limiting the compensation paid to executives of those companies.

To help win the support of House Republicans, the agreement also would likely include an option under which Paulson and future Treasury secretaries could choose to sell companies government-backed insurance to cover securities - thereby improving their value - rather than buy the assets as initially proposed.

A vote in the House could come as early as Monday seemed, Emanuel said.

Source. Much more here. It is rumored that ACORN misses out!

Posted by John Ray. For a daily critique of Leftist activities, see DISSECTING LEFTISM. For a daily survey of Australian politics, see AUSTRALIAN POLITICS Also, don't forget your roundup of Obama news and commentary at OBAMA WATCH (2). Email me (John Ray) here

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