I am happy to finally see a few Republicans openly acting like Republicans and voicing loud opposition to the bailout plan. I wish they had been louder in the demand to reign in FreddieMac and FannieMae. Yes, the cartoon characters were creations of FDR making them sacrosanct to the believers of the Democratic Party think; however failure to let opposition be known created the opportunity for the media to frame the programs as creations of George W. Bush.
I think Bush made a big mistake in trying to position the bailout as a creation of his administration when the creation currently being considered is actually quite bipartisan. Perhaps the most important part of the art of compromise is that one needs to let the opposition share claim. On that note, McCain has a history of sharing credit on legislation.
IMHO, in a healthy system of discourse, people would very clearly express uncompromised versions of their ideas. When making compromises with the opposition, they would share credit while letting the nature of the compromise be known. Perhaps the best example of a compromise is the 3/5th rule. Opponents to slavery weren't able to resolve the issue. Realizing that slaves would not be allowed to vote, they pushed an absurd compromise that slaves would count as only 3/5th a person in the enumeration used to distribute Congressional districts.
I think one of the reasons that Bush comes off as so uncompromising to the public is that he keeps positioning compromises as his creation.
I am really happy to see Republicans coming out and sounding like Republicans.
Unfortunately, I think Congress has no choice but to pass the silly bailout program and get to work buying up the "toxic mortgages" to restore liquidity to the market.
I happen to believe in people. Most people work hard to pay their debts. As such, I supect that the "toxic mortgage" portfolios are worth more than the current market price. I suspect that the true value of the portfolios lies somewhere between the current market price and the book price.
The reason the Federal Government has to get involved in the bailout is that FDR's bastard children FannieMae and FreddieMac made the financial world a tacit promise that big daddy federal government would back up the loans. Failure to live up to this promise would have long term ramifications.
Now that FannieMae and FreddieMac are officially listed among the failed New Deal programs, I hope that our society undergoes a deep conversation about the nature of mortgages and how mortgage financing inherently instable and that we need a mechanism where the property owner and lender share the equity and risk related to a property rather than this system that forces an onerous burden of debt on the public.
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