So the Senate passed the bill…kind of.
They passed a bailout plan, but they also included a load of pork along with the bill.
Although arguably not a bad development, the fact that a website called “Treehugger.com” is blogging about the fact that this bill has a tax credit for plug-in vehicles shows you how business really gets done in Washington (Pork-Laden Senate Version of Bailout Bill has Plug-In Hybrid Vehicle Credits).
The self-congratulatory Senate praised themselves for coming together to aid the American people in their time of need. As I have grudgingly acknowledged here, I think some kind of bailout is arguably necessary in order to keep systemic risk contained. Out of respect for someone I really admire, I wanted to acknowledge a logical counterpoint to the bailout that is probably right:
- $700B is arguably not enough unless we do something to stem the decline in housing values and household credit which are driving the majority of this contraction.
But, even though that is likely true, I think we need to get this thing done before the glad-handers go off to parade around the nation.
Although the Senate did get something done, it is disappointing that rather than focusing on passing the bill we needed, special interests lobbed in requests to get their pet projects included in what is now an over 400 page document…this one is even too long for me to micro-analyze.
And that is part of the problem. America is so shell-shocked at considering the prospect of an economic crisis that we have complacently shrugged our shoulders as Washington jammed this bill full of pork.
Even people like me, who have been shouting into the blogosphere for the last two years on this topic, are starting to simmer with our diatribes.
I am somewhat disappointed in myself for not even mentioning it when the government slipped a $25B loan to U.S. automakers through Congress last week.
Or that the SEC is helping banks cook the books by altering Mark-to-Market accounting rules: S.E.C. Move May Relax Asset Rule:
Under pressure from banks and legislators, the Securities and Exchange Commission issued an interpretation of an accounting standard that could make it easier for banks to report smaller losses, or perhaps even profits, when they announce results for the third quarter, which ended Tuesday.
The move on Tuesday drew praise from the American Bankers Association
Can you believe the Bankers Association is happy that the SEC is going to let them manipulate their financial statements in the open and get away with it?
I think that we have collectively become so worn out with the emotional debate and dialogue around what is going on in the financial markets, that we are running the risk of complacency.
Anytime in life when fatigue sets in, it is sometimes easy to just push snooze and roll over. But I think it is important that we keep paying attention and that we keep our elected representatives accountable in the upcoming election season.
I expect the House will pass the pork bailout bill tomorrow. And hopefully that along with the SEC manipulations will help stabilize things for the time being. Unfortunately, I think the economy is going to be in for some tough times for awhile, so be careful out there if you are an individual investor with any kind of short term horizon.
Hopefully, I can turn to brighter topics sometime soon. In the mean time, I’m going to get a cup of coffee, watch the debates, and try to keep my eyes open to see what other shenanigans come across the screen.