# House of Representatives Rejects Bailout Bill **URL:** \ **Category:** Great Debates\ **Created:** [September 29, 2008, 6:21pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746 "2008-09-29T18:21:41Z")\ **Posts on this page:** 20\ **Page:** 13
**Author:** ![Mosier](https://avatars.discourse-cdn.com/v4/letter/m/7ea924/32.png) [@Mosier](https://boards.straightdope.com/u/Mosier)\ **Post date:** [September 30, 2008, 6:12am UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/241 "2008-09-30T06:12:14Z")
> [@Shayna](#): > > I don’t see where Democrats “favored adjustable mortgage rates” either. I certainly disagree that Bush is blameless in any of this. It’s gone down primarily on his watch over the past 7 years! I didn’t say Democrats were to blame for the silly creative mortgages that were being handed out everywhere, either. But Bush himself was one of the few people who actually tried to do anything about it, and was overruled or ignored by the rest of his party (and ours). ---
**Author:** ![MsAnneThrope](https://avatars.discourse-cdn.com/v4/letter/m/3d9bf3/32.png) [@MsAnneThrope](https://boards.straightdope.com/u/MsAnneThrope)\ **Post date:** [September 30, 2008, 6:53am UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/242 "2008-09-30T06:53:52Z")
> [@The\_Second\_Stone](#): > > Ya know, that’s bullshit. It’s as big a steaming pile of bullshit as Republicans blaming Nancy Pelosi for being mean and making them change their vote. We are entitled to defend ourselves from bullshit attacks. Where is the bullshit? Where is the attack? I’m not assessing any blame. Why does it matter who was driving the bus that got us to our present destination? ---
**Author:** ![Mosier](https://avatars.discourse-cdn.com/v4/letter/m/7ea924/32.png) [@Mosier](https://boards.straightdope.com/u/Mosier)\ **Post date:** [September 30, 2008, 6:58am UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/243 "2008-09-30T06:58:46Z")
> [@MsAnneThrope](#): > > Where is the bullshit? Where is the attack? I’m not assessing any blame. Why does it matter who was driving the bus that got us to our present destination? Because it’s important to make sure the driver doesn’t get behind the wheel of any other buses. It’s also important in deciding just who’s advice to take on how to get out of the situation we’re in. ---
**Author:** ![MsAnneThrope](https://avatars.discourse-cdn.com/v4/letter/m/3d9bf3/32.png) [@MsAnneThrope](https://boards.straightdope.com/u/MsAnneThrope)\ **Post date:** [September 30, 2008, 7:12am UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/244 "2008-09-30T07:12:57Z")
> [@Mosier](#): > > Because it’s important to make sure the driver doesn’t get behind the wheel of any other buses. It’s also important in deciding just who’s advice to take on how to get out of the situation we’re in. Good point(s). But how do we know who to trust as far as advice goes? Is there anyone that can be trusted to give sound advice without skewing it in such a way as to profit from some personal interest? Hell, is that even possible? ---
**Author:** ![2nd\_Law](https://avatars.discourse-cdn.com/v4/letter/2/f475e1/32.png) [@2nd\_Law](https://boards.straightdope.com/u/2nd_Law)\ **Post date:** [September 30, 2008, 8:12am UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/245 "2008-09-30T08:12:08Z")
> [@The\_Second\_Stone](#): > > I’ll eat my hat if it isn’t below 9,000 sometime between opening and closing tomorrow. Assuming the markets open. Bush is scheduled to address the nation at 7:45 a.m. this morning, and I wouldn’t be surprised if he announced some kind of “market holiday”. [link](http://www.thewashingtonnote.com/archives/2008/09/bush_will_addre/) ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [September 30, 2008, 11:03am UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/246 "2008-09-30T11:03:32Z")
> [@Magiver](#): > > The logic is that losing a third of your party vote means something is seriously wrong with the bill. Deal with it (not you, Congress). Huh. And what does it mean when the president loses two thirds of his party for his own legislation? You deal with it. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [September 30, 2008, 12:53pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/247 "2008-09-30T12:53:13Z")
> [@Lamar\_Mundane](#): > > I’m not going to get sidetracked here. For a good explanation of the story, read this current article in [Business Week](http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html?campaign_id=rss_blog_blogspotting). > > _The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations._ Sheesh you’re really changing the bar! First they weren’t pressured, now only some were pressured. It doesn’t matter. Try this: a mortgage is essentially a commodity, like a peach. If you drive down a rode and there are five peach stands all selling the exact same peaches, from which will you buy? Likely the cheapest. Also likely is that they will be priced close to each other. Now if the government steps in and makes one stand lower the price, than competitive market pressure forces all the others to follow suit or lose market share. It doesn’t matter if the one you forced only sells a small fraction of the market, they are setting the price point for the whole market based on the gov intervention. ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [September 30, 2008, 1:29pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/248 "2008-09-30T13:29:53Z")
> [@Scylla](#): > > Let’s back up a step. We both agree that the bonds were misrated. You seem to think that this was deliberate, for money provided by the issuer who hired the ratings company, and the perceived conflict of interest. > > [. . .] [. . .] [. . .] I have a few quibbles with your post, but nothing that affects the bottom line: this crisis was caused by bad judgments in the private sector. I took you to be arguing against that position. If you’re not doing so, I’ll return to the sidelines. ---
**Author:** ![Lamar\_Mundane](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lamar\_Mundane](https://boards.straightdope.com/u/Lamar_Mundane)\ **Post date:** [September 30, 2008, 1:38pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/249 "2008-09-30T13:38:54Z")
> [@Scylla](#): > > Sheesh you’re really changing the bar! First they weren’t pressured, now only some were pressured. It doesn’t matter. > > Try this: a mortgage is essentially a commodity, like a peach. If you drive down a rode and there are five peach stands all selling the exact same peaches, from which will you buy? Likely the cheapest. Also likely is that they will be priced close to each other. Now if the government steps in and makes one stand lower the price, than competitive market pressure forces all the others to follow suit or lose market share. It doesn’t matter if the one you forced only sells a small fraction of the market, they are setting the price point for the whole market based on the gov intervention. More nonsense. The CRA worked perfectly fine for almost the entire life of an average mortgage, then in 2004, mostly from the private sector, ridiculous loan terms began emerging, which were the ones that failed. Trying to tie this mess back to a bill in 1977 is a transparent partisan ploy. For your scenario to work, you have to come up with an explanation for why there was no trouble at all for 25 years, and then things blew up. If it was the fault of CRA, then why didn’t it happen sooner? ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [September 30, 2008, 1:46pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/250 "2008-09-30T13:46:01Z")
> [@Richard\_Parker](#): > > I have a few quibbles with your post, but nothing that affects the bottom line: this crisis was caused by bad judgments in the private sector. I took you to be arguing against that position. If you’re not doing so, I’ll return to the sidelines. No. That’s far to simplistic. There was a series of misjudgements in both the private and public sectors, as well as chain of circumstances in the environment itself. ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [September 30, 2008, 1:55pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/251 "2008-09-30T13:55:10Z")
> [@Scylla](#): > > No. That’s far to simplistic. There was a series of misjudgements in both the private and public sectors, as well as chain of circumstances in the environment itself. Every action in the world is the result of a complex chain of causation. Nevertheless, we speak of primary or proximate causes. In the case of the mortgage meltdown, the primary cause was: a bunch of money to invest + crappy T-bills + false assumptions about housing + bad ratings + credulous investors. Government policies affected all of those things on the margins, but no government mistake was a proximate cause. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [September 30, 2008, 2:02pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/252 "2008-09-30T14:02:00Z")
> [@Lamar\_Mundane](#): > > More nonsense. The CRA worked perfectly fine for almost the entire life of an average mortgage, then in 2004, mostly from the private sector, ridiculous loan terms began emerging, which were the ones that failed. Trying to tie this mess back to a bill in 1977 is a transparent partisan ploy. > > For your scenario to work, you have to come up with an explanation for why there was no trouble at all for 25 years, and then things blew up. If it was the fault of CRA, then why didn’t it happen sooner? You’re just handwaving now. If you’ve read my earlier post on the previous page, I’m not blaming the housing initiatives of 30 years ago. In fact I’ve praised them. You keep changing you’re arguments here. This latest one is inane. How can something work for 30 years and then fail? Environments and circumstances change. This is not the 70s anymor. ---
**Author:** ![Lamar\_Mundane](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lamar\_Mundane](https://boards.straightdope.com/u/Lamar_Mundane)\ **Post date:** [September 30, 2008, 2:14pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/253 "2008-09-30T14:14:44Z")
> [@Scylla](#): > > You’re just handwaving now. > > If you’ve read my earlier post on the previous page, I’m not blaming the housing initiatives of 30 years ago. In fact I’ve praised them. > > You keep changing you’re arguments here. This latest one is inane. How can something work for 30 years and then fail? Environments and circumstances change. This is not the 70s anymor. As others have noticed, you’vd tried to lay this on the doorstep of government, with your main point seemingly that they didn’t stop the bad practices of the private sector. That’s like blaming the grocery store for your obesity, diabetes, and lung cancer because they kept letting you buy your cheetos and beer and cigarettes. Yoy say that environments and circumstances change - yes, they change when private lenders sell mortgages at silly terms to people for whom they deliberately falsified credit information, then sold these obligations, somehow rated AAA. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [September 30, 2008, 2:15pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/254 "2008-09-30T14:15:34Z")
> [@Scylla](#): > > This is one of those arguments that is founded by a poor understanding of the ratings process on a number of levels. I am having a hard time sorting out just how badly the ratings companies failed us but they definitely seem to have failed us and, more to the point, did so willfully to some extent. It does not look like it was merely an “oops” kind of thing. (Bolding Mine) > [@](#): > > In 2000, Standard & Poor’s made a decision about an arcane corner of the mortgage market. It said a type of mortgage that involves a “piggyback,” where borrowers simultaneously take out a second loan for the down payment, was no more likely to default than a standard mortgage. > > \ > > Six years later, S&P reversed its view of loans with piggybacks. It said they actually were far more likely to default. By then, however, they and other newfangled loans were key parts of a massive $1.1 trillion subprime-mortgage market. > > \ > > It was lenders that made the lenient loans, it was home buyers who sought out easy mortgages, and it was Wall Street underwriters that turned them into securities. But credit-rating firms also played a role in the subprime-mortgage boom that is now troubling financial markets. S&P, Moody’s Investors Service and Fitch Ratings gave top ratings to many securities built on the questionable loans, making the securities seem as safe as a Treasury bond. > > **Also helping spur the boom was a less-recognized role of the rating companies: their collaboration, behind the scenes, with the underwriters that were putting those securities together**. Underwriters don’t just assemble a security out of home loans and ship it off to the credit raters to see what grade it gets. Instead, they work with rating companies while designing a mortgage bond or other security, making sure it gets high-enough ratings to be marketable. > > The result of the rating firms’ collaboration and generally benign ratings of securities based on subprime mortgages was that more got marketed. And that meant additional leeway for lenient lenders making these loans to offer more of them. > > \ > > **The subprime market has been lucrative for the credit-rating firms**. Compared with their traditional business of rating corporate bonds, the firms get fees about twice as high when they rate a security backed by a pool of home loans. The task is more complicated. Moreover, through their collaboration with underwriters, the rating companies can actually influence how many such securities get created. > > \ > > When Wall Street first began securitizing subprime loans, rating firms leaned heavily on lenders and underwriters themselves for historical data about how such loans perform. The underwriters, in turn, assiduously tailored securities to meet the concerns of the ratings agencies, say people familiar with the process. **Underwriters, these people say, would sometimes take their business to another rating company if they couldn’t get the rating they needed.** > > SOURCE: [Wall Street Journal: How Rating Firms’ Calls Fueled Subprime Mess](http://online.wsj.com/article/SB118714461352698015.html) ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [September 30, 2008, 2:17pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/255 "2008-09-30T14:17:04Z")
> [@Richard\_Parker](#): > > Every action in the world is the result of a complex chain of causation. Nevertheless, we speak of primary or proximate causes. In the case of the mortgage meltdown, the primary cause was: a bunch of money to invest + crappy T-bills + false assumptions about housing + bad ratings + credulous investors. Government policies affected all of those things on the margins, but no government mistake was a proximate cause. False. Failing to rein in Freddie and Fannie as the mortgage backed market moved to excess was a government error. ---
**Author:** ![Scylla](https://avatars.discourse-cdn.com/v4/letter/s/a5b964/32.png) [@Scylla](https://boards.straightdope.com/u/Scylla)\ **Post date:** [September 30, 2008, 2:25pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/256 "2008-09-30T14:25:00Z")
> [@Lamar\_Mundane](#): > > As others have noticed, you’vd tried to lay this on the doorstep of government, No. That’s not accurate. ---
**Author:** ![The\_Second\_Stone](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@The\_Second\_Stone](https://boards.straightdope.com/u/The_Second_Stone)\ **Post date:** [September 30, 2008, 5:04pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/257 "2008-09-30T17:04:56Z")
You wrote: > [@MsAnneThrope](#): > > Jesus shit on a cracker! If everyone put half as much effort into coming up with a feasible solution to the financial situation we’re in as is being wasted on trying to assign blame for said situation… > Perhaps we need another Great Depression to get our priorities straight. Perhaps we deserve another Great Depression for letting things get so fucked up in the first place. > No, I certainly don’t have any answers, but the sophomoric “They started it”, “No, they started it” shit is really becoming tedious. > The situation in which we find ourselves does not change with the identification of a confirmed scapegoat. I then wrote about your post: > [@The\_Second\_Stone](#): > > Ya know, that’s bullshit. It’s as big a steaming pile of bullshit as Republicans blaming Nancy Pelosi for being mean and making them change their vote. We are entitled to defend ourselves from bullshit attacks. And you responded: > [@MsAnneThrope](#): > > Where is the bullshit? Where is the attack? I’m not assessing any blame. Why does it matter who was driving the bus that got us to our present destination? Do you really need to spell out the bullshit and the blame in your original post? Did you read it? Maybe you were just exclaiming. I don’t know. But I will break it down for you: Bullshit: 1 _ **Jesus shit on a cracker!** _ The bible does not refer to the savior having a cracker or shitting at any time. That makes this made up and therefore bullshit. 2 _ **If everyone put half as much effort into coming up with a feasible solution to the financial situation we’re in as is being wasted on trying to assign blame for said situation…** _ No, the efforts of all the bloggers on all the bulletin boards will have no effect on the outcome of the crisis. We don’t get votes and no one pays attention to us. We are expressing our frustration. The idea that perhaps the 535 congresscritters are combing the intertubes for solutions is preposterous and bullshit. Their primary concern is that Nancy Pelosi is mean to them. 3 \*\*\*Perhaps we need another Great Depression to get our priorities straight. Perhaps we deserve another Great Depression for letting things get so fucked up in the first place. \*\*\*Nobody deserves another great depression. It was most damn unpleasant from my listening to those who lived through it and my study of it. This is a steaming load of bullshit. 4 _ **The situation in which we find ourselves does not change with the identification of a confirmed scapegoat.** _ Perhaps we can identify the responsible flawed policies and not elect their proponents in the future. The idea that we can ignore who got us into this mess seems to me designed to help the reelection of the idiots. Perhaps you didn’t mean it that way, but the “let’s not point fingers” seems to be designed to repeat in the future. The straw man of assuming that the finger pointing was designed to effect immediate change is a straw man and generally acknowledged as logical bullshit among rhetors. We can refuse to reelect the idiots in 37 days or sooner if we vote by mail. Blame: 1 I_ **f everyone put half as much effort into coming up with a feasible solution to the financial situation we’re in as is being wasted on trying to assign blame for said situation…** _ You are holding us message boarders responsible for not coming up with a feasible solution because we are trying to identify those responsible and their policies to avoid it again in the future. 2 _ **Perhaps we deserve another Great Depression for letting things get so fucked up in the first place.** _ This suggest that perhaps we deserve punishment and blame, although in the opposite order. “We” seems to include everyone. “letting things get so fucked up in the first place” suggests that “we” did this. Perhaps you did not intend to spew bullshit and blame, much like the repeal of Glass Stegal wasn’t intended to cause another depression, or the reduction in reserve requirements was not intended to leave banks overexposed. But when such acts or writing contribute in an uninterrupted stream to the result, people are going to draw that conclusion. Your post suggested bullshit and blame to me. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 30, 2008, 6:12pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/258 "2008-09-30T18:12:08Z")
[This is both interesting and unsurprising:](http://www.opensecrets.org/news/2008/09/finance-sector-gave-50-percent.html) > [@](#): > > WASHINGTON – Members of the House of Representatives who supported bailing out the financial sector with $700 billion in taxpayer money have received 51 percent more in campaign contributions from the finance, insurance and real estate sector in their congressional careers than those who opposed the emergency legislation, the nonpartisan Center for Responsive Politics calculated following the 228-205 vote on Monday that defeated the House bill. > > Examining campaign contributions from the industries that were most eager to see the Emergency Economic Stabilization Act of 2008 passed, the Center found that the gap between lawmakers who supported the bailout and those who successfully opposed it was especially wide among House Democrats. ---
**Author:** ![dehacker](https://avatars.discourse-cdn.com/v4/letter/d/bbe5ce/32.png) [@dehacker](https://boards.straightdope.com/u/dehacker)\ **Post date:** [September 30, 2008, 6:44pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/259 "2008-09-30T18:44:19Z")
**The Second Stone** , are you warming up your hat yet for easy digestion, or was that just bullshit you were spewing? ---
**Author:** ![Sinaijon](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Sinaijon](https://boards.straightdope.com/u/Sinaijon)\ **Post date:** [September 30, 2008, 7:07pm UTC](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746/260 "2008-09-30T19:07:24Z")
> [@dehacker](#): > > **The Second Stone** , are you warming up your hat yet for easy digestion, or was that just bullshit you were spewing? What!!! The DOW didn’t drop below 9000!!! While, I never… But come one, being off by over 1700 points isn’t really all that bad, is it? [Previous page](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746.md?page=12) [Next page](https://boards.straightdope.com/t/house-of-representatives-rejects-bailout-bill/465746.md?page=14)