“Sophie’s Choice,” “False Choice,” call it what you want. Senate passes Bank “Rescue” Bill.

Much like John McCain — and most Americans, I would guess — “the issue of economics is not something I’ve understood as well as I should.” But we’re all getting a speed-reading course in it now, aren’t we? The only trouble is, of course, that this is not Econ 101 (which I did take, by the way), but this is PhD. level economics. Nothing like jumping right into the deep end.

I understand that this country has basically been operating on credit for the past few years. (Personally feel like I constantly have Suze Orman on my shoulder lecturing me on all my past poor purchasing decisions. I know, Suze! I’m trying to pay off my credit card debt and save for retirement. I really am! Yes I know we probably shouldn’t have taken that trip to Cape Cod this year, but …)

But I digress. Last night the Senate passed a bank bailout rescue bill. And I have no idea whether it’s the “right” thing or not. At this point, it’s probably as good as we’re going to get. Anything with real teeth in it — anything that requires true courage and character from our politicians in Washington — is not going to happen as we get closer and closer to the elections. Remember, the entire House of Representatives — all 435 of ’em — are up for re-election this year. They like their jobs. They want to keep them.

From what I’ve read, the Senate bill is better than the one the House defeated. It’s not perfect; it’s better. From Bloomberg:

The U.S. Senate approved tax cuts valued at more than $100 billion, including a host of alternative energy credits and dozens of breaks for businesses and individuals, as part of its $700 billion bank rescue bill.

The legislation, which the House likely will act on tomorrow, passed the Senate on a 74-25 vote. It would give the Treasury Department authority to buy troubled assets, chiefly mortgage- backed securities that are burdening financial institutions.

The Senate added the tax provisions to woo Republican votes in the House, where an earlier version of the bailout plan failed by 12 votes on Monday. The tax package would spare 24 million American households from a scheduled alternative minimum tax increase this year, renew credits for business research, and extend $17 billion in energy incentives….

It would be “virtually impossible” to expand solar energy without the credit, Madison Grose, a managing director at Starwood Capital Group LLC, said yesterday in an interview before the vote. “The cost to the rate base for these types of projects is substantially higher without the investment tax credit being part of the capitalization of the projects.”

Solar energy is something that has always fascinated me. I don’t pretend to really understand the technology behind it, but consider this: Think about the advances in cell phone technology in the past 10 years. Phenomenal, isn’t it? And although Suze Orman would certainly advise against using your credit card for it, an iPhone is available for the average person.

Now think about solar panels. When was the first time you heard of them? About 40 years ago? President Jimmy Carter had them installed at the White House. Then President Ronald Reagan moved in and had them removed. Unlike cell phones, solar panels are still way out of reach for the average American. The amount of research and technology that has gone into making cell phones an everyday tool have not been invested in solar panels. Why? I can only assume that there’s not the profit to be made in solar energy that there is with cell phones. And if that is the case, then the Government must step in as they are doing in the Senate bill passed last night.

What do you think?

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3 comments

  1. funny, the promise of tax cuts and money infused doesn’t change the fact that unemployment is on the rise.

    personally? I can’t wait to see what Palin says about it tonight…

  2. Economics!! Yum, my favorite “intellectual” topics (along with politic sciences and philosophy) which I studied at length in Paris…
    Worry you need not Dear Sue, the understanding of the current situation does not require a PhD 🙂

    Let’s start with the bail out matter and go through logical reasoning, elaborating also on one of Michael Moore’s good point.
    I tend to be against the bail out because it won’t fix a few fundamentals of this country:

    – the bail out does not reduce the gas price. We all know that gas cost highly affects consumers’ moral and spending habits, especially in this country – used to relatively low gas price.

    – it does not address the foreclosure matter. So many people are still loosing their homes, hurting the entire real estate market, which strongly and negatively impacts the economy.

    – it does not provide the US people with health insurance yet the funds allocated to the Wall Street bail-out would finance well this social program. Health Insurance is indeed related to foreclosure. The number 1 cause of people declaring bankruptcy is because of medical bills: http://www.nytimes.com/2005/02/02/business/02insure.html Then comes the second reason: interest rate rise.
    So if non-wealthy people had health insurance, this mortgage crisis and its impact on Wall Street may never have happened.

    BOTH Democrats and Republicans overly benefited from Fannie and Freddie’s late success whether you like it or not. So I don’t think one party is more to blame over the other.
    Offering “crazy great” mortgage conditions to poor people has a great purpose: giving people the opportunity to own a roof rather than sleep under the bridge. It became a huge problem because of abnormal facts: increasing medical bills and interest rate volatility.
    High gas prices are abnormal too of course since the profit of it only goes to Exxon and Co.

    So long as these are not fixed, the bail out will have a temporary effect and we’ll fall out again in a few years. Only, it will be harder and harder… until China owns every single equity in Wall Street…

    Well, there’s so much to tell. I tried to stick to the “rescue bill” matter and share my view and not digress too much.

  3. How does it feel to be owned?

    Did everyone notice the media spin and blackout leading up to this vote? The media reported that more people were now favoring the bill when 90% of the calls were from people still opposing it.

    Bush and crew have now completed their theft of the country’s wealth. The elite are going to be chuckling and shaking their heads at the squalor they have created while Bush retires on the property that he bought in Nicaragua complete with Secret Service to protect him.

    The people who own the Fed are now angry at the American population and they will raise interest rates in an attempt to beat us into submission.

    There are 263 Congress members and 74 Senators that should not be returning to office and the President should not be selected from the major parties.

    http://ewebsmith.com/finance/CPResponse.html

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