Making Sense of the Bailout

By Ruth Cullen, Forum Staff

I don't know about you, but all this bailout talk is making my head spin.

It's hard enough to sift through the non-stop blather about "illiquid" this and "troubled assets" that without the added complication of spin and bias from just about everyone - and namely, politicians and pundits.

Who to trust? Where to find credible, unbiased straight talk about what the bailout is and why it's both important and urgent?

Barring the discovery of a Cliff Notes version of the 451-page Emergency Economic Stabilization Act of 2008, here's an interesting round-up of voices chiming in about the proposed bailout bill, politics, and the current state of our U.S. economy to help all of us get a clue.

From Ian Ayres' article in The New York Times...

At the end of the day, it may be necessary to get the at-risk incumbents and their challengers to agree to take this issue off the table. If McCain and Obama jointly reached out to both sides in these close races, it might be possible for both contenders for a House seat to simultaneously agree to support the package. This will not be easy. Adversaries in tight races are loathe to cooperate when there is political advantage to be had in clinging to the popular position. But the alternative is to ask some incumbent members to engage in probabilistic political suicide. Read more...

From Senator John McCain as quoted in the Los Angeles Times...

"Crises often have a way of revealing our better selves, of showing what we're made of and how much we can achieve when we're put to the test," the Arizona senator said, speaking to about 100 supporters in a cozy wood-paneled auditorium at the Harry S. Truman Presidential Library and Museum. "It should not require extreme emergencies, when the future of our entire economy is on the line, to bring out the best of us. . . . We are supposed to do that even in the calmest of times." Read more...

From Senator Barack Obama as quoted on Politico...

“This is not just a Wall Street crisis – it’s an American crisis, and it’s the American economy that needs this rescue plan,” Obama said in a floor speech. And behind the scenes he is making phone calls to House Democrats helping to shore up that vote Friday." Read more...

From Thomas Friedman in The New York Times...

I totally understand the resentment against Wall Street titans bringing home $60 million bonuses. But when the credit system is imperiled, as it is now, you have to focus on saving the system, even if it means bailing out people who don’t deserve it. Otherwise, you’re saying: I’m going to hold my breath until that Wall Street fat cat turns blue. But he’s not going to turn blue; you are, or we all are. We have to get this right. Read more...

From George Soros in The Guardian...

"The fact that the plan was rejected in Congress provides an opportunity to amend it to make it more effective," Soros told Reuters in an interview. "The way to do it is to focus on recapitalizing the banks by injecting equity and actually encouraging existing shareholders to provide that equity." Read more...

From James Klurfeld in Newsday...

Over the years, I've always believed that no matter how cumbersome our form of government, no matter how deeply felt were our differences, in a crisis, serious people can come together and solve problems.

When I heard that the House had voted against the bailout Monday, it shook the very foundation of that belief.

It looks like the House will have another chance. For all our sakes, I hope that the serious people can prevail. Read more...

From a speech made by Franklin Delano Roosevelt in 1932, as quoted in BusinessWeek...

The "mirage" of American economic invulnerability has vanished, along with "much of the savings of thrifty and prudent men and women...We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer," he said. Read more...