The much-touted CEO pay limits are a joke, Amit Paley reports in a page 1 story for WaPo. Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules. But at [...]

John Cole has come up with “A Bailout Plan the GOP Can Support.”  After years of having it pointed out to him that violence in Iraq is comparable to that in Detroit and other American metro areas — and noting that Michigan has a large Muslim population — he put two and two together. We [...]

President Bush may ignore Congress and give the Big 3 the money they want, anyway. Worried about the weakening economy, the Bush administration said it was ready to step in and prevent the U.S. auto industry from collapsing after the Senate refused to pass a rescue bill endorsed by President George W. Bush and congressional [...]

After a three month experiment and some discussions with regular readers, we’ve decided to suspend operations on the Atlantic Council’s breaking news blog, Atlantic Update, and to consolidate it into New Atlanticist.  The result, I hope, will be one, livelier blog that becomes a hub of discussion about transatlantic issues. While I’d still prefer that [...]

Senate Republicans killed the bailout deal worked out between President Bush and congressional leaders that had previously passed the House.  NYT: The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which say they may not be able to survive through this month. After Senate Republicans [...]

The auto industry bailout looks to be in trouble again. WASHINGTON (AP) – Emergency aid for the nation’s imperiled auto industry was thrown into jeopardy Wednesday, opposed by Republicans who were revolting against a hard-fought deal between Democrats and the Bush White House to speed $14 billion to ailing carmakers. Democrats detailed the compromise measure [...]

Stephen Green has a great advertising poster for the concept. Not great if you’re an auto exec looking for a handout but great all the same.

Paul Krugman says the death of the American auto industry is inevitable. Nobel economics prize winner Paul Krugman said Sunday that the beleaguered U.S. auto industry will likely disappear. “It will do so because of the geographical forces that me and my colleagues have discussed,” the Princeton University professor and New York Times columnist told [...]

Barry Ritholz calculates that the various government bailouts under way amount to $4.6165 trillion dollars.  To put it in context, he shows the cost of some other government expenditures you might have heard of: • Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion • Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 [...]

In a NYT op-ed entitled “Let Detroit Go Bankrupt,” Mitt Romney argues that Congress should let creative destruction do its job. IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually [...]

Grover Norquist has applied for a $700 billion subsidy from the Treasury.  His appeal reads, in part: I have a plan for this $700 billion which should be just what’s needed to get the American economy going. Since the money came from the taxpayers in the first place, I propose giving it back to them. [...]

Yay! For all the fury over Treasury Secretary Henry Paulson’s $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government’s response to the credit crisis. According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for [...]

Remember that emergency bailout, wherein the world would come to a complete halt if the government didn’t buy up all the bad loans? Hank Paulson says “Never mind.” Treasury Secretary Henry Paulson says that the $700 billion government rescue program will not be used to purchase troubled assets as originally planned. Paulson says the administration [...]

Megan McArdle argues that those saying we should bail out General Motors and save its workers just like we did the banks and insurance companies miss the point of the bailout. Whereas a collapse of the financial sector had the ability to take down the rest of the economy with it, that’s just not true [...]

At the risk of beating a dead horse of no specified color, one byproduct of this campaign will be to rob the word racism of what’s left of its power.  Lewis Diuguid, a Kansas City Star columnist of whom I’ve never previously heard, is getting significant blogospheric attention for a piece titled “Shame on McCain [...]

Well, it looks like what I was worried about is going to happen. The Treasury Department will be buying equity in 9 of the U.S. largest banks. What I find particularly dishonest was this line, Therefore, the Treasury had little choice but to “jawbone them into taking the money in a coordinated fashion all at [...]

Howard Glackman at the Tax Policy Center is saying his sources in the Federal Reserve and the financial industry that hundreds of billions more are needed to recapitalize financial institutions in trouble. That is the current bailout is just not going to work. Also fits well with the decline in the stock market we’ve been [...]

Congress has passed the bailout now that the three page bill has expanded in size a hundredfold and it has been larded with some good old pork: With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to [...]

As Dave Schuler has been predicting for a while now, the financial crisis is starting to hit state governments. California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal [...]

The next episode of OTB Radio, our BlogTalkRadio program, will record and air live tonight from 7-8 Eastern. Dave Schuler will co-host with me tonight. We’ll have as our special guest Megan McArdle, the world’s tallest female econoblogger. We’ll be talking, again, about the mess in the financial markets, the various bailout plans, the presidential [...]

Nate Silver compares the list of Representatives voting No on yesterday’s bailout bill with the list of swing districts — that is, those where the re-election of the incumbent is seriously in doubt — and finds a surprisingly strong correlation. VULNERABLE GOP = 3 YEAS, 17 NAYS (15%) OTHER GOP = 62 YEAS, 116 NAYS [...]

An interesting meme is developing among smart commenters from across the political spectrum that the House’s failure to pass the bailout bill demonstrates the soft underbelly of our political system itself. Ezra Klein: Above all, though, this is a failure of politics. Like with global warming, with health care, with the national debt, with immigration. [...]

Perhaps the House Republican leadership have read Michael Moore‘s latest diatribe? Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion [...]

Drudge reported that the Dow plunged 500 points. Something happened. I’ll post more as it comes in. Update: Looks like investors are fearing the bailout will not pass. Dow down now 700 points. Update II: I’ve heard several unconfirmed reportst that the bailout has not passed. One that it failed in the Senate and the [...]

While I am not a fan of the bailout, buying the toxic assets from foundering financial institutions, there is a logic to it that, in the end, could work. Here is the idea, Right now people are very uncertain and very nervous. As such they are most likely to to err on the side of [...]

While he doesn’t come right out and say so, I sense that Thoreau seems less than pleased with the bailout compromise: Screw it. The real divide in this mess is not rich-poor, it’s responsible-irresponsible. Whether you’re a moron who borrowed too much or a moron who loaned too much, you get taken care of. Screw [...]

It appears that House and Senate negotiators are on the verge of an agreement with the administration on a plan to address the financial crisis. Congressional negotiators and the Bush administration’s top Treasury officials go to work Sunday on settling the final details of a historic $700 billion Wall Street bailout aimed at keeping credit [...]

Numerous reports on what happened in the cranky, late night session that ended with the Paulson bailout plan seemingly dead indicate that John McCain — who you may recall has suspended his campaign to work on the economy — may have pulled the trigger. Memeorandum links an ABC News report that was originally headlined “Deal [...]

And that is a good thing, in my opinion. A high-profile White House meeting on Treasury’s $700 billion Wall Street rescue plan ended on a sour, contentious note Thursday after animated exchanges among lawmakers laced with presidential politics just weeks before the November elections. Treasury Secretary Henry Paulson came up to the Capitol hours later [...]

The next episode of OTB Radio, our BlogTalkRadio program, will record and air live tonight from 7-8 Eastern. Dave Schuler will co-host with me tonight. We’ll have as our special guest Stephen Bainbridge, a UCLA business law professor, expert on corporate governance, and proprietor of the Professor Bainbridge Punditry blog. Steve Verdon also hopes to [...]

ABC News’ George Stephanopoulos reports that, if  John McCain doesn’t vote for the Bush administration’s $700 billion economic bailout plan, it won’t pass. “If McCain doesn’t come out for this, it’s over,” a Top House Republican tells ABC News. A Democratic leadership source says that White House Chief of Staff Josh Bolten has been told [...]

It appears that George Will has had enough of John McCain.  Like myself, he’s long been a bitter opponent of McCain-Feingold and thought Sarah Palin an unimpressive — if thus far politically shrewd — choice for vice president.  McCain’s odd reaction to the recent bad news from Wall Street, though, has apparently been the last [...]

After following the rapidly developing news of the financial crisis and the efforts of the Fed and other U.S. agencies to prevent the onset of Great Depression Part Deux, I still honestly don’t know what to think.  My inclination, however, remains skeptical.   Jim Henley‘s had the best line on this so far: “Wouldn’t it save [...]

The Bush administration is “working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues,” Deborah Solomon and Damian Paletta report for WSJ. At the center of the [...]

Chuck Todd and company note that Barack Obama has rebounded in the polls and that we’re now “about where the race was before the conventions.” The reason why Obama’s up: women. According to the latest New York Times/CBS survey, Obama is ahead overall by five points (48%-43%); a week ago after the GOP convention, CBS [...]

Lance Paddock, in his best Mr. Rogers imitation, asks, “Can you say moral hazard?” Unfortunately, the notion of “too big to fail” means that those who behave badly often keep the benefits when things go well but pass off the negative consequences of failure. UPDATE: Via Greg Ransom, I see that Cato’s Gerald Driscoll has [...]

The next episode of OTB Radio, our BlogTalkRadio program, will record and air live tonight from 7-8 Eastern. Dave Schuler will be joining me tonight to talk about recent events in the news.  Possible topics include: The New Yorker cover flap McCain and Obama’s evolving Iraq and Afghanistan plans Freddie and Fannie bailout Alternative energy [...]

Now that Freddie Mac and Fannie Mae have joined the “too big to fail” club, isn’t it high time we started thinking about how to avoid allowing companies and other quasi-private agencies to get into these problems in the first place? It seems that over the past few decades, the Federal government has pretty much [...]

The widespread rumors of a government bailout of Fannie Mae and Freddie Mac have already had dramatic consequences, perhaps creating a self-fulfilling prophecy. Iain Dey and Dominic Rushe, writing for The Times of London, note that, “The two companies lost almost half their market value last week as rumours of a government bail-out swept the [...]

A rather clueless NYT feature reports breathlessly that some people continue to live the good life even during recessions. Who said anything about a recession? Sometime between the government bailout of Bear Stearns and the Bureau of Labor Statistics report that America lost 80,000 jobs in March, Lee Tachman spent roughly $50,000 last month on [...]

I’ve long thought that American politics and the fact that we have an activist/interventionist government when it comes to economic policy leads to a race to see who can pander the most to voters, or at least a sub-class of voters. John McCain’s new “plan” to bail out the greedy and stupid when it comes [...]

The Bush administration has strong-armed mortgage companies into freezing teaser rates on old loans. The Bush administration has come up with a plan to help strapped homeowners facing a daunting jump in their monthly mortgage payments. The proposal, reached in negotiations led by Treasury Secretary Henry Paulson with the mortgage industry, would freeze introductory “teaser” [...]

It appears that the long-forecast burst of the housing bubble may be upon us, as several companies who made risky home mortgage loans are in trouble. Hanging in the balance is the nation’s housing market, which has been a big driver of the economy. Fewer lenders means many potential homebuyers will find it more difficult [...]

Kenneth Rogoff has an interesting article on the problems facing the International Monetary Fund. Sept. 25, 2006 issue – As the international Monetary Fund holds its big fall meetings in Singapore this week, it faces a financial world that has been turned on its head. Traditionally, the Fund has helped out bankrupt emerging-market governments using [...]

That is the gist of Radley Balko’s article at Fox News. The fatal flaw in the “war on terror” has always been its open-endedness. The president of the United States is never going to sit down on a battleship to sign a peace treaty with terrorism. So when we give the government special, allegedly temporary [...]

This article from the Cato Institute paints a very depressing image of President Bush’s bail out for New Orleans and the areas affected by hurricane Katrina. Calling President Bush, Franklin Delano Bush, based on this seems inaccurate in timing only given that President Bush has expanded spending at a rate that would have left Republicans [...]

Former Vice President Al Gore opened “Saturday Night Live” last night giving an address to the nation as the 43rd President of the United States. The skit was fairly amusing, both self-deprecating with many references to his famous “lockbox” and making fun of the Bush administration without getting nasty, although some parts were rather weak. [...]

Is Toyota in a position to take it over? Rumor has long been that Toyota will/may acquire the GM behemoth. That is unlikely to happen in any straight sort of business sense. Perhaps GM has two options for survival: a bailout by the Feds, which Leviathan likely couldn’t afford, or, an acquisition by a foreign [...]

GM chairman and CEO Rick Wagoner whines about having to compete with Japan in an OpinionJournal op-ed. Since mid-October, General Motors has announced plans to cease production at 12 North American manufacturing facilities and eliminate 30,000 jobs by 2008; trim $1 billion in net material costs in 2006; and, in cooperation with the United Automobile [...]