The problem with a bipartisan jobs bill is that it is too darned bipartisan, dagnab it:
Senate Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Charles Grassley (R-Iowa) worked for weeks with Reid’s blessing and frequent involvement to craft an $85 billion jobs bill, a measure that seemed destined to break the partisan logjam that has ground the Senate to a halt.
But as Baucus, Grassley and President Barack Obama were preparing to celebrate a rare moment of bipartisan Kumbaya on Thursday, Reid stunned a meeting of Senate Democrats by announcing he was scrapping Baucus-Grassley, replacing it with a much cheaper, more narrowly crafted, $15 billion version.
“Grassley and three to four Republicans would have voted for it, but all the other Republicans would have beaten the living s—t out of us [during the 2010 midterms], claiming the bill was too bloated,” said a Democrat who supported Reid’s decision, explaining the leader’s logic.
What good is it to enact legislation if your political opponents can beat you over the head with it (and, coincidentally, you can’t use it as a club to beat your opponents with)? Other than that it would be statesmanlike and stuff?
Another profile in courage from the Senate leadership.
Honestly, I’m relieved. I’m skeptical that any jobs bill that has the general shape that has been suggested will actually create jobs. What I think it will do is give a handout to companies that were going to add jobs anyway, further aggravating the deficit for no particularly good reason.
As I’ve said before, the jobs bills that I’d like to see are correcting the ongoing problems in the financial system and maintaining a stable regulatory and tax environment thereafter as long as the unemployment rate is above 8% to allow companies to reconnoiter.
I’ve got a question for someone more knowledgeable than I. Why aren’t the banks being required to write down some of the bad paper they’ve got to its actual value? At least it would get it off their books. As long as they’re in suspense, it’s hard for me to imagine anything other than an uncomfortable stasis.
Problem with a bipartisan bill? It is bipartisan. Grab your wallets and hold on tight!!
“Why aren’t the banks being required to write down some of the bad paper they’ve got to its actual value?”
Please Dave, no false modesty, you’ve put forth the answer on this very blog before.
The answer is that in point of fact TARP money never really went toward buying down the toxic assets. Further, the regulators all across the country who are involved in small to medium sized banks in particular, are worried as hell about commercial real estate, and don’t want the banks to do anything except shore up their reserves in anticipation of the commercial real estate debacle that’s about to happen.
Politically the current American administration simply can’t let that information get out. They have done nothing productive. Hence we have the “suspense” that you cite.
I do believe that there was a raging debate here, perhaps more so over at OTB, about zombie banks and such earlier this year. I also believe that this commentor stated repeatedly, and I mean repeatedly, that the banks should be let be let fail and they should be recapitalized as such. That is, let the market value of equity be wiped out, let the market amount of debt be wiped out, and move forward. I was castigated by any number of other commentators including a certain Bernard Finel – who had strange, truly strange, ideas about how to let this infection resolve itself. And here we are: nowhere.
The brilliance of Ronald Reagan back in the early 80s was that he was willing to let the destructive forces take place, he had the balls to let the economy do what it had to do to fix itself, and live with the political fallout. Wouldth that we had such leadership today. If we could get through the bad times we could reset our course, unfortunately we have no such leadership in place today in Washington.
The problem with bipartisan bills is that pork is the only thing that’s truly bipartisan.
Dave,
You know, that’s a good question. I haven’t heard anything about those “toxic assets” for a long time.
re: Toxic Assets
Richard Koo courtesy of a zero hedge article this AM
“While announcing what would appear to be tough new regulations for the banks, the US authorities have substantially eased the rules on bad loan write-offs and are moving to prevent the recent plunge in commercial real estate prices from causing further damage at US banks. Nationwide commercial real estate prices have fallen 43% from the 2007 peak on average. Many properties are now worth less than the outstanding balance on the loans secured by them, preventing banks from rolling over the loans. The sharp drop in property values also means that the loan-to-value (LTV) ratio on all real estate-related loans has probably exceeded an appropriate level. If US banks start refusing to roll over existing loans or tighten the criteria for extending new loans because LTVs are too high, they could trigger a wave of commercial real estate-related defaults. That, in turn, could inflict fatal damage on a banking sector already weakened by problems in residential mortgages. Many of the loans issued during the bubble are due for refinancing between late-2009 and 2011. Consequently, there is no time to waste for either the authorities or the banks themselves. If lenders refuse to roll over these loans, the US could experience another Lehman shock.”