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The Great Bailout Debate |
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October 3, 2008
When the collapse of Lehman Brothers set off an unexpected chain reaction that some experts warned could threaten the entire economy, the Bush Administration approached Congress with a three page plan: allow the Treasury to spend $700 billion to purchase the distressed mortgages causing banks so much pain.
Many members of Congress, and the public, balked at the idea of giving Paulson unchecked fiscal powers, but, responding to stern warnings of a financial meltdown, the House created a compromise bill around Paulson's plan, 110 pages long. Despite White House pressure and bi-partisan deal-making, the bill didn't pass. The Senate, which Constitutionally cannot originate appropriations bills, responded by pasting the plan into an existing appropriations bill and adding "sweeteners" — unrelated goodies designed to coax reluctant House members into voting for the bill. The Senate passed the bill, called the "Emergency Economic Stabilization Act of 2008," and on Friday afternoon, the House followed suit, passing the bill 263 to 171, and President Bush signed it into law shortly afterwards.
Georgetown University's legal and finance scholar, Emma Coleman Jordan, joins Bill Moyers to discuss how the bailout bill looks now and what it can and can't accomplish.
Inside the Bill
Watchdog groups are leading the charge to use the internet for a more open government. If you are interested in investigating the 451 page bailout bill, visit the Sunlight Foundation's PublicMarkup.org, which lets you review and comment on the bailout — and other bills — section by section. You can also see how complicated it is to follow the changes made from one version of the legislation to the next by watching this video from Sunlight. And check out the the References and Readings section below for in-depth articles about how we got here and what it means.
Emma Coleman Jordan
Georgetown University Professor Jordan is best known for establishing the field of economic justice in legal theory, and for her work in financial services and civil rights. Her most recent book is ECONOMIC JUSTICE: RACE, GENDER, IDENTITY AND ECONOMICS, the capstone to a series of articles, chapters, and books she has written on the subject. Her forthcoming projects concern economic justice, in addition to a book on lynching, LYNCHING THE DARK METAPHOR OF AMERICAN LAW. At the Law Center she teaches courses in Economic Justice, Commercial Law, Torts, and Financial Services.
Before coming to Georgetown, she taught for twelve years at the University of California, Davis. She began her teaching career at Stanford Law School as a teaching fellow. She has been active in the financial services field, serving as chair of the Financial Institutions Committee of the California State Bar, drafter of the statute to regulate bank check holding practices, and co-counsel in class actions challenging bank stop-payment fee charges. Her article, "Ending the Floating Check Game" (1985), grew out of this involvement. She organized the Financial Institutions and Consumer Financial Services section of the Association of American Law Schools. She was a White House Fellow in 1980-81, serving as special assistant to the Attorney General. She was counsel to Professor Anita Hill during the Clarence Thomas confirmation hearings.
Guest photos by Robin Holland
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 Kevin Phillips on BAD MONEY Bill Moyers sits down with former Nixon White House strategist and political and economic critic Kevin Phillips, whose latest book BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM explores the role that the crumbling financial sector played in the now-fragile American economy. (September 19, 2008)
 Winners and Losers
NEW YORK TIMES business and financial columnists Gretchen Morgenson and Floyd Norris discuss who wins and who loses in the financial turmoil. (September 19, 2008)
 Facing up to the Economy
Bill Moyers talks with economist Dean Baker and journalist Bob Herbert about the economic challenges facing the government and the populace. (August 8, 2008)
 Mortgage Mess
THE JOURNAL travels to ground zero of the mortgage meltdown — Cleveland, Ohio. Correspondent Rick Karr takes viewers to Slavic Village, one of the hardest hit neighborhoods in the nation when it comes to the spate of foreclosures caused by the subprime mortgage crisis. (July 18, 2008)
 John Bogle
Investment industry giant John Bogle says that as more and more money managers take control over corporations on Wall Street, Main Street is paying the price.
(September 28, 2007)
 An American Recession?
Veteran market watcher Robert Kuttner and Wall Street insider William H. Donaldson give their read of the current economic landscape and discuss the risks of the deregulation of the financial industry. (October 12, 2007)
 Gretchen Morgenson
Financial columnist Gretchen Morgenson on the SEC, the mortgage crisis and other matters fiscal. (June 29, 2007)
 The Downturn on the Homefront
Sociologist Katherine Newman on the global markets' effect on kitchen table issues. (January 25, 2008)
NEW YORK TIMES Topics: Credit Crisis - Bailout Plan
FRONTLINE: The Long Demise of Glass-Steagall
"Lehman's Demise Triggered Cash Crunch Around Globe"
By Carrick Mollenkamp and Mark Whitehouse in London, Jon Hilsenrath in Washington and Ianthe Jeanne Dugan in New York, the WALL STREET JOURNAL, SEPTEMBER 29, 2008.
"As Credit Crisis Spiraled, Alarm Led to Action, "
By Joe Nocera, THE NEW YORK TIMES, October 1, 2008.
"Rescue's Supporters Failed to Connect With Public "
By John D. Mckinnon and Sarah Lueck, THE WALL STREET JOURNAL, October 1, 2008.
Interactive Map of House votes
This NEW YORK TIMES graphic illustrates who voted yes and no on the Emergency Economic Stabilization Act of 2008.
NPR: PLANET MONEY
NATIONAL PUBLIC RADIO blog and podcast covering financial news.
"How bailout deal will impact next president"
By Gail Russell Chaddock, THE CHRISTIAN SCIENCE MONITOR, September 28, 2008.
Charlie Rose interviews Warren Buffett
Warren Buffett joined Charlie Rose October 1, 2008, to make the case for a bailout.
Published October 3, 2008
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