Tonight I again quote CNN to bring to light the days "soap opera" I don't mean to make light of the seriousness of this economic issue but the debate and the lack of trust of the Senate Banking Committee is volatile to say the least.
Federal Reserve Chairman Ben Bernanke was back on Capitol Hill Wednesday, warning that the current financial crisis is the most significant in more than 60 years, and that even tougher times are ahead without quick Congressional approval of a controversial Wall Street bailout.
But members of the panel repeatedly asked Bernanke for arguments they could use to explain to angry voters back home why they voted for such a plan...."Credit will be restricted further. That's not just an inconvenience; that will affect spending and economic activity," he said in response to one question. "It will affect the unemployment rate. It will affect real incomes. It will affect everybody's standard of living."
"It's about the overall performance of the U.S. economy over perhaps a period of years," Bernanke added. "The choking up of credit is like taking away the life blood away from the economy."
But he said the primary problem is a drop in home prices, which sparked a rise in foreclosures that have cut the value of trillions of dollars of mortgage-backed securities to what he termed "fire sale" prices.
The lack of demand for those securities, in turn, forced banks and Wall Street firms to take $500 billion in charges that dug into the capital they use to make loans.
Bernanke said that when the government starts buying the mortgage-backed securities from the banks, it will provide a market that doesn't exist now, and allow the prices to rise from the current depressed levels to ones more justified by the fundamentals of the loans, most of which are not in default.
As President Bush addressed the Nation the congress was working through the evening to hammer out a compromise proposal.
This evening the following statement was issued. In a show of unity, House Speaker Nancy Pelosi, D-Calif., and Minority Leader, John Boehner, R.-Ohio, said Tuesday evening that they are working closely with the administration and "have made progress" on hammering out a deal.