“The era of greed and irresponsibility on Wall Street and in Washington has led to a financial crisis as profound as any we have faced since the Great Depression.

“But regardless of how we got here, the circumstances we face require decisive action because the jobs, savings, and economic security of millions of Americans are now at risk.

“We must work quickly in a bipartisan fashion to resolve this crisis and restore our financial sector so capital is flowing again and we can avert an even broader economic catastrophe. We also should recognize that economic recovery requires that we act, not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America.

“But thus far, the Administration has only offered a concept with a staggering price tag, not a plan.

“Even if the Treasury recovers some or most of its investment over time, this initial outlay of up to $700 billion is sobering. And in return for their support, the American people must be assured that the deal reflects some basic principles.

    * No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.

    * Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.

    * Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.

    * Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.

    * A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.

    * Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families – a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.

    * Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.

“The bottom line is that we must change the economic policies that led us down this dangerous path in the first place. For the last eight years, we’ve had an “on your own-anything goes” philosophy in Washington and on Wall Street that lavished tax cuts on the wealthy and big corporations; that viewed even common-sense regulation and oversight as unwise and unnecessary; and that shredded consumer protections and loosened the rules of the road. Ordinary Americans are now paying the price. The events of this week have rendered a final verdict on that failed philosophy, and it is a philosophy I will end as President of the United States,” said Senator Barack Obama.

Michael Ramirez summed the Democrats and Barack Obama’s solution to America’s financial crisis up in his political cartoon above.

For a historical reference point let’s travel back to the year of 1999 (when Bill Clinton was President and Barack Obama financial advisor, Frankin D. Raines was Chairman of Fannie Mae) and the warnings about the subprime mortgage market were made in the New York Times.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Fancy that. The chickens of subprime mortgages to uncreditworthy borrowers and speculators came home to roost.

Barack Obama’s and the Democrats in Congress plan to bail out this mess will plunge this country into a Herbert Hoover type depression.

The GOP and President Bush must vett these bailouts carefully and prudently or allow some financial institutions to simply fail. President Bush should not be hesitant to use the “bully pulpit” and his veto pen. GOP Senators should filibuster any proposal that unfairly burdens future generations of Americans.

Stay tuned……

Update:

Looks like the White House is using the “bully pulpit” to press for passage of its financial rescue plan.

The White House is pressuring congressional Democrats “to send a clear signal” before the markets open Monday that Treasury Secretary Henry Paulson’s bailout plan will be approved quickly and essentially as written, a senior Democratic aide tells Politico.

The warning: If investors don’t believe help is coming quickly, the markets could spiral downward all over again.

Asked about the pressure, White House spokesman Tony Fratto said that “there’s a very good appreciation for the seriousness of the situation and the need for this legislation.”

“As last week showed, our markets are fragile right now, and it’s not in anyone’s interests to test them at this point,” said Fratto. “We do need to send a very strong signal to market participants that this plan will go forward, and that it will go forward quickly.”

But, the Democrats have rejected the seriousness of the crisis and will exact their own concessions from the Bush Administration.

The Democrats will relentlessly blame the GOP and President Bush regardless if the crisis worsens or not in the short term. However, they might face a backlash from working class voters if it is perceived they are obstructionist.

The Dems will pass this measure with some modifications by this next Friday.