Call Their Bluff
Josh Marshall sums up the cynical GOP strategy that seems to be emerging:
Pence is saying all this, of course, because he is confident the Democrats who control Congress will pass some sort of bailout and therefore his "let the market sort itself out" approach will never be tested. To go back to the fire analogy, he's standing on the sidelines screaming that the fire will burn itself out, but knowing that the fire fighters will do whatever needs to be done regardless of what he says.
As a commenter in my last post pointed out, this is just a slight variation on the "stabbed in the back" mentality that has infected conservative thinking over the years. As always, conservative ideas didn't fail, they just weren't given sufficient time to play themselves out. The liberals intervened. If the Democratically controlled Congress bails out our financial system, Republicans--having been shielded from the full consequences of their policies--will claim that the intervention was unnecessary and will lead the pitchfork brigade against the wasteful Big Government Democrats who spent so much of the taxpayers' money.
It's time for that end. It's time to call their bluff. Unless a sizable majority of the Republican caucus is willing to sign on, the Democrats should refuse to pass any sort of bail out. This is a game of chicken and there's no reason the Democrats should flinch first.
I not suggesting that the Democrats should allow the entire financial system to meltdown just to keep the Republicans from scoring political points. Someone has to play the role of the responsible adult here. That said, I think there are ways of making it clearer to the voters just what the consequences of inaction would be. If the Democrats make it clear, publicly, that they don't intend to support any bailout if the Republicans aren't willing to shoulder their responsibility, the market is likely to react almost immediately. It will then be up to the Republicans to reassure the market by making it clear that they support a bailout. The more they rail against the idea, the more the financial situation will deteriorate and voters will understand that something has to be done.
No matter how many new provisions and safeguards the Democrats add to the bailout bill, they are not going to create something that the voters will like. The sheer price tag of the bill will give plenty of populist ammunition to cynical Republicans. That's why they cannot be allowed to oppose this bill while reaping the benefits of the financial disaster it averts. They need to be forced to take ownership of this bailout. Call their bluff. Make it clear that nothing will pass unless they take equal ownership of it.
The Republican/McCain plan is to get the Democrats to bail out the GOP's Wall Street friends and then run against them for doing it.As I wrote yesterday, it's akin to setting your house on fire and then suing the firefighters who show up to put it out for causing water damage. It's that level of cynical. And it's already started. Last night Republican Congressman Mike Pence was on Hardball, and he gave one of the more shameless performances I've ever seen. He railed against government intervention in the "free market" and feigned outrage that the government was on the verge of forking over $700 billion in taxpayer money to Wall Street, promising to fight the bailout to his last breath.
Pence is saying all this, of course, because he is confident the Democrats who control Congress will pass some sort of bailout and therefore his "let the market sort itself out" approach will never be tested. To go back to the fire analogy, he's standing on the sidelines screaming that the fire will burn itself out, but knowing that the fire fighters will do whatever needs to be done regardless of what he says.
As a commenter in my last post pointed out, this is just a slight variation on the "stabbed in the back" mentality that has infected conservative thinking over the years. As always, conservative ideas didn't fail, they just weren't given sufficient time to play themselves out. The liberals intervened. If the Democratically controlled Congress bails out our financial system, Republicans--having been shielded from the full consequences of their policies--will claim that the intervention was unnecessary and will lead the pitchfork brigade against the wasteful Big Government Democrats who spent so much of the taxpayers' money.
It's time for that end. It's time to call their bluff. Unless a sizable majority of the Republican caucus is willing to sign on, the Democrats should refuse to pass any sort of bail out. This is a game of chicken and there's no reason the Democrats should flinch first.
I not suggesting that the Democrats should allow the entire financial system to meltdown just to keep the Republicans from scoring political points. Someone has to play the role of the responsible adult here. That said, I think there are ways of making it clearer to the voters just what the consequences of inaction would be. If the Democrats make it clear, publicly, that they don't intend to support any bailout if the Republicans aren't willing to shoulder their responsibility, the market is likely to react almost immediately. It will then be up to the Republicans to reassure the market by making it clear that they support a bailout. The more they rail against the idea, the more the financial situation will deteriorate and voters will understand that something has to be done.
No matter how many new provisions and safeguards the Democrats add to the bailout bill, they are not going to create something that the voters will like. The sheer price tag of the bill will give plenty of populist ammunition to cynical Republicans. That's why they cannot be allowed to oppose this bill while reaping the benefits of the financial disaster it averts. They need to be forced to take ownership of this bailout. Call their bluff. Make it clear that nothing will pass unless they take equal ownership of it.
posted by A.L. at 9:23 AM
10 Comments:
The premise behind *ANY* bailout plan is that a bailout is both necessary and sufficient to prevent catastrophe. And that taking money from us to give to Wall St. is the best way to do this. Why? "Because it's complicated."
Why are progressives and liberals accepting this absurd framing? To the extent that a rescue plan *is* actually needed for the economy, why are we not proposing a bottom-up Keynesian approach?
To the extent that people like Paulson are claiming that intervention is necessary because this is the worst shock to the system since the 30's, why are we not proposing the progressive policies that actually brought us out of the Great Depression and that have been stripped away over the last several decades? You know, policies that tend to actually strengthen and protect the middle class and enhance Democratic electoral prospects?
As a commenter in my last post pointed out, this is just a slight variation on the "stabbed in the back" mentality that has infected conservative thinking over the years.
Interesting - IIRC, when that most recently re-emerged the theme was that evil Reps would blame Dems for our impending and inevitable defeat in Iraq.
Is that still the prevailing belief system? Has Bush still led us to certain defeat in Iraq?
Tom Maguire
Tom,
Why, i guess that would depend on what your definition of 'victory' is.
Why don't you go ask Petraeus and let us know what the good General thinks on the isue?
I agree with Progressive Libertarian. If we're going to spend a bunch of money for a pig in a poke, why not give it to those people who aren't able to make their mortgage payments? They'd get to keep their homes, and the value of the securitized mortgages would rise.
Anyone have any idea if this would cost more or less than directly helping the companies that over-leveraged themselves?
To Hank Gillette and Progressive Libertarian: The problem is that you can't just bail out individuals unless you're planning to bail out all the individuals who also have stocks and bonds, retirement, 401Ks, all the stuff we're supposed to have in order to be "responsible".
If I was advising the Obama campaign and the DNC, not that I am after your title AL, a simple strategy for the Dems is, “The Republicans have finally admitted after controlling Congress for 10 of the last 12 years, the Whitehouse for eight and the enactment of much of their economic agenda, that Republican leadership and economic principles have been completely useless in avoiding the biggest economic crisis since the Depression. As a nation we simply can’t afford the Republicans anymore.”
I agree with you that if the Republicans all come out against a bail out, then the Dems have to call their bluff and not vote for it.
Make them walk up and vote YAY before a single Dem votes YAY.
They cannot be allowed to use this crisis that they caused to score political points at our expense. The middle-class public is largely against the bail-out (even a more-responsible one), I think without understanding the (Great-Depression style) impact on the middle class that would occur if the system crashed. This is off-shore drilling x1000. I would rather all burn together then have the Repubs score big with (misguided) public opinion (in which case we would burn eventually anyway).
The problem is that you can't just bail out individuals unless you're planning to bail out all the individuals who also have stocks and bonds, retirement, 401Ks, all the stuff we're supposed to have in order to be "responsible".
But it's somehow OK to bail out major companies with CEOs making millions of dollars a year?
We've got two groups who are at fault here: people who took out loans that they couldn't afford (some of them unknowingly), and the lenders who loaned money to unqualified borrowers and leveraged the resulting securities to the extent that relatively minor default rates caused major disaster. These people were supposed to know what they were doing. I'm not interested in helping them if the crisis can be resolved in another way.
I'm certainly no financial expert, but my understanding is that there is a liquidity crisis. Congress should think outside the box and try to figure out a way to add liquidity to the system without rewarding the people who got us into this mess. I think it would be fine if a few more of the irresponsible companies went bankrupt.
To clarify, I'm not advocating bailing out individual homeowners on their mortgages. I'm talking about beefing up the social safety net to first-world standards in terms of unemployment benefits, health benefits (expanding COBRA), relocation and rental assistance for those who do lose their homes, increasing food stamp alloawances, etc.
Look, if this really is the most severe economic crisis since the 30s (which I am personally not convinced of), then we need to think seriously about mitigating the costs of human misery in the downside. $700B will tap the Treasury and we don't get a do-over on this.
The thing to keep in mind is that the current proposal is an *attempted* fix. If this is really a doomsday scenario, applying a band-aid fix and hoping no one figures out how bad things are is the same kind of "bet-it-all-on-black" gamble that got us here in the first place. And there'll be nothing left when things actually get bad.
I hope you people have done your homework. Hoover actually started the government intervention and Roosevelt built on top of it. The reason the Great depression lasted so long is b/c of the screwed up government monatary policies in place at the time. By the way they are not much better today! The NRA actually killed small busines and the the tax rate doubled. Roosevelt actually considered raising it to over 90%. For Pete's sake he took us off the gold standard, he did everything possible to devalue the Dollar. The fact that people think the government will take my $ and spend it more carefully than me is plan stupid! If you think the government deserves more of our $ you have los tyour mind. The republicans are actually right on the bail out. The Pres. is basically going around and telling people its the worst crises since the Great Deperssion. Maby so but scaring people won't help and government intervention prolonged the Great Depression. These people are out in search of power over us. Try reading the Declaration sometime to remind yourself where we come from!
Later,
Dean
Post a Comment
Links to this post:
Create a Link
<< Home