Hullabaloo

Sunday, September 21, 2008

 
Playing Chicken

by digby

The Democrats make a few common sense requirements, considering the epic level of philosophical failure, incompetence and corruption of the Republicans:

Speaker Nancy Pelosi (D-Calif.) today said that Democrats would "not simply hand over a $700 billion blank check to Wall Street" and called for "independent oversight, protections for homeowners and constraints on excessive executive compensation" to accompany any Treasury Department bailout.

Here's what they get in return:

“Efforts to exploit this crisis for political leverage or partisan quid pro quo will only delay the economic stability that families, seniors and small businesses deserve,” House Minority Leader John A. Boehner (R-Ohio) said in a statement issued Saturday afternoon. “Going forward, I hope we all can agree that we should keep any legislation as straightforward as possible while doing everything we can to protect American taxpayers.”

So it looks like the Republicans are prepared to play chicken. Fantastic. We all know how well that works out for the country.

Earlier on CNN Fareed Zakaria interviewed a bunch of people about the crisis and Niall Ferguson said this:

And what I think we may end up with is a slightly sort of soft, soft version of the New Deal being offered by Obama, and John McCain having to counter with another kind of Rooseveltian economics -- Teddy Rooseveltian economics -- saying, you know, this isn't going to be solved by increasing the power of the federal bureaucracy. This is about bashing bad guys on Wall Street, and bashing corrupt congressmen.

I think there's two different kinds of populism that can be rolled out at this point, one of which increases the federal government's power, and one of which doesn't necessarily. And I'm not sure it's clear which one American voters will go for yet.

He frames this as Obama wanting to "increase federal power" and McCain wanting to battle back the great malefactors of wealth. It's absurd, of course, since its McCain's own party demanding this blank check with no accountability, but I can see how the campaign might try to further that misconception. If McCain decides to break with the white house and fight this plan, that's how I'd see this playing out.

This is what all the politicians are pussyfooting around right now. Both presidential candidates are on the populist field but they are playing different games. They don't yet know how to gauge the public mood. But I think when facing these kinds of major crises, politicians shouldn't try top hard to guess the public mood. These are situations where the public really does look to their leadership to actually lead. We don't need them telling us who we are allowed to sleep with or what music to listen to. But we do want them to call on all the best minds in the world and try to figure out a solution to a serious, complicated crisis.

In fact, our most pressing problem as citizens right now is that the conservative movement has so degraded any belief that Americans have in their government that they literally don't trust anything they say. And the living symbol of their greatest power, the Bush administration, is so lacking in credibility that we'd be fools to do so. It's a bad place for a country to be in a time of crisis.

The first order of business is to stop the Paulson steam roller and catch a breath before they sign over 700 billion more dollars to the Bush administration with no accountability or oversight.There are plenty of people with alphabet soup after their names with other plans, which aren't "giveaways" or "pork", which should be considered. Like Nouriel Roubini, who called this crisis from the first, for instance. Or Dean Baker, (who, I think, presents a very common sense solution for stressed homeowners that avoids moral hazard.) I'm sure there are many more, including some smart bloggers who think about these things.

But this is unfolding very quickly and the Fed and the treasury are putting tremendous pressure on the lawmakers to sign off without thinking it through. That's shown itself to be a very bad policy these past few years.


It's been pretty clear for a while that these people aren't very good in a crisis:

Trust em?

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digby 9/21/2008 07:00:00 PM |