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The Bailout: Why Are Bush and the Democrats Combining Against Congressional Republicans?
In Washington, it's a showdown between the representatives of Wall Street and the representatives of Main Street. But have you noticed that the old partisan alliances are reversed? It's the Democrats who are now the Wall Street Party. And Republicans -- with the conspicuous exception of President Bush -- are now the Main Street Party.
Consider: President Bush proposed the $700 billion plan; after days of hiding behind the Secretary of Goldman Sachs, Henry Paulson, Bush finally emerged from the sidelines Wednesday night to tout the plan in prime time. Just this morning, he spoke again in favor of his plan, while again taking no questions from pesky reporters.
But the Congressional Democrats, who mostly despise Bush, are also mostly for the Bush plan. Sure, they made some cosmetic changes in the bailout proposal, but they have never wavered in their basic endorsement.
So who's against the plan? It's Congressional Republicans who are getting in the way. They are the heroes of the hour. Although outnumbered, these brave Capitol Hill GOPers have stopped official Washington in its tracks. Why? Because the Democratic majority, supporting the bailout, doesn't actually dare to vote for it unless they know that most Republicans will vote for it, too. And that's because the Democrats fear that this bailout legislation is deeply unpopular with the country. So the only way that Democrats can vote for the bill and be safe this November is if Republicans also put their names on the legislative dotted line. Not a profile in courage for Democrats, of course, but it's smart practical politics for them to demand some "cover."
But let's step back a minute. How did it come to pass that President Bush is siding with Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi? What thought process led the administration to support a big-government bill that the Republican grassroots all despise? Bush, of course, never met a Cheney-esque secret plan that he didn't like. And it would also seem that seven-and-three-quarters years in office have totally disconnected him from rank-and-file Republicans. Remember his support for the ill-fated immigration "amnesty" bill back in 2004? And after that misguided legislation was beaten back, he proposed it again in 2007. What was he thinking?
For their part, the Democrats are emerging as the new party of the rich, the party of Wall Street, the party that champions financiers at the expense of producers. For years now, the most affluent precincts in the country -- mostly on the two coasts -- have been solidly Democratic. And in 2008, the polls show that upper-income voters mostly support Barack Obama. And Obama, of course, guided by the likes of Robert Rubin, has been quietly supportive of the deal. Indeed, Obama personally epitomizes the Democrats' new political arrangement: He was raised mostly poor, then worked mostly with the poor, but now he is rich and works mostly with the rich -- his campaign is a well-financed corporation. Yet he has maintained his popularity with the poor. For their part, the Republicans now represent the majority of middle-income voters -- Main Street. But the Democrats, with their political pincer movement, from the rich above and the poor below, have the clear electoral advantage in 2008.
So it's understandable that the Democrats would want to take care of "their" people at the top. That's the revised Democratic model: The same old socialism for the poor, of course, in the form of the bureaucratic welfare state, and a new kind of socialism for the rich, in the form of this bailout.
In addition, the Democrats have some sordid secrets to protect -- and Paulson & Co. are helping them keep hidden. Much of the overall financial crisis can be traced back to bad mortgages made to unqualified buyers at the behest of Democratic poverty advocates; it was a neat arrangement, poor Democrats got houses, as rich Democrats got richer by manipulating the financial paper. But the Bush administration, eager for a deal with the Democrats, has made it clear that it won't point fingers. For their part, Senate Banking Committee chairman Chris Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.) are returning the favor by pushing the bill forward.
So only Congressional Republicans -- the single most implacable figure being Sen. Richard Shelby, the Rock of Alabama -- are taking a firm stance against this monstrosity. They even seem to have brought along John McCain, who has taken various positions on the bailout over the last few weeks. But bravo for the Congressional Republicans. After years of embarrassments and scandals, the Capitol Hill GOP has rediscovered principle and honor. And so rediscovered the glory of genuinely representing the people, against the powerful.
I am reminded of Aragorn's Battle Speech at the Black Gate in the third of the "Lord of the Rings" trilogy. The King tells his outnumbered troops:
"I see in your eyes the same fear that would take the heart of me. A day may come when the courage of men fails, when we forsake our friends and break all bonds of fellowship, but it is not this day.
An hour of wolves and shattered shields, when the age of men comes crashing down, but it is not this day!
This day we fight!!
By all that you hold dear on this good Earth, I bid you stand, Men of the West!!!"
And so, in the Tolkien story, the Men of the West are triumphant. But today, in the real world, could the Republican Men and Women of Capitol Hill yet prevail? The Washington DC conventional wisdom, as of Friday, is that the Bush Administration/Democratic/Wall Street juggernaut will eventually bring the Congressional GOP to heel. If so, that would be the final victory of Wall Street over Main Street.
But maybe not. Maybe ordinary people will win this epic struggle.
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How can anyone support a blank check for Bush & Paulson at this time with no more specifics?
I am so sick of both parties, no matter who we have, we lose. The two party system is a failure and until we get past this blue/ red smokescreen of us and them, we can't move forward because all our arguements for reform are divided.
The democrats are the lesser of two evils, but just barely.
Hope for the best, but prepare for the worst.
All this debate and fuss over the vote, can anyone know if their vote will even be counted accurately?
After 28 years of Raygun GOP domination, the dems created the DLC to try to be more conservative and attractive to voters.
The Kucinich Coalition are good people worth reelecting.
The Pelosi DLC folks should be replaced ASAP.
Contribute to Sheehan.
Its so disheartening to see the leading democrats supporting Bush in his proposal to bail out the legalized criminals who foisted the MBS pyramid scheme. Why should those who promoted the issuing of bad loans, because they could sell them at a profit, and now find themselves holding all these bad loans be rescued.?
Any bail out funding by the taxpayer should be directed to the real victims: those who were given a hard sell to take on mortgages and loans that the lenders knew they couldn't pay for; those who finally made it into their own house only to find that their interest rates were structured to force them into foreclosure.
"But the Bush administration... won't point fingers." I almost didn't realize this was satire! Pointing fingers is only success Bush has had.
Since when are the Repuglicans so interested in the average American?
Since the latest poll.
Those of us with pension plans will be affected by no bail out. With a bail out we're also affected, so either way we are going to take a hit.
I'm glad they push for oversight. With McCain/Palin refusing to cooperate with investigators, their administration sure seems like another one that will not answer to anyone.
Yikes!!!
This was a bunch of right wing talking points. I don't come to Huffingtonpost for this.
>> Much of the overall financial crisis can be traced back to bad mortgages made to unqualified buyers at the behest of Democratic poverty advocates
uh...REPUBLICANS had control of the executive AND legislative branches when all this mess started in the early 2000's. This is and always has been about big business, not the average american citizen. What unfortunately happened, is that the average american citizen tried to "keep up with the Jones" and outborrowed beyond their means, and the debt was being passed on from big business to big business under the farce of securities. "Democratic poverty advocates" were not out there advocating legislative policy to create a smoke screen.
Everybody is to blame for this.
YOU NAILED IT. Democrats don't need Repulican support to pass the bill because Democrats have the majority in both houses and Bush supports it. Democrats are demanding Republican support because most Americans oppose the bill and Democrats want to say "Don't blame us. This was a bipartisan effort." Pelosi even said as much.
However, Mr. Pinkerton said, while this is "not a profile in courage for Democrats," it is "smart practical politics." ARE YOU KIDDING ME? Pelosi admitted that Democrats are putting politics ahead of what they think is good for the country. If the Republicans did this, Democrats would be outraged (and rightfully so).
If Democrats think the bill is the right thing to do, they need to pass it. If the public is against it, Democrats should explain why it is the right thing to do. If the public is still against it, Democrats need to announce (1) "We are dropping this bill because the American people do not support it," or (2) "By electing us, you entrusted us to do what we think is best for the country. We know you have misgivings, but we think this is the right thing to do."
The Democratic Congress does not know how to lead. They have had a majority in both houses for two years. Bush is a lame duck with low approval ratings and no real support from his own party. YET THEY HAVE DONE ABSOLUTELY NOTHING! Remember this when you vote on election day.
Too bad you are not right. The republicans can stop any bill in the senate with just one senator. That will be the case until the Democrats get 60 votes to overrule a filibuster.
"It's the Democrats who are now the Wall Street Party. And Republicans -- with the conspicuous exception of President Bush -- are now the Main Street Party."
This presents a transition in the meaning of "Wall Street." Traditionally "Wall Street" was synonymous with "Big Business", whose shares were traded at Wall Street. Perhaps the Wall Street traders would be lumped in. Banks were not part of "Wall Street" because, for one, previous laws restricted them to states, they were dispersed.
Today "Wall Street" generally mean the NYC Investment Banks, the trading houses, hedge fund managers, finance capital. This started in the 1980's with the emergence of deregulations. Yes, the Democrats are the party of Wall Street, perhaps better put, the party of Finance Capital. The Republicans are still the party of manufacturing capital. The Democrats, as the party of Finance Capital, have led the charge to repeal the protections begun with FDR. (AT the DNC Obama called the Democrats "the party of Franklin Roosevelt. Not true.) In the states during the 1990's the Democrats led the charge for repeal of usury laws for Credit Card Cos. Federally, they led the charge against Glass-Steagall.
Note carefully that none of the Democrat amendments to Paulson's deal return to traditional Democratic protections for the economy. That party is done. Today's party is Pelosi, Dodd, and Frank leading the march for their major donors.
The Democrats unquestioning support of a 700 billion sendoff of the Bush Bunch and their friends shows how small is the measure of influence of the middle class. Their allegiance to Wall Street and mercantelistic finance is so profound that double crossing their own bases of support took not a moment's hesitation. What else can we do for you Masterful?
It was NOT unquestioning support, that is a blatant mischaracterization. In fact I watched hours of very tough questioning. Every provision the Dems asked for that called for oversight, regulation, taxpayer dividends, executive salary caps, segmented pay out as needed were NOT in Bush's plan.
This is so wrong. No ideological Republican has any concern for "main street." They just don't want government to spend money to bail out the people that got us into this mess. They do not care about anyone but themselves and the growth of wealth for the few. Caring about Main Street means that you want to make sure there is not an immediate run on the banks or collapse of the financial markets because you do not want the poorest up to through the middle class to be put in immediate distress. You do not want the guy making just over minimum wage to lose his job because his boss can't get the credit he needs for cash flow. You don't want the student who is the first person in her family to go to college to lose out because she can't get a loan. You don't want the person who got talked into a sub-prime mortgage, to lose their house. You don't want the person who saved all their life to lose their pension. It is very ideological to say that government should not be bailing out the scoundrels. But if bailing out the scoundrels is a stop-gap measure that keeps the poor and middle class from falling farther down, then I am all for it. Get off your high horse and have some compassion and empathy. On either side, if you are an ideologue, you do not care about individuals -- only high-minded positions.
Spot on Kat.
It is apart of the plan. no matter what the dems proposed the rethuglican party was going to go against it. An continue going against it no matter how long it took. I think in order for this to work the Dems are going to also disagree with the plan or make publicies in plane english what the bailout is going to be to the public and the benifits as well as the GOP plan so that if the GOP go against it they will look stupid
I'm a liberal and never considered myself a Democrat, but capital and credit have completely dried up. It's been affecting Main Street for months.
I'm in the commercial building industry and every major development project we're involved in that was supposed to have bid and awarded has been stalled. Jobs we closed and received contracts for have stopped dead. If commercial credit and financing is not made available soon we will start losing even more jobs than we already have.
The only work available is publicly financed, most of it infrastructure like roads & sewers. There is not enough building work to go around, we are all scrounging for crumbs to stay in business. I'm bidding a small one room addition to a library and 20 contractors, many of them major firms, are bidding. Normally you'd have 4 or 5 small to mid-size firms bidding such a small project.
If a bail out includes oversight and regulation, help for homeowners, a taxpayer dividend, executive pay caps, and implementing the plan in segments so that maybe we don't need to use the whole 700 billion....I'm for it because it will release credit and financing for those trying to create jobs through development projects.
The House Republican plan is a joke. Complete market deregulation, corporate tax breaks and an insurance program that would take years to be solvent enough to handle bailing out firms that pay into that system. They are using this crisis for political gain. Country first my ass.
This is the best analysis of the House Republican position I have seen. The problem here for all concerned is that this is George Bush's Boy Who Cried Wolf moment. The American populace from left to right are extremely pissed about this and, especially given the messenger, not convinced of its necessity; it's been 80 years since the banking failure that initiated the Great Depression, and this huge bailout--necessary or not--for fat cats offends the nature of our people. The House Republicans have parlayed that animus to cover their blatantly anti-regulatory, pro-corporate program, in order to get reelected. If this thing does not work out, they will be able to later claim a victory of sorts.
Yep, the Dems are dumber than dirt. Or, as Britney Spears would say "Whoops, they did it again." So this is the Rovian October Surprise we were expecting. Pelosi, Reid, Hoyer, oh my, rush in like the fools they are, support Bush & Co. instead of standing up for Main Street. Then conservative Republicans say excuse us but we will stand up for Main Street. Presto chango: the Dems have become Republicans and Republicans have become Dems, just in time for the election. Ha, ha, ha, we are so screwed with thugs on the right and fools on the left.
I have been watching the Democrats become more and more like the Republicans each year. There is no longer two parties, just one party with two wings. Oil, abortion and Iraq are about all that really separate the two parties when you boil it down. They are all paid off by the same companies that they are trying to now save. Pathetic really.
Neither party supports the middle class, not the lower class.
NO BAILOUT PLEASE.
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