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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Considering the public outrage over this bailout, I fear the Dems are blowing their chances of expanding their majority in Congress. There could be a huge backlash against them.
Sorry Mr Pinkerton - no one but the party faithful are buying your spin - and probably very few of them either. The only reason that the Republican congress critters appear opposed to the Bush bail out is because they are up for re-election and there are not enough billionaires in any congressional district to vote them back to the trough.
Exactly. They see this as the only way to get elected. They got us into this mess and now they want to look like the heroes. It is BULL as usual.
We ought to be screaming into the ears of Congress:
NO BAILOUT for BETS!
This bailout is NOT about mortgages. BushKo frames the narrative this way so the average American with an 8th-grade-education level can "understand" the issue.
The superficial, lazy corporate media reinforces this blatant lie.
This has NOTHING to do with subprime mortgages. Foreclosures are simply "the box" hiding the truth.
Look down in the muck, stir up the mud and the crap and the ooze and you'll find the PRODUCTS that created this madness... Credit derivatives. Credit swaps ... The real assets are buried way back where the sun don't shine. The real assets got lost in the churning and turning of the packaging, repackaging, and repackaging again and again ad infinitum.
This bailout is about BETS built on BETS built on even more BETS -- all made on Wall Street, which operates like Las Vegas on steroids. These were bets that people will pay their mortgages. Bets that they won't. Bets that the bets will lose. Bets that the bets will win.
Tentacles like Medusa's head grew from the investment firms into the insurance industry and credit rating companies. This financial implosion is a monster created by greed and dishonesty. And the bastards -- who knew this day was coming -- should have to clean it up with their own money.
They could start with throwing into the bailout pot their $38 billion in bonuses last year -- then we'll talk about saving their sorry asses.
Or "rescue" their sorry souls, whichever word Karl just plucked from the dictionary.
Excellent response AND excellent HuffPost name.
So much of what you write is just plain wrong, unsubstantiated. Poor democrats get welfare?? Are you aware (and if so, you should note this) that poor republicans get welfare too (all seven of them)-it really isn't confined to democrats only. And,are you aware that Clinton actually did put an end to "welfare as we know it" back in the 90's? The only real, cadillac driving, free food, welfare left is corporate welfare and it comes without strings attached at the behest of Republicans and Republicans only.
However, I'm as puzzled as anyone about this, and I think it's a good hypothesis you put forward. But I think it is really stretching it to state it as a truth.
Thank you, he is really off the bus!
Mr. pinkerton you make George Orwell proud.
The Republicans who never saw a tax break for the rich they didn't like.
The Republicans who see any restraint against unfettered wild west capitalism as big government impeding the magic of the marketplace.
The Republicans who have sent us into Iraq and accuse those of wanting to get out supporting terrorists.
The Republicans who under there watch made the K-street lobbyists practically the shadow congress.
They are the party of the middle class?
It is easy to oppose this bailout It is the politicaaly cheap thing to do. That' rediscovering principle and honor?
Wow.
No, no, no! There's not an US and THEM on this one. We need the companies that feed America—through our credit cards, our mortgages, the retirement accounts invested with them—to keep feeding us. They #^*%ed up, yes, but so did we. We racked up credit card debt we couldn’t pay & bought houses we couldn’t afford, then defaulted on them. The debt had to go somewhere—and those companies, the ones holding our debt, are the ones going under. We can’t afford to just throw money anywhere right now—there has to be a standard, an agreement. The good thing about bailing out the companies is that we can tell them to pay it back, and to reward us for helping them. Bush has run this country like a corporate monster, but we have to clean up his messes before we can just move past them. This country is a business in that the money has to come from somewhere to go to somewhere. Save this country—feed the corporations that feed us, and force them to feed us in return and not just themselves. Make sure our heads are still above water as a country. Those corporations could take down hundreds of thousands of everyday folk—Main Street folk—if they can’t sign their pay checks. Don’t you see that?
Mr. pinkerton I think you're wrong on this one, "because the Democrats fear that this bailout legislation is deeply unpopular with the country."
Harry Reid and Nancy Pelosi in their robotic rush to help GW and Wall Street have forgotten just unpopular this deal is. They should have kept their names off of this pig. Unfortunately for Democrats these two can't lick a stamp.
Democrats, make a point to the folks who run the party. Go to your local print shop and have them make up a bumper sticker that reads:
Voting Democratic is "off the table"
Maybe Nancy Pelosi will get the message.
I gotta tell you I agree.
I am a true blue Dem but I don't like this bailout.
We really don't know what will happen if it doesn't pass - we are taking the presidents word after all.
I think the Dems should walk away and call the repubs bluff. They've given them cover by blowing up the deal.
If the sky falls then they will come back and take whatever the Dems give them.
Nobody likes the bailout!
An entertaining post, not bad as story fare. Unfortunately it completely ignores the reality of this situation. It's very likely that control of the Executive will pass from Republicans to Democrats on election day (barring, of course, "unforseen" and inexplicable issues with our little black voting boxes, or, Obama's 11th-hour admission of having had oral sex with someone who was not his wife). Simply put, Mr. Obama and the Democrats will then take ownership (or at least visible stewarship) of this steaming pile of sh*t we're referring to as the the "crisis." Mr. Bush and his cronies can't go down in history as having betrayed one of their core constituencies (financeco) in the twilight of their reign, and the Democrats, smelling a large and likely to be ever-growing steaming pile of sh*t, want to mitigate its size and smell as much as possible prior to taking-over ownership of it. Motives for this "alliance" between Democrats and the Administration are just that simple. Pinkerton would like you to believe Democrats "run" Wall Street. Nice try, James. House Republicans motives are even clearer. They will be ass-kicked in early November, and their power base will be emasculated for some period of time to come. They simply figure they've got NOTHING to lose. In fact, by stonewalling any relief strategy or bail-out package, they'll actually appear to be acting in a "populist" manner and will smell no worse than they did before balking.
Oh for god sake, We're the adult party, they're the something for nothing, party of petulant children. NOBODY WANTS to bailout Wall Street. They've got a gun to our heads, and the adults have to act pragmatically, unless you want to unleash another great depression.
Bs, I have several banks contacting me asking if I would like a loan, yes, a real loan, fixed terms.
This is just a slight of hand for one more robbery before 20 Jan 2009.
Mr. Pinkerton, you completely missed the boat on this one. The Republicans are offering a package based on the old business as usual models that include tax cuts and government guarantees, but no government oversight or actual control. No, the Republicans, if they have their way, will produce a package that favors business, plain and simple. Republicans inherently oppose the plan backed by Democrats because it smacks, they say, of socialism. That is, it includes government ownership -- i.e. taxpayer ownership -- in Wall Street investment firms. I still want to get more details, but what is clear is that your Republican friends are no heroes of the moment.
"it includes government ownership -- i.e. taxpayer ownership -- in Wall Street investment firms"
Have another beer man, you aren't going to own anything. Let's just say for some crazy reason government makes a bunch of cash on this . . . do you think you would see a dime?
Think back to the tobbacco lawsuits.
If McCains republicans they keep this up, let's get the popcorn ready for watching wall street go down in flames. After that we can get more popcorn for watching what happens in main street to our jobs.
I don't think that McCain deserves any speeches for running away from responsibility.
So you think $700 billion dollars is a magic bullet that fixes everything . . .
No, I don't think that, but the compromise could be lived with until after the election.
I would have preferred for Obama to set his own agenda and demanded economic stimulus and protection of house owners. I suppose he sacrified that in order to reach compromise and get liquidity to the banks before more of them had to crash.
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