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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Eliot Spitzer back in February 14, 2008 wrote the following (abridged):
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative."
URL: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html
Spitzer is a fool, but he's no idiot.
A fool or perhaps a political victim?
A light bulb moment indeed!!!
Thanks for the post. Wake up people and kill this bail out!
I think many of these Republicans see this as an oppurtunity to distance themselves from this shipwreck of a presidency before they are sucked down with it in the November elections. I'd like to think that they finally grew backbones and are FINALLY doing the will of the people they were sent to Washington to represent but I'm much too cynical of both parties to really believe. It's all about political self preservation.
Don't try selling me that the house Repugs are champions of the people....that is just horsesh*t...having said that, I am happy that they are standing up against this bail out...once again the Dem.s have been suckered into supporting a disasterous policy by letting bush/cheney/paulsen panic them into a bogus framework...Let the the solvent banks & financial institutions take over the failing ones by buying them out ala WAMU/JP Morgan!
Good point. The JP Morgan purchase of Washington Mutual not only didn't cost the taxpayer a dime it also didn't result any anyone losing money by having funds at W.M. that weren't FDIC insured. A real win-win for everyone. The government's role in this should be to encourage such buy-outs, which appears to be what the House Republicans are pushing for.
Message to all Dems: The Bush bail-out plan, as usually the case with any Bush plan, is wrong, wrong, wrong. The alternative plan in the House being pushed by the Repugs is much better as it won't cost nearly as much and will leave some money left for Obama to run the government.
I see the new Republican talking points got to Faux Snooze. Sure, we believe the Democrats, not the Republicans, are the party of the wealthy. Sure, and we still believe Saddam Hussein possessed a huge arsenal of WMDs in 2003.
This spin is so strong I'm getting dizzy.
You are forgetting the bait and switch tactics the right has used all these years.
Let's look at this legislation:
The problem was caused by the free market Republicans.
Both parties know America has a bitter pill to swallow.
The Republican's have figured out a way to transfer responsibility and blame to the Democrats.
For the good of the country, or so they feel, the Democrats are likely to pass legislation proposed by this administration and caused by the irresponsibility of the last 20+ years of Republican majority in Congress.
The Teflon and weasel Republicans will run and point fingers, much like this article.
Thank you for this article... it truly highlights just how corrupt BOTH parties are and just how gullible the supporters of BOTH parties appear to be.
I agree w/ the House Repubs (the Senate Repubs were going to go along)... this "solution" is nothing more than EXTORTION !!!!... and Americans... demorcrats or republicans.... should be fighting this thing instead of allowing the Bush Administration to punk us into believing the only way we can be saved is to give his cronies $700B for a... for a... what??? THEY DON'T EVEN HAVE A PLAN !!!!!!
I do disagree w/ your assertion that the Dems are now the party of the rich. I think the dems saw an opportunity to finally get some of the things they want while they had some leverage. It just happened to backfire. Mc Cain also got played. He thought he could sweep in there... say a few words and get his fellow repubs to toe the line... but they are saying NO GO (as they should). Now... he looks like an idiot. He didn't fix anything... but still has to go and debate after he said he wouldn't unless things are fixed. Not to mention... if this bill doesn't pass... it'll be his fault (he opened the door for the house repubs to protest).
After having fought like Orcs under Sauron's command to geld and otherwise moot laws and oversight and regulation, the same Republicans are now, too late to avert the resulting disaster, racing to pose as saviors of the little guy, who will be in debt servitude one way or another for the remainder of their lives.
The Democrats, however, are guilty of more serious crime: they are guilty of hearing the Liar In Chief drum up a crisis where there was none two weeks ago, and then having heard all the dire predictions, without pausing to reflect on all previous lies and their purveyors, have tripped all over themselves trying to do what the president commands while looking as if it was their idea.
The Republicans have shown the donkeys how it might be done: blow off the president, his treasury secretary and that wheedly Bernanke without a second thought. They know Bush is a liar, and they figure he's probably lying now.
That's probably a safe bet.
Bush and his cabal are attempting to cram an Economic Patriot Act down the throat of the nation, and mostly, all the Democrats have done is fall for the lies of the Liar In Chief for the umpteenth time and try to cut up this offal meal into bitesize chunks for the disnourishment of the American people. And although tis information has no practical use, I must offer it up: NADER WAS RIGHT ABOUT BOTH PARTIES.
So, This is happening because the Republicans deregulated then when the meltdown happened and the Democrats want to do something instead of just sitting there to see the market crash, it then becomes Democrat's fault? That's the Republicans' playbook for so long. Will voters believe them this time?
This was the strategy all along. Now is the time for Barack Obama to show that he leads this Democratic Party and call on Nancy Pelosi to start impeachment proceedings! We have the proof and we have the reasons.
CALL FOR IMPEACHMENT, BARACK OBAMA!
CALL FOR IMPEACHMENT OF GEORGE W. BUSH & RICHARD CHENEY!
CALL FOR IMPEACHMENT FOR THE SALVATION OF THE COUNTRY!
No one knows how a conservative thinks better than another conservative. This is simply another Rove production - McCain and the Republican leadership (Boehner, et al.) could very well come out of this looking like they championed Main Street and stood up to Wall Street.
It doesn't matter if it's true - it matters who spins it the best over the next few weeks. The GOP will stay on message and the corporate-owned media will repeat that message over, and over, and over, and over. . .until undecided voters believe that McCain flew to Washington and got everyone back on track.
We've seen it before and we need to stop falling for it. The Dems should shelf this "bailout" until after the election. Wall Street has apparently been limping along for quite some time, another few weeks will give everyone an opportunity to see exactly where Bush and McCain's economic policies have taken us. At that time, the Dems can push through whatever legislation they want without appearing to cave to Bush's demands.
I read the Pinkerton bio after reading the post, and it did not negate or minimize any of the points he hammered home. Intriguing sort of circle jerk going on here as all individual parties concerned on both sides of the aisle are jockeying for position. I'm not so naive as to give Obama a complete pass where affiliations with the corporatocracy are concerned. But what about the language of this bailout scheme that concentrates more and more power in the hands of Dubya's executive?
Remember how Obama reneged on his promises to gut FISA and immunize the telecoms.
The Administration has taken the measure of the Democrats. That is one indisputable fact here.
I haven't heard this much blarney since being told Palin has foreign policy experience.
Clearly the Republicans are the party of big business. That's why CEO's like them so much. Even Silicon Valley CEO's heavily support Republicans.
Democrats are the party of unions and worker benefits. Remember minimum wage, family leave, and other low and middle income policies.
This article fails the maximum nonsense word density.
I will NOT be voting for a Republican on November 4.
Given Obama's active attempt to shovel taxpayer money into the pockets of greedy robber barons, with absolutely no protections for struggling homeowners in bankruptcy court, Obama might as well have an R after his name. He won't be getting my vote. And it makes me furious!
It is astonishing that the Democrats, led by Obama and Franks, are morphing into Republicans 40 days before the election. It is disgusting, and millions of Americans are left with no good options.
Except of course all those loans you blame Clinton for didn't happen under Clinton. They happened under Bush. Well into Bush's Presidency. So, no the GOP method of take a kernal of truth and use it for a foundation on which to build a house of lies is once again not valid.
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