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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As a big ol liberal I was grateful this morning that the looney Republicans stopped Bush's Weapons of Mass Economic Destruction fiasco. It's clear the US is in/headed for a huge economic mess. To take the word of the Extorter yet again is foolish. By now we should all have learned what he says is usually the opposite of the truth. For the Democrats to accept this trickle down welfare for the rich solution is disgusting. The Republicans, who have supported every single thing Bush has done in his 8 years of disaster are seizing this opportunity to distance themselves from President Titanic and increase their chances of staving off a Democratic Congress come November. The GOP basic economic policy is still transfer of wealth to the few from the many, and will remain the same. But by posing as the champions of the common man they can hoodwink the gullible voters yet again.
Can't say the Dems did not leave themselves open to this boilerplate Republican bulshit. This crisis has a lot of cosmic Kabuki.
I agree, something is wrong with this picture.. Topsy turvy
Conservative Republicans as "Men of the West"? Surely you jest! Those "heros" are the orcs that caused these problems. "Don't you know we're at war!?" is the line from Lord of the Rings that sane people associate with conservative republicans.
When you yell "fire" in a crowded theater, do you then congratulate those who remain in their seats? If there is no fire, what the hell has been going on these last weeks? Republican posturing? A bizarre and convoluted Hail Mary pass? Who, Mr. Pinkerton, yelled "fire"? Nancy Pelosi? Harry Reid? Hardly. Shame on these cynical Republicans.
This is a lie.
The Republicans are pushing an alternative proposal that demands more de-regulation and privitazation and cutting the capital gains tax---and no one is breathing a word about it when they could be making political hay pointing out that the Right is NOT on the side of the people who protest this Wall St give-away, but actually advocating the very policies that created this crisis.
Unbelievable.
Wow. What an ignorant simplification.
"And Republicans -- with the conspicuous exception of President Bush -- are now the Main Street Party."
What about the Republicans in the Senate? They support the $700MM Paulson/Democrat compromise. 100 House Republicans do not make the Republican Party anymore than Sarah Palin represents the Republican Party.
Please clarify, this "Main Street Party" of which you speak...wh
My mother used to say, "if you don't have anything good to say, don't say anything at all." To paraphrase her, "If you don't know what you are talking about, shut up."
The fact is, the Democratic leadership wants to act in a responsible, bipartisan fashion to prevent an economic meltdown that would result in a depression affecting everyone on Main Street and the other side of the tracks. They rejected Bush's initial three page plan on behalf of the taxpayers.
Help me out here guys.
Are the HuffPo'ers FOR or AGAINST the bailout? I've been on this site for an hour and I can't figure it out.
I know that lefty's are all about government intervention, so should I assume that you're FOR the bailout? please confirm. Thanks!
I don't know about HuffPost, but I'm against the current form of the bailout. This is just Socialism for the rich.
Which one?
Paulson's
The one negotiated until yesterday?
Or the new one form House Republican's
It's hard to be againt someting when one does not know the details.
Nobody is for the bailout - it's like saying you're for abortion if you agree with a woman's right to choose. In a perfect world, we'd all sit back and watch Wall Street crash and burn - we can't, too much of the economy runs on credit and the credit markets are threatening to grind to a halt. Bailing out the financials that caused this mess may sting like the dickens, but the only other choice is to fall further into the recession know one will admit is a recession, risking an even worse depression.
The most telling aspect of all this is the Republican Secretary of the Treasury and the Republican Chairman of the Federal Reserve say this is the plan that best suits the problem, and it is the Republican minority that won't go for it. Is it the "Do-Nothing" Congress because the Dems won't step up, or because the Repubs would rather go against their own President and leader of their party to stymy Pelosi, Reid, Dodd and Franks? You tell me.
These armchair generals GoP'ers, Know NO bravery. Especially John Boehner. After the disasters that Republicans have led us down, now they want to keep the keys to the Kingdom, because the all of sudden APPEAR, to discover principals. Just because Republicans know how to create problems, doesn't mean they know how to solve them. Republicans are Slogans without Solutions, and their bluff will be called. Let's continue to highlight over the next 36 days, what Democrats have been exposing over the last 18 months: how unwell Republicans have served "Producers of the Economy" and in the last 28 years have served Wall Street, and champions financiers. Republican's Know no bravery.
The one little problem with your argument is that House Republicans are simply advocating we first lower corporate taxes and loosen banking regulations, then gift the trillion tax payer dollars.
It's blatantly obvious that Democrats love their friends on Wall Street and would like nothing more than to hand them a cool trillion just for kicks. However, the Republicans are not in any way, shape or form standing up for the American People on this issue.
Sorry to burst your bubble, but the common man has very few friends in D.C. and if you want to find them it's very unlikely that an (R) is next to their name. Bernie Sanders comes to mind.
Thanks.
"Much of the overall financial crisis can be traced back to bad mortgages made to unqualified buyers at the behest of Democratic poverty advocates"
Really? The big bad Democrats forced the bankers to make loans? How brutal.
Before you blame the poor for the rich going broke, how about some figures? What percentage of the bad loans made under such duress are part of this problem?
Were they 100% of the bad loans? 50%? 25%? perhaps 5% at most (and I'm being generous) and a handy scapegoat because CEO's can't be blamed for anything (after all, under conservative thinking, CEO's wouldn't get paid so much if they weren't smarter than us, and they DO get paid so much, hence they ARE smarter than "us").
The answer? The House GOP plan for MORE tax breaks for the rich and MORE de-regulation.
Yep, I totally see how the Republicans have become the "Party of the People". I'm ready to tear up my union card and join them right now... NOT
I agree with your take on the shift in the Democratic party, but I'm not sure how you can interpret House Republican's objections to “Government Interference” as a fight for the common man. The effect of their objection may be that we don't get stuck with the entire tab of the bail-out, but it is certainly not their concern for the average worker that motivates them. It is their consistent “drown government in a bathtub” ideology that motivates them.
I can’t believe people buy into this idea that it was “poverty advocates” that motivated these mortgage brokers to lend to unqualified borrowers. I’m sure there are a lot of people that Wall Street listens to, but I assure you it ain’t “poverty advocates”. I think if Democrats can be blamed for anything that led to this mess it was the repeal of The Glass-Steagall Act, and the passing of the Gramm-Leach-Bliley Act. One of those names sound familiar?
How wrong you have it. Notwithstanding the fearmongering by Bush in seeking an open check for Paulson, a cash infusion into major banks is an absolute essential for the normal functioning of the economy. The belief that the issue today has to do with bad loans to homeowners is a gross oversimplification that misses the real problem which is that the entire economy is experiencing a massive credit crunch. That crunch is preventing the normal transaction of business, including the types of investments that create jobs on Main Street. Banks don't want to lend to each other because they don't know that their counterparty is good for it (major banks such as Lehman Brothers, Bear and WaMu clearly weren't). The belief / hope is that with a cash infusion and a capping of losses, the credit markets will return to normal and the economy will stabilize. I know its hard to accept that Bush and Paulson may be fundamentally correct (although the power grab initially in the plan was unconscionable), keep in mind that liberals like Paul Krugman and Barney Frank because they correctly recognize that action is absolutely necessary.
The credit crunch is being caused by the bursting of the real estate bubble. The bubble was inflated by a lot of really questionable home mortgage loans. These loans were made as a result of greed and not because of the imploring of poverty advocates. There is no question of the need for some type of intervention. I just don't agree with Mr. Pinkerton when he asserts House Republicans are objecting to the intervention because they are trying to protect the common man. House Republican also know that if they swallow this "big government" pill, it will be hard to argue against the next one, like say Universal Health Care.
Read this guys bio and you'll see his "perspective" in all of this. The rethugs will continue to hammer the CRA as the root cause of this. The legislation was an attempt to keep lenders from acting in a racially biased manner. No one expected them to LOOK for people with bad credit to throw money at.
Watching GOP senators right now on CNN. McConnell said McCain talked to him and others. Positioning McCain as the MAN OF ACTION. So the STUNT is working. If Pelosi, Reid, Frank, Dodd etc. fall for this.....s
Its working, because McConnel said so???? No, ....McCain played and lost.
Democratic congressional leaders Reid and Dodd were on earlier and ripped McCain nicely, telling the truth as evidenced from all other sources on both sides that McCain showing up just politicized the whole event and that McCain did not have one idea to offer. In fact in the big White House meeting he didn't even say a single word until the end where he just vaguely repeated some other ideas. And I just saw a press conference with the two leading Republicans in the House who were saying McCain's presence helped people focus and added a sense of urgency, when the press asked them to name even one single policy proposal he suggested they couldn't name one. This entire stunt was just a huge failure for McCain. In fact both Republican and Democratic senators have said that the current draft they are working on only includes the proposals from Obama which have largely been agreed to - various taxpayer protections, strict executive compensation limits, etc.
Please let me say this, I work on Wall Street and agree with the author that Wall Street heavily supports Democrats, but that is at the individual level. The lobbying groups on Wall Street are still overwhelmingly focused on Republicans. At the individual level Wall Streeters have donated much more to Democrats that Republicans, but Wall Streeters in general by demographics naturally support Democrats - they are highly educated, urban, and tend to be young - all major Democratic demographics.
Obama talked to his people and Republicans in the Banking Committee too. He didn't just keep silent for the whole time or didn't read the report as in McCain's case.
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