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.

Comments

[DWHarper]

Here comes the purely political ploy by House Republicans. A perfect storm for them, a chance to not only blame the bailout on the Democrats but also throw Pres. Bush under the bus too. Where is country first for them? In order to get elected, they would rather jeopardize the financial system of the US than work in a bipartisan matter to help. Of course Pinkerton toes the Republican party line to give them some intellectual heft ( I am using that term loosely in this case). Again equating Democrats with some sort of elitist wealthy class when the public knows that the Republicans ARE the elitist wealthy class that brought the financial system to the brink of destruction. Orwellian politics at its finest!

[micmac]

Excellent! Very good article

[research]

You GOP filibuster and Veto then blame the democrats for inaction.

GOP=Liars.

[RetireGreen]

Obama has taken several million dollars from Goldman, Lehman, Morgan Stanley, UBS, and others, the Democratic Party has taken several millions more, what do you expect?

This is the best Government money can buy.

Switch to the Green Party, save your self respect, and the nation too!

[VikingQuest]

Green Party . . . LOL . . . I think I heard comething about a hip hop constitution in their VP's acceptance speech.

BTW, left, right, up and down are all bought. You can find Obama and McCain taking cash all over the board from these failing companies.

[american2008]

Cut the crappola! He never took any such thing. These were donations from employees to the Obama campaign! Your attempt at character assassination will not work here.

[larry278]

Yeah, & the USA's establishment annointed BHO as the Democratic candidate for POTUS & POTUS #44 out of examplary, disinterested, pure patriotism. The establishment owns the entire Democratic party now Obama, Reid, Pelosi. Oh, you say that the establishment always donates to both candidates to cover all bases & bets, sure; ducks don't waddle either.

[monstermagnet]

Hmmmm.... Seems to me the Republicans' newfound "populism" is nothing more than a trojan horse to sneak Newt Gingrich's ultra-regressive tenets into the legislative architecture being created.

[pavroviandog]

Exactly!

[Charley2u]

So why are you siding with Wall St on this bailout. Accept criticism from whatever quarter and ask yourself how you got into this predicament - bailing out GOP friends on Wall St, while your own constituency faces foreclosure.

SHAME on you!

[LHoney]

Why don't you pull that lens back a little further? I believe this whole thing is BALONEY! The democrats were set up with the "mortgages to unqualified buyers" scenario so that in September/October Bush could present his new WMD's of Wall Street and they would cave to cover their butts. And now, the deregulation gestappo is going to get the credit for protecting main street and win all of their elections this fall! Far fetched???

[Findley]

It's the DERIVATIVES, the SWAPS that triggered the big mess. THAT MUST BE MADE CLEAR BY THE DEMS....ge­t it on the air.

[pavroviandog]

THANK YOU for mentioning the D-word. That's exactctly what the PAULSEN WALL STREET MACHINE doesn't want the public to know. The oldest magician trick in the world: keep you eyes on this hand while I pull the real trick with the other. And under that handkerchief are $450 TRILLION DERIVATIVE BUBBLE "doves" waiting to be released. It's all in the timing.

[pavroviandog]

THANK YOU for mentioning the D-word. That's exactctly what the PAULSEN WALL STREET MACHINE doesn't want the public to know. The oldest magician trick in the world: keep you eyes on this hand while I pull the real trick with the other. And under that handkerchief are $450 TRILLION DERIVATIVE "doves" waiting to be released. It's all in the timing.

[ivangoldstein]

I was going to vote for Obama but if his solution is to hand a trillion dollars to Goldman Sachs and the other charlatans that created and sold these derivatives then he is going to lose a lot of people.

I checked the Green Party platform and they actually are talking about banning derivatives. Tell Pelosi and Reid we want a real solution, not more trickle down economics.

[VikingQuest]

"The democrats were set up with the "mortgages to unqualified buyers" scenario"

They weren't setup for it, they pushed for it for years and years . . .

[IsaacKuo]

As much as you'd like to lie that Republicans are no longer the party of the rich, the obvious facts contradict it. If many wealthy people have become supporters of Obama, it's because they are finally realizing the reality that Republican policies of trickle down don't actually work.

The Congressional Republicans are simply clinging onto the failed ideology that the market knows best. They just can't face the reality that markets obviously don't self-regulate. They're approach is simply to believe in the market--it's all just part of the invisible hand's plan.

They're just like the faithful Christian who refuses to go to the doctor when they're coughing up blood because he has faith in God. It's the same faith-based approach. Only this faith isn't based on the Jesus Christ, it's based on Adam Smith.

The rest of us, the reality-huggers, know that the market does NOT always know best. Some amount of government regulation and intervention is necessary. The alternative could be to do nothing and simply let the market bring us a "Great Depression".

[Abo]

actually, it is more Milton Friedman

[hominidx]

Wow, you know, I disagree with what you say here, but I think it's interesting you're being put here on the Huffington Post. So...I honestly think that's pretty cool. I worry that I get tunnel visioned because I spend the vast majority of my time on places with a similar ideological stance, so it's oddly refreshing to get some contrast and other lines of thought. Thanks!

[Aaror]

I agree that it is cool that Huffpost tries to be balanced (within the constraints of reality of course). Myself I just use realclearpolitics as a balance to Huffpost. RCP also has some great poll stats...
(sorry for promoting the competition)

[radiclib]

.
.
There is a lot of truth in what you write, but it is not the whole truth.
Pull back your lens a bit and look at the big picture in wide scope:
This is the end of the Reagan Era and the modern Conservative movement started by Barry Goldwater that was based on a coalition of Greed, God and Guns.
The coalition is fraying; it is unraveling.

When right-wing fringe Senators like Jim Bunning accuse a Republican President of ``Socialism,'' it might be time to pay attention. And Bush's high-pressure sales tactics ------ so much like his approach to the Iraq War ----- have even his supporters suspicious. Such is the price to pay for the Boy Who Cried Wolf.

Hey, remember when he tried to grab Social Security after the 2004 election? How he wanted to put all our retirement money in the hands of Wall Street and the money markets? What would thing be like if he had pulled that off?

This administration began with 9-11. Katrina came in the middle. And now this. What will history make of George W. Bush?
.
.

[gd h]

I respect your direction and purpose here, and I am as progressive (ex radical, probably) as they get, but I don't think Goldwater had any negative or manipulative thoughts about greed and god. Guns, I think he probably wanted to protect our right to own them, and that's not so "modern conservative" but goes back a ways, to the constitution, so it's hard to argue that it is a "conservative" position.

Goldwater, in his later years, was very supportive of a gay grandson (I think), and said something to the effect of "the fundamentalist movement is unamerican­."

So I think it's best to track the Greed, God, (Gay) and Guns wacko wing right back to mr. trickle down himself, not to Goldwater, who in his last years really became an avid supporter of human rights and government actually leaving people alone. It was Mr. Ray Gun that did most of what we're seeing in its full bloom right now. I think.