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John Lumea

John Lumea

Posted: September 29, 2008 02:31 PM

In Crisis, Obama's Quiet Action More Influential, And More Presidential, Than McCain's Loud Words


In his op-ed last week about Washington's continuing efforts to hammer out a deal to rescue the country's financial system, Paul Krugman praised the Congressional "Agreement on Principles," released last Thursday, as a marked improvement over Treasury secretary Henry Paulson's original proposal.

Writes Krugman (emphasis mine):

[T]he grown-up thing is to do something to rescue the financial system. The big question is, are there any grown-ups around --- and will they be able to take charge?

Earlier this week, Henry Paulson, the Treasury secretary, tried to convince Congress that he was the grown-up in the room, come to protect us from danger. And he demanded total authority over the rescue: $700 billion to be used at his discretion, with immunity for future review.

Congress balked. No government official should be entrusted with that kind of monarchical privilege, least of all an official belonging to the administration that misled America into war. Furthermore, Mr. Paulson's track record is anything but reassuring: he was way behind the curve in appreciating the depth of the nation's financial woes, and it's partly his fault that we've reached the current moment of meltdown.

Besides, Mr. Paulson never offered a convincing explanation of how his plan was supposed to work --- and the judgment of many economists was, in fact, that it wouldn't work unless it amounted to a huge welfare program for the financial industry.

But if Mr. Paulson isn't the grown-up we need, are Congressional leaders ready and able to fill the role?

Well, the bipartisan "agreement on principles" released on Thursday looks a lot better than the original Paulson plan. In fact, it puts Mr. Paulson himself under much-needed adult supervision, calling for an oversight board "with cease and desist authority." It also limits Mr. Paulson's allowance: he only (only!) gets to use $250 billion right away.

Meanwhile, the agreement calls for limits on executive pay at firms that get federal money. Most important, it "requires that any transaction include equity sharing."


What Krugman neglected to mention was that the Congressional agreement released last Thursday mirrored, both in spirit and in letter, principles that Barack Obama had offered the day before --- principles that reflected Obama's determination that any rescue legislation incorporate taxpayer and homeowner safeguards that were conspicuously absent from Paulson's plan.

Having suggested to John McCain earlier on Wednesday that the two of them issue a joint statement on the financial crisis, Obama proposed that these principles be included in the statement.

McCain refused. So Obama issued them himself.

M.S. Bellows explained:

[T]he McCain campaign issued a press release containing the joint statement of principles McCain and Obama had negotiated:


"The American people are facing a moment of economic crisis. No matter how this began, we all have a responsibility to work through it and restore confidence in our economy. The jobs, savings, and prosperity of the American people are at stake.

"Now is a time to come together --- Democrats and Republicans --- in a spirit of cooperation for the sake of the American people. The plan that has been submitted to Congress by the Bush Administration is flawed, but the effort to protect the American economy must not fail.

"This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. Now is our chance to come together to prove that Washington is once again capable of leading this country."

Nothing but platitudes. Around the same time, the Obama campaign issued its own press release, containing the same agreed-upon language, but adding principles that Obama believes must be part of the bailout plan --- principles that McCain must not support, since they weren't included in the joint statement. Here's what McCain wouldn't sign on for, from the Obama press release:

"Speaking for himself, Senator Obama outlined the following principles that he calls on Senator McCain to support:

"I believe that several core principles should guide this legislation.

"First, there must be oversight. We should not hand over a blank check to the discretion of one man. We support an independent, bipartisan board to ensure accountability and complete transparency.

"Second, we need to protect taxpayers. There should be a path for taxpayers to recover their money, and to turn a profit if Wall Street prospers.

"Third, no Wall Street executive should profit from taxpayer dollars. This plan cannot be a welfare program for CEOs whose greed and irresponsibility has contributed to this crisis.

"Fourth, we must help families who are struggling to stay in their homes. We cannot bail out Wall Street without helping millions of families facing foreclosure on Main Street.

"Fifth, we both agree that this financial rescue package should move on its own without any earmarks or other measures. We have different views about the need for other action, but this must be a clean bill.

"This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. This is not a Democratic problem or a Republican problem --- this is an American problem. Now, we must find an American solution."

Simple question: What human being couldn't find a way to sign on to those principles?


John McCain, obviously.

Four of Obama's five principles found an explicit echo in the total 13 principles that constituted the Congressional Agreement on Principles:

* Obama's First, calling for "an independent, bipartisan board to ensure accountability and complete transparency," was Congress's 2b: " Establish strong oversight board with cease and desist authority."

* Obama's Second, calling for "a path for taxpayers to recover their money, and to turn a profit if Wall Street prospers," was Congress's 1b: "Require that any transaction include equity sharing [for taxpayers]."

* Obama's Third, that "no Wall Street executive should profit from taxpayer dollars," was Congress's 1a: "Prevent excessive or inappropriate executive compensation for participating companies."

* Obama's Fourth, that "we must help families who are struggling to stay in their homes [and] facing foreclosure," was Congress's 3a: "Modify mortgages for homeowners at risk of foreclosure."

And Obama's fifth principle? The one pushing for "clean" legislation, free of "any earmarks or other measures"? McCain --- Mr. Shake-Up-Washington-By-Banning-Earmarks himself --- refused to sign on to that one, too.

So: Who was the talker here, and who was the doer? Who exercised quiet but real influence? And who preferred, instead, to stand in front of a microphone, two days before a debate that had been in the works for years, and tell everybody that true patriots stall debates, rather than have them? Who preferred to sandbag Obama into flying to Washington for an hour of kabuki theater in which McCain himself didn't even have a speaking role --- a charade that only proved correct Obama's own previously stated doubts about the usefulness of such an exercise? Who decided, after all of that --- and after thieving from Obama a day of debate prep --- that, you know what, he would debate after all, even though his own conditions for doing so had not been met?

Jesus, I seem to recall, much preferred the person of sincere faith who prayed in his closet, to the loudmouth hypocrite who shouted his prayers in the public square. I'm sure Sarah Palin knows the verse.

Oh, and one more thing: Jerking people around is not presidential.