How Politics Trumped Governance

So, how did we get a war inside the Republican party that may leave the economy in shambles? Look to the end of last week, when McCain made his odd Washington cameo.

First, a bit of subtext: the legacy of the Bush years is how politics trumped governance. McCain, egging on these Republican anti-Bush/Paulson insurgents during his brief return, was doing the politics-first, win-at-all-cost, dance. He was, in essence, telling Bush it was payback time (after all McCain had done, holding his nose, in a support role for W since 2004). Specific, unspoken instructions to Bush in that big White House blow up: give way (and lose face) as the new Republican party -- which McCain now claims to lead -- alters his Treasury Secretary's $700 billion bailout. This will make McCain seem like the de facto president, filling a vaccum, giving him a huge election time boost -- maybe enough of a boost to win. Bush's response, screw you; I'm still in charge and, incidentally, I don't believe in reciprocity. Bush's position: Loyalty goes one way with me, it flows upward, and I'm still the President. I thought you got that, John.

This behind the scenes power putcsh is why most of the House Republicans are now opposing Bush. They're done with him, that's clear, and running from him like the Republicans did in Nixon's final days. For his part, Bush is trying to make sure no one else (and especially McCain) has a chance to step up into the void. With Bush, everything is personal -- it's how he makes sense of a complex world and tries to bend it to his will.

Historically speaking, the Bush/Cheney/Rove innovation of this period has been the view that politics and governance are not incompatible. In fact, their view is that politics fiercely played -- triumphing in daily news cycles and winning as a first principle -- is the guiding strategy of governance.

Now, McCain, waiting to claim victory of any brokered deal inside the Republican camp, is saying that the tide is with me. If I keep my cooI, I might ride it right to the White House. He's taking a leaf from a well-worn playbook that history may show as the cause of so much that has gone wrong. It may now spell political gridlock, incoherent policy, and disaster for the U.S. economy.

Comments

[bellier20]

I can certainly sympathize with those who are not thrilled with the idea of a Wall Street bailout. I mean who seriously wants to subsidize the cigar-puffing fat cats at the expense of the American taxpayer?

Here's the thing though; doing something, anything, to re-ignite the credit markets is the only way we are going to protect ourselves, our jobs and our retirement savings. The biggest banks in the country right now fear that they won't be able to get loans for their own short-term debts. So what are they doing? Hanging onto their capital — capital that should be funding investment loans that create jobs and prosperity. No credit, no investment. No investment, no prosperity. No prosperity, no jobs, loss of 401K and savings value, less consumption, less manufacturing, etc.

We all want to punish Wall Street for being arrogant asses, but doing so is like eating a big piece of chocolate cake; it feels good for about a minute and then you spend the next 6 months hating yourself every time you look in a mirror.

[QWERTY007]

Everyone should stop mischaracterizing the opposition to the first bailout plan!
This has nothing to do with punishment.
We, the people, do NOT want to finance the entire bailout.
When cooler heads prevail, a better plan can be developed that will rely more on the free markets and less on the taxpayers wallet.
Is this so hard to understand, or are these comments just partisan pap.

[BeltwayBette]

I once paraphrased the writers of "Americas Sweetheearts", a very funny John Cusack movie, and said "McCain would sell us all to China for medical experiments to win this election.'

Wha ti didn't suspect was how he would manage that. Now I know. He simply gets us all to borrow another $700B from China and keeps adding more if he wins the election.

Since they are our nation's largest creditors right now -- one reason why we can't push them too hard on trade -- all McBush and the Bush/Cheney/Rove Republicans have to do is keep borrowing from them. One day soon we will become an annex of China and we all know how they treat their own citizens.

Add Palin the Puppet -- who can';t say which newspapers she reads because her puppetmasters haven't told her yet -- to this mix and it's pretty damned scary to this military veteran.



,

[QWERTY007]

Did you know that the GI Bill could help you get an education???

[QWERTY007]

Pardon me, but it is the Dems who are so adamently supporting the Bush/Paulson bailout plan. Thankfully the House Republicans are developing a plan than uses market forces rather than taxpayer money to solve this crisis. By accepting the first plan presented and running around like chickens without heads, the Dems look extremely inept. Of course the first revision to the new plan by the Dems is to add more money giveaways. It is beginning to look like McCain is truely the outsider who can reform ALL of Washington.

[apeman637]

McCain isn't steady Doesn't know where he's goin but these Guys did the right thing holdin out for a better plan. I support the dem's and it's good Pelosi reminded everybody that the GOP's tring to save their asses. However she really is weak and should be replaced as speaker. She should have spent time impeachin W. Before this got to this point.

[nomobull]

the same plans that got us here in the first place how's that working for you.

[QWERTY007]

How about adding a bit of logic to your statement??

[quest44]

Whether McCain called for this meeting at the White House with Bush ,Obama and the rest to use it for a politic play for votes ,"which I am sure he did ," what happened with the stalled bail out deal could very well be a good thing.
Today I received an email from Congressmen Kucinich and in the email he explained just how this $700,billion deal works ! Here is what he said .

Here is a very quick explanation of the $700 billion bailout within the context of the mechanics of our monetary and banking system:

The taxpayers loan money to the banks. But the taxpayers do not have the money. So we have to borrow it from the banks to give it back to the banks. But the banks do not have the money to loan to the government. So they create it into existence (through a mechanism called fractional reserve) and then loan it to us, at interest, so we can then give it back to them.

Confused?

This ends up costing a trillion dollars and is payed back by cutting Social Security ,Medicare ,Medicaid etc.
We can't afford to let Congress push this plan through .Instead of bailing out Wall Street we need to bail out American's who have gone bankrupt ,lost their homes and jobs .We need to put that money into the infrastructure so we create jobs for people and give them health care so they aren't going bankrupt paying off high health care

[pcdragon]

Something is "funnamennally" odd.

Both Bush and McCain recently told us the economy was "funnamennally" sound. What gives?

[websmith]

The economy was in shambles long before this disaster appeared.

Our jobs, our manufacturing, and our money has been moved off shore. The legislators have teamed up to destroy once healthy industries like the telecom, airline, construction, and, now, banking industries. Our trade agreements amount to, we buy their stuff and they don't buy our stuff until we run out of money. We are involved in an illegal war that is accomplishing nothing but to kill our children and drain our economy.

Americans are already suffering and it doesn't scare us to tell us that we are going to suffer more. We are taking names and the message that we are now sending is that if you vote for this bill, you won't be re-elected.

If you want to fix this country, put it back into the hands of the people who love it. Give the money to the people. They will deposit it, catch their mortgages up to date, and renegotiate their loans. It's called trickle up economics and it's the only thing that works in a free market. The founders of this country trusted the citizens and it's time that our public servants did the same.

http://ewebsmith.com/bus/taxpayers.html

[VikingQuest]

"Give the money to the people. They will deposit it, catch their mortgages up to date, and renegotiate their loans."

What are you talking about, send the people a $5,000 check and you will see people buy a $5,000 TV.

BTW, I am against bailing out people or business, you made your bed, now sleep in it.

[imustbehavingabaddream]

All those who talk about the bailout just being for wall st must not have savings, retirement accounts, kids to put through college. Sure, credit has been too easy and American spend too much money they don't have, and that has to stop -- or at least be slowed down. But the only way out of the potential mess, which will not only mean a decline in American financial power but severely limit its political and military power as well, is with government action. Even the conservatives, who may not like it, have to look at the facts on the ground, the dangers that the U.S. and the whole Western economy is facing, the consequences of a credit squeeze, the effect on Main Street and on jobs. The irony is that it's the guys who got America into the mess in the first place, by allowing productive jobs to be exported in the interest of globalization and turning the country into luftmenschen who live off the air of financial and service jobs, who now want to destroy the savings of millions of people who invested in what they thought were solid retirement funds and not high-risk shares of made-out-of-air derivatives. Henry Clay, a statesman and senator in the 1800s, once said "I would rather be right than be president." Well these cons would rather be right, by their own warped ideological standards, that to protect the economy. It makes me sick...

[VikingQuest]

"All those who talk about the bailout just being for wall st must not have savings, retirement accounts, kids to put through college."

BS, if you are close to retirement your account is up pleanty over the past 20 years. If you have a savings account with money in it, why do you care?

[sparafucilli]

Come November it better be a clean sweep for the Dems - House, Senate, White House.

[darker]

It better be.
Because REPUBLICANS proved they CANNOT GOVERN.
And America needs a government.
Republicans are losers.

[anniegirl9]

I can not seem to get over how many of you are so glad this bill failed. Of course it wasn't perfect. But we just lost 1.2 Trillion. That's 400 Billion more than what the bail out would have cost, with at least the potential to recoup much of the money and give protections for home owners. Estimated it would have cost every man woman and child a little over $2,000. I easily lost that in my 401K. And now my local bank is in trouble. Jobs will be next. No matter how much we want to stick it to Wall Street, please understand that we are sticking it to ourselves in the process.
And there is no indication that when they reconvine on Thursday that they will be any closer to putting out an actual solution.

[penelopepunditwatcher]

You just don't get it. The bill was a disaster and there was too much wrong with it. You act as if you actually have lost real money instead of on paper. There's going to be a bill passed. You do know that, don't you? The stocks will go back up when that's done. Hopefully, this time around it will be enough of a better bill many of us who objected to this one will support it.

Hey, I lost more than $2K in the past year in depost interests alone. Quitcherbe­llyachin'. You can't even say for sure that, had the bill passed yesterday, you wouldn't have lost just as much on the market within the next couple of months; because that bill was not even close to an adequate remedy.

We need a better solution than what was offered yesterday.

[larry278]

Calling the Pauslon bill, even the much modified version which the house rejected on 9/29/08, a disaster is an understatement. Mazel tov, penelopepu­nditwatche­r, you've mastered the arts of understatment & optomism. I'll be looking for your comments. I say "Amen' to the last line of your comment.

[GalacticDerelict]

That is such a load of crap. The Dow dropped 777 points. So what? That's just herd behavior that we see all the time. It's already recouped some of that today and over time, probably not too long, it will recoup the rest and more. To equate the loss on paper of the Dow with the bailout money that may have stopped what is a temporary drop is disingenuous.

This is not a disaster as the leadership in Washington who have vested interests in seeing a bailout are trying to make us believe. There are many large banks, and many more smaller banks, that are solvent. Wall Street simply whines the loudest when their industry is in trouble. And to the credit freeze idea, anything will LOOK LIKE a freeze compared to the "go-go" days past, when little or no money was needed to buy a house. Banks will still lend money, but with loans that are to businesses and individuals with good credit, the way it used to be and should be. After all, BANKS ARE IN THE BUSINESS OF LENDING MONEY. They will still do it, but its just not going to be the free-for-all it once was, so lending will look like its all gummed up from that perspective.

[GalacticDerelict]

Further to my previous comment, you mention protections for homeowners. Those houses were bought under risky lending practices by people that could not afford them and which artificially inflated the prices of houses over time. People in this country had it drilled into their heads that their homes are high yield investments, so many bought and those that already had homes began planning their retirements around the increased equity. But did I say that the prices are over inflated? And they never will be that high again because as people go into more and more debt, which is happening, they will be able to afford less and less. Unless of course, we start throwing money at the problem again to the tune of $700B and wax into risky lending practices (do you really think there is going to be that much oversight in the future, especially when bad deals don't rear their ugly heads for a couple of years?). How are we going to jump start the housing market unless we make it easier to borrow through risky lending at current prices, or house prices drop dramatically from where they are now? People have got to get over the fact that houses in general are high yield investments.

[wishfor]

There are two classes of homebuyers: those with low incomes who were bamboozled into buying homes they could not afford, with ARM mortgages they could not afford: and those who were buying as investments or to satisfy an ambition to have a larger house than really needed. I want to help the first group of people but not the second, if this is possible.
The mortgage backed securities developed from these actions are bad assets which may never be sorted out and resold with proceeds going to the taxpayers. We must face this sad fact and account for it in any solutions that is finally reached.
Distasteful as it is, we must inject taxpayer money into some kind of rescue plan. The upside will be strict regulation, accountability and transparency going forward. The best we can do is learn from this tragic lesson in basic economics.

[BlueOnBlue]

It is becoming obvious that McCain's "Country First" is not a slogan, it is an answer. And the question is, "what should we throw overboard?"

[dhcases]

Conflict of Interest: Be it resolved that once elected to public office, an official owes a duty to the entirety of the citizenry, and shall resign from and not participate in any way in party politics.

[cobraxus]

how's this for a campaign slogan:America is going to hell and John McCain knows a shortcut that'll get us there in half the time!

[Ohg]

It is the Titanic all over again. Posturing to be the fastest boat hit an iceberg - posturing to get reelected sinks the economic boat. ..........­..........­......
http://thefiresidepost.com/2008/09/30/the-titanic-usa-is-sinking-passengers-are-in-life-boats/

[meetoo]

http://www.dailykos.com/ T
he daily thread offers some insightful tidbits

[flyers]

HazelPethigFan,

We may get a better bill out of this later on, and I think that is why so many people had hissy fits about this bill yesterday. To me, this isn't a republican or democrat issue, so anyone who is playing politics should step down from congress right now. The notion by Bush/Paulson and the other fearmongers that this bill had to pass by Monday morning before the Asian markets opened was ridiculous. Where is the time for debate? Everyone needs to take a step back and take a deep breath and make sure we don't just give some blank check to our government and say, "BAIL US OUT!!!!, EVEN THOUGH YOU GOT US IN TROUBLE IN THE FIRST PLACE!!"

The bill has to be thorough and be specific that it goes loan to loan, bank to bank, and take each case on its own merit and to the degree it should be bailed out. The notion of giving the government 700 Billion Dollars and giving them utter autonomy just so the Market doesn't drop in one day, or one week is ridiculous.

[penelopepunditwatcher]

Exactly!! For instance, the bill had an oversight committee included in it, but no teeth for them to enforce any of it. What good was that going to do? There was a great deal lacking in the fool thing, due mostly to this typical Bush rush. Many people (like me) looked at this felt a deja vu moment. How many times can these people cry wolf and expect us to swallow it, hook line and sinker? Weapons of Financial Destruction, my aunt fanny. Take the time to figure this out and do something more constructive than throwing bs at the people.

I'm sick to death of people having this "the sky is falling" attitude. You didn't know that a 401K is investing in the markets? You thought buying a house was a get-rich-quick way to make money? Well, aren't you just dumb. That doesn't mean you get to sock it to the rest of us without any discussion because the country is facing a financial crisis.

And just for the record ... what's with the Paulson co-dependent behavior of worrying whether banks/financial institutions won't buy into it if restrictions are put on whatever bill is finally passed? If they don't want to play, fine! Let 'em fail - they don't need our taxpayer money very badly, if they won't accept restrictions.

[proudem]

Good point(s) and well said. The banks are not in the power seat of this negotiation. Maybe it is about time they began to understand this...and suck it up.

[allsogreat]

Looks like it's all the Republicans fault that the Democrats didn't vote for the Bail-out - didn't know they had all that much power over the DNC

[nomobull]

just as smart as blaming a speech.