Focus on the Merits
Josh Marshall sums up the blogospheric conventional wisdom:
I think Kos, Digby and Kilgore have this about right. The Republican/McCain plan is to get the Democrats to bail out the GOP’s Wall Street friends and then run against them for doing it.
I think all those esteemed bloggers may be right. Still, I think the intensive concern over this particular point is a little bit misplaced. Or, rather, that it should be strictly dominated by concern over the merits of the plan that’s passed. If progressives throw Paulson’s plan in the trash modify Paulson’s plan in ways that make it a good plan, then, sure, some people are going to vote “no” and run against them on that basis. But that’s congress for you! If progressives ever want to get anything done, that’s going to entail writing bills that the other side votes “no” on and then runs against. The thing to avoid isn’t conservative criticism, it’s passing a bad bill. Krugman says the Dodd proposal “is a big improvement over the Paulson plan” and I agree. The appropriate focus is on further improving the bill, not on worrying about what the mean ol’ Republicans might say about an improved bill.
58 Responses to “Focus on the Merits”
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September 23rd, 2008 at 8:59 am
Conservative criticism is inevitable.
Conservative criticism that leads to losing elections is not. That’s what Kos/Digby/Kilgore are concerned about.
September 23rd, 2008 at 9:01 am
What no one seems to be pointing out is that the Bush/Paulson proposal is the one of the most basic and most effective negotiating tactics — start off with a completely outrageous request (like $700B and no oversight) just to create a benchmark.
Even when people are aware of the tactic, it still is proven to work.
If Congress agree to a $400B bailout with a bipartisan oversight committee and some rules on executive compensation, that’s still an amazing victory for the pro-bailout side. One month ago, could you have even imagined such a bailout even being discussed?
September 23rd, 2008 at 9:04 am
If you buttfuck this country with a $700 Billion Bailout for the Superrich, you’re going to have some mean ole DEMOCRATS to worry about.
As someone said a few days ago, handing us a shit sundae with a cherry on top is still handing us a shit sundae.
Anybody heard from Ralph Nader lately?
September 23rd, 2008 at 9:06 am
Conservative criticism that leads to losing elections is not. That’s what Kos/Digby/Kilgore are concerned about.
So long as it’s a good plan, we should run on it and fuck the Republicans. The notion that the Democrats should not do something smart and good for the country because it might open them up to conservative criticism and electoral defeat is like the Platonic form of concern trolling.
I’m not saying that I know this plan is going to be a good one. What I think the big lefty bloggers are worried about is the Democrats caving and giving Paulson his free hand and massive crony bailout, and then the Republicans running against that really bad plan and winning. If the Dodd/Frank plans are as solid as Krugman seems to think, there should be little fear of the Democrats running on that. I expect that would be Atrios et al’s stance, too.
So, I don’t think these big bloggers are concern trolling. I think they’re worried about Democrats getting snowed into supporting a terrible bill, and then losing some votes on top of it. But the way you outlined their position, that is precisely concern trolling.
September 23rd, 2008 at 9:08 am
Correction –make that a $2 TRILLION bailout. As I’ve repeatedly noted. $800 Billion allocated so far –to bail out Fannie Mae, AIG,etc. $700 Billion for the new Paulson Platinum Credit Card. Plus $500 Billion for Treasury Bond Interest over the 4 years to finance the Bailout.
It’s kinda surreal to explain how the people proposing to bailout the crooked accountants are using crooked accounting for the bailout.
September 23rd, 2008 at 9:09 am
I’d like to hear the Democratic strategy for not losing the Presidency if a Democratic-controlled Congress passes a Bush administration request to give a trillion dollars to Wall Street.
Some people have mentioned deals in which Republicans have to agree on votes in House and Senate to get Democratic approval. So far that’s just a discussion, not a strategy.
But, yeah, if this is done straight up, every Republican on the planet, including John McCain, will run against the Democrats who hand a trillion dollars to Wall Street.
September 23rd, 2008 at 9:09 am
Call it the Bush Bailout–it’s even alliterative–pass a decent bill per Dodd and Frank, and frame it as “anti-regulation Republicans went wild and left the country to bail them out. Again.” Hang those who vote against with no alternate plan as do-nothings. The issues may be complex, but the framing is simple if the Dems can just avoid falling into dithering. (And I want both Obama and McCain voting on whatever comes up–show some political courage.)
September 23rd, 2008 at 9:10 am
plus, Ruffini is generally wrong. and, McCain himself is generally supportive of the bailout.
September 23rd, 2008 at 9:11 am
It’s all the more reason that Dems have to insist that a bill will only be passed if it meets all their concerns, as per the Dodd bill.
btw, It looks like Cheney will be lobbying on the Hill to win over “conservative’ support for bailout, which could minimize the aforementioned concerns, if he is successful.
September 23rd, 2008 at 9:19 am
I’d like to hear the Democratic strategy for not losing the Presidency if a Democratic-controlled Congress passes a Bush administration request to give a trillion dollars to Wall Street.
They’ll still win. “Strategy” is rarely particularly important – people already blame the Republicans for the mess on Wall St, for instance.
Ultimately, elections are really boring events. They have almost not sociological texture to them – millions of people do a binary thing on a certain day. These sorts of events can be understood without a lot of narrative analysis – structural factors which are unlikely to be much affected by a Wall St bailout will basically determine the election. and these factors are really good for Obama.
The reason the bailout freaks me out is that if the governments drops $1T on Wall St, there won’t be money left over for the Dems in 2009. Even with a mediocre president and a mediocre congress (on economics, that may be generous), the raw numbers of the majority should allow us to expect significant leftist reform – expansion of health care, global warming initiatives, education spending – more than we’ve seen since 1965.
What I’m worried about is losing that money, not losing the election. We’ll win the election.
September 23rd, 2008 at 9:19 am
A couple points… (1) As someone pointed out, McCain is for the bailout as well, with similar provisions as those the Democrats are suggesting (but vaguely and confusingly expressed, as usual). (2) The general freaking out of the liberal blogs on this issue was based on assuming that the Democrats would not modify Paulson’s plan in a sufficiently positive way, in which case that would indeed turn out to be the case. And certainly, Schumer seemed like he wanted to do that last Thursday. However, things have changed, and no credible alternative to the bailout has materialized on either side.
September 23rd, 2008 at 9:19 am
The question is, should Democrats worry about the merits of the bill, or should they worry about getting McCain’s support for the bill?
Generally I agree that the merits are more important, but the fact is that we’re just over a month away from an election. Electoral strategy has to come first.
September 23rd, 2008 at 9:19 am
Re DivGuy’s comment “I expect that would be Atrios et al’s stance, too.”
———–
Here’s what Atrios said:
———–
And Because It’s So Obvious
If the Democrats pass this piece of shit, look for Republican challengers to run against them on it.
-Atrios 15:23
September 23rd, 2008 at 9:20 am
Christ people are ignoring the facts here. McCain has openly supported the BS Paulson plan, that can easily be painted as a corporate giveaway. Dodd’s plan – not so much.
McCain’s been on the wrong side of this from the beginning folks. C’mon.
September 23rd, 2008 at 9:20 am
The point of the concern isn’t that the way a “yes” vote for Paulson’s Folly will be used in a campaign is a reason to vote “no;” it’s that when the Bush administration says “vote for this bill or the economy will collapse and it will be your fault” they’re not just wrong, they’re lying. Even if we need to do something now, the Bush administration knows full well that a no-strings-or-oversight-attached $700,000,000,000 cash dump on Wall Street executives who caused this mess in the first place with a combination of fraud and childlike wishful thinking isn’t that something.
September 23rd, 2008 at 9:26 am
The Dems will lose the House if they pass this bailout without Republican votes, and Obama will lose the election.
And there won’t be many Republican votes for a bill that Matt supports. (The Dodd bill is one of the stupidest bills I’ve ever seen. It promises that firms struggling because they own toxic MBS will continue to have those assets shadow them, so that new capital will refuse to come in. How that’s supposed to help is left to the imagination.)
The original proposal was and is deeply unpopular. The idea that if we just make it a bit punitive and also bigger, with billions for Democratic special interests, it’ll somehow become popular is fanciful.
But: Losing the Congress isn’t the worst thing that could happen to the Dems! They will still have the gratitude of their friends on Wall Street, their self-respect, and their knowledge that they did what the Bush administration thought best for the country.
September 23rd, 2008 at 9:31 am
Emphasis added. Atrios is talking about a particular piece of shit bill – specifically, the Paulson crony give-away. IF – and obviously this is a huge if – the Democrats can push through a pretty good bill, this worry would cease.
I don’t know if I should be confident or not – I was disconsolate as of Saturday, and I’m probably just setting myself up for a fall now, because counting on Democrats on economic matters is never a smart call.
But I think my point stands in the abstract – the concern isn’t over the Republican response to any finance plan, it’s about the Republican response to this particular shitty plan.
And I also think that worrying about the Republican strategic response is unnecessary – the real worry should be the substantive one, as the government gives away the money that should have gone to providing health care to the people.
September 23rd, 2008 at 9:31 am
Re DivGuy’s comments “If the Dodd/Frank plans are as solid as Krugman seems to think, there should be little fear of the Democrats running on that. ”
——————
Oh, bullshit. As if Chris Dodd and Barney Frank have done such a GREAT job of looking after us so far, hmmmm?
There’s no way to make being sodomized with a broken beer bottle painless. $2 Trillion is $2 Trillion.
Democratic voters aren’t going to give a shit that the Bailout for the Rich was crafted by OUR Whores for Rich vice Republican Whores for The Rich.
September 23rd, 2008 at 9:35 am
I’m more than willing to be convinced that Dodd’s plan is really, really terrible.
I don’t know finance. I generally trust Black and Krugman, and they both think Dodd’s plan is pretty good.
September 23rd, 2008 at 9:35 am
Do the networks charge the McCain campaign for ad time when Tucker Bounds appears to refuse to answer questions in a remotely responsive way? Why do they even talk to him? It’s an insult
September 23rd, 2008 at 9:37 am
oops, wrong comment thread, sorry! I agree with all the folks cited on the Paulson giveaway
September 23rd, 2008 at 9:39 am
1)If this bailout is really needed , there’s only ONE WAY to make it acceptable to 97 percent of the voters. And that is to make the people who caused the Trainwreck pay for fixing the tracks.
2) Levy a $2 Trillion Income Surtax on the Richest 3 percent of the Population.
3)Dump the bill on the general population and we will know who’s the enemy.
September 23rd, 2008 at 9:40 am
To imply, as Matt does, that there is anything progressive about this bailout is simply absurd.
September 23rd, 2008 at 9:40 am
I’d love to see this crisis used as an opportunity to restructure the whole diseased late capitalist system. That ain’t gonna happen.
It seems like the best thing we could do now is either (a) nothing, but that poses real risks too, or (b) some sort of bailout that preserves late capitalism but gives the government oversight of the money and an opportunity to make the money back. The equity stake plan makes sense to me on that level – the finance industry will survive if they get a massive infusion of capital, and then the equity purchased by the government would appreciate later and get sold off without huge losses. That’s how I understand the positive reviews of Dodd’s plan. Again, I’m more than willing to be convinced I’ve got this wrong – finance is way far afield from my areas of specialized or even basic knowledge.
September 23rd, 2008 at 9:45 am
I think Democrats have to do 2 things, at least, on the actual substance of the bill:
First, go way beyond what even Lord Chancellor Paulson & HRH Bush Jr. would find acceptable in terms of making this a bankruptcy bill with incredibly tough control & punishment.
Second, put something in this bill — hey, you don’t pass a trillion dollar bill all that often — that directly, palpably, undeniably helps the vast majority of Americans.
After that, you have to work insanely hard on packaging.
But then, Jerome A Paris theorizes that this is really about our own government being broke, not just Wall Street, so maybe this is all sound and fury signifying nothing anyway.
Quoting an anonymous ‘central banker’:
September 23rd, 2008 at 9:48 am
I certainly agree that passing a good bill is the paramount goal. But there are tactical maneuvers the Democrats could engage in to avoid the all but inevitable Republican faux populist rampage. First and foremost would be to tell Bush, Boehner, McConnell, banking and finace minority chairs, and McCain that if they don’t sponsor the legislation, it won’t be introduced. What are they going to do? Complain that the Democrats won’t introduce legislation so they can vote against it? These people are toxic. Everytime I think they can’t do something worse, they prove me wrong.
September 23rd, 2008 at 9:54 am
I couldn’t disagree with you more, Matt! There is no “win” in this situation. You either pass this bill, and introduce the risk of possibly defaulting on the U.S. debt, or at least sparking inflation as the Fed prints more money to pay for it, or you don’t pass the bill and watch as the markets implode. There is no “good” policy solution.
September 23rd, 2008 at 9:58 am
Concern over what congressional Republicans vote or don’t for as a political tactic should be dismissed. The Secretary of the Treasury, the Fed Chairman, The POTUS, Congressional leaders and most economists beleive that “something” needs to be done. Democrats (actually all of congress) need to make sure that the “right something” is done. If you beleive “all is fine” or “let the whole economy collapse” fine. Tell congress to do nothing. If you beleive there are real issues that need to be addressed (and fairly quickly) tell congress to create a “good plan.” Worrying about the politics of this situation seems ridiculous and as much respect as I have for Kos/Atrios et al., the idea we need to gameplan for the pettiness of some Republican tactics seems a bit paranoid.
September 23rd, 2008 at 10:05 am
At least put up the Paulson plan, unedited, for a vote.
At least the only vote won’t be whatever the grownups come up with. There will have been alternatives presented.
September 23rd, 2008 at 10:11 am
Atrios clarifies, agrees with my reading:
September 23rd, 2008 at 10:11 am
Re El Cid’s comment “Jerome A Paris theorizes that this is really about our own government being broke, not just Wall Street ”
————
1) Jerome is being sloppy in his use of terms. Obviously, the US Government is not broke –else, 30 year Treasury Bonds wouldn’t be selling this morning at 4.4 percent. There’s been a huge torrent of money flowing into US Treasuries looking for safe harbor.
2) Because what backs US Government securities is roughly $41 Trillion (2005) of Fixed, Reproducible Tangible Wealth available for the taking. http://www.census.gov/compendia/statab/tables/08s0701.pdf
That’s what bayonets are for.
And by the merest coincidence , the US Government now has the largest peacetime Military in our 220 history. Plus that shiny new Department of Homeland Security, in case any “Terrorists” object to paying their income tax.
September 23rd, 2008 at 10:15 am
If the Dems pass a bailout, Republicans will accuse them of being “big government” and “fiscally irresponsible.”
If the Dems wait for a new administration the Republicans will accuse them of not being “serious” about policy and untrustworthy stewards of the economy.
Criticism is inevitable. Democrats control Congress, therefore they must govern. All they can do is evaluate if a bailout in some form is beneficial to the economy or not and, if it is, build a good bill that addresses the economy’s needs. After that it’s the party’s job to make the case to the voters that they did what needed to be done.
September 23rd, 2008 at 10:29 am
A thought just occurred to me: how much of Paulson’s bailout plan is actually a bailout of the bailouts that have already taken place? E.g., a bailout of the Fed’s window operations?
Viewed in this light, the maneuver is actually a gambit to get congressional approval after the fact, for actions that Paulson / Bernanke took that were extra-legal.
How much of this is a post-hoc CYA immunization of Paulson/Bernanke for actions they’ve already taken?
September 23rd, 2008 at 10:32 am
Second, put something in this bill — hey, you don’t pass a trillion dollar bill all that often — that directly, palpably, undeniably helps the vast majority of Americans.
Here’re a few ideas:
Let’s build from there…
September 23rd, 2008 at 10:41 am
I think the point Atrios et al were making was that the only reason Democrats would back this stupid, stupid plan would be for politics — not getting with the blame for a crumbling economy. Over the past few years, some of our Dems have felt that if they just go along with this nonsense, they will be rewarded for their bipartisanship. But that never works. These people are running a 50 + 1 government, and in this case, it would truly be obscene: Dems would pass a Republican plan and get attacked by Republicans for it.
Of course, in the end, you’re all right: they should pass whatever is good policy, and run on that. Better to be hit as obstructionists to a terrible plan than enablers of it. Better to stand by the policies you believe in than ones that are patently stupid. The Broders of the world may screech, but elections do not reward Miss Congeniality.
September 23rd, 2008 at 10:42 am
I couldn’t agree more with your point about the need to focus on the merits. I am so tired of all the punditry and interminable focus on and analysis of the political games and gamesmanship. This has all been a horrible, wasteful, distructive distraction and I don’t see anyone it’s served but the pundits themselves and those in politics who have perpetrated this latest fraud.
I’m undoubtedly naive about how one plays the game of politics but what I care most about is not politics but the policies needed based on the real-world circumstances that drives them. I suspect most average people feel exactly the same. Everything else is just more whistling past the graveyard.
The reality is that the grim debt collector has been on the doorstep for some time now and we’ve still been partying like it’s 1999. Time to grow up, face facts, figure out our best solutions among the undoubtedly limited options we’ve left ourselves, tighten our belts and take responsibility for the mess we’ve created when we turned over the keys to the kingdom for the past 40 years to these deluded con men and women and their bankrupt ideologies, morality, and politics.
Enough in enough. As George W. once famously said, fool me twice, well, don’t fool me. As far as I can tell, though, denial seems to be the strongest force in the universe. Consequently, I am not overly encouraged about our prospects.
September 23rd, 2008 at 10:44 am
Dear oh dear. Still haven’t learned your lesson from the War on Iraq, have you Matt?
When Republicans scream there’s a problem to be solved now, the idea is not to come up with your own plan, but to just fucking oppose for a change.
Nationalise the mortgage industry! No bailout for Wall Street Crooks!
September 23rd, 2008 at 10:47 am
You’re actually talking about the media.
We’ve gotten so used to any Republican attack getting 24/7 coverage and any democratic criticism hissyfitted that we’rre scared of doing something good that could be seen as something bad–even though if it’s unimpeachable they’ll just make stuff up.
If the Republicans make the charge and the media endlessly repeat it, Democrats will lose.
And this is all as if the 2006 elections never happened (as the media want us to think.)
But when Katrina happened, and the Republican government screwed up, and there were dead bodies floating in the streets of New Orleans, and George Bush flew over it, his popularity went down too 30% and stayed there. No upticks.
And why? because it violated our self image: the United States always goes in. We always help, even if its the Russians or the Taliban. And we save lives, and we comfort the afflicted. And the Republicans not only screwed up, but whined and blamed everybody else.
This is Katrina part two.
It’s also built into our mythology–the Wall Street Fat Cats wrecking America for the rest of us. Nobody doubts it.
We’ve got the facts on our side–but we’ve also got the mythology.
The ppress talked over Katrina, buried it, and the the Republicans blamed Ray Nagin for everything–but the numbers didn’t change, and in the next election the Republicans were turned out to an unprecedented extent.
It’s easy to forget, with the everyday nattering.
September 23rd, 2008 at 11:00 am
There is also the issue of several informed voices saying this is not a liquidity problem, or at least not just a liquidity problem. Roubini also admitted last year that housing crisis is a problem with both liquidity and insolvency, emphasized that the two things are related but distinct, and these banking problems triggered by the bursting of the housing bubble.
Would the same answer, specifically the injection of a large amount of liquidity into the banking system, fix both problems, especially when the market of credit default swaps (now largely considered junk, and a major part of the problem) is larger than the entirety of the world’s GDP? It sounds like the efficacy of giving them cash at all is big damn question mark, and yet Paulson seems absolutely and inexplicably certain in his insistence that $700 billion will do the trick but WE HAVE TO DO IT NOW, NO TIME TO THINK, JUST DO IT.
Instead of debating what regulations and CEO punishments we should add to the $700 billion, the Dems should really think about whether this is even the right approach to take to the crisis, or the right place to inject the money, or in the right form. Would it be smarter to leave the big banks out in the cold and use that cash to protect homeowners and small businesses in or near foreclosure? Forcibly split the banks into the separate entities mandated by the old regulations a la Microsoft or Ma Bell? Let the government do some limited borrowing directly to responsible individuals and small businesses or set up a front to do so to keep the credit crunch from getting out of hand while encouraging the creation of jobs that actually build things? Instead of handing the money out, treat it like the government is investing in the company, lending it capital, and entitling it to dividends which would go directly into paying off the national debt?
The Bush Administration said the same thing about the AUMF, and the USA PATRIOT Act, and telecom immunity, and warrantless wiretapping, and the Military Commissions Act. Democrats fell for it every time only to realize later that the Administration was lying to them about the need for the legislation or its effects. It’s Lucy with the football.
September 23rd, 2008 at 12:53 pm
Thanks Matt. This is a big and confusing deal and I see many grappling with it. But to reject any action for this political reason is wrong headed I think. Many on the blogosphere have written of this in the same light as the savings and loan debacle, but in that case the stakes while high were orders of magnitude lower – the failure of big banking is in the many trillions and that could suck us all down an economic black hole. Hence, I think there is a real basis to act, and to not act could be damaging to the country, world, and our political chances in November to boot.
So if the action leads, as so far the Obama/Dodd/Frank rhetoric suggests, to some real positive actions and potentially some valuable equity for the taxpayers, then I think we have salvaged the situation as best we can. I would add to that Bernie Sanders surtax on the wealthy, but that may have to wait for a President Obama to get passed.
Finally, on this notion that the republicans will then run against the Bush-Democrat plan, well, the more I think about it the more I think, fine but that is a sign of desperation. The public may be low information voters on the whole, but they are smart enough to get this equation system:
Bush = republican
Republican congressman = republican
Democratic congress + Democratic POTUS candidate pushing for populist Main Street protecting reform with bailout NOT = republican
and by a 2:1 ratio the low information public gets that this economy is a republican generated problem.
Let them run on that – it won’t work and is easily countered.
September 23rd, 2008 at 1:39 pm
I think the idea is that those same Republicans really support it, they just don’t want to have to take responsibility for it.
Chris Matthews asked a Republican who was on hardball opposing it, sure you can say this now but if you are the deciding vote are you gonna relent and vote yes? I think he has the right idea…Republicans want Dems to vote yes, because they do support the bill they just don’t want to say so.
September 23rd, 2008 at 2:44 pm
“I think the idea is that those same Republicans really support it, they just don’t want to have to take responsibility for it.”
That’s exactly right. Kilgore started it, kos and digby picked up on it. But he never said that Dems shouldn’t do something, he was just pointing out the Republican strategy so that Dems could act accordingly.
No concern trolling as someone, who obviously didn’t read the articles, sugested.
What I find surprising is that so many of you assume that this MUST be done. Just because Krugman is in agreement doesn’t make it so. (Remember how some of you talked about him when he started dissing Obama?) Read Greenwald. Many of the folks telling us that we need to bail these bastards out have very close financial ties to the very corporations that will be helped out.
We need to question everything that comes out of this Admin. Why was Paulson saying that that economy was sound on Monday then that the sky was falling on Friday? What happened in between. I think I read somewhere that he had a meeting with a bunch of industry lobbiests. Did that sway him? Did the Bush admin finally realize that Obama was going to win and they were making sure he had his hands tied going in?
We need to question these bastards! Never accept anything at face value no matter what.
September 23rd, 2008 at 3:15 pm
The proper negotiating tactic is to come back with a proffer that has everything we could ever possibly want.
That’s what negotiating is about.
The Dems haven’t done that in years. They ask for only what they expect to get, and the Republicans push them down from there to almost nothing.
Haggling. How did they forget this skill.
Our job is to remind them: They will have you either way, but if you want our votes, you’d better do the right thing.
September 23rd, 2008 at 7:11 pm
I’m generally to the left of Yglesias, TPM, etc. That said, I’m shocked any of you “liberal” bloggers are CONSIDERING supporting this MONSTROSITY.
LET THE GODDAMNED BANKS KICK ROCKS. Use public money to give short term loans to real businesses and individuals that are caught up in any short term turbulence. Do NOT give the banks a blank check.
Why are Lou Dobbs and Newt Gingrich making more sense than Yglesias and Marshall? Please make it stop.
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