September 23, 2008

9/23: The Politics Of $700,000,000,000

Nearly all liberal bloggers (and a majority of conservative bloggers) remain fiercely opposed to the Bush Admin.'s $700 billion bailout plan. Some lefty bloggers are cautiously supporting CT Sen. Chris Dodd's alternative plan, but they're worried that congressional Dems will make too many concessions in order to get Dodd's bill passed. Arianna Huffington urges Dem lawmakers to stand firm:

"In the battle over the proper role of government, the forces of the Right, the high priests of the church of the Free Market -- including [George W.] Bush, [Treasury Sec. Henry] Paulson, and the Masters of Wall Street -- have suffered a monumental defeat. So why are we allowing them to dictate the terms of their surrender?"

While Huffington sees this as an opportunity for Dems, other liberal bloggers are worried about the politics of the bailout debate. After conservative blogger Patrick Ruffini urged GOP candidates (including John McCain) to run against the bailout plan (which he described as "the Bush-Pelosi Wall Street bailout"), many liberal bloggers expressed concern that GOPers could succeed in turning the issue against Dems. Like Ruffini, these bloggers believe that GOPers could effectively distance themselves from Bush and portray themselves as a friend to taxpayers if they were to aggressively oppose Bush's bailout plan. Consequently, the netroots are urging Dem lawmakers to proceed slowly with the negotiations.

$700 BILLION BAILOUT: Hell No!

Liberal bloggers remain fiercely opposed to the Bush Admin.'s bailout plan:

• Open Left's Matt Stoller: "Hank Paulson [is] a bad faith actor. This deal is bullshit. Progressives should pick a new number at random to start negotiations, say, $400 billion or $1.2 trillion, and start there with an entirely different framework. It doesn't matter. This is a political game of chicken, and the administration is acting like this is 9/11 and they have another opportunity to rob everyone blind and then run an election on law and order. Fuck them. Hell no."
• Huffington: "We've seen how negligent the Bush administration is with our money -- flushing billions on wasteful, mismanaged Iraq reconstruction and Katrina recovery projects. Now the same folks who brought us those no-bid, profit-guaranteed, crony-friendly, war-and-disaster-profiteering boondoggles want us to hand them control of a $700 billion Wall Street slush fund -- with no strings attached. How dumb -- or frightened -- do they think we are? [...] Let's hope Democratic resolve holds up against the inevitable charges by the Bush administration that demands for oversight, limits on executive compensation, profit sharing for taxpayers, and aid for struggling homeowners will lead to an economic Armageddon. There is no question that the need to address this crisis is urgent and that the issues involved are complex. But urgency and complexity cannot be allowed to become excuses for lawmakers, the media, and the public to throw up their hands and allow themselves to be bull-rushed into disastrous public policy."
• Daily Kos' Hunter: "The more we hear about The Mother Of All Bailouts, the worse it sounds. We can set aside the 'no strings attached' demands by Paulson and Wall Street -- that should obviously be a non-starter. [...] I'm more concerned about the overall premise of the bailout. It seems a bailout of Wall Street, written by Wall Street, benefiting nobody but the very people most at fault for the current financial conditions. [...] I think everyone recognizes that government intervention is necessary. But I'm surprised by the astonishingly narrow boundaries of the debate, which has over the weekend managed to get framed as a Paulson-premised megabailout, or nothing. The Congress would do themselves well to listen to other proposals, and any solution that revolves around bailing out the richest while doing nothing to fix the underlying economic or regulatory problems should be, in any rational world, a non-starter."
• Atrios: "Call your member of Congress. Politely suggest that giving Hank Paulson 700 billion dollars is insane."

$700 BILLION BAILOUT II: The Rightroots (Mostly) Balk

Most conservative bloggers are also opposed to the Bush Admin.'s bailout plan:

• Michelle Malkin: "The battle over the Mother of All Bailouts is a battle for the soul of the Republican Party. A few fiscal conservatives like GOP Rep. Mike Pence are daring to stand up against this disaster. And where is GOP Minority Leader John Boehner? Chastising the Right not to oppose it because 'This is not a time for ideological purity.' What?! When is there a better time for conservative ideological purity than now — now that we face the most massive taxpayer rescue in American history spearheaded by a phenomenally wrong-headed, ChiCom-promoting, liberal Democrat-installing, [Al] Gore global warming alarmist [i.e., Paulson]? Hell, yes, this is a time for 'ideological purity.'"
• Hot Air's Ed Morrissey: "The crux of the skepticism over the plan comes from an absurd protocol at the heart of it. It makes Henry Paulson a de facto financial czar, in charge of potentially a trillion dollars in taxpayer money with no accountability whatsoever for his actions. [...] We don't allow this kind of free agency from elected officials, let alone political appointees. Not even in his role of Commander-in-Chief does a President have a mandate that is completely unreviewable. Henry Paulson may or may not be the most brilliant thinker in high finance, but even if he was, why would Americans want to give him literally a carte blanche with the equivalent of one-third of our annual budget? With no review possible? It's absurd, and at its heart, it's un-American, in the sense that America exists precisely because of our desire to rein in government and make it accountable to the people."
• Townhall's Amanda Carpenter: "Today Congress will consider spending $700 billion of your tax dollars to bailout out a banking industry who did themselves by extending housing credit to people who weren't credit worthy. [...] This is an off-the-rails train wreck, brought to you in only two years by the Democratic Congress. Funny, some conservatives thought we'd have to wait for an Obama administration for socialism to be shoved down our throats. Who knew [Sen. Maj. Leader Harry] Reid and [House Speaker Nancy] Pelosi were so capable?"
• NRO's John Hood: "I understand that a governmental response to financial panic may have a political necessity that forces lawmakers to act in bothersome ways. But that doesn't mean the act itself has to be panicky and muddle-headed. There are quite a few alternatives to granting the next treasury secretary -- remember, it ain't Paulson -- unprecedented power over a wide swath of the American financial system. It is, indeed, possible to make a bad situation worse by adopting poorly thought-out policy responses..."
• AmSpec Blog's Philip Klein: "[SC Sen. Jim] DeMint calls bailout plan 'unacceptable.' Good for him."

Other conservative bloggers appear to cautiously support the plan, albeit with reservations:

• NRO's Rich Lowry: "It seems to me people opposing it have to do two things: 1) Explain why they think a financial meltdown in which the credit markets freeze up either wouldn't be as bad as most everyone thinks, or explain why the resulting mini-depression would be a lesser evil than the Paulson plan (personally, I can't see it); 2) If they aren't willing to do 1), explain what their alternative plan is to stem the financial panic. If they aren't doing either of these two things, opponents of the plan are just blowing smoke."
• NRO's Jonah Goldberg: "I think the bailout plan stinks from my limited and less-than-fully-informed vantage point. But lots of necessary things stink. World War Two was a major bummer, but it was better than the knowable alternatives. Likewise, I haven't seen an alternative proposal that delivers all of the components we seem to need: clarity, action, comprehensiveness etc."

$700 BILLION BAILOUT III: Will The GOP Go Populist?

Conservative blogger Patrick Ruffini generated a lot of buzz in the liberal blogosphere with the following post, in which he outlines a GOP strategy for dealing with the Bush Admin.'s bailout proposal:

"Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say 'No' and go to the country with a stinging indictment of the majority in Congress. [...] In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while [Barack] Obama punts."

Liberal bloggers find Ruffini's argument persuasive, and they're urging Dems not to embrace Bush's bailout plan so quickly:

• The Democratic Strategist's Ed Kilgore: "Ruffini is exactly right about the politics of this issue, especially for Republicans. [...] For McCain and other Republicans, voting 'no' on Paulson without accepting the consequences of that vote is the political equivalent of a bottomless crack pipe: it will please the conservative 'base,' distance them from both Bush and 'Washington,' and let them indulge in both anti-government and anti-corporate demagoguery, even as Democrats bail out their Wall Street friends and big investors generally. You simply can't imagine a better way for McCain to decisively reinforce his simultaneous efforts to pander to the 'base' while posing as a 'maverick.' Democrats are right to demand significant substantive concessions before offering their support for the Paulson Plan. But just as importantly, they need to demand Republican votes in Congress, including the vote of John McCain. If this is going to be a 'bipartisan' relief plan, it has to be fully bipartisan, not an opportunity for McCain to count on Obama and other Democrats to save the economy while exploiting their sense of responsibility to win the election for the party that let this crisis occur in the first place."
• digby: "Note [Ruffini's] framing of the 'Bush-Pelosi' bailout plan. Very crafty. [...] If they go this way, McCain gets to distance himself from Bush by standing on the sidelines wielding a phony pitchfork while Obama, as the head of the Democratic party and thus the leader of the congress, gets splashed in all this muck. It's quite ingenious and a very possible scenario in my opinion. [...] Let's hope the Democrats are thinking a few moves ahead on this and don't allow themselves to be trapped into being 'responsible' while McCain runs around like some avenging angel and demagogues his way into a victory."
• Daily Kos' Markos Moulitsas: "If Democrats want to throw away this election, there's no better way to do it than to join Bush in his 'Chicken Little' act, and raid the treasury to bail out those incompetent and greedy Wall Street assholes. [...] Yet bizarrely, Democrats are rushing headlong into those boondoggle, flailing their arms in blind panic at the behest of the Bush Administration, all for a proposal that will dump a trillion dollar budget deficit on Obama's lap before he's spent a single dime on anything else. Unlike Iraq, there's a real crisis here, that requires real governmental intervention. But like Iraq, waiting a few weeks for a better picture of the crisis to be painted would inject much needed reason into this process. I wouldn't go so far as to claim that this crisis is good for McCain. But for down-ballot Republicans desperate for a populist issue to grasp, this could be a gift from heaven. So there's a political reason to wait five weeks until after the election for a response, which will hopefully be more persuasive to some than the obvious 'good policy' reasons."
• TPM's Josh Marshall: "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."
• Mark Kleiman: "No one trusts John McCain to do anything except pursue John McCain's best political interests. I have no idea whether Patrick Ruffini reflects the thinking of the McCain camp, but someone who chose Sarah Palin as a running-mate simply can't be trusted not to throw a 'Hail Mary' pass as his otherwise losing campaign grinds toward its end. And [Sen. Min. Leader] Mitch McConnell is already laying the basis for the double-cross by expressing 'serious questions'. At minimum, Harry Reid should announce right now that no bill will reach the Senate floor unless both Presidential candidates have signed on as sponsors."

Atrios, who predicted that GOPers would run against the bailout plan, isn't surprised by Ruffini's proposed strategy: "They'll run against it. Of course they will. And, hey, what do you know, the economy's still here! Hasn't imploded yet! While I'm increasingly pleased at Dodd's new plan, a major boo to him and [NY Sen. Chuck] Schumer for playing right into the 'WE MUST DO SOMETHING NOW NOW NOW' crap from the administration. I don't know what exactly needs to be done or how urgent some sort of intervention is, but I do know that if someone asks you for $700 billion you'd better get something for it."

$700 BILLION BAILOUT IV: Dodd To The Rescue?

Most liberal bloggers like Sen. Dodd's alternative financial rescue plan, but some are worried that Dems won't play hardball during the negotiations:

• Think Progress' Matthew Yglesias: "These proposals from Chris Dodd seem like steps in the right direction to me. [...] Still, you need to watch the legislative mechanics here. If progressives start out by saying 'yes a bailout is needed' and then adding 'but we also need this other stuff' then what's going to happen is the conservative bloc will say 'well, you guys need to radically scale back your good stuff' and then progressives will be cornered. You need to insist on the provisions that could make this plan a good one."
• Firedoglake's Ian Welsh: "It's a good plan and it helps more than just the banks. It includes a lot of what outsiders were suggesting, especially with respect to help mortgage holders. It doesn't go quite as far as I would have liked -- I would have preferred to just buy up entire failed corporations rather than their assets, but if the share program is done properly the government could wind up with effective control of many corporations anyway. This is only reasonable, if the government has to bail you out for more than half your value, the government should own you. [...] The question now is how much of this will survive negotiations and if Bush will veto a good bill. Also in question is if Republicans will vote against a good bill, handing Democrats a club to beat them with."
• Atrios: "Devil's in details and things that I probably can't really know, but this sounds better. But no proposal matters as long as the plan is to surrender when Mr. 24% stamps his feet."
• The New York Times' Paul Krugman: "[Dodd's proposal] is a big improvement over the Paulson plan. The key feature, I believe, is the equity participation: if Treasury buys assets, it gets warrants that can be converted into equity if the price of the purchased assets falls. This both guarantees against a pure bailout of the financial firms, and opens the door to a real infusion of capital, if that becomes necessary -- and I think it will."

Balloon Juice's John Cole is more skeptical of Dodd's plan: "While I would gladly have voted for Dodd in the primaries, is it wrong for me to mention that one of the real and fair knocks against Dodd is that he is wholly in bed with the banking and insurance industries? But somehow, because we are a nation of morons, we will judge giving 700 billion to someone with no strings unacceptable, but giving 700 billion to someone with a few caveats about CEO pay is somehow teh awesome. And who will be the white knight to bring us this reform? The guy in the Democratic party most in bed with the people who screwed up."

Several conservative bloggers are upset that Dodd is writing the Dems' alternative bailout bill:

• The Heritage Foundation's Conn Carroll: "When the Senate went to write new accounting legislation after Enron's collapse, it did not invite disgraced Enron chief executive Ken Lay to draft the legislation. Why on earth is the Senate letting Chris Dodd, both Freddie and Fannie's biggest defender and benefactor, write this legislation? The integrity of the Senate is at stake. Again."
• Carpenter: "I'm glad I'm not the only one fuming over the fact Chris Dodd is in charge of writing this bill. Yeah, the guy who helped keep Freddie Mac and Fannie Mae's books in the shadows in return for a steady stream of donations and got a secret, discout mortgage on his own home from his friend Angelo Mozilo at Countrywide is heading up this bill."

MCCAIN: Steve Schmidt Calls The Whambulance

Liberal bloggers are mocking the McCain camp after they "convened a conference call [yesterday] to complain of being called 'liars'" yet made several "misstatements of fact" during the course of the call:

• AMERICAblog's John Aravosis: "[McCain strategist Steve] Schmidt held a conference call today to whine to reporters that they'd better stop calling John McCain a liar. Only problem? Most of what Schmidt told reporters during that call was, uh, a lie."
• Kleiman: "Note to Steve Schmidt: If you're going to hold a conference call to complain about being called a liar, you avoid lying in the course of the conference call."
• Moulitsas: "[The] McCain campaign lies when whining about being called liars."
• Cole: "[This was] pathetic, even by GOP and McCain campaign standards. [...] At some point it is going to settle in with the media that when the Republicans said they were making their own reality, what they really meant was that they were going to lie about everything."

Other liberal bloggers are accusing the McCain camp of whining:

• Atrios: "Does the McCain campaign do anything aside from throwing hissy fits? I mean, other than lying, of course."
• Daily Kos' BarbinMD: "If there's one thing the McCain campaign hates, it's being called out for their hypocrisy, and predictably, they are throwing a hissy fit over the New York Times' report on McCain's campaign manager Rick Davis having been paid nearly $2 million by Fannie Mae and Freddie Mac for access to John McCain and his deregulating ways."
• tristero: "Get out the 700 billion smelling salts! Somebody hurt McCain/Bush's feelings and they just might swoon under the stress."
• Oliver Willis: "Steve Schmidt needs his diapers changed, apparently."

The Atlantic's Andrew Sullivan: "[The McCain camp's] interaction with the press is in complete disarray. Steve Schmidt even lies when trying to point out others' lies."

MCCAIN II: You Go, Steve!

Conservative bloggers, on the other hand, are defending Schmidt's allegation that the media (and specifically the New York Times) is biased against McCain:

• NRO's Jim Geraghty: "In the eyes of the left, the comments of McCain campaign manager Steve Schmidt on a recent conference call will be seen as a meltdown, a sign that the McCain camp feels its only hope is to 'work the ref.' In the eyes of the right, he's just coming out and saying about The New York Times what many have thought for a long time."
• Townhall's Matt Lewis: "Prior to winning the GOP nomination, McCain was the toast of the liberal media -- a group he famously referred to as his 'base'. And when his campaign was down and out, the NYT endorsed him. But just months later -- after winning the nomination -- the 'newspaper of record' launched a scurrilous attack against him, alleging affair with a female lobbyist. And their attacks have not let up. Of course, they claim McCain has changed -- which is more convenient than admitting that their coverage has changed because he now poses a threat to their favorite liberal candidate. Of course, the fact that we have a liberal bias in this country should not surprise anyone."
• Power Line's John Hinderaker: "The McCain camp's long-overdue retaliation against the Times was not entirely spontaneous. They must have calculated that the Times' reputation has fallen so low that it is now safe to call the paper's reporters and editors what they are: political operatives, not journalists. That has been obvious for a long time to anyone who actually reads the Times, but the McCain campaign apparently believes that some sort of tipping point has been reached, and that most people -- the sort of people who learn about press conferences, anyway -- will understand that as a news organization, the Times is illegitimate. The chickens, in short, may have come home to roost."
• RedState's Jeff Emanuel: "The Bush Derangement Syndrome, and schoolgirl crush on Obama, that has infected this country's Mainstream Media for a growing period has transformed the Times from a mostly-harmless left-leaning dead tree publication, to an anti-administration adrenaline junkie of a newspaper that lived for the thrill of pulling the cover back on classified government information -- preferably of the national security variety -- and informing the entire world about it, to, now, an effective surrogate for a candidate for President of the United States who appears to have done nothing to deserve the cheerleading but allow the Liberal intelligentsia a means of assuaging their White Guilt."
• Hot Air's Allahpundit: "[This is] not the first nuclear strike Schmidt's launched on the media this month, but certainly the most gratifying. Needless to say, we're a long way from Team Maverick touting the Times's endorsement on its home page. [...] When does Schmidt get around to taking on Newsweek?"
• Commentary's Jennifer Rubin: "There is a lot of downright antagonism [in the McCain camp] toward the MSM. Moreover, there is an obvious plan now afoot: spend the next 43 days 'educating' the public about Barack Obama and making this about leadership. Will it work? Perhaps, but it may be the only realistic counteroffensive McCain has available in a hostile media environment and a collapsing economy."

THOUGHT OF THE DAY: A Tale Of Two Outsiders

The Atlantic's Ross Douthat:

"As a early Palin-booster who's expressed disappointment with what we've seen from John McCain's running mate to date, I think it's reasonable for me to explain what, exactly, I was hoping for from the Alaska governor -- who has, after all, been placed in an excruciatingly difficult situation over the last few weeks. The answer, I think, is something along the lines of what we saw from Mike Huckabee during the primary season. Huckabee was just as much of a political outsider as Palin (albeit one with more years in statewide office), he had the same sort of non-elite background -- the degree from Ouachita Baptist University, the distinct non-yuppie family life, etc. -- and the same dearth of foreign-policy experience, and he absorbed some of the same snobbish slings and arrows -- from conservatives more than liberals -- that have been hurled in Palin's direction. But in a highly-charged political environment, he also demonstrated enough of a facility for talking about politics and policy -- which is an imperfect way to judge a potential President, but nonetheless one of the more important ways to judge that we have -- to make himself a credible contender for the highest office in the land. Or at least I thought so. [...]

[Palin] has given one fine speech, and two lackluster interviews, and has otherwise dodged the sort of rough-and-tumble venues and conversations that Huckabee welcomed, and which he used to make his candidacy for president seem more plausible than it initially appeared. Palin needs to at least approach the standard Huckabee set; she hasn't yet; and that failure is showing up in her approval ratings. There's still time for her to turn it around, and as you might expect, I'm pulling for her to do it. But at this point, there's an awful lot riding on that one vice-presidential debate."

LEST WE FORGET: Checks And Bailouts

The Washington Monthly's Kevin Drum makes an observation:

"As near as I can tell, conservatives are outraged by the idea of a blank check Wall Street bailout because -- hey, Barack Obama might win in November, and God only knows what kind of insane nutball he might appoint as Treasury Secretary. Do we really want to trust $700 billion to whatever quasi-socialist we might end up with on January 20th?

Liberals, meanwhile, are outraged by the idea of a blank check bailout because -- hey, even if you trust Henry Paulson, it's possible that John McCain might win in November, and God only knows what kind of insane nutball he might appoint as Treasury Secretary. Do we really want to trust $700 billion to whatever quasi-lunatic we might end up with on January 20th? Phil Gramm, anyone?

This almost restores my faith in the political system."

Posted by Ian Faerstein at September 23, 2008 01:15 PM