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September 25, 2008

Comments

Also note that, per Marc Ambinder, the Very Serious people of the McCain campaign used a metaphorical chainsaw to neuter the proposed Joint Statement on principles for the bailout until it meant nothing at all. Indeed, their behavior on the Statement pretty strongly signals that no bipartisan cooperation is intended whatsoever.

maybe McCain can just say that he'd love to debate Barack Obama, but the dog ate his cue cards

"I would have gladly come to the debates, if only Obama had joined me at town hall meetings."

Cry-baby.

Thanks for the link to Larison, Eric.

I'd never read him before but glancing at a number of recent posts he seems worth the time. An actual conservative rather than a mere GOP hack! Who knew that such still walked the Earth?

Speaking of fear-
Pres Bush today: "Without immediate action by Congress, America could slip into a financial panic. ... More banks could fail, including some in your community."

In an ideal world, the President wouldn't be sabotaging consumer confidence at a time like this, or holding it hostage in order to get his no-strings-attached bailout plan passed.

This financial disaster is completely the result of the Republicans, Democrats have shown that they will cooperate in trying to resolve the crisis, but they would be fools to be the only ones to vote on the bailout and let the Republicans play both sides.

I strongly encourage Reid and Pelosi to make it completely clear that every single Republican "Nay" will be met with two Democratic "Nays". Nothing has to be done about this problem this week or before the election. Democrats can walk away from it and should have learned by now not to be panicked by the dude in the White House who has no clue what is going on.

I've seen a lot of comments from lefty bloggers (on DKos, Openleft, etc) saying that this bailout bill is bad news and democrats should not go forward with it.

I'm also seeing Dodd and Barnie Frank trumpeting the agreement as a success. In my mind, these two guys have a pretty good reputation of standing up to bullshit and they have a decent reputation in the liberal blogosphere.

So there's a disconnect. Is anyone is saying that Dodd and Frank are dead wrong on this issue? This is a legitimate (not rhetorical) question.

In an ideal world, the President wouldn't be sabotaging consumer confidence at a time like this

IIRC (and the memories have gotten a little bit dim since so much has happened in the last 8 years) this is how the Bush administration started, trash talking the economy from Jan 2001 thru the spring and summer of that year.

I remember having conversations with friends at the time where we couldn't figure out why he was doing that given the likely effects of that sort of talk on consumer confidence.

They are going out the way they came in.

This financial disaster is completely the result of the Republicans,

Dude, don't be daft. The Democrats bought their stake in the ownership of the current financial crisis years ago when they decided to cuddle up to Wall Street and try to be Republican-lite. Clinton (Bill) and his crew were very much on the page when a lot of the framework for the nonsense that is occurring right now was put into place.

The main difference between Dems and Republicans in this mess is that the Dems have the ability to pull back from where we are now and put us back on a more sane path - more transparency, more regulation, turning back to those New Deal era institutions that Republicans have demonized for decades but that served us very well in the past. Republicans have had their ideology of "free markets uber allies" turned on its head and they've got nowhere to turn.

But don't think that the Dems hands are clean here, or that Bush the Lesser and his wrecking crew get to take all the credit. Republican-lite Dems (Bush Dogs as folks call them these days) own a chunk of this as much as any Republican. Which is probably why they're once again right there with the administration demanding that Congress do what they're told.

So there's a disconnect. Is anyone is saying that Dodd and Frank are dead wrong on this issue? This is a legitimate (not rhetorical) question.

That depends. If Dodd and Frank get the bill they want, then it's OK. I still see no reason why they should sign off on $700 billion right away. Cut that number in half, or fourths and dole it out in pieces (so that we can see how it works in practice with the first, say, $150 before they authorize the next traunch).

But one of the big problems is that Dodd and Frank aren't going to get the bill they want when the dust settles. They might be trumpeting the merits of their bill, but it still has to pass through the meat grinder, and when it comes out, it won't look so good.

Further to Larison's point, though: why the rush? Take a couple of weeks. Study the problem closer. Kick around ideas.

Is anyone is saying that Dodd and Frank are dead wrong on this issue?

all the polls are wildly opposed to it. people hate the general idea that we're spending $700B to bail out Wall St.: to buy bad mortgages, to keep firms who took huge risks from failing, etc..

and i suspect that's all most people know about it: we're preventing people who made bad decisions from suffering the consequences. it's an over-simplified model. but the GOP is going to play it that way.

I've seen a lot of comments from lefty bloggers (on DKos, Openleft, etc) saying that this bailout bill is bad news and democrats should not go forward with it.
I'm also seeing Dodd and Barnie Frank trumpeting the agreement as a success. In my mind, these two guys have a pretty good reputation of standing up to bullshit and they have a decent reputation in the liberal blogosphere.
So there's a disconnect. Is anyone is saying that Dodd and Frank are dead wrong on this issue? This is a legitimate (not rhetorical) question.

That’s a good question.

First thing to remember is that even the Democratic party is not by any stretch an ideological monolith, much less the broader grouping which lumps together progressives as an ideological block with partisan Democrats (many of who are not progressives but rather are centrists or even somewhat conservative). So part of it is this is what you should expect to see in a big tent party.

The other thing is that I think this Wall St. bailout bill is in some sense a historic crossroads for the Democratic party, sort of a crossing of the Rubicon, for reasons that are hard to explain unless you are familiar with the work of the author Kevin Phillips.

The short version is that the GOP and the Dems have spent the last 100 years or so swapping places with each other. They have exchanged regional bases and sectional identities. The Dems used to be the party of the south and the GOP the party of New England, as well as their respective ethnic, religious and cultural diasporas in other parts of the US, and now that position has reversed itself. The electoral map of today looks like the electoral map of the early 20th cen. with the colors swapped.

Part of this swap is that as the Democrats have become the dominant party in those regions of the country (both at the state/region level and in areas of higher levels of urbanization and population density) which are the centers of the financial services industry, that industry (which was traditionally very fiscal conservative and pro-GOP) is in turn changing its colors. Wall St. has been slowly turning blue since the early years of the Bill Clinton administration, and that trend is continuing. The hedge funds for example have made large contributions to both Obama and Hillary in this election cycle.

If this trend (which has accelerated recently due to the fecklessness and incompetence of the GWB administration) continues, eventually the Democratic party will be the party of Big Money and fiscal conservatism, not the GOP. The latter will find itself in much the same position as the late 19th cen. Democrats, confined to a regional ghetto in the states of the Confederacy and more rural areas in other parts of the country which are opposed to the economic interests of the large cities.

I expect that at some point the GOP will have to turn populist and break out of this position using class warfare from below as an electoral lever (something they can’t really do now because of the historic ties of the current party leadership to big business and its lobbying arms), at which point you will see someone emerge as the GOP equivalent to FDR. If you look at Mike Huckabee today and where he is positioned as a populist anti-Big Business Republican, that is what I am expecting more of, once the GOP sheds the neocons and fiscal cons.

The vote this week or next on this Wall St. bailout bill is a big step in this evolution of the two parties, and one that as a progressive I view with concern and trepidation. I wish the party wasn’t giving Wall St. what it wants, but I recognize that it is part of a larger historical pattern which is going to take enormous effort to slow down or stop.

"If Dodd and Frank get the bill they want, then it's OK. I still see no reason why they should sign off on $700 billion right away."

Agreement Reached on Bailout Ahead of High-Level Meeting:

[...] After a three-hour meeting, lawmakers agreed to legislative principles that would approve Treasury's request for the funds, but would break it into installments, according to people familiar with the matter. Treasury would have access to $250 billion immediately, with another $100 billion to follow if needed. Congress would be able to block the last installment through a vote if it was unhappy with the program.

The agreement could require all companies participating in the program to agree to limits on executive pay—such as restrictions on "golden parachutes." It is also likely to give the government equity warrants in all participating companies.

Still unresolved is whether or not to include changes to bankruptcy law that would give judges the right to change the terms of mortgages. Democratic Sen. Dick Durbin of Illinois made a plea for it to be included, even though many lawmakers and the White House are hotly opposed.

So, there you go.

Nice. Thanks GF - as always.

If this trend (which has accelerated recently due to the fecklessness and incompetence of the GWB administration) continues, eventually the Democratic party will be the party of Big Money and fiscal conservatism, not the GOP

I dont think I agree, although this is interesting. The reversal isn't a complete switch of party identity, but an adaptation of those bases (in some cases, leading to reversals) to social change.
For example, in the 1850s the great economic tension in the US was regional- Southern agricultural v Northern industrial- since these were big power bases, it was natural for each to be incorporated in one of the two major parties. Today there are no such regional economic tensions- the GOP is the party of business across the country, and the existing regional tension seems like more an artifact of smaller tensions (eg existing attitudes towards race, lack of unions, lower urbanization, and higher evangelical populations in the South).
Instead, we see divisions forming on a smaller scale- the existence of suburbs and exurbs has created a new tension, and this naturally creates new party lines (with the *urbs going red and urban centers going blue).

Im not saying that Democrats won't eventually become the party of big business or that the GOP won't embrace economic populism, just that the social scene changes too much over time to call it a game of musical chairs. Also, things change slowly.

I expect that at some point the GOP will have to turn populist and break out of this position using class warfare from below as an electoral lever

I think that'll take a while; there's so much intertia built into the system now. Particularly with people absorbing entire worldviews from their political orientation (eg the Jesus-was-a-capitalist education available from Patrick Henry U).

One more thought- to some extent I see this process occurring as conflicts in the body politic are resolved- again, using the Southern agricultural v Northern industrial as an example. Once that tension was resolved by industry becoming the standard, both parties make their peace with it and exploit the division between unions and labor, or suburbs and urbs.

Carleton Wu,

Good points.

I'm taking my cues from Phillips whose writing I find fairly persuasive. His argument is that this binary division in Anglo-American politics is as much based on cultural and demographic factors (ethnicity and religion are the big ones) as they are on socio-economic grounds.

In "Cousins War" he makes a case that the Red-Blue divide in the US today can be traced all the way back to 17th cen. Britain and the English Civil War of the 1640s and the related sectarian conflicts of that era which were in part a legacy of the English and Scottish Reformations.

If this hypothesis is correct, then this divide is approximately 400 years old and has endured through enormous changes in the poltical and economic environment, which suggests that economic issues tend to be layered on top of underlying regional and cultural rivalries rather than the other way around, and in turn the respective political parties are floating on top of that mixture in an unstable fashion such that they can become detached from one set of identities and take root in a different set of identities.

In other words the identities which today we call “Red” and “Blue” (which in earlier times would have been Confederate and Yankee, and before that Tory and Revolutionary Patriot, and before that Cavalier and Roundhead) are older and more stable than either of the political parties or their socioeconomic policies, which they (the older core identity pair) can discard and change like a pair of individuals swapping clothing with one another.

That sounds very interesting- is there a particular title that you'd recommend?

Wouldn't that make the liberals of NY and MA the 'descendants' of the roundhead religious extremist factions? On the one hand, this makes sense insofar as this group was very capitalist-friendly (and NYC's banking etc is based on this), but that also runs against the thread insofar as 1)the South is the bastion of evangelical voting today and 2)the GOP (based in the Southern/Cavalier states) is the business-friendly party...
I guess Im thinking that such a broad theory could easily justify events in either direction (eg the Scandinavian Lutherans could be roundheads bc they're protestant egalitarians, or cavaliers bc they're not religiously intolerant & historically favor social safety nets over pure capitalism), but Id be interested to read more.

Of course, now it's all http://www.nytimes.com/2008/09/26/business/26bush.html?hp=&pagewanted=all.

That is, Bailout Plan Stalls After Day of Talks. Sorry, I'm not having a good day.

"In other words the identities which today we call 'Red' and 'Blue' (which in earlier times would have been Confederate and Yankee, and before that Tory and Revolutionary Patriot, and before that Cavalier and Roundhead) are older and more stable than either of the political parties or their socioeconomic policies, which they (the older core identity pair) can discard and change like a pair of individuals swapping clothing with one another."

I think that's absolutely right, and I'm resisting the urge to use words like "unquestionably," and "obviously," since it's neither, but still.

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