Monday, September 29, 2008

McCain and the Bailout Failure

It appears the Republican (this time with some help from Democrats) have sunk the bailout a second time... I have mixed at best feelings about this plan. From the Caucus:
For its part, the McCain campaign issued a statement by Doug Holtz-Eakin:
“From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Obama and Reid, Speaker Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families.

“Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill.

“Just before the vote, when the outcome was still in doubt, Speaker Pelosi gave a strongly worded partisan speech and poisoned the outcome. “This bill failed because Barack Obama and the Democrats put politics ahead of country.”

Then read this:
“Now is not the time to fix the blame,” McCain said in Des Moines, Iowa. “It’s the time to fix the problem.”

McCain sure has a lot of chutzpah. Briefly before the bill fell apart, McCain rushed to take credit for the victory... shortly after, his campaign rushed to lay blame for its failure.
He was not welcome when he went back to Washington, by members of both parties were angry that he injected himself recklessly for political gain. The first deal fell apart shortly after he arrived, after which both Democrats and some Republicans let McCain know that it was time to get out of town... preventing McCain from making any political hay riding into the rescue.
Indeed, the first time the deal fell apart, John McCain failed to even take a stand.
Perhaps more maddening, this bill is supported by Pelosi and Reid, who delivered majorities of Democrats. Boehner couldn't (or wouldn't) deliver majorities of his Republicans.
There's going to be hell to pay after the Dow drops 800 points. The house Republicans voted against it, any repercussion would justly fall on them. Their "alternative" of cutting capital gains tax, by the way, is ridiculous and would do literally nothing to alleviate the problem.
If this illustrates anything, it's how tangled the politics of the bailout are. The public is not at all happy seeing wall-street get bailed-out, and the house Republicans are all to ready to lead a populist fight against this bill. This makes me wonder, could we muster enough votes for something better, say, bank nationalization like what was done in Sweden. Paul Krugman says this is better policy wise, but we need the Republicans on board for political cover. I'm beginning to think we can't get enough congressional Republicans on the current bailout. Could we get enough votes for nationalization, and more important, could we get the administration to go along? Certainly, that would better policy-wise and less plutocratic.

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