Our message to Wall Street is this: the party is over. The era of golden parachutes for high-flying Wall Street operators is over. No longer will the U.S. taxpayer bailout the recklessness of Wall Street.
Said Nancy Pelosi, right before she voted to force the U.S. taxpayer to bailout the recklessness of Wall Street. Fortunately, she was actually more right than she knew, at least for now.
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The original bill spend $700 Billion dollars, and was only 3 pages long. That’s it. You can’t get a cell phone without signing a contract 10 times as long as that bill! I don’t like overly complex legislation, but more care than that needs to be taken for that kind of money. Einstein used to say that we should make things as simple as possible, but not simpler. Well, this was simpler.
Each line item should have been separately debated and voted on. Different asset types should have been considered for saving, some (irresponsible “flipper” mortgages) should have been allowed to fail and die. And I would have loved to see the roll call vote on who voted for billions of those dollars to go to ACORN and La Raza.
In fact, every prior bailout should have been voted on in exactly the same way. There is no billion dollar tax expenditure (short of national defense dollars that must for security reasons be kept classified) that should be spent without a a full debate and vote by the Congress as a whole. I wonder if CEOs otherwise inclined to recklessness would be more careful if they knew they wouldn’t be bailed out without a full – and public – debate on the merits of such a “rescue.”
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If this bill had been voted on along party lines, it would have been a huge political coup for the Democrats. Nancy Pelosi, Harry Reid, and Barney Frank purposely manuevered themselves to be out in front in a leadership role.
But Pelosi couldn’t even get 40% of her own party to vote along with this. When she had the opportunity to reach accross the aisle to get just 12 more Republicans on board a plan their President and their Presidential nominee supported, she wasted it by giving a snide, hyper-partisan rant. Obama couldn’t convince just 12 more Democrats to support him in an election year in such a way that he could look like he kept the deal together.
At a time when leadership, post-partisanship, and political risk were all required to do what they believed needed to be done, Obama and Pelosi were able to muster none of these things. What does that say about what an Obama Presidency with a Democratic Congress would look like, or be able to accomplish? (Hmmm… On the other hand, maybe that’s a silver lining…)
If this is how they deal with this crisis, how would they deal with another kind? A 9-11?
John McCain should run ads hitting this theme all the way to election day. “Agree or disagree with the bailout bill, let’s look at the folks who want to be your nation’s ‘leaders’ in the next four years…”
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That puts one in a mind to wonder what Obama’s diplomacy would look like. If he can’t get 12 of 95 of his own party members to support a plan he wanted and believed would benefit him and all Democrats politically, what makes him think he can convince Russia to not sell nukes to Venezuela, or to stay out of Georgia? Putin has to be wringing his hands with glee.
And now that Nancy Pelosi has adopted the my-way-or-the-highway, angry, partisan, cowboy diplomacy as her new signature style, how will she complain about Bush’s foreign policy any more? Oh, wait – cognitive dissonance. Never mind.
Unfortunately, one can make the same argument for McCain. But as Jim Geraghty noted:
House Republicans were never going to to approve spending $750 billion to rescue banking institutions by a wide margin. But what is the Democrats’ philosophical objections? They don’t oppose the idea in principle; they oppose the details, presumably… [***] Throughout the negotiations, everybody knew the House GOP hated this rescue in concept and detail; McCain’s mission of persuading Republicans was exponentially harder. But last week he did go to Washington to get their ideas included. What, precisely, did Obama do to get the House Democrats on board?
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By the way, I’m still waiting for Obama to explain to me a single regulation that Bush “gutted,” vetoed, or otherwise prevented from passing that would have prevented this mess. Just one. That’s it.
That, by the way, is what McCain should have asked Obama during the debate, when the good Senator from Illinois kept repeating the absurdity that the economy under George Bush was under-regulated. It would have been devastating.
He has two more chances. Please don’t blow it (again), sir.
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I hope this bill stays dead, and that Pelosi is unable to pass a more left wing version that might get some more votes from her own party. (If she does, I hope Bush has just enough spine left to veto it, but I’m not holding my breath.)
Whatever pain comes now from its failure (and it will be real) will pale in comparison to the crash that will occur if this rotted, corrupt, over-regulated zombie of a financial system is propped up yet again, only to inevitably fail when it’s grown even bigger.
But if not, at least the resulting inflation will make my law school loans cheaper to pay off…
