We Won't Get Fooled Again

The verdict on the Paulson plan is in and it's resounding: take this bailout and shove it. Krugman lays out the chief technical deficiency here. The Politico runs down economists' objections here. Dean Baker provides progressive conditions here, and the fine folks at CAP give their scathing review here.

Two things I've learned in my year in Washington.

1) If the Wise Old Men all agree on something it's almost certainly a bad idea.

2) Whenever interpreting Bush administration actions, one must force oneself to select the most cynical, uncharitable interpretation of their actions. This is the most likely to be correct.

In this case, that means that it's quite possible, indeed I'm operating under the belief, that this is nothing more than an attempt to use panic and fear (much of which is warranted) to transfer a gobsmacking amount of public money into private hands. That's the only way the Paulson proposal makes any sense.

So what next? Now this becomes a game of legislative chess. Democrats need to issue their own plan so that they can tell the White House and Paulson not just no, but hell no.

This really is a crucible for the Democratic party. This is the authorization to use force vote all over again. Barack Obama has an opportunity to show leadership here and make sure Wall Street doesn't get a blank check. Let's see what he's made of.

Comments (25)

1. Correct, this is Obama's biggest chance/challenge -- and most delicate balancing act yet.

   He'll have to bring to bear all the intelligence, good judgment & leadership flair that he can muster.

   Since McCain has displayed precious little of these qualities, and given Gramm as his financial brain, there'll be no competition from that camp, except in the form of brickbats hurled at whatever Obama proposes.

   Now this could become a truly important election ... unless the Dems capitulate to W&Co before election day.

   Posted by sloper at 09/22/2008 @ 08:01am

2. Posted by Darin_the_Troll at 09/22/2008 @ 08:16am

   See? I knew that the Republicans wanted to fix everything and them dang ol' Democrats wouldn't let them.

   Cuz as we know, Republicans are the party of business and financial regulation and those Democrats want to de-regulate everything and let it go to hell!

   This goes back to President Hoover and his New Deal!

   Posted by Maskdelta at 09/22/2008 @ 08:49am

3. I'm betting that Obama will do nothing.

   And here's a rule to add to those above: Don't ever believe anything until it's been officially denied.

   Posted by mikecope at 09/22/2008 @ 09:42am

4. "take this bailout and shove it."

   oh, it will be shoved.

   Posted by frosty zoom at 09/22/2008 @ 10:18am

5. http://economistsview.typepad.com/economistsview/

   Posted by frosty zoom at 09/22/2008 @ 10:19am

6. Thanks, "Frosty," for the link to that great article by Paul Krugman.

   I'm afraid it doesn't really make any difference at this point whether the US-American people are fooled or not. We have only two parties, the Democrats and the Republicans. While it's true that for the Democrats, deregulation has always been motivated more by triangulating opportunism than by ideology, the fact is that they have done precious little to stop it. Now, what we need is not only to slam the brakes on further deregulation, which the financial industry shamelessly continues to demand, but to re-regulate our financial system.

   But where are the Democrats calling for the restoration of the Depression-era laws that worked so well for so many years to keep banks secure and trustworthy?

   It's sad that most of the New Deal's proud legacy has been whittled away during the years of Republican dominance (1980-2006), using the weak, but always well-funded argument that New Deal is "tired and old." And Democrats have let it all happen, failing to take any pride in their party's greatest achievements.

   I cannot foresee that anything can change this short of a productive catastrophe, such as our country's antiquated electoral system has always required to bring about real progress. (Sadly, as German history shows, not every catastrophe is necessarily productive.) I'd like to see our electoral system made more accurate and fair (as I have argued again and again on these threads), but I won't hold my breath until this happens.

   Posted by JakobFabian at 09/22/2008 @ 10:50am

7. juan cole on electoral masochism.

   ouch!

   http://juancole.com/

   Posted by frosty zoom at 09/22/2008 @ 10:56am

8. Posted by JakobFabian at 09/22/2008 @ 10:50am

   great blog by this brainiac:

   Mark Thoma

   Department of Economics

   University of Oregon

   srj posted a link one day and i've been reading it ever since.

   Posted by frosty zoom at 09/22/2008 @ 10:59am

9. My current instinct is to say "shove it" -- although I'm not actually gonna say it till I know what happens if there's no bailout. Do any of the economists tell us? I frankly don't care is bunch couple of greedy rich guys jump out of windows? But what happens to the rest of us?

   Posted by jts44 at 09/22/2008 @ 11:53am

10. BTW, does ANYBODY think that ANYBODY but the die-hard "free marketeer" Right...

    is going to buy spin that "it's the Democrats' fault" that the banking and financial services guys weren't regulated enough?!??!??!?

    Was it OBAMA who said "I'm fundamentally a de-regulator"...or Sarah's running mate???

    Posted by Maskdelta at 09/22/2008 @ 12:04pm

11. or Sarah's running mate???

    Posted by Maskdelta at 09/22/2008 @ 12:04pm

    todd?

    Posted by frosty zoom at 09/22/2008 @ 12:06pm

12. Unfortunately the New Deal demos are mostly gone. The ones I knew would challenge any repuke who spouted this pseudo populist nonsense we've heard for the last thirty years. A withering stream of profanity from these guys directed at a repuke would have him running for cover. In their hayday it would have been fists to back up their defense of the working man. We may be a bit more genteel in this day, but democrats have got to take it to 'em. Time to puncture the Wizard's hot air balloon!

    Posted by Sorelish at 09/22/2008 @ 12:38pm

13. Posted by frosty zoom at 09/22/2008 @ 12:06pm

    No,no...the OTHER guy who stares at her breasts. The "Fundamental De-Regulator" Guy.

    Posted by Maskdelta at 09/22/2008 @ 12:41pm

14. http://donstuff.files.wordpress.com/2008/09/bullwinkle_assassinated.jpg

    Boris Badenov "I never met Sarah Palin"

    Posted by crabwalk at 09/22/2008 @ 12:48pm

15. http://donstuff.files.wordpress.com/2008/

    09/bullwinkle_assassinated.jpg

    Posted by crabwalk at 09/22/2008 @ 12:52pm

16. No,no...the OTHER guy who stares at her breasts. The "Fundamental De-Regulator" Guy.

    Posted by Maskdelta at 09/22/2008 @ 12:41pm

    john maasch?

    Posted by frosty zoom at 09/22/2008 @ 12:59pm

17. john maasch? Posted by frosty zoom at 09/22/2008 @ 12:59pm

    No no no. I'll give you a hint. If you can hear someone talk about him for more than 2 minutes without mentioning POW you can consider yourself lucky.

    Posted by Cccomfo1 at 09/22/2008 @ 1:24pm

18. bob crane?

    Posted by frosty zoom at 09/22/2008 @ 1:32pm

19. Vice President Sargeant Sarah Palin Shultz?

    Posted by crabwalk at 09/22/2008 @ 1:33pm

20. Anyone expecting even shorts bursts of brilliance from Barak Obama and the Glass-Steagall busting advisors like Robert Rubin who surround him is in for a surprize. They have no idea what to do now and had none when they led the charge toward de-regulation back in the 1990s. What you might more comfortably rely upon is Obama trying to interpret this mess in terms that will benefit him politically, that after scratching his head a bit as he is apt to do and um-ing and ah-ing for a few minutes. Yes, expecting Barak Obama or John McCain to know how to extricate us from this crisis is like expecting the funeral director to revive you. Think about it, on one side, S&L crisis survivor John McCain and on the other supporter of the recent tightening of bancrupcy laws Obama and MBNA Joe. Talk about foxes in the chicken coup. Progressive vote Nader!

    Posted by john lowell at 09/22/2008 @ 1:37pm

21. bob crane?---Posted by frosty zoom at 09/22/2008 @ 1:32pm

    Bob Crane is dead....

    oh wait a minute...so may McCain's Presidential hopes too, so that doesn't work!

    Posted by Maskdelta at 09/22/2008 @ 1:42pm

22. Come on everybody....

    Where's that good ol' socialist spirit??

    Wallstreet can be the gubment's for only a trillion dollars!

    The left may not get a chance like this again.

    Posted by bleedingheart at 09/22/2008 @ 1:46pm

23. Okay Mask. You get an "A" in sarcasm, but when was the last time sarcasm won the Presidency?----Posted by Darin_the_Troll at 09/22/2008 @ 1:32pm

    "Al Gore said he invented the Internet!"?

    "Did Kerry REALLY shoot that goose?"

    As for the rest, I know you're a die-hard Darin, but you may be the last guy in the Bunker at this point.

    You REALLY think that you (and Limbaugh, Hannity, etc) are going to be able to pull off "The collapses of the financial markets due to de-regulation...is the DEMOCRATS' fault not Bush's"?

    Long history there of Democrats wanting de-regulation, is there??? Bush and McCain "fundamentally regulators", are they?

    Oh, and since it's BUSH pushing the $700,000,000,000 bail-out....think anybody, even McCain, is going to keep talking about "permanent tax cuts", much less "MORE tax cuts"?

    I'd get over my Dubya fixation right now....the man just drove the last nail in the coffin of the Reagan Revolution.

    Posted by Maskdelta at 09/22/2008 @ 1:47pm

24. Won't get fooled again, eh?

    Forgive me for being cynical, but: we're F***ED. Just like every time there is a chance to either (a) straighten things out or (b) give free money to the rich. No one stands up f0r the masses anymore. They just out it to us and expect us to stand still for it. Which of course we do, like good little citizens. Phooey.

    The politicos (both parties) use this as an excuse to reward the billionaires for screwing the American people. They'll make noises about doing the right thing but in the end... we get the shaft. Guaranteed.

    Bend over and drop 'em, folks... here it comes... and much as I hate to say it, we getting what we deserve for putting those crooks in office.

    Enjoy the ride.

    Posted by ucnick at 09/22/2008 @ 3:10pm

25. My video bearing the same name:

    http://www.youtube.com/watch?v=i9njqqeljAo

    Posted by gouko787 at 09/26/2008 @ 7:35pm