Obama's Bailout Strategy

By Tom Hayden

October 2, 2008

I thought our philosophy was not simply to understand the world, but to change it. I keep receiving e-mails offering progressive alternatives to the Wall Street bailout, but none are connected to strategy or tactics. Congress, Wall Street and the media have little interest in our fine ideas unless we have a plan to do something.

  • Volcker Rules

    Business

    Robert Scheer: Obama's endorsement of what he calls the 'Volcker Rule' for once puts him squarely on the side of ordinary Americans as opposed to the banking bandits who have so thoroughly fleeced the public.

  • A Cold Day in Washington Subscribe

    Economic Policy

    Christopher Hayes: A freeze on discretionary spending may poll well, but it endorses ignorance of how the federal government spends its money.

  • Geithner's AIG Bailout

    Economic Policy

    Greg Kaufmann: Treasury Secretary Timothy Geithner was summoned to testify before the House yesterday to answer two questions: why did he sign off on AIG paying full value on insurance for bad assets, and what was his role in the decision not to disclose that?

» More

That "something" is to frame the crisis clearly as the voters' verdict on failed free-market fantasies, elect Barack Obama and a few more members of Congress, then demand emergency action to address the Wall Street crisis and its $700 billion twin, the war in Iraq.

I have no problem with Barack Obama's supporting the bailout package as long as it keeps him on track to the presidency. He needs to be critical, to offer amendments, and to promise to return to the crisis the day after November 4.

He should take another look at The Second Bill of Rights: FDR'S Unfinished Revolution and Why We Need It More than Ever, by his Chicago friend Cass Sunstein. After the 1929 crash, Roosevelt was elected president as a fiscal conservative pushing a message of hope after Hoover's dismal term. Then came the great social movements that, combined with Roosevelt's pragmatism and political skill, achieved the New Deal. On the right he was accused of being worse than a friend of the Weathermen. On the left, he was accused of saving capitalism from its opponents. What's missing today are the social movements, and I suspect they might be coming if this crisis continues to command full attention.

We need a November electoral mandate rejecting reckless unregulated free-market capitalism as a model for our century. Every minute we carry that message in these days before the election, we are building that mandate. We need a peace mandate, too.

If I had a vote, I would vote "no" on the bailout package because it remains completely weighted to Wall Street's interests. Just look at Wall Street's calculation: they will get $750 billion with no new strings or conditions they haven't managed to live with, or circumvent, before. There are no performance standards for reducing foreclosures, bankruptcies and job losses. There are no penalties for failing to achieve those performance standards. There are no oversight mechanisms with new teeth, like a public monitor on private investment bank boards or inspectors general with subpoena powers within.

Democrats at least should have posted a bill that would contain real countervailing powers, and posed the question whether Wall Street really wants the money, or only public money for private use.

The Democratic proposal should be something like this:

• $300 billion immediately for Wall Street, with effective oversight, enforcement and performance standards with penalties;

• another $100 billion per month through January if there are measurable results with the first downpayment;

• no later than 2009, budget $80 billion for public works jobs by closing Bush-McCain's tax loopholes for the rich;

• no later than 2009, budget another $80 billion for public works, healthcare and green jobs by cutting the funding for Iraq in half.

Make the rest of the package a debate over philosophy and priorities going into the election. Make the Republicans into New Dealers (unlikely) or latter-day Herbert Hoovers.

About Tom Hayden

Tom Hayden, a former California state senator, is the author, most recently, of The Long Sixties: From 1960 to Barack Obama (Paradigm). more...
Advertisement
Advertisement
Advertisement

Blogs

» The Beat

Facing Bipartisan Criticism, RNC's Steele Asks If Race Is Factor | "Why? Is it because Michael Steele is the chairman, or is it because a black man is chairman?” he wonders. Maybe he could compare notes with Obama.
John Nichols

» Editor's Cut

New Web Column at The Washington Post | Every Tuesday, I'll be featuring progressive thinking about politics and challenging the Right in my new web column for The Washington Post. Read my first one here.
Katrina vanden Heuvel
31 Comments

» The Notion

When Snow Melts: Vancouver’s Olympic Crackdown | Anger is growing in Vancouver in advance of the 2010 Winter Olympics in Vancouver. Like Olympic clockwork, here comes the media crackdown.
Dave Zirin
43 Comments

» The Dreyfuss Report

The Mind-Boggling Stupidity of Michael Rubin | How an AEI apparatchik's love affair for Ahmed Chalabi blinds him to Chalabi's pro-Iran treachery.
Robert Dreyfuss
27 Comments

» Act Now!

Demand Question Time | Join the call for the President and Congress to implement regular Question Time sessions.
Peter Rothberg
56 Comments

» And Another Thing

How to Counterbalance Focus on the Family on Superbowl Sunday | Give to help low income girls and women.
Katha Pollitt
54 Comments

» Altercation

Slacker Friday | James O'Keefe and Alter-reviews.
Eric Alterman