Bailout Signals the Election Is Over

Bailout Signals the Election Is Over

By approving the bailout, Congress sealed our political fate more firmly than any presidential election.


Election day is officially November 4. A month earlier voters started mailing in their ballots. We can expect the usual uplifting essays, extolling the spectacle of millions of Americans peaceably exercising their democratic rights, so unlike in Cuba or North Korea.

Unusually early, the real election day this year fell on October 4, the day the House of Representatives finally approved the bailout bill already passed by the Senate two days earlier.

Real elections mostly come after the symbolic election day. They are staged, sometimes protracted events, designed to remind voters that no matter what they may have thought they were voting for when they went to the polls, no matter who the victor or what his pledges, reality is in charge.

Examples vivid in my memory include the arrival in Britain of a Labour government in the fall of 1964 after twelve years of Conservative rule. Hopes were for sweeping change in accord with Labour’s Socialist program. The real election then took place, and the bankers voted no. Lord Cromer, governor of the Bank of England, told Wilson that there was a financial emergency: the international integrity of the pound sterling was being compromised. He advised the prime minister that Labour’s plans for economic and social reform must be abandoned forthwith. Cromer carried the day.

The election of Jimmy Carter in 1976 was also a season of hope that a new era was dawning, particularly in the arena of foreign policy and the cold war. "If, after the inauguration," Carter’s campaign manager, Hamilton Jordan, told the press, "you find Cy Vance as secretary of state and Zbigniew Brzezinski as head of national security, then I would say we failed. And I’d quit." Carter wanted George Ball as secretary of state, but in the backstage maneuverings of the real election the Israel lobby vetoed Ball. Carter was forced to pick Vance as secretary of state and the cold war fanatic Brzezinski as national security adviser. Jordan did not quit.

The real election in Bill Clinton’s case took place after his election, when he swiftly indicated surrender by making Goldman Sachs’s Robert Rubin his treasury secretary. By May 1993 he had signaled his total submission to the Wall Street banks and the end of any pretense–thin from the get-go–of economic change or social reform.

This year the economic crisis demanded an early real election, designed to fend off the admittedly very remote possibility–Rubin is Barack Obama’s close economic adviser–that Obama, victorious in the November 4 election, might claim a reformer’s mandate and seek to prize loose the stranglehold of Wall Street financiers on the economy.

On September 23 Obama stated on NBC that the crisis and the prospect of a huge bailout required bipartisan action and meant he likely would have to delay expansive spending programs outlined during his campaign for the White House. Thus did he surrender power even before he gained it. Simultaneously, McCain, endorsing the bailout, destroyed a golden opportunity to revive his candidacy by placing himself at the head of the Republican revolt and seizing the popular mood, which was and remains one of vitriolic fury at Wall Street and the bailout.

Dissent dwindled rapidly in the press as the Accredited Commentariat, from George Will on the right to Paul Krugman in the center, declared the bailout odious but necessary. The rebellion of the House Republicans was an unexpected bump in the road. They were execrated as "irresponsible" along with the ninety-five Democrats who joined them.

At this point the last, best weapon of the Real Electioneers sidled onto the stage. On October 2, Representative Brad Sherman, a California Democrat and opponent of the bailout, stated in the House that members of Congress were threatened that "there would be martial law in America if we voted no." A day earlier, on our CounterPunch site, Doug Valentine had pointed out that George Bush was equipped with such powers, having issued in May 2007 National Security Presidential Directive 51 and Homeland Security Presidential Directive 20. These directives gave Bush the authority to assure the "Continuity of Government" in the event of a "Catastrophic Emergency"–which resulted in, among other things, some extraordinary disruption of the economy.

As the Senate voted, Obama once again affirmed publicly that he accepted the verdict of the real election. He told reporters in Clearwater, Florida, on September 24 that "issues like bankruptcy reform, which are very important to Democrats, is probably something that we shouldn’t try to do in this piece of legislation." In addition, he said that his proposed economic stimulus program "is not necessarily something that we should have in this package." Nine days later, cowed by a strike of capital on Wall Street, battered by charges of reckless endangerment of the American Way of Life, recalcitrants in the Congressional Black Caucus having been hectored by Obama, House resistance dwindled and the Paulson bill rolled through.

As the economic crisis continued unabated, people said this showed that the bailout bill had been useless. Not true at all. Its paramount importance was as a show of force, as dramatic as nineteenth-century cavalry cutting down demonstrators at Peterloo. As an instigator of beneficial change, the Clinton administration was over six months after election day 1992. Assuming he wins, Obama has beaten the speed of Bill Clinton’s 1993 collapse by almost seven months.

But hold! you cry. Obama may enter office with a secret plan. Even FDR campaigned in 1932 for a balanced budget. And anyway, Obama and Biden will save us from Sarah Palin, Alaska’s answer to Eva Perón! My friends, the ebullient Palin, a provincial right-wing populist in the Poujade tradition, is a distraction from the uncomfortable truth. After the October coup, and Obama’s meek surrender, the November ballot is merely a coda.

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