Who's to Blame: The Collapse of the Bipartisan Bailout Deal
Well, the deal on the table is dead. And if you want to understand why, you can read this piece which lays out a bunch of the excuses about why the effort failed.
Washington is now busy trying to figure out who is going to get the blame. One of the more amusing excuses was this one:
[A] top aide to Mr. Boehner said it was Democrats who had done the political posturing. The aide, Kevin Smith, said Republicans revolted, in part, because they were chafing at what they saw as an attempt by Democrats to jam through an agreement on the bailout early Thursday and deny Mr. McCain an opportunity to participate in the agreement.
Oh, poor John McCain. Those nasty Democrats keep playing hardball.
And then you get this:
But a few blocks away, a senior House Republican lawmaker was at a luncheon with reporters, saying his caucus would never go along with the deal. This Republican said Representative Eric Cantor of Virginia, the chief deputy whip, was circulating an alternative course that would rely on government-backed insurance, not taxpayer-financed purchase of mortgage assets.
He said the recalcitrant Republicans were calculating that Ms. Pelosi, Democrat of California, would not want to leave her caucus politically exposed in an election season by passing a bailout bill without rank-and-file Republican support.
“You can have all the meetings you want,” this Republican said, referring to the White House session with Mr. Bush, the presidential candidates and Congressional leaders, still hours away. “It comes to the floor and the votes aren’t there. It won’t pass.”
But, perhaps the reason for the Republican attitude isn't as much political posturing as outright fear for their own wellbeing. From Laura Rozen we get a hint of the anger in the hinterland that the bailout of Wall Street will not be taken quietly.
But I can't help but think it also reflects the fact that by and large the class of people in and driving the press coverage is completely disconnected from the perspective of people who are overwhelming, in a completely uncoordinated way, virtually every congressional office.
The Washington pundits and Republican elite like to laugh when the Angry Left rail about the imperiousness of the ruling consensus, but they are not so sanguine when the anger comes from the rabid right. The Republican rank and file are more than aware they will rue the day they cross their angry constituents. After all, they've spent decades feeding the beast, they know how vicious it can get, and now that beast is looking at them.
So who should take the blame for this collapse of the bailout deal?
Well, I'd put at the head of the class, Henry Paulson, who thought he could railroad the Congress to give him a blank check to bailout his Wall Street friends. Imperious and unaccountable. No wonder people rebelled.
And we can add President Bush who spent his bully pulpit trying to terrorize the American public into believing they had to do his bidding or see the world end. But it's funny how a people, who have been told for decades that the government steals their money to pay for the unworthy, have come to believe that giving up their hard earned cash to help the Fat Cats is crazy. And, so the fear of the future ("the world will come to an end") was weighed against the anger at the Fat Cats stealing their money, and anger won.
Certainly we can add John McCain who spent his time "leading" in this crisis by scuttling the deal because it let's him keep that angry, angry base on his side. Such amazing leadership he's shown. But one does wonder if he worries just a bit about his own financial future if they don't come up with a "real deal" soon because a true financial crisis could badly damage him and his wife. After all, when billions of dollars disappear, they tend to do some damage to anyone who has invested in the market.
Finally, I think that our Democratic leaders did not do their part in "selling" the necessity of this deal to the American public. They too seem to believe they can execute a deal without an honest accounting to the American public. If they had really wanted to make a case that it was essential to put together a responsible bailout package, then they would have insisted that they had time to craft something that worked for the American public and one that could be honestly sold to them. The rabid right would never go along, but Americans deserve to be treated as adults during this crisis.
I hope the markets like waiting until after the election before getting some relief, because just like those other crises the Bush administration "handled", this one has been handled in ways guaranteed to make it harder to manage.