After describing Monday’s stomach-in-your-throat, topple-off-the-edge-of-the-building stock market plunge, Tuesday’s Post-Dispatch editorial said:
Worse could be in store. Or maybe not. The financial markets are in uncharted waters, off the edge of the map where it reads, “Here there be monsters.”
Some of our Dems are braving those waters: Lacy Clay and Emanuel Cleaver voted no on the bailout. Cleaver’s take on it was: “‘If you feed pigs a great deal, they’ll become hogs.'”
And apparently, the public is against raising hogs:
“There is no reason for us to go in there and bail out George Bush,” Missouri Democrat Emanuel Cleaver said. “I don’t think anyone is going to step out on a limb,” he said, because “there is no way to sell this” to voters.
Indeed. Lacy Clay’s office tells me that 98 percent of the calls they got opposed the bailout, and that he opposed it because there were no provisions for bankruptcy judges to rule in ways that could help out the little guy. Both Cleaver and Clay, who represent districts with high proportions of black voters, no doubt understand that those deceptive mortgages were marketed in large part to the poor–to many blacks, in other words.
Jerry Costello, a Democrat across the river from St. Louis in Belleville, IL, brought up another factor for the “No” voters:
“I have not been convinced that it is imperative we act right now, or that this proposal will solve the problem as indicated. In fact, numerous economists insist that the Paulson approach will not work. And I resent being told by the investment bankers in the Bush administration and on Wall Street — the very people that have railed against government oversight in the financial industry for years — that the taxpayers must come to their rescue.”
Michael Moore, who opposed the bailout as it was written, does more than just agree with Costello. He gives all the Democrats the benefit of the doubt:
Here’s my guess: The Democratic leadership in the House secretly hoped all along that this lousy bill would go down. With Bush’s proposals shredded, the Dems knew they could then write their own bill that favors the average American, not the upper 10% who were hoping for another kegger of gold.
But Moore gives Republicans no credit for their no votes. He sees them as cynically putting distance between themselves and a toxic lame duck president in this election year:
There they were, one Republican after another who had backed the war and sunk the country into record debt, who had voted to kill every regulation that would have kept Wall Street in check — there they were, now crying foul and standing up for the little guy! One after another, they stood at the microphone on the House floor and threw Bush under the bus, under the train (even though they had voted to kill off our nation’s trains, too), heck, they would’ve thrown him under the rising waters of the Lower Ninth Ward if they could’ve conjured up another hurricane.
To Todd Akin, who averred that many who voted for the bailout were being too hasty and giving up principles (“You never save principle by giving it up”), Moore would probably ask, “What principle might that be? The principle of self preservation?”
David Sirota is no way so harsh on Republicans who voted no:
it’s clear that Congress is facing a full on revolt from both the Right and Left – the very revolt that I predicted in my book, The Uprising. No longer is this a populist revolt merely scaring Wall Street and Washington – this is a populist revolt that has, to quote Markos, crashed the gate, and it represents a real victory for the progressive movement and voices who said Hell No.
Those who are surprised by this turn of events just haven’t been paying attention to what’s going on out in the country – they haven’t been paying attention to, for instance, the social survey research showing rising rage against both our corrupt government and Corporate America. During my 3 month book tour, I faced a wave of skepticism from the Establishment media about my thesis. This earthquake on the floor of the U.S. House should end that skepticism once and for all.
I can imagine some populist revolt from the right, but … from Todd Akin? Nah.
Whatever Republican motivation was, though, the bottom line is that the bailout vote failed. Look, I don’t want to be gobbled up by a monster in uncharted waters, but I’m inclined to listen to progressives who are advocating alternative solutions.
Sirota abhors the bailout as it was written, provides five reasons to oppose it, and offers some alternatives. Here are three of them:
In the Washington Post last week, Galbraith outlined a multi-pronged plan shoring up and expanding the FDIC, creating a Home Owners Loan Corporation, resurrecting Nixon’s federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.
The Service Employees International Union has drafted a plan based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their bad mortgages.
Sirota also suggests giving the money to struggling homeowners to pay off part of their mortgage.
Paul Krugman, who says he might have voted for the bailout in the name of temporary relief, advises–now that it’s failed–that we temporarily nationalize the banks:
Brad DeLong says that Swedish-style temporary nationalization is the right answer to a financial crisis; he’s right. I haven’t been clear enough about this, it seems, but it’s where my basic diagnosis leads: the problem is insufficient capital, you want to inject capital, but you don’t want it to be a windfall to existing stockholders – hence, take over and recapitalize the failing firms. By the way, that’s what we did with AIG 10
Any time you have Emanuel Cleaver and Todd Akin making common cause against the House leadership, you and Alice are in Wonderland. The question is whether Clay, Cleaver and Akin can unite around one of these alternatives. Or, failing that, whether enough of the Dems can be united around one them to pass it.