September 29, 2008

I'm bailing out too

I'm gonna shoehorn in one last post before the holidays. I'm on deadline so you're not gonna get links, or my trademark coherence, or even a tangentially related picture of a scantily clad female.

I haven't posted much about the bailout because despite my faithful downloading of NPR's Planet Money podcast (spun off of that This American Life show about the mortgage crisis), I still only barely understand the whole thing. I go back and forth on whether the bailout bill was the least bad option or just a bad option. It does seem to me that even if we're facing an imminent crisis, there are other plans out there (I've seen them from Greider, Galbraith, Sirota etc) that should probably have been explored first.

But let me stick to the politics of this, which I have somewhat better grasp on. It seems to me that if the ineffectual Democratic Congress sticks to its usual game plan, the House Republicans will come out of this stronger. They're the ones who torpedoed the bill, so they're the ones who need to be placated in order to get it passed. As a result, we'll end up with something even worse than what got shot down today.

Noah Millman (look, a link!) has what's clearly a better idea: Since the Democrats met the Republicans half way and have nothing to show for it, they should introduce their own bill, based entirely on Democratic principles and not merely tweaking Paulson's plan. They can "pass it on a party-line vote, and dare the Administration to veto."

Meanwhile, Obama should have hit harder (and still can) on a valuable theme: Yes, this bailout is terribly unfair and shouldn't be necessary. But if it needs to be done to save us all an even worse fate, the important thing is to use this opportunity fix the entire system from the ground up so that we don't need another bailout in six more months. I'm all for stuff like caps on CEO compensation, but that's basically feel-good trimming. The Democrats should push harder for substantive reform while they can.

Update: Krugman answers my basic questions. In his view, immediate action is necessary and the Swedish model sorry, the Swedish model is the best approach but "politically untenable." Did someone mention ineffectual Democrats?

Related: Powerline 2005:

It must be depressing to be Paul Krugman. No matter how well the economy performs, Krugman's bitter vendetta against the Bush administration requires him to hunt for the black lining in a sky full of silvery clouds. With the economy now booming, what can Krugman possibly have to complain about? In today's column, titled That Hissing Sound, Krugman says there is a housing bubble, and it's about to burst.

Posted by Daniel Radosh


I agree with you on the Democrats pushing back the Republican's. It's time they take the stick since they are the majority. But knowing Mr. Bush he would veto their bill. He always has to have the last word being a lame duck president.

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