Pelosi screwed up royally. She is the Democratic Tom DeLay. Newt Gingrich was an ideologue, but Tom DeLay was simply a partisan, most keenly interested in maximizing his party’s political power. Pelosi cut a deal in which, as far as I can tell, every single Republican in a safe seat had to vote yes so that the Democrats could maximize their no votes. Given that the Republican caucus is pretty much in open revolt, this was beyond moronic. She then spent a week openly and repeatedly blaming the Republicans and the Bush administration for the current crisis. The way she set things up, it was “Heads I win, tails you lose”: vote for the deal and I’ll paint you as heartless reactionaries bailing out your fat cat friends. If you’re going to do that, you’d better make sure you have some goddamn margin for error in your own party. She didn’t. Then she got up and delivered yet another speech blaming the Republicans for the bailout deal she was about to pass.
Great take on this. Pelosi’s battle cry was ridiculous. She will be remembered as one of the worst speakers of the house. She couldn’t pry ten more votes? Did she even try?
Barney Frank, Barack Obama, and other Democrats have suggested that this problem resulted from a philosophy of deregulation. Is that explanation fair, or what’s really at the heart of this?
A basic explanation of how we are where we are is the devalued state of the real estate market. We’ve had monetary policies that have allowed free credit to flow. We’ve had oversight regulators that have not done an adequate job in certain instances. But let’s see where we first started going off course. That was during the Carter administration, when Congress began this process of pushing lending institutions into extending credit to uncreditworthy borrowers.
This is the Community Reinvestment Act that you’re talking about?
Yes. And in fact, as the regulations developed, banks would be punished if they couldn’t demonstrate a certain number of loans on their books that were extended to those who were not worthy of that type of credit. It started a very bad trend. And then we had Fannie and Freddie, who continued this cycle and really ramped up that kind of lending in an exponential way with a very ineffective oversight regime, a fault of both Congress and the administration.
If there were one or two changes you could make to get more Republicans on board, what would you do in order to have the bill pass in an improved version?
First of all, an insurance program that would apply to certain classes of assets would help reduce the amount of money flowing out of the Treasury. Also, I think if you put in language about the mark-to-market rule — repealing that instead of just asking for a study about it. There’s not unanimity, but there’s a growing consensus about the impact of the implementation of that rule by the regulators as well as the accounting firms.
I also think that folks are very concerned about the short-selling situation at the FEC. We absolutely have to reinstate the uptick rule, and from what I’m told there’s runaway naked short-selling (the short-selling of stocks one does not actually possess) that tends to imperil the market. We need much stricter enforcement on the naked short-selling.
we yelled loud enough to stop a bad bill, but at what cost?
Oh, 1.1 trillion dollars. I take a panglossian view of most everything in the news, but for the first time in my adult life, I feel as though I am living under the Carter Administration. Unfortunately, it will be a little more than four years from now (at least) before Bobby Jindal can pronounce, on his inauguration day that “It’s morning in America again.”
- If you listen to Obama speak on difficult issues while they are developing (Georgia, Financial Bailout) notice how his remarks are similar to what a reporter would be saying, with a few very broad “we should ….” or “during these times it is important to ….” – just reporting and very broad insight. - AP
Obama’s prepared remarks, from earlier today in Colorado.
And today, Democrats and Republicans in Washington have agreed on an emergency rescue plan that is our best and only way to prevent an economic catastrophe.
Not so much.
UPDATE:
After seeing the bill fail, Obama scapped the originial script and talked of Rocky Mountain-like turbulence
And today, Democrats and Republicans in Washington have a responsibility to make sure that an emergency rescue package is put forward that can at least stop the immediate problems we have so we can begin to plan for the future. As I said, this is a hard thing to do. And right now Democratic and Republican leaders have agreed but members have not yet agreed.
There are going to be some bumps and trials and tribulations and ups and down before we get this rescue package done. It is important for the American public and for the markets to say calm because things are never smooth in congress and to understand that it will get done. That we are going to make sure an emergency package is put together because it is required for us to stabilize the markets and to make sure that when a small business-person wakes up tomorrow morning, he will be able to make payroll.
We are not going to lose jobs at an even faster clip than we are doing right now. I am confident we are going to get there but it’s going to be sort of rocky. It’s sort of like flying into Denver. You know you’re going to land but it’s not always fun going over those mountains.
Shortly after the bailout vote, a statement from the campaign of Sen. John McCain (R-Ariz.) blamed the loss on “the Democratic leadership: Senators [Barack] Obama and [Harry] Reid, Speaker [Nancy] Pelosi and others.
“Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families,” said the statement, released in the name of senior policy adviser Douglas Holtz-Eakin.
[...]
“From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Obama and Reid, Speaker Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families.
“Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill.
“Just before the vote, when the outcome was still in doubt, Speaker Pelosi gave a strongly worded partisan speech and poisoned the outcome.
“This bill failed because Barack Obama and the Democrats put politics ahead of country.” — McCain-Palin senior policy adviser Doug Holtz-Eakin
Before McCain Came To Washington, Senate Democrats Called On McCain For Leadership In Economic Crisis
From what I understand, House Republicans including our man crush Eric Cantor are indicating that the partisan tone of Nancy Pelosi, including shutting out Hosue Republicans from negotiations led to the failout. The above video is apparently the straw that broke the pig’s back.
Former House Speaker Newt Gingrich reversed course on Monday, issuing a statement saying that if he were still in office he would “reluctantly and sadly” support the $700 billion Wall Street bailout bill.
Gingrich, who led the charge against the bailout last week, explained his change in position by saying that the House Republicans, “reinforced by John McCain,” have improved the bill “significantly” so it is “less bad” than the original proposal offered by Treasury Secretary Henry Paulson.
While saying that he sympathizes with any member of Congress who votes “no,” Gingrich says in his statement that the crisis of the credit markets is real and could have “horrendous” consequences.
While Gingrich has come around on the bailout bill, he still wants Paulson to resign for initially requesting the $700 billion with no oversight.
Gingrich maintains that as long as Paulson is in charge, “it is impossible to get a creative or significantly better solution.”
“Having a former chairman of Goldman Sachs preside over disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of – if not the actual existence of – corruption,” says Gingrich in his statement. “The Bush Administration has now provided three case studies in arrogance, isolation, and destructiveness: Michael Brown during Hurricane Katrina, Ambassador Jerry Bremer in Baghdad, and Secretary Paulson at Treasury.”
“It is a tragic and very expensive legacy,” he continued. “No conservative and no Republican should doubt how much it has hurt our cause and our party.”
In a closed-door session with House Republicans, Minority Leader John A. Boehner just called the financial rescue deal a “crap sandwich” – then said he’ll vote for it when it comes to the floor Monday.
House Republicans are the key to the bill’s passage – Speaker Nancy Pelosi said earlier today that it’s a “bipartisan” bill and will need “bipartisanship” to pass – and it now appears that a substantial number of them will put cast their votes in favor of it.
According to a source in the room, the plan has so far won endorsements from Minority Whip Roy Blunt, who negotiated it on behalf of the House Republicans; Eric Cantor, the chief deputy whip; and Paul Ryan, a hard-core conservative from Wisconsin who may hold more sway with conservatives on this issue than any other member of the House.
But like Boehner, Ryan wasn’t exactly happy about how things have unfolded. Referring to the situation facing the country – and not the bill itself – Ryan said, “This sucks.”
I am not sure if Boehner is referencing the classic South Park episode regarding the 2004 election where Stan was forced to choose between a “Turd Sandwich” or a “GIant Douche.” Personally, I supported the turd sandwich. It’s a bad position that the House conservatives are in, but at least they put up a fight though the fight seemingly was for naught.
It’s good to see Eric Cantor involved in this to such a high degree. He is the future of the Republican party as far as the House goes and he needs to make himself a national name. The guy could be the next Newt.
