Monday, September 29, 2008

The Financial Bailout/Investment Plan (Post 2 of 3): The Miserable Politics

TW: I think the Republicans initially saw the "bailout" as an opportunity for political gain before apparently agreeing to do the right thing (such as it is).

1) McCain tried his stunt that backfired:
From Craig "the Curmudgeon" Crawford:
"As the dust begins to settle...let's look back at John McCain's weird theatrics in the days leading up to last week's debate. What was his point?
Given how the Republican presidential nominee said nothing during the debate about his threats to skip it, we can rule out any plans on his part to somehow use his brinkmanship against Democratic nominee Barack Obama during their faceoff on Friday night.
Assuming McCain had a strategy for nearly de-railing the debate -- and maybe there wasn't one -- perhaps he was just messing with Obama's head, trying to disrupt the opponent's plans for three days of preparation...If the objective was to rattle Obama, it did not work. Although Obama is a methodical guy who does not relish chaos -- a trait that the Republicans might have been hoping to exploit -- he seemed unflappable on stage.
In retrospect, McCain's pre-debate drama was just plain silly and a pathetically hysterical attempt to dominate the campaign narrative for a couple of news cycles."

2) TW: Dick Morris (Fox political consultant/toe sucker) captures the true irresponsible cynicism of some Republican efforts in a post entitled "McCain's Trump Card". While pushing opposition as a political ploy, he baldly acknowledges the lack of substantive value of the Republican plan only the value of appearing to oppose the proposed Paulson plan:

"During Friday's debate, John McCain assiduously and inexplicably avoided using the issue that might have won him the debate and the presidency: opposition to a taxpayer-funded bailout of the financial crisis...In an unusual act of political foresight and skill, the normally dead-headed House Republican leadership has crafted a platform that can carry the party to victory in November. All that remains is for the Party's candidate - and perhaps even its president and Treasury Secretary - to get on board. McCain can recover at the negotiating table the economy issue he lost in Friday's debate. He needs to have the courage of his convictions and insist on a bailout without requiring taxpayer-funded purchase of defunct mortgages from failing institutions.

The difference in the bailout plans is, of course, largely cosmetic. Dead paper is dead paper whether it is on the books of the government, purchased from banks, or on the books of the banks, insured by the government...But it makes all the difference in the world politically...Loans are politically viable. Purchase of bad debt with tax money is not.

If McCain stands firm, the Democrats will either have to pass the bailout package on their own, without Republican votes, and rely on Bush's signature on the bill to provide a fig leaf of bipartisanship - or they will have to cave in and pass the Republican package. Either way, McCain comes out ahead. If he gets his way, he gets credit for the bailout. If he doesn't, he can spend the campaign attacking Obama and the Democrats for spending $700 billion of taxpayer money.If the Democrats don't adopt either course and play a game of chicken with the Republicans, their Congressional status as the majority party dooms them to taking the blame for any ensuing collapse."

3) TW: Some Republicans have seen and perhaps still see the bailout as a wedge issue for 2012. They see parallels with the 2002 Iraq War vote. I believe the analogy to be false. Yet I am sure some ambitious Republicans will not. Note the ideology check at the little right wing nut luncheons they apparently have weekly in DC.

From Pethokoukis at USNWR:
"Here is, I think, a pretty safe prediction: The Republican presidential nominee in the summer of 2012 will have come out against the Paulson-Bernanke bailout plan in the fall of 2008...And don't be surprised if there are insurgent Republicans in 2010 who run against incumbent GOPer who voted for the bailout...there is a conservative meeting every Wednesday here in DC where aspiring conservative politicians show up to make their case to the activists. Each one is asked his or her view on "babies (meaning abortion), guns, and taxes." I think "bailout" might get added to that mix."
http://www.usnews.com/blogs/capital-commerce/2008/9/26/how-paulson-just-picked-the-2012-gop-nominee.html

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