Tag Archives: bailout legislation

plus ca change

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While the spinners parse President Obama’s speech to the UN General Assembly according to the foreign policy clichés of the moment, it’s at least interesting to wonder if any US president can effect any change in foreign affairs that is more than symbolic, or alter the ideologies of the nation’s military and intelligence agencies or change their behavior. I had planned to write something about this, but Gary Wills has written something more authoritative than anything I could have said, in the New York Review of Books.

“A president is greatly pressured to keep all the empire’s secrets,” Wills writes.

He feels he must avoid embarrassing the hordes of agents, military personnel, and diplomatic instruments whose loyalty he must command. Keeping up morale in this vast, shady enterprise is something impressed on him by all manner of commitments. He becomes the prisoner of his own power. As President Truman could not not use the bomb, a modern president cannot not use the huge powers at his disposal. It has all been given him as the legacy of Bomb Power, the thing that makes him not only Commander in Chief but Leader of the Free World. He is a self-entangling giant.

This perhaps explains why President Obama’s campaign promises to dismantle criminal enterprises within the national defense establishment are likely to remain unfulfilled. Read the entire Wills essay here.

I’m now wondering if the new direction that those of us who ardently supported the President when he ran for office hoped for was ever more than a pipe dream that ended when it was found that AIG and certain banking institutions were “too big to fail.” It now appears that the banking industry with its rightist ideology will be too big for government to reign in, though that really means that there is so much interdependence between the interests and power bases of Wall Street bankers and those of key legislators that serious regulation of capitalist excess is impossible. And it now appears that certain cartels, the medical-industrial complex and the national defense cartel, with their rightist ideologies, have become so powerful that they cannot be successfully opposed.

The Republican party may be in disarray, but the ideological right is not only alive and well but also very much in control.

“Oh c’mon, do we have to?”

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Apparently Spunky Palin is not pleased with Maverick McCain’s decision to move campaign resources out of Michigan and has expressed her displeasure in a quick email. Spunky is also annoyed with Katie Couric, but Mav soldiers on. He is mostly annoyed with Barack Obama, it seems.

Meanwhile the House of Representatives have passed the Wall Street Bailout bill aka The Rescue. Here are a couple of background pieces on the financial crisis — best I’ve seen.

“Why the Bailout Sells America Short”

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Nomi Prins, a former Wall Streeter, has a good critique at Mother Jones of the bailout proposal as it was voted down yesterday. After summarizing the reasons why, in her view, the amended bill was not a good bill, Prins concludes:

The current financial crisis—and the debate over the bailout package—provided an opportunity to shine a light under the hood of the industry, remove its engine, and reinstall a more efficient one. It’s not likely that the 130 or so House Republicans who bucked their party leaders to vote against the bill are looking for the re-regulation of Big Finance. The 90 House Democrats who also voted against the bailout are probably more sympathetic to that approach. But for the moment—despite all the harrumphing from pundits and commentators about the bailout’s crash in the House—the opportunity to get it right (or, at least, better) remains.

But Prins has argued earlier that a better bill would have to include reregulation of the financial industry. So I’m not sure where her optimism about getting it “right (or, at least, better)” comes from. Read the whole critique here.

after the vote

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Here are some thoughts about the defeat of the Wall Street bailout.

  • I’m wondering what’s next. A large group of economists has written an open letter criticizing the bailout plan and saying it ought not to be enacted without serious debate and modification; though none of these, apparently, believes there is no crisis in the country. On its face, even as amended, the proposal seems to be a typical Bush power grab that the administration is trying to stampede the congress into approving without a fair debate.
  • I’m thinking the proposal is bad on the merits. The oversight provision puts in charge the same people who created the crisis in the first place. The limits on executive compensation leave in place all agreements presently in existence. The limits on how much of the $700 billion can be spent allow the President and the Secretary of the Treasury far too much discretion. And the proposal contains no provision to help struggling middle and working class people beyond suggesting a sort of noblesse oblige on the part of the Treasury Secretary.
  • Perhaps the proposal’s defeat might be an opportunity for Congress to draft a better proposal, though I can’t imagine this coming about in the present political climate, or with this President. Perhaps Congress might make the cosmetic limits and restraints on executive authority into real limits — the President can’t veto this thing, after all — but I don’t see that happening.
  • I’m thinking the congressional negotiators gave the President too much, but maybe what they settled for was the best they could do, and maybe the bailout needs to be passed given the gravity of the present crisis. The problem all along has been getting enough Republican votes to pass it as a bipartisan measure, though that seems very unlikely now.

As Paul Krugman sums up the impasse:

. . . [W]hat we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.