By Carter Bundy
Most of us who follow politics, lobby, campaign or even just talk back to political TV ads would love to have a vote in Congress or in
There seem to be very few economists or financial analysts of any political persuasion who don’t think some kind of temporary rescue is necessary to avoid crippling our credit markets. You almost never see this kind of unanimity among economists and policy analysts, much less among leading political figures in both major parties.
On the other hand, the American public is, rightly, feeling that Wall Street has already gotten the benefit of the last eight years of economic policy, and they’ve been promised by conservatives for 30 years that what’s good for big business and Wall Street is good for them. So why do they now get put on the hook for tens of thousands of dollars per household?
In other words, it’s a political loser. But it’s also something that probably has to be done in some way. To their credit, each presidential candidate has prepared for the blowback and stepped up to endorse doing something substantial. It works because they both jumped off that political bridge together. If one were opposed, the other would have to be, too.
Privatize profits, socialize risk
With the Republicans controlling the executive branch for the last eight years and for 20 of the last 28 years, the House for 12 of the last 14, and the Senate for almost 11 of the last 14, it’s hard to put it all on Jimmy Carter, as Rush and Sean desperately try to do every day.
It’s even harder to put it on Obama, when the vast majority of the bad loans were made prior to his even being elected to the U.S. Senate (Fannie’s and Freddie’s bad loans went up tenfold during W’s first few years).
On the other hand, it’s pretty easy to pin it on an economic philosophy and actual policies that essentially removed any government oversight or regulations of financial markets.
It’s not just a philosophy: It’s a series of deregulations, lack of enforcement and votes by hard-core laissez-faire guys like McCain to “get government off the back of Wall Street.” Except, of course, when Wall Street needs help. Privatize profits, socialize risk. The great GOP way.
Bad medicine
But no matter how we got here, almost everyone agrees that without some government help, credit is going to dry up in
Too much debt is bad, but almost no one would ever own a home or car, and very few businesses would exist, if they weren’t able to take on some debt initially. What percentage of people buy a car or home with one big check? What percentage of business start-ups are 100 percent funded with cash? Credit, in moderation, is a necessary fuel for the American economy.
So the question is, do you let the cancer of evaporating credit spread throughout the business and consumer world, or do you administer some really bad medicine?
The bailout looks and feels a lot like financial chemo. Anyone who has had the misfortune of knowing people suffering with cancer knows that the cure is pretty damn awful, too, and there’s not even a guarantee it will work.
Congress is being asked to administer a heavy dose of painful medicine to arrest the cancer of dying credit. It’s easier to be the person who grabs the hand of the patient and says “I’m not going to let them hurt you anymore” than it is to say “this is going to hurt a lot, but it’ll be worse if we don’t.”
I personally don’t know that it will be worse without a bailout. It’s very tempting to go with fellow columnist’s Jim Scarantino’s well-written, powerful argument that everyone just needs to suck it up. But I do know that most every serious economist, regardless of political viewpoint, thinks we’re heading for something far worse than “sucking it up” if government doesn’t address the credit crisis.
This is one of those votes when I’m happy not to be an elected official. There’s hell to pay with voters if you vote for this, and there’s not even a guarantee it will work in any event. But it might be the best thing to do. Maybe. Ugh.
Debating patriotism
The GOP has a surreal talent for taking any Dem questioning of limitless war and painting Dems as unpatriotic. John McCain shamefully tried to do that during the first debate, when he accused Barack Obama of not supporting the troops because he voted against funding without a timeline.
Obama quickly called out McCain’s faux-patriotism drivel by pointing out that McCain also voted against funding the troops, but in the reverse situation (when the bill had a timeline).
Kerry wasn’t able to fend off these vicious GOP attacks (remember “I voted for it before I voted against it?”) but Obama can and does.
One of my absolute favorite things about Barack, and something that will be an excellent trait if he’s president, is that he calmly calls out phony claims and explains the underlying facts succinctly. Obama looks — and is — presidential when he does it, and McCain looks small, petty and political for having attempted the deceitful smear.
Bundy is the political and legislative director for AFSCME in