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Wednesday, September 24, 2008

Bailout developments reax 


The president's speech was useful and important. It was scary, on the one hand, but free of partisanship. Like him or not, it all needed to be said. I especially liked the part about him not letting the defaulting mortgagors off the hook for their share of the blame. People bought houses they could not afford. My mother -- and indeed my grandmother -- told me never to do that in very clear terms. Deadbeat is as deadbeat does, even if the mortgagee was an idiot.

[MORE: Text here. This is the part I liked, and which only a second-term president could say:

Easy credit — combined with the faulty assumption that home values would continue to rise — led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell. And this created a problem: Borrowers with adjustable rate mortgages who had been planning to sell or refinance their homes at a higher price were stuck with homes worth less than expected — along with mortgage payments they could not afford. As a result, many mortgage holders began to default.

Point is, both lenders and borrowers screwed up, but there was no blaming the lenders for the borrowers screwing up.]

On McCain's "suspension" gambit, what she said.

Posturing though it may be, I like it that Barack Obama and John McCain have it within themselves to issue a joint statement. There have been plenty of candidates in the last two decades who would not have risen even that small distance.

Then again, maybe McCain killed a done deal.

27 Comments:

By Blogger Anthony, at Wed Sep 24, 09:44:00 PM:

I don't agree with McArdle that this is dumb. Far from it, I think it's almost a win-win for McCain.  

By Blogger Miss Ladybug, at Wed Sep 24, 10:26:00 PM:

And how much crap did Bush get for staying in Crawford during some crisis (can't remember which one: Katrina??)? Yeah, a president should be able to multitask, but sometimes the location of that multitasking makes a difference.

And Obama? "Call me if you need me"? That's not leadership...  

By Blogger D.E. Cloutier, at Wed Sep 24, 10:32:00 PM:

If the Republicans lose, I won't blame the Democrats. I'll blame people like George Will, David Brooks, Charles Krauthammer, and Tigerhawk who sniped at their own side during the crucial period of the campaign.

When crybaby Republicans aren't sniping at McCain, they're running around, wringing their hands, moaning, "We're gonna lose. We're gonna lose."

The Democrats tried to demoralize Republicans. In some cases they seem to have succeeded.

People forget: Carter was a Southern, "middle-of-the-road" Democrat in 1976. Many folks here are too young to remember a truly left-wing U.S. government with Ramsey Clark as the U.S. Attorney General. You aren't going to like it.

You have two options: Win or suffer.  

By Blogger clint, at Wed Sep 24, 10:38:00 PM:

Sure looked like Congressional backing for the bill was falling apart, just yesterday...

I think Megan's "It's Dumb." comment misses the point.

McCain isn't needed for his financial acumen.

McCain is needed for his longstanding experience at brokering Senate compromises on issues that have both sides screaming for nuclear options.

And this is a very good time to remind the American public of McCain's longstanding expertise in this area. You know, bipartisanship -- the very "Change" Obama likes to talk about.  

By Blogger dfp21, at Wed Sep 24, 10:55:00 PM:

If you're seriously interested in solving a complex problem (many people involved) you must be taken seriously by the other people involved. You must stop talking behind peoples' backs. McCain is a serious person. Not a genius, but serious. Obama is not a serious person, and not a genius. "Look at me talk. I talk slow."  

By Blogger TigerHawk, at Wed Sep 24, 11:11:00 PM:

You're a hard man, DEC, although I suppose I should be flattered to be lumped with those other big names.

Look, here's the question that matters from the perspective of solving the problem: Did McCain's gambit inject more partisan maneuvering -- as opposed to productive problem-solving -- into the system, or did it reduce the unproductive partisanship. I think it is a bit hard to know that right now, and am open to either answer being correct. Let's see what tomorrow brings.  

By Anonymous Anonymous, at Wed Sep 24, 11:38:00 PM:

I especially blame Tigerhawk because of his past associations with Jim Leach.... :)

Seriously, we would all like to see a solid Republican victory (well, most of us, anyways). If only there was a solid Republican to vote for.

Okay, really seriously now, there are real consequences for an Obama Victory. He's supposed to be a socialist and everything, I mean, he might try to take over all the banks and Wall Street....

Okay, now I'm really going to be serious.
I frankly have to agree with dfp above 100%. McCain is not a genius, but he is a serious person, in that he will take the office and the responsibilities seriously. He's not afraid to work out compromises with Democrats, as much as that infuriates a lot of Republicans (like me, frequently).

Barack Obama is a smart man, but really, what has he ever accomplished? What one achievement in his life can he point to and say, "I did that, that shows what kind of man and leader and President I will be."

Making friends with Tony Rezko and Bill Ayers is not exactly resume building material, is it?

He is supposed to be Chairman of the Senate Banking Committee. What kind of hearings has he held in the last year? Isn't there some sort of banking crises going on? Oh yeah, he's running for higher office.
Uh-huh.

I may be a little discouraged at times, but it is mainly the tide of furious ignorance and bias by the so-called Fourth Estate of the Republic that seems intent on buffing Obama's shoes and blowing him kisses whenever it can.

-David  

By Anonymous Anonymous, at Wed Sep 24, 11:43:00 PM:

No, that's Dodd that's chairman of the Banking Committee.
Obama is too junior to be chairman of anything in the Senate.

Never mind.

-David  

By Blogger Escort81, at Thu Sep 25, 12:50:00 AM:

DEC is a hard man -- a cold realist -- although I don't think TH can swing the election much either way! Check your dates, though, DEC, Ramsey Clark was AG under LBJ in 1967-68. Clark is a whacko. Griffin Bell and Benjamin Civiletti served as Carter's AGs, and both are pretty mainstream in terms of their politics.

McCain is not going to undercut the Administration's plan. He spoke to Romney at length, and I would really doubt that Romney would question the judgment of Bernanke and Paulson. The issues of scope, size, and timing are the big ones and it makes sense to approve as big a facility as possible to give comfort to the entire credit market right now. The Fed and Treasury have the best imperfect information on the scope of the problem and have tried to share it with House and Senate leadership. Executive comp and warrants are political point scoring exercises. It's like trying to in for an emergency landing on a commercial airliner and some random attendant is worried that the empty drink containers haven't been collected. Let's keep out eye on the ball here, folks.  

By Blogger Miss Ladybug, at Thu Sep 25, 12:51:00 AM:

Obama is the chair of some subcommittee, but he hasn't held any meetings. Can you really be a chairman if you don't actually do the job?  

By Blogger Escort81, at Thu Sep 25, 01:16:00 AM:

See Andy Kessler's piece in the WSJ. He really likes the profit potential for the government in Paulson's plan.

Miss Ladybug - Plenty of chairs don't do any work. That's why they're put there -- they can't do much harm, and it's a nice title.  

By Blogger Miss Ladybug, at Thu Sep 25, 01:34:00 AM:

I guess that was more of a rhetorical question. Something that looks nice on a resume, but it's all fluff...  

By Anonymous Anonymous, at Thu Sep 25, 03:44:00 AM:

I think this is probably the only way McCain can support a bailout without endorsing it in its current form. If he simply indicates his opposition to the bill, the thing could very well die, since the democrats are afraid to back it without McCain on board, and republicans are jittery as well.

Someone has to allay conservative and liberal concerns about this thing being a giant giveaway, and McCain's stamp of approval is probably needed for that. But if he really wants to make sure that there is some oversight attached to this thing, he will probably need to put it in himself.

One thing he has done is immediately change the game in such a way that there is enormous pressure on him to get a reasonable compromise bill passed quickly. Good politics or not, I have to respect him for that.  

By Blogger TigerHawk, at Thu Sep 25, 06:35:00 AM:

The one-degree-of-separation stories that I have heard about Hank Paulson is that he is a very tough negotiator and a bare knuckles political in-fighter. None of the polish and probably not all of the brains of Robert Rubin, but very capable of making this deal profitable for the government and motivated by pride to do so. That's the guess from my side, anyway.  

By Blogger D.E. Cloutier, at Thu Sep 25, 06:46:00 AM:

This comment has been removed by the author.  

By Blogger D.E. Cloutier, at Thu Sep 25, 06:50:00 AM:

Escort91: "Check your dates, though, DEC, Ramsey Clark was AG under LBJ in 1967-68."

I know, Escort81. LBJ was the last time we had a "truly left-wing U.S. government" -- the so-called "Great Society." As you yourself just said, Bell was "pretty mainstream." Carter was a middle-of-the-road Democrat compared to many other people in the Democratic Party.

It took 16 years to solve the problems from LBJ. Nixon + Ford worked on them for eight years. Carter was ineffective. Reagan had to work on them during his first four years in office.  

By Anonymous Anonymous, at Thu Sep 25, 09:39:00 AM:

Since the bail out is being touted as saving the economy, what happens if the bail out package is passed and the financial markets melt down anyway. What then?  

By Blogger D.E. Cloutier, at Thu Sep 25, 10:00:00 AM:

"What then?"

If your business interests are solely in the U.S., you stand in line at a soup kitchen.

If your business interests are worldwide, you focus on growing markets. Somebody, somewhere, always has money.

I do well during economic downturns because I am a counterpuncher in business. The corporate giants invariably cut back too far during recessions. I move in.

My advice: Think globally.  

By Blogger D.E. Cloutier, at Thu Sep 25, 10:09:00 AM:

P.S. Definition of counterpunch for readers who don't follow boxing: "A counter-attack begun immediately after an opponent throws a punch, exploiting the opening in the opponent's position."  

By Blogger Escort81, at Thu Sep 25, 11:29:00 AM:

Apologies, DEC, I was thrown by the topic sentence referring to Carter in the paragraph in your first post that named Clark.

I agree with you to a certain degree -- certainly the term "another failed Great Society program" has become a cliche -- so in one sense there were many social engineering programs brought forth under LBJ, but the true left-wingers (and beyond LW) who marched against LBJ because of Vietnam would probably say that he was no left winger.

Anyway, think what would have happened had Henry Wallace (VP for FDR from 1940-44) ascended to the presidency in 1945 instead of Truman. That's left wing.  

By Blogger Anthony, at Thu Sep 25, 11:33:00 AM:

"...think what would have happened had Henry Wallace (VP for FDR from 1940-44) ascended to the presidency in 1945 instead of Truman."

Please! You'll scare the children! (And me...)  

By Blogger Dawnfire82, at Thu Sep 25, 11:41:00 AM:

Since E81 mentioned Henry Wallace ascending to the Presidency, here's a nifty bit of counterintelligence lore about him.

"Henry Wallace, vice-president during Roosevelt's third term of office (1941-1945), said later that if the ailing Roosevelt had died during that period and he had become President, it had been his intention to make Duggan his Secretary of State and White his Secretary of the Treasury." - p.109, The Sword and the Shield: The Mitrokhin Archive, Christopher Andrew

Laurence Duggan, code-name FRANK, and Harry Dexter White, code-name JURIST, were both Soviet NKVD agents.

Continued: "The fact that Roosevelt survived three months into an unprecedented fourth term in the White House, and replaced Wallace with Harry Truman as vice-president in January, 1945, deprived Soviet intelligence of what would have been its most spectacular success in penetrating a major Western government. The NKVD succeeded none the less in penetrating all the most sensitive sections of the Roosevelt administration."  

By Blogger D.E. Cloutier, at Thu Sep 25, 11:52:00 AM:

"he was no left winger"

LBJ's domestic "solutions" were left wing, Escort81. (Model Cities program, antipovery efforts, etc.) They did little more than create jobs for "community organizers." I covered those programs as a journalist at the end of the "Great Society." (I got out of the U.S. Army in mid '68, and immediately returned to journalism. I left the newspaper business in mid 1972.)  

By Anonymous Anonymous, at Thu Sep 25, 12:46:00 PM:

I think that LBJ was not a 'progressive' in the sense that it is frequently used.

He did believe in the power of the government to change things and interfer with people's lives, 'for the better'. And that could be a difference without a distinction.

Who can forget (well, most everybody has): Model Cities, Urban renewal, founding of HUD, Interstate highway program, which all combined to hollow out many a city in the US. A clever and resourceful researcher/writer could probably put together a pretty coherent case that those policies from LBJ in the '60's have led to the present mess we are in.
A great deal of housing in many cities was destroyed to make room for interstates and urban renewal/model cities. That, combined with busing, led to 'white flight', and the downward economic spiral of many cities (tax base destroyed-mission accomplished!), and the inevitable demand for "more affordable housing". That battle cry is still with us, and the vehicles of Fannie Mae and Freddie Mac were just the organizations to get that done.

-David  

By Blogger Escort81, at Thu Sep 25, 01:16:00 PM:

DEC, I agree with you regarding LBJ's domestic programs (you obviously are well informed about those programs having covered them); my point was that the anti-war left would not have considered him one of their own, either culturally or politically. I guess because I put I high priority on national security matters, I tend to make right/left distinctions on foreign affairs.

(We are all products of our environment -- the Soviet-backed government in Budapest nationalized all of my mother's family's assets in the late 1940s, so I never viewed the Soviets with much admiration.)

LBJ just didn't have the tools at hand to bring about quick political victory in Vietnam and save his presidency. Heck, he probably heard you were leaving the Army and thought, "if I've lost DEC, I've lost Vietnam!"

Just out of curiosity, how would rate the domestic policies (creating EPA, expansion of HEW) of the Nixon administration on the left/right scale?  

By Blogger D.E. Cloutier, at Thu Sep 25, 02:02:00 PM:

Escort81: "my point was that the anti-war left would not have considered him one of their own."

No argument from me on that point. They bad-mouthed LBJ all the time. At the same time, radical activists often took jobs at the local agencies of LBJ's federally funded programs. (I'm talking about agencies in your neck of the woods if you still live in the Philadelphia area.)

Re: Your question

I would classify Nixon as left of center on domestic issues. Interestingly, I had several professional African-American friends who absolutely adored Nixon at the time. Don't ask me to explain it.  

By Blogger D.E. Cloutier, at Thu Sep 25, 02:38:00 PM:

P.S. Keep in mind, Escort81, I'm a Western-style libertarian Republican. I was an early supporter of Reagan. I wasn't a Rockefeller Republican.  

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