Things on the economic front still look very bad out there, what with a stock market in free fall, Iceland on the verge of bankruptcy, and, oh, did you hear that we’re pumping another $38 billion into AIG? It’s all ugly, and it’s probably going to get worse and stay bad for some time.
But there’s a few little tiny bits of good news that Yves Smith rescued from the rubble yesterday. [Read more]
The first House vote on the bailout just failed, 208-225. Republican congressmen voted against it by a two-to-one margin. This would seem to be a problem, not only for the rest of us, who will suffer for it, but also for Republican politicians.
So what do you do if you’re a Republican congressman? Do you accept some responsibility for the fiasco? Of course not. You, the party of macho moose hunters and multi-day snowmachine racers, blame the tone of Nancy Pelosi’s pre-vote speech:
Some members of the House GOP are blaming Speaker Pelosi’s hard-edged partisan speech for the loss.
“Progress had been marked by magnaminity with Frank, and Hoyer … Hers (speech) had a partisan tone,” said Rep. Adam Putnam.
Suddenly the enduring popularity of the Republican party makes complete sense to me: being a conservative means never having to take responsibility for anything.
P.S. I’d sure love to be there for the Boehner-McCain phone call that is probably happening, oh, right about now.
++++++++
Second Quick Update (#1 below): McCain’s campaign is giving it a whirl as well, blaming Pelosi’s tone and (surprise!) Obama for the House Republicans’ vote:
Where are we now?
+ Reports off the Hill say that a deal is done. $700B total, greater Congressional oversight, restrictions on executive pay, no bankruptcy law changes, no money for affordable housing, the (useless) House GOP insurance proposal stays in but only as an option, and, most importantly, the government gets equity warrants in case the toxic assets really are as bad as everyone fears. Obama and McCain are both on board.
+ Paul Krugman and Brad DeLong are now openly favoring Swedish-style nationalization instead of the Paulson plan–which, for the record, Yves Smith has been pushing since the beginning–even though Krugman, at least, recognizes that a nationalization plan is political poison until at least after the election.
Krugman, on last night’s bailout blowup:
How did we get to this point? It’s the culmination of many past betrayals.
First of all, we have the Republican Study Committee blowing things up with a complete nonsense proposal — solving the crisis with a holiday on capital gains taxes. How is that possible? Well, if a party runs on economic nonsense for 25 years, eventually many of its foot soldiers will be people who actually believe the nonsense.
More specifically, though, the failure to get a deal reflects the betrayals of the Bush years. Democrats weren’t going to trust Henry Paulson, because behind him they see the ghost of Colin Powell (and Paulson’s “all your bailout are belong to me” proposal, aside from being bad economics, showed an incredible tone-deafness.)
And after the way the Bushies and their allies double-crossed the Democrats again and again in the aftermath of 9/11 — demand national unity, then accuse you of being soft on terrorists anyway — there’s no way Pelosi and Reid will do the responsible but unpopular thing unless the Republicans agree to share ownership.
So what 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.
As a friend said last night, we’ve become a banana republic with nukes.
Kudos to Paul Krugman for recognizing how silly it was for Hillary Clinton to suggest bringing Alan Greenspan back to address the current crisis. After his column earlier this week I’d begun to wonder if he’d ever allow himself a word against her. Apparently so:
OK, this is pretty dumb. Hillary Clinton wants a high-level commission to analyze ways to resolve the mortgage crisis — including Alan Greenspan.
Yes, I know people still listen when Greenspan speaks — and John McCain once joked about taking Greenspan’s advice even if he’s dead. But for those in the know, AG is a key villain in the whole affair.
I mean, why not add Charles Prince, Stanley O’Neal, and Angelo Mozilo to the commission?
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