Bailout Politics (Updated)
An interesting meme is developing among smart commenters from across the political spectrum that the House’s failure to pass the bailout bill demonstrates the soft underbelly of our political system itself.
Above all, though, this is a failure of politics. Like with global warming, with health care, with the national debt, with immigration. It is further proof that we have a calcified political system incapable of responding to either long-term threats or short-term crises. The electoral and partisan incentives have made actual action too dangerous and rendered obstruction everyone’s easy second choice. The Republicans killed this bill. Without their cover, the Democrats refused to save it, rather than take ownership of it.
It’s easy enough to imagine a society running atop a stable economy even when it has an unhealthy politics. And it’s simple enough to see how an unstable economy can be calmed through concerted action by an effective political structure. But an economy in chaos and a political system in paralysis? What happens then?
I didn’t think it was possible to be more disgusted with politicians than I usually am, but I find it impossible to express the seething contempt that I feel at this kind of opportunism. I don’t mind when they screw with the normal operation of the economy for venal personal gain. But risking a recession in order to get a cut in the capital gains tax? Letting it tank because you can always blame it on the Republicans?
[T]he idea of the package was to prevent a financial mewltdown. But here’s the thing — no one gets credit for stopping a meltdown if it doesn’t happen. To use a security analogy, think about what would have happened if either the Bush or Clinton administrations had killed the leadership of Al Qaeda and the Taliban prior to June of 2001. Even if they had claimed that they were foiling a terrorist plot against the United States, no one would have known about it, and it would have been pretty easy to attack either administration for belligerent unilateralism. In other words, it was only after 9/11 that the American public was ready to take the actions that would have prevented 9/11.
Maybe letting the representatives of the people, assembled in Congress, vote on such important issues — especially five weeks before their political futures are on the line — is asking too much. After all, even those of us who read the newspapers voraciously don’t really understand this mess; certainly, Joe Sixpack doesn’t.
Then again, I’m not at all convinced that anybody truly understands what’s going on here, let alone that there’s an expert consensus on what the impacts of the compromise legislation arrived at some 24 hours ago will have on the economy. That some action needs to be taken and soon seems to be a given. This action? Right now? That’s hardly settled.
It may be true that when forced to eat a crap sandwich, the thing to do is to take big bites. But it’s not unreasonable to first take another look in the pantry to see if there’s a more palatable option.
UPDATE (Dave Schuler)
See my update to the post below for my thoughts on the likelihood of a plan more palatable to the Republicans being brought up before the election. Voting down a bill whose original form was proposed by a Republican administration and which had bipartisan support effectively indemnifies Democrats against blame for the fallout and, as noted above, nobody will get the credit for anything that doesn’t happen.