September 26, 2008

Queering the Deal: Democratic Leaders Torpedo Bailout For Obama

Before I dive into this, let me say one thing: I am not an economist, and have no idea if the current proposal is a good one, if other proposals and amendments are better, or even if any of them will work.

What I do know is politics in action, and we saw it in spades last night, as noted chillingly in this article from David Rogers at The Politico:

At the White House, in fact, House Minority Leader John Boehner had bluntly warned about the lack of Republican support for the massive government intervention: "I can't invent votes," Boehner said. But House Financial Services Committee Chairman Barney Frank (D-Mass.) angrily accused the minority of trying to undercut Paulson by crafting a late-breaking alternative proposal—with the tacit support, Frank said, of Republican presidential candidate John McCain.

Both McCain and his Democratic rival, Sen. Barack Obama, would leave the White House without comment, and the meeting was described as among the wildest in memory. A beleaguered President Bush had to struggle to maintain order and reassert himself. And when Democrats left to caucus in the Roosevelt Room, Paulson pursued them, begging that they not "blow up" the legislation.

The former Goldman Sachs CEO even went down on one knee as if genuflecting, to which Speaker Nancy Pelosi (D-Cal.) is said to have joked, "I didn't know you were Catholic."

It was McCain who had urged Bush to call the White House meeting but Democrats made sure Obama had a prominent part. And much as they complained later of being blindsided, the whole event turned out to be something of an ambush on their part—aimed at McCain and House Republicans.

"Speaking professionally," said one Republican aide, "They did a very good job."

When Bush yielded early to Pelosi and Senate Majority Leader Harry Reid (D- Nev.) to speak, they yielded to Obama to speak for the assembled Democrats. And it was Obama who raised the subject of the conservative alternative and pressed Paulson on what he thought of the idea.

It seems probable that a deal had been reached earlier yesterday as mid-day reports were indicating, but then the Democratic leadership—Pelosi, Reid, and Presidential nominee Obama—determined that they were willing to risk a national (and global) economic collapse in order to play Presidential politics and try to make this into a "McCain versus Obama and Obama is the hero" story.

Reid and Pelosi's judgment is notoriously bad (as their lowest recorded Congressional approval ratings in history and utter failure to pass any meaningful legislation in the last Congress proves), and Obama is preternaturally self-centered and ambitious, so it is not entirely surprising that they would go this route.

It is just that we've been hearing so much about how serious a bailout is needed, and that we need to pass something relatively quickly, and then they do this—a melodramatic hissy-fit—for no other reason than theatrics. All major democratic concerns had been met in eariler compromises.

It's disgusting.

Update: And for what little it is worth considering economics is far outside of my comfort zone, I'm falling into the camp of thinking that the bailout plan as proposed isn't that great of an idea.


It has a bit to do with the big picture view of capitalism that Bill Whittle wrote of in Trinity, (Part 1). As with most of Whittle's essays it is brilliant and insightful in a "why didn't I think of/see that?" sort of way, but it is a lengthy screed, so I'd set aside a good half-hour (and get a nice fresh cup of coffee) before you snuggle into it.

There is also a second part, helpfully titled Trinity, (Part 2) that I won't get a chance to dive into until this evening, but both are pushing me back to my fundamental, capitalist core beliefs that government intervention in most things is almost always bad.

Posted by Confederate Yankee at September 26, 2008 08:44 AM
KROFT: Why you? I mean, why do you think you would be a good president?

OBAMA: Well, I was going to get to that.

KROFT: Go ahead.

OBAMA: You know, I’m a, I’m a practical person. One of the things I’m good at is getting people in a room with a bunch of different ideas who sometimes violently disagree with each other and finding common ground and a sense of common direction. And that’s the kind of approach that I think prevents you from making some of the enormous mistakes that we’ve seen over the last eight years.

Clearly after yesterday's meeting at the White House which Democrats to a man called a "waste of time," Obama needs a better reason to be President. Posted by: Neo at September 26, 2008 09:18 AM

I find the BAILOUT is disgusting in the lard the Democrats want to put into it...100 million dollars for ACORN...puhleez!

Posted by: Jaded at September 26, 2008 10:19 AM

Any bailout plan that Dodd, Frank, and Obama support has got to be corrupt as hell.

Of course the Democrats are willing to wreck the economy for political gain. They don't care about anything but getting (and keeping) power.

Posted by: iconoclast at September 26, 2008 10:28 AM

Yes, that makes a lot of sense. A minority of Republicans who met with McCain shortly before the meeting, make demands that nobody's ever heard before, say that they won't vote for the bailout unless their brand new demands are met, and it's Obama and Pelosi who are ruining the deal.

Are you seriously rewriting history here?

Posted by: Mar at September 26, 2008 10:55 AM

You miss the point Mar:

The Democrats don't need the Republicans' support for a deal. They are the majority.

They want the support in order to triangulate the issue (or as I like to call it, Obamatize it) so that either way, they're in the clear and their power isn't threatened.

If they get the GOP on board and it goes south, they can say it was Bush and the GOP's fault.

Posted by: Hawkins at September 26, 2008 11:25 AM

Moreover, notice the frantic flipping back and forth.

On Wednesday, Reid said McCain needed to be in Washington.

On Thursday, when McCain actually came, Reid reversed himself and said he didn't -- and then with his puppet Schumer, started a screaming hissy fit about how awful it was that McCain came.


On Wednesday, Obama said the crisis wasn't that bad.

On Thursday, Obama dragged his feet heading back to Washington because the crisis wasn't that bad.

On Friday, Obama is screaming about how "obstructionist" the Republicans are in the face of this horrible, awful crisis.


Like I asked on Wednesday of the Obamabots: is this or isn't this a crisis? Because if it isn't, like Obama said, then the Republicans are right. If it IS, as Obama denied for days, then Obama is a liar and an opportunist who puts his political campaign ahead of the country's business.

This is why the media is in full crashing meltdown mode, and why all the polls are suddenly jumping for McCain; in one week, he has demonstrated that the Democrat Party's economic rhetoric is solely spoken for their political benefit, and actually has zero to do with the situation as it stands.

Major pwn.

Posted by: North Dallas Thirty at September 26, 2008 12:52 PM

I want to know why a large percentage of the bailout monies, are to be directed to Obama's pet project ACORN?

As far as Mar's assertion goes, get a clue moron. The Dems are the majority. If this is such a great plan, why haven't they passed it and put their good names to it?

Posted by: Conservative CBU at September 26, 2008 01:37 PM

As was noted at StopTheACLU site:

"...But, the Democrats already have a plan to spend “profits” that not only do not exist yet, but may never exist. In the “Agreement in Principle” is the following line:

“Directs a certain percentage of future profits to the Affordable Housing Fund and the Capital Magnet Fund to meet America’s housing needs.”

So, the Senate Democrats want to re-direct profits to the “Affordable Housing Fund” and the “Capital Magnet Fund” instead of keeping these future profits going to pay back the American people for this $700 Billion bailout loan. And what are these special agencies the Senate Dems want to fund?

We turn to the Wall Street Journal in a July 2008 piece that reports on what sorts of groups that were to be the recipients of the federal pork from earlier bills the Senate tried to pass.

That tax eventually will channel upwards of $600 million annually in grants for developing and restoring housing, mostly as low-income rentals, available to Acorn and other groups (such as the National Council of La Raza and the National Urban League ). Democrats on Capitol Hill and housing groups say the housing-assistance money is vital to helping Americans hit hardest by what some call the largest drop in home values since the Great Depression. But they acknowledge the perception of political conflict in giving federal funds to an organization that does political work. “We are guarding against it,” said Massachusetts Rep. Barney Frank in an interview. He secured the Affordable Housing Trust from his seat as chairman of the House Financial Services Committee…

Many may already know that ACORN ( The Association of Community Organizations for Reform Now) is under investigation in several states for voter fraud. They have been caught turning in hundreds of thousands of fake voter registration cards in an effort to stuff ballot boxes with fake voters and pump up Democrat vote totals. ACORN’s founder also tried to cover up an embezzlement scheme his little brother perpetrated when he stole $1 million dollars of the organization’s money. This has only lately come to light.

Of course, many are also aware of the race oriented Hispanic La Raza group that has been a major player in trying to allow illegal aliens to enter the U.S., vote in our elections, and take freely of schools and social welfare monies.

Naturally, all these organizations exclusively support the Democratic Party."

So, yeah those natsy Republicans are killing the only hope we have to salvage this nation from the looming GREAT DEPRESSION! /sarc

Reid, Pelosi, Dodd, Frank - the slimiest of the slime party.

Posted by: in_awe at September 26, 2008 02:37 PM

Now if all the positive people here can go over to HotAir and beat the crap out of the negative nellies over there, it would be quite helpful.

Posted by: Sakaki at September 26, 2008 03:35 PM

Hawkins, actually, they do.

49 Democrats
49 Republicans
2 Independents

236 Democrats
199 Republicans

When you consider that at any one time, about 10-20 senators aren't voting, then, yeah, you might need a few Republicans on board.

Posted by: Mar at September 26, 2008 04:01 PM

Please understand: Barney Frank and company started us down this road when Bill was Pres.

Now it is President Bush's fault??????????????


Posted by: Engineer-Retired at September 26, 2008 04:40 PM


They've got plenty of votes in the Senate. It's the House where the GOP is rebelling. As usual.

Also, the disagreements that GOP House members have are not remotely new. They've been screaming about them for over a week to anyone who will listen.

Democratic leaders were NOT surprised by these. They simply found it politically expedient to say so. They were in front of TV cameras complaining about the lack of agreement by GOP House members as recently as Wednesday evening.

Posted by: Clint at September 26, 2008 05:20 PM

The Democrats have the votes to push this bill through. They do not need the House GOP members to vote on it. The only problem is a lack of courage on the part of the Democrats.

But I cannot fault them too much for that. The GOP & Bush had the same failure of spine back in 2003 when, for lack of "bi-partisan" consensus, a bill to stop the looting and politically-inspired loans at Fannie & Freddie was killed.

And when I hear about $$$ going to crooks like Acorn, if the GOP had stood still for that then I think they would become worse than Democrats.

Posted by: iconoclast at September 26, 2008 07:47 PM

So Obama's reason for wanting to be president is that he's a community organizer?

Posted by: indga at September 27, 2008 06:17 AM