Friday, October 03, 2008

It's the Democrats' Shitpile Now

The Democrats have taken on Paulson's plan as their own. Unlike Paul Krugman, I do not seeing any meaningful revisions being made to the plan when January rolls around. I do see Paulson trying to spend every last penny of the Treasury on his Wall Street buddies before December 31. I also forsee Obama keeping Paulson on for at least a year to "ensure continuity during the transition" (i.e., as a favor to the Wall Street firms backing Obama now so they can drain the public coffers as long as possible).

It is more than the Wall Street blow job. It is that Obama has not evinced a single sign that he wants to be a Democrat, that he believes in Democratic (or even democratic - see "FISA, voting for") principles, or that he intends to use the Oval Office for anything except running for Preznit again in 2012. His foreign policy plans, as far as there are any, seem to be focused on holding his own glorious little war with Pakistan, based out of Afghanistan. Europe is expected to go along because they have already declared him their choice for Preznit of the World.

The choice on November 4 is between two versions of Republican policy - the thoroughly odious vs. the batshit insane. Obama will always move to the right when faced with opposition, and the Village (and the Blogger Boyz) will cheer wildly, applauding his statesmanlike gravitas and his savvy positioning to set up a greater victory down the game tree. Oh, and the bipartisan unity. Can't forget that.

But what we will have from the Right is anything but unity. They will happily hand over the bankrupt and beggared nation to their opponents and spend the next four years screaming about how this is all the fault of the Democrats who over-regulated the markets while under-regulating government agencies, who have gutted the military and aren't sufficiently strong against the militant jihadism, and who are trying to force their heathenish, immoral values like gay marriage and birth control onto good upstanding citizens.

It will be culture wars layered on top of economic devastation, fought out between the economic and social philosophies of the Right, but blamed on the Left when none of it works.



cellocat said...

and to think we spent 7 years longing for this moment, when we could see the light at the end of the Bush tunnel. It's a horrible, nightmarish joke. When am I going to wake up?

cutepeachpanda said...

Obama's presidency will be a disaster. The Democrats have willingly taken on the shitpile rather than coming up with actual solutions that differ from Republican ones. At this point I prefer 4 years of McCain taking the blame for this and have Hillary or another real Democrat run in 2012. Obama is the Democratic George W. Bush. Absolutely clueless and a puppet for the already ineffective Democratic leadership.

R. S. Martin said...

Hi Anglachel:

Paulson will likely get out of there as soon as Bush's term is up. For one thing, the oversight provisions of the bill don't really kick in until the next administration, and I don't think he's going to want to stick around for that. Obama's going to want one of those clueless-but-oh-so-smart buddies that he's enamored with in there (e.g. Liebman, Cutler, Goolsbee). If McCain makes it in, which I seriously doubt is going to happen now, he's going to want to appoint Phil Gramm. Speaking of whom, I have no faith whatsoever in Reid, et al's ability to do the sane thing in response to that and say no bleeping way. We have to be bipartisan, you know.

The events of the past few days have been beyond belief. Reid did an end-run around the appropriations authority provisions of the Constitution with this bill. As you know, the House has to pass an appropriations bill before the Senate can consider it. So what did Reid do? He dusted off a 2002 appropriations bill that had stalled, stripped most of the provisions out, and put the House bill and the assorted lard in there instead. And how's this for irony? The Senate sponsor of the 2002 bill was Paul Wellstone, who would have undoubtedly been leading the fight against this legislative abomination.

As I wrote on my blog today, Wall Street's behavior this past week has been like that of a mob protection racket. They demand money, and the House says no. So they freeze the credit market and effect a superficial plummeting of the stock market's value. It's a lot like the way mob thugs will trash a part of one's home or business to emphasize the need to give them the money. Scare the living hell out of those being intransigent, and sooner or later they'll capitulate, like the House did today.

I won't be surprised if Krugman's called it right, and we'll be seeing another bailout package being demanded before the next President is even inaugurated. Give a mouse a cookie, and he's going to want a glass of milk.

OTE admin said...

Thank you for your excellent post. I have long felt Obama was nothing but a ringer, and it appears he is a ringer for the same right-wing, Wall Street interests that normally support Republicans.

He's not a Democrat at all, never was. And I am scared as hell over what he would do as president. I think SS, Medicare, and other traditional Democratic programs will be up to privatization.

Unknown said...

I knew that the Democrats would find a "compromise" and give Bush what he wanted. I've seen the theatrics before, no surprises.

I've been seriously thinking that it's time to put some money under the mattress. It's not an FDIC issue, but maybe banks will be given "new rules" to allow only a certain amount of money withdrawn every month, just thinking.

Elise said...

I lean right but I try to be as objective as possible and I've found your blog to be invaluable in understanding the non-Right view of how we got ourselves into this mess. In particular, I've found your references on what exactly is meant by "deregulation" to be invaluable. Many people seem to say "repeal of Glass-Steagall" and think they've presented a compelling case. As much as I hated that repeal, I've never thought that just mentioning it actually counted as incisive analysis.

I have to admit, though, that I was dismayed to have you say about the "Tipping Point" article that "[t]he slant on the article is not so good". Perhaps I'm misunderstanding but it sounds like you're saying that since this article does not reflect your view of the causes of the meltdown it reflects the biases of its authors while the first two articles do not.

On the political or ideological side, I think almost every article on this mess reflects some level of bias even if only in deciding which of the many, many guilty parties is emphasized.

On the substantive level, Bill Clinton has said that to the extent Democrats bear any blame it is in their resisting the Republicans and Clinton himself in regulating Fannie and Freddie. Clinton does not claim this is the primary cause of the meltdown (he also dings the Dems for not regulating derivatives more aggressively and lays the primary blame at the feet of the Bush administration for doing away with the uptick rule) but it is clear he considers it one of the factors.
Clinton excerpts

Sometimes I wonder how many people in the country wish right now that it was Hillary Clinton versus Mitt Romney.

Anglachel said...

Hi Elise,

I think your comment actually belongs under the post with the links to The Reckoning series.

I'm glad you find the blog to worth reading. Great link to Media Matters, btw, thanks!

You're right that I am tougher on the Fannie Mae article than the other two, but wrong on what I dislike about the slant. The slant I don't like is tying the actions of Fannie Mae primarily to extending credit to poor and minority (especially minority) borrowers and foregrounding that aspect of their business. Fannie Mae bought my loan, and that of most of my friends and relatives, and I can assure you that as a group we are not poor or minorities, and I suspect this is true of the majority of FNM mortgages.

As I've said in other places, I fully agree that the GSEs were having major management issues - just like other players in the industry (such as Countrywide, who purchased my loan from Magnus, which is now defunct, before selling it to FNM), and for exactly the same reasons; pushing from shareholders to increase stock value and the sight of so much easy money sitting there for the taking. The NYT article does a great job of explaining how those forces came to bear on Daniel Mudd.

I have no idea what biases Charles Duhigg may or may not hold, and I don't attribute any to him. I'm pointing out the narrative spreading in the MSM fairly recently, prominently enough that major economics analysts like Barry Ritholtz are fighting back to prevent it from simply settling in as Conventional Wisdom.

I put that narrative in the context of things like GLBA and the instrumental use of race by the Movement Conservatives to capture the Republican Party and turn it to their own devices, such as the total deregulation of the financial industry. The problem with the GSEs, from this perspective, is not that they existed, but that they placed constraints upon the desires of the industry to do as it pleased due to their ties to the Federal government. Entities that bought up the toxic loans and took them out of the mortgage companies' hair was pretty useful, and the initial push under Mudd's tenure was to get FNM to expand its participation in the market, not contract it, to take on purely subprime and Alt-A sludge, not defend against it.

Now that the shit has hit the fan, the search for a scapegoat is on and, wouldn't you know it, here are these undeserving poor and minority people to hold up as the causes of our misery. That reductionistic argument is what I object to.

Yes, Bill Clinton is right that the problem is lack of proper regulation and oversight, and I absolutely agree that the Democrats in Congress who did not fight for that are culpable in the mess. They were also the minority party, and could not effectively stop the Bush juggernaut. As the Dems come back into power, their culpability in the mess increases exactly to the degree that they *can* rectify the situation and fail to do so. There is always blame to go around, but it matters who is in power when the fateful decisions were made.

Hillary vs. Mitt Romney? That would be a great improvement.

Thanks for your comments,