Comments on: What kind of crisis is this?

By: Ian

Ian — Wed, 01 Oct 2008 22:28:30 +0000

I would add this, then: If the Democrats must undertake a political kamikazee mission in passing this bailout, they might as well get as much out of it as they can. In other words, if Dems are going to be attacked for passing the bill no matter what it looks like (more or less), Dems might as well use this as an opportunity to force President Bush to approve a bill that includes all sorts of important policies/reforms/etc, etc. that Bush wouldn’t ordinarily be willing to accept. Let Bush veto a bailout bill, or else let him approve a bill that would undo some of the damage he has done to this country.

By: aaron

aaron — Wed, 01 Oct 2008 18:57:09 +0000

Fantastic post!

I could be wrong but, I see it like this: We’re facing a situation that has the potential to end in a depression. The original depression probably could have been tamped down and made less worse if Andrew Mellon wasn’t such a numbskull and Hoover had the political will (and backing?) to be more aggressive from the outset. I think we’re in that situation now except that we have the history and lessons of the Great Depression to look back upon.

I didn’t realize that the bailout would prove so unpopular (color me stupid!). I have to admit that I’m nervous now, especially with how well you’ve laid out the situation as it is in this moment, about the political fallout of Democrats passing a bailout. Perhaps pain and suffering is exactly what has to happen? Perhaps more people have to experience, first hand, the economic downturn before they are willing to see the necessity of this process. It’s awfully disappointing that people don’t see it now.

I was listening to ‘Wait, Wait, Don’t tell me…’ on the radio this past weekend and they were interviewing George McGovern. The host invited him to say to the nation “I told you so” but, he declined. I think the best that Democrats can do is to be on the Right side of History as they’ve always been (or at least since the Depression and before). And I think, that while it may be politically inexpedient in the near term, someone has to stand for Reason.

Of course, I want my cake and to eat it too – a good Bailout gets passed and the Republicans are held to account for screwing up the economy. And it may take twenty years but, I’m confident that that will become the widely accepted historical narrative for the early 21st century.

By: John

John — Wed, 01 Oct 2008 11:36:52 +0000

Ian: I think it’s that important if the credit markets totally freeze. I think that because if companies suddenly can’t make payroll and workers don’t get paid (and not small businesses but major corporations) all hell will break loose.

By: Ian

Ian — Wed, 01 Oct 2008 04:11:08 +0000

Here’s another question: If we urge our Democratic Congresspeople to pass a partisan bill and they do so — and Bush signs the bill into law — and then the Republicans successfully campaign against the Dems saying the bill was a power grab and a waste of taxpayer dollars, etc., will it have been worth it?

In other words, is avoiding this catastrophe so important that it’s worth doing even if it means handing control of Congress over to the Republicans for a decade? Because that may be the result if patriotic Dems show political courage and sacrifice their political careers for the sake of avoiding a disaster.

By: Lee

Lee — Wed, 01 Oct 2008 03:34:27 +0000

The answer to your question depends on how bad the economy will get if our financial system is destroyed. Is the basic dynamic of the credit crunch a feedback loop? Does it become significantly harder to fix the economy with every day that passes, or will it be more or less equally easy to do so. If the latter, then allowing the crisis to play out may give a sense of legitimacy to the bailout. I believe that the trust issue you refer to is at the center of why this bailout is under attack. If you don’t trust Bush, you’re not trying to screw him by not supporting the bailout, as some kind of revenge ploy, but you simply don’t believe him. He’s a lying liar whose every word is a lie.

Such a person believes, as Severin apparently does, that it is possible to be insulated from the effects of the destruction of our financial system. Such a person may need to be disabused of that notion before he will support the bailout.

By: John

John — Wed, 01 Oct 2008 02:02:45 +0000

An argument against the "bailout" is here. It mixes the stock market and debt market up. But can we afford it to fail? I mean sure you could have a patient bleeding to death but why give a transfusion when they could just, by chance, pull through? I think the ripple effects would be so great that it would take until 2015 to recover.