Lead!
We are facing the worst economic crisis since the 1980's. WaMu just set a record as the "Largest U.S. Bank Failure Ever." (Mazel-tov, WaMu.) Investment titans are on the knees, the ones that haven't gone under or been torn apart. Debt is at a historic high. Credit is tight. People are losing their houses and their jobs. Everyone is angry. Everyone is afraid.
And at a long serious table in the White House, three men who would lead this country, one at each end and one in the middle, sit impotent. George Bush is despised by two-thirds of the country. Would that he had had the grace to depart in 2006 when the majority made clear that it no longer trusted him to run the country. He is President now only by virtue of the office. The two who would replace him sit quietly while the economy roils, plotting subtle jabs and symbolic gestures, arguing about television schedules. Their positions on the bailout are...vague. Somewhere between "we must act now" and "the plan still needs work." Be careful, candidates. You wouldn't want to say the wrong thing. The bailout might not work, so you don't want to own it. But you can't have us think you're fiddling while we burn either. Gotta do something. Can't commit to anything.
Fuck that. If you wish to lead, now is your chance. The lame duck can't fly. The parties are divided. There is no one to step up but you. We don't need any namby-pamby joint statements about how seriously you take this crisis. We don't give a shit whether you debate tonight or next Wednesday. We don't care about the status of your campaign ads. We need a plan. We need you to talk to us and tell us what has to happen to avert this crisis. We need you to bend the legislators of your party to your will. We need you to go back to that long serious table, not to participate in a process, but to make a deal. We need you to lead!
And at a long serious table in the White House, three men who would lead this country, one at each end and one in the middle, sit impotent. George Bush is despised by two-thirds of the country. Would that he had had the grace to depart in 2006 when the majority made clear that it no longer trusted him to run the country. He is President now only by virtue of the office. The two who would replace him sit quietly while the economy roils, plotting subtle jabs and symbolic gestures, arguing about television schedules. Their positions on the bailout are...vague. Somewhere between "we must act now" and "the plan still needs work." Be careful, candidates. You wouldn't want to say the wrong thing. The bailout might not work, so you don't want to own it. But you can't have us think you're fiddling while we burn either. Gotta do something. Can't commit to anything.
Fuck that. If you wish to lead, now is your chance. The lame duck can't fly. The parties are divided. There is no one to step up but you. We don't need any namby-pamby joint statements about how seriously you take this crisis. We don't give a shit whether you debate tonight or next Wednesday. We don't care about the status of your campaign ads. We need a plan. We need you to talk to us and tell us what has to happen to avert this crisis. We need you to bend the legislators of your party to your will. We need you to go back to that long serious table, not to participate in a process, but to make a deal. We need you to lead!
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Actually, I do care that they debate tonight. In the debate they won't be able to avoid taking a position on this.
September 26, 2008 10:23 AM | Reply | Permalink
Destor has the perfect photo for what I want to say. I interrupt this programming for HYSTERICS, a Drama Queen.
The image of NOT A LEADER:
http://tpmcafe.talkingpointsmemo.com/talk/2008/09/a-woman-has-to-say-it-mccain-m.php
Genghis, feel free to post this at your blog if you like. I think, in all humility, that I've got the pitch perfect MEME to brand mcShame as not a leader, unless you count leading people off a cliff via HISTRIONICS!
September 26, 2008 10:28 AM | Reply | Permalink
Thanks a lot, TheraP. It's cross-posted here.
September 26, 2008 11:59 AM | Reply | Permalink
My primary interest is no longer finding out where the candidates stand. I want them, in particular I want Obama, to take a stand. It's not the same thing. And whether it happens in a speech, a debate, or a blog at the Cafe doesn't matter to me.
September 26, 2008 10:30 AM | Reply | Permalink
Actually, according to Joe Klein over at Swampland, Obama was at least engaged at that table "peppering" Paulson with questions, which seems to me the right thing to do. McCain just sat there like the dullard he is.
I'd like Obama to take a stand too, though. No bailout unless we get stock.
September 26, 2008 10:35 AM | Reply | Permalink
And in my view as long as mcShame seizes the "drama" it's very hard for anyone to solve the problems that face our country. Very difficult for Obama to maneuver. Or anyone! The tantrum is taking precedence - and we need to short-circuit that, in my view.
September 26, 2008 10:38 AM | Reply | Permalink
Fuck McCain and his hysterics. Obama can take the spotlight back if he takes decisive action.
September 26, 2008 10:43 AM | Reply | Permalink
To do that he would need to stop campaigning. He would need control over the media. He would need to neutralize both bush and mcshame.
His best bet comes tonight.
September 26, 2008 10:49 AM | Reply | Permalink
Genghis! Dropping the hammer! Well done, and agreed. My only hesitation is that the financial world can be gamed a fair bit, not so much by individual investors (who might not be willing to blow enormous chunks of cash to score political points), as by the Governments' arms themselves. Wheels within wheels here, and Obama's team is likely advising real caution, just to protect against politically-driven financial traps. Nonetheless, LEAD!
September 26, 2008 7:18 PM | Reply | Permalink
One other thing. It's almost impossible to know, right now, without all the inside info & a team working on it, how big the problems REALLY are. The risk then is that your plan is adopted, and the thing STILL fails. You're toasted. Nonetheless, a leader's option might be to spell that out, and stand on it anyway. As it is, Obama's backing into office a bit. Same as in the final months of the primary. It makes electoral sense, yes. But you risk leaving a bigger mess that you then have to clean up later.
September 26, 2008 7:28 PM | Reply | Permalink
McCain is absolutely pathetic, of course, but peppering Paulson is not sufficient either. Asking questions is important, but you ask questions in order to decide on a course of action. Obama needs to make that decision, communicate it, and execute it.
September 26, 2008 10:41 AM | Reply | Permalink
Tonight's the night.
I think of that song from Westside Story:
http://www.youtube.com/watch?v=5_QffCZs-bg
I pray he comes through for us, Genghis!
(meanwhile mcShame will do everything to disrupt!)
September 26, 2008 10:45 AM | Reply | Permalink
You do realize he isn't in a position to "execute" anything as the junior senator from Illinois, right? I suggest we keep our expectations in line with reality.
September 26, 2008 10:51 AM | Reply | Permalink
Thank you, sir. I'm all for reality.
September 26, 2008 10:54 AM | Reply | Permalink
As the Democratic nominee, he is in many ways the leader of the party which, along with the bully pulpit of the media spotlight, gives him a great deal of power. That's why he was seated at one end of the long table. I would like him to exercise that power.
I realize that he does not control the Treasury Department or the Republican party.
September 26, 2008 11:13 AM | Reply | Permalink
By all accounts, he has been doing that. Dodd and Schumer sure changed their tunes pretty quickly from the first interviews I saw with them. That new attitude was very reflective of Obama's first statements. I guess I see strong leadership in places you don't.
September 26, 2008 1:16 PM | Reply | Permalink
And my primary interest is making sure mcShame does not get elected.
But I totally respect where you're coming from here. And I applaud that.
We can work in tandem. You goose Obama. I'll soften up mcShame.
Both are needed at this moment.
September 26, 2008 10:36 AM | Reply | Permalink
Sounds kinky
September 26, 2008 10:45 AM | Reply | Permalink
:) !!!!
I did give you a Rec by the way.
Kinky certainly fits in with "histrionic."
(but not with me)
September 26, 2008 10:47 AM | Reply | Permalink
Please advise what word you prefer instead of meme.
I'll defer to your better judgment in this matter.
September 26, 2008 10:52 AM | Reply | Permalink
Obama has taken a stand, basically backing the Dodd-Frank plan. He has also worked behind the scenes to unify the Democrats fo quick action and suggested in his phone call to McCain on Wednesday morning rallying both parties to common principles for the sake of quick passage.
The crisis is real, urgent and NOT contained to the "Wall Street investment firms" so many people here suggest.
When banks won't lend to each other because they have no idea what's on the other's books, banks fail. When banks fail, other banks fail. When lots of banks fail, we call that all the ingredients necessary for a Depression. Yet inflation is spiraling and will continue to do so in a scenario worse than the stagflation of the 1970s if the crisis is not arrested.
The $700 bailout is not a bailout in the usual sense of the word. The Treasury will eventually recover most of its investment or even profit if the Democrats get their way.
Don't blame Obama. This deal was almost done before McCain rode to the rescue and injected politics right where it doesn't serve any purpose.
September 26, 2008 10:54 AM | Reply | Permalink
Thus my focus on the "histrionics." I agree with your assessment.
September 26, 2008 10:55 AM | Reply | Permalink
Ripper, the Treasury will only recover its money if it demands preferred stock in exchange for taking on these liabilities. And they are liabilities. if there's no assurance of a full recovery this is just a giveaway.
September 26, 2008 11:01 AM | Reply | Permalink
Destor, could you make an appearance at my blog (linked above)? Just to put your avatar there. To give people a sense of what I'm talking about when I say hysterical, histrionic, Drama Queen.
I'd be ever so indebted to you.
September 26, 2008 11:11 AM | Reply | Permalink
destor, the value of wealth that would be erased if more banks collapse is monumental compared to the difference between buying the toxic mortgages at a discount or at a premium. Either way, Treasury recovers at lest 50 cents on the dollar, and the Democrats are only willing to risk $250 billion outright before reassessing the program. If you doubt this, consider that WaMu's $300 billion in assets just collapsed on the strength of only about $20 billion in bad mortgage loans. Gee, I didn't think Americans could afford to lose so much over so little.
Thus, the bailout is not much of a giveaway.
September 26, 2008 11:35 AM | Reply | Permalink
But Ripper you will concede that selling this to joe bag of donuts is a bit problematic. He is sitting on a house that has lost value. Just seen his 401k go in the tank and is about to see his company close up shop. Giving money to guys that ride around in Limo's and go the Hamptons every weekend is a pretty hard sell.
But that sell must be done. And to do that you need a vocal leader that can get out and connect with the people of this country. We don't have that guy or gal in any fashion right now.
September 26, 2008 11:39 AM | Reply | Permalink
see my response at 11:40 below.
September 26, 2008 11:42 AM | Reply | Permalink
Whose wealth?
September 26, 2008 11:52 AM | Reply | Permalink
If a given bank fails due solely to the fact that it cannot obtain credit from another bank, is it not possible that the lending bank was extremely wise not to offer credit?
It is not immediately clear to me why I should offer my $700 billion of tax dollars to the troubled bank when its peers refuse to do so.
September 26, 2008 11:09 AM | Reply | Permalink
Because banks have a fiduciary duty to shareholders, not to society at large. In others words, the fact that bank boards want to protect their asses is no indication they care about what happens to yours.
September 26, 2008 11:37 AM | Reply | Permalink
And what happens when the "bank" is our Federal Government and the "shareholder" in this case is the American citizen? Should not I still be protected?
Where I am going with this, Ripper, is to try to convince you to rethink your position because it is totally wrong. ;D
Any bailout that socializes the banks' losses, and particularly losses of this magnitude, is a travesty to some of the core principles on which the United States was founded. I am disgusted that my tax dollars will be funding this charade.
September 26, 2008 11:48 AM | Reply | Permalink
1) The losses that you say will be private ones will in fact, be losses to the public if the banks fail completely, as some may still do. Municipalities, sewer districts, utilities and pension funds all are investors in and have stakes in the health and stability of our banking system.
2) If the program as outlined by Democrats passes, $250 billion would be budgeted for the program before any more could be spent without review, not the $700 billion under the original Paulson plan. That $250 billion is only slightly more in today's dollars than was spent on the S&L crisis of the late '80s.
3) If you're wrong, we are fucked to the tune of WAAAAAY more than a few hundred billion. You included.
September 26, 2008 12:02 PM | Reply | Permalink
In response to #1) So it would then be correct to further socialize the losses? I can make a disclaimer: I have money in the market, and I have lost quite a bit, and I stand to lose more before this whole mess is over. But my loss, and my fear does not justify the bailout. How can you possibly have the conscience to ask Joe Blow taxpayer, making less than 30k, who never decided to risk his money and invest in those banks, or those institutions that chose to invest in them, to subsidize bad business decisions to the tune of $2,300 (at 700 billion) or any amount for that matter? I can not. To the point of Genghis' original post, he is asking for leadership from Obama. That sure would be nice. I, at least, will display my own form of leadership by sucking up my personal losses and opposing the bailout in whatever meager way I have available to me, because it is fundamentally wrong.
In response to #2) You actually bring up a good point which I (and others) have been considering a lot lately - namely the S&L crisis. We truly are now seeing "more of the same". The parallels between our current crisis and King George I's in the 1990s are truly astounding to me. Does it EVER stop, Ripper? Should I be expecting another 15-20 years until the American taxpayers are asked again to absorb the bad bets of a Bush friend? Maybe Jeb in 2025? When will one more time be one too many for you? For me, it's right now.
#3) I steadfastly avoid the claim that foregoing a bailout will not cause pain. It will cause pain. It will hurt. To use your language, I "will not" be fucked - I already have been. So please explain to me how infusing banks with cash directly translates into helping me and other taxpayers make our mortgage payments?
Also, if and ONLY if you feel comfortable sharing this info, may I request a disclaimer? In light of the fact that any bailout news would surely have a dramatic effect on the markets, I do believe it is only fair for you (and others too) to clearly state if you stand to make an immediate financial gain on market recovery that would result from a passed bailout proposal if you are going to write in support of said bailout. I do not make this request because I suspect you personally of disingenuity - I don't think anyone could reasonably claim that of you - but as you are a professional journalist I am sure you understand that such a disclaimer should really be offered.
September 26, 2008 12:35 PM | Reply | Permalink
Injecting cash into banks won't help you pay the mortgage. That's why Democrats have been trying to get provisions for mortgage relief and economic stimulus included in the plan. If you think you stand a better chance under the party that gave you this crisis, have at it. But of course, don't come whining to me when that doesn't work out so well—again.
September 26, 2008 1:12 PM | Reply | Permalink
Here you crystallize one of my final and perhaps most crucial thoughts on the matter:
What part of either mortgage relief or economic stimulus require a bailout for the banks?
I hear lots of talk about limiting executive-level compensation, and/or opening mortgage loans to be "renegotiated" by the judiciary. In a nebulous sense, both seem like reasonable ideas to me, though I am not completely sold on either. HOWEVER - I do not see any way these types of concepts or the ones you propose would necessarily require hundreds of billions of taxpayer dollars to be sent to banking institutions.
To address your other concern - namely supporting Republicans? Frankly, the bailout to me seems like one of the most "Republican" things ever conceived. Taking money from those who have little to none and giving it to those have made millions? FDR must be spinning in his grave.
September 26, 2008 1:25 PM | Reply | Permalink
It's not an either/or proposition. Mortgage relief and an economic stimulss do not contradict a bank bailout. So what purpose does a bank bailout serve? Injecting the liquidity into financial markets that is the basis of everyday transactions at the level of your business and your pay and the "full faith and credit" institutions must have in each other to lend money. Short answer: If the banks fail, no matter how bad off you are now, your dire straits will make you want to pick up a cheap gun at the pawn shop but be too broke to afford one.
September 26, 2008 6:06 PM | Reply | Permalink
Almost forgot:
But apparently, society-at-large must have a fiduciary duty to banks?
In others words, the fact that bank boards want to protect their asses is no indication they care about what happens to yours.
Yet I must protect their asses?
Awfully good arrangement they seem to have here.
September 26, 2008 12:42 PM | Reply | Permalink
You're almost to the point of willfully misconstruing reality. Banks don't have a legal or financial duty to society. Society has a duty to preserve life and property, i.e., a duty to ourselves. That road runs through the financial system.
September 26, 2008 6:08 PM | Reply | Permalink
I don't blame either Obama for the failure to come to an agreement. The key person responsible for that is Boehner, but certainly, Obama is doing more than McCain for to make this thing happen. McCain was a fucking wallflower at that conference.
BUT neither Obama nor McCain have taken ownership of this solution. Obama could hold a press conference and say, this is what we need to do and why we need to do it. He could put political pressure on the Republicans by casting them as opponents of the deal. But he doesn't want to be the deal's champion. He doesn't want it to become an albatross on his neck. He doesn't want to take any action that appears to be cooperate with a Bush plan. That's may be politically safe, but it's not leadership.
September 26, 2008 11:53 AM | Reply | Permalink
Nope, sorry, gotta disagree. You know, and I know you know, that he's been brokering the whole thing behind the scenes. He's way more effective at actually getting the job done this way. Making a speech about it would only give Republicans an excuse to polarize the talks further. And it would negate his best argument: McCain fractures the process, while Obama heals it. McCain exploits a crisis, while Obama solves it.
Obama is no wimp. This is how he is going to govern. We've got to get used to it.
September 26, 2008 6:16 PM | Reply | Permalink
Feels a bit like FDR staying vague, prior to assuming office, to keep his freedom of action.
But Obama has taken a stand, just not trumpeted it widely and loudly. We were encouraged to sign a petition to give support to Dems demanding certain principles in the bailout.
September 26, 2008 11:05 AM | Reply | Permalink
Nobody is going to lead. Nobody in that town has a set big enough to take a hold of the situation. Lets dump the whole group and start over. For the love of God....We need a leader
September 26, 2008 11:36 AM | Reply | Permalink
You can hardly expect Obama to be able to lead House Republicans less than 40 days before so many of them are up for election. If McCain or Bush can't save the country when the Democrats are unified to do just that, that speaks more highly to Obama's abilities vs McCain's than anything I've seen.
September 26, 2008 11:40 AM | Reply | Permalink
Look, we are all basically of the same thought process on this blog and there is no concensus here. There has to be someone that doesn't care about their political future enough to step up to a podium and say...what we should do and why. All I am telling you is that there isn't anyone in Washington strong enough or courageous enough to do that....Outside of maybe Barney Frank. Everyone else is looking out for Number 1. This isn't rant against Obama. This is a rant against what has become our system. They all should GO.
September 26, 2008 11:46 AM | Reply | Permalink
And not to belabour the point but you've done a better job of explaining and sell this than anyone in Washington has done. What does that tell you?
September 26, 2008 11:53 AM | Reply | Permalink
THIS is why I am more qualified than Palin to be Veep. She can't even explain herself.
September 26, 2008 12:04 PM | Reply | Permalink
Tells me we need for the Lawyers to head home and put normal people in there that have a Clue about what the real world is about.
September 26, 2008 12:06 PM | Reply | Permalink
Also, Genghis - I do sincerely and truly apologize for hijacking your thread and turning into a discourse on the bailout. I had considered writing my own post, but I believe my thoughts on the matter do not (at least yet) warrant clogging the reader boards even further than they already are.
Can you please forgive me?
September 26, 2008 12:48 PM | Reply | Permalink
No worries. But I'm not getting involved b/c I don't have time to get into it again. DF has a good rundown about why action is necessary but how it should be different from Paulson's proposal.
September 26, 2008 1:34 PM | Reply | Permalink
I saw it. Good stuff. Thanks for the heads-up anyway.
September 26, 2008 1:52 PM | Reply | Permalink
You can't lead without holding office.
First things first.
As hard as I know it is for some to believe, Obama doesn't have this election wrapped up.
What's on tonight's agenda is for the candidates to make their pitch to (literally) the middle-American -- who, as hard as it is for many of to fathom -- still hasn't made up his mind.
First things first. Obama can offer his vision, but he can't lead.
Just yet.
September 26, 2008 5:59 PM | Reply | Permalink
You're reading "lead" to literally. He can't fire the Treasury Secretary around or command troops, but that doesn't mean he can't lead. He is now in many ways the leader of the Democratic party, which controls the Legislature, and he has a national stage from which to address the American people. He is sitting back and letting others drive the intervention.
September 26, 2008 6:06 PM | Reply | Permalink
I think you're literally blaming Obama when it's literally clear—literally—that Joe Biden is to blame here. Literally.
September 26, 2008 6:09 PM | Reply | Permalink
He is not quite the leader of the Dem's yet... and even if elected President, he still won't be. You can be assured that Pelosi and Reid aren't abdicating anything to him.
Moreover, the Dems currently in office, while strongly supporting him in the partisan election, will be a bit more slippery when talking about real policy. After all, until Obama is elected, he is merely the Junior Senator from IL.
This is what makes politics so interesting -- can you run something without offending anyone? The Dems don't want to piss off Obama, but they also don't want to get into bed with him just yet -- until he wins.
This is nothing new in politics -- it's been going on for 1000's of years.
September 26, 2008 6:39 PM | Reply | Permalink