Business as usual with Obama and McCain
Monday September 22, 2008
This is shameful. Both McCain and Obama say they support the proposed mega-bailout, with caveats, but see no reason why they can't continue to live in La-La Land: But Mr. McCain said in an interview here with CNBC and The...
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About Crunchy Con
Rod Dreher is an editorial columnist for the Dallas Morning News, and author of "Crunchy Cons" (Crown Forum), a nonfiction book about conservatives, most of them religious, whose faith and political convictions sometimes put them at odds with mainstream conservatives. The views expressed in this blog are his own.
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Telling the truth didn't do Carter much good (although he, of course, had other problems!)
So sad but so true. Probably both Obama and McCain would love to say such a thing but know they can not and get elected. Since both sincerely believe that they're getting elected will allow them to make positive change or avoid negative changes, they are doing what makes sense.
Dancing Cat
I've been a longtime Obama supporter, but if McCain were to stand up and make a coherent case for not rushing through this bailout packagae, I'd seriously consider voting for him. Both he and Obama are missing a huge opportunity to demonstrate some real leadership and provide insight into their approaches to governance. Well, the latter might be all to clear...
It's telling that both Kristol and Krugman (in today's NY Times) basically agree on their inherent distaste for this "plan." The more you read about it, the more it sounds like the typical Bush/Cheney approach: give us sweeping powers, little oversight, an open-ended budget, and trust us to fix the problem.
Isn't it "shameful" that a writer who will remain unnamed has suddenly forgot about the "peak oil" crisis to focus on another alleged calamity that supposedly justifies chickens in the back yard?
By the way, what ever happened to global warming?
maltf is right on. I'd even vote for McCain myself, under this (very unlikely) scenario.
The problem is that I don't think America wants to hear the hard truth from either of the candidates. And they both know this. Because one or both would be tarred and feather and ran out on a rail, if they didn't try to offer tickling words for our ears to hear. So much of the American ethos in the American dream is based on mindless optimism and rugged individualism. This is grounded in a total disregard for history as well as any felt need for any accountability outside of one's own individual autonomy. We are also a culture obsessed with loopholes and worshipping at the alter of credit. There is nothing worse to an American's ears than "you will reap what you sew."
I'm with Matt and Leo, I'd jump ship. And I say this knowing that the possibility of its hapenning is probably zero.
But what does it say about our society that a potential Churchill could never rise higher up the political ladder than, say, Ron Paul? I used to think that the country is suffering through a serious dearth of serious leadership. Now I understand that there are plenty of real potential leaders, there's just no market for them.
There is no market in politics for telling people what they don't want to hear.
Too true. As I've often said, the problem in American elections is more with the electorate than with the candidates.
Scott M.: I think you're being a little unfair. If a person goes on about peak oil or global warming or such all the time, he's pigeonholed as an obsessive. If he doesn't talk about them all the time, that shows he either has his head in the sand or that the problems aren't really that bad. What kind of logic is this?
Frankly, I think it could be argued that our generation is facing more truly gigantic problems at the same time than any other in recent memory has. It really makes the gears of the mind freeze up--how does one contemplate financial meltdown, the possible effect on the global economy, global warming, scarcity of energy resources, and on and on, without flipping out?
I think all we as individuals can do is to try to live more modestly and sustainably, according to our individual circumstances, try to be as well-informed as possible, make the best (or least bad) electoral decisions and activism that we can, and then pray for the best. In other words, be concerned, but not obsessed, realize we're not going to solve things overnight, and do the best you can. Which is exactly, I think, what Rod has been saying and doing, and what we all need to do.
I think the best case we can hope for is that McCain gets elected and gives the speech Rod wants to hear in his first State of the Union address.
We need a Republican president and a Democratic Congress to keep each other honest. McCain's base pleasing plan would be dead on arrival so he would then be free to compromise. A Democratic Congress would give him the political cover he needs to tell his base that they aren't going to get what they want.
Obama would have no such political cover.
A Republican president and a Democratic Congress would also give us the opportunity to forge a bipartisan consensus on how to handle the growing economic crisis.
I have to confidence in either McCain or Obama. I don't particularly like or dislike either of them.
This is just a pitch for divided government, which would neutralize the extremes and entrenched special interests in both parties during a time of crisis.
I have TO confidence in either McCain or Obama. > I have NO confidence in either McCain or Obama.
But what does it say about our society that a potential Churchill could never rise higher up the political ladder than, say, Ron Paul?
It should be pointed out that in his society, Churchill could never rise higher up the political ladder (after the 20s) than the post of "annoying backbencher", even during the far greater financial crisis of the 1930s. It was only when global war came that he got back into the government, and only when bombs were falling on Blighty that he was given the top job by a small group of men. And five years after that, there was this matter of a general election where the actual British electorate threw him out when the other side promised, yes, unlimited prosperity that wouldn't need to be paid for. So it is a bit unfair to say our "society" is at fault for not giving a "Churchill" a chance to Save Us.
Bloomberg's speech seems stupidly dishonest to me,
And we're paying the price for the last years where we all wanted something for nothing, where we took risks because we were convinced that we would never have to pay
Baloney. In the immortal words of Tonto, "What do you mean, 'we,' white man?" I didn't get something for nothing, in these last years or any other time. We turned down the fancy house our realtor was dying to sell us and bought an older place that is well within our means. I don't know who he's talking about, but it isn't me, and I'll wager few other people around this blog have profited by this mess, either.
We all were happy when the stock market was going up, we were all happy when there was all this money sloshing around in the economy, and everybody could get a loan whether they could pay it back or not. When companies went out and bought other companies and people got great bonuses, it was great. Er, yeah . . . it was great for people in the financial world, and executives of big corporations. They may have been happy. But they are not us. They're taking the money and trying to offload the guilt onto ordinary people. Yeah, it's those presents you bought your kid last Christmas that have caused us to have to give ourselves 700 billion dollars of your money! Be ashamed! Are there no lengths that these people won't go to, to try to make ordinary voters feel too guilty to notice whose hand is really in the cookie jar?
The fact is that Obama's package is still more fiscally responsible than McCain's. No amount of hand-wringing is going to change that. And no amount of shaming and blaming of the middle class is going to change the fact that the people in power today will happily bail themselves and their pals out to the tune of 700 billion dollars, while stoutly maintaining that we can't afford decent health care for the people who created that money.
I should also add that, while I don't have much confidence in McCain, I respect his willingness on several occasions to take on the PARTY of MONEY in Washington. He seems to have learned something from the Keating Five scandal.
When has Obama taken on any special interest in his party? Do we have any evidence that he would be able to stand up to the far left of his own party in Congress? Bill Clinton was an experienced exectutive when he got to Washington and even he could not stand up to them in 1993-1994. It took the defeat of his own party in Congress before he was able to govern from the "vital center" as he had wanted to do all along.
A people get the leaders they deserve. Where, in this entire culture,
is any institution saying that no, you can't have it all and you can't have it now. A few churches, but little else.
Bloomberg is so refreshing. Thanks for sharing the transcript, Rod. I wish that both parties would have nominated someone a little more polarizing because then Bloomberg may have thrown his hat in the ring.
It's hard not to be upset and cranky over this bailout. But being cranky and disgusted isn't going to solve the problem. Our government, obviously, has to act fast, and that means the Executive Branch has to initially deal with it. I feel better hearing Bloomberg speak so highly of Paulson. Congress can deal with the regulation down the road.
I don't think that either candidate is discussing the crisis as intelligently as Bloomberg, but of the two candidates, I have to say that Obama is doing a better job.
1. Someone has to pay for our debt. At least Obama is willing to tax SOMEONE. It makes no sense to go to war, extend our spending spree, bailout our financial institutions, and talk about extending the BUSH TAX CUTS. His tax cuts were plain crazy. I don't know what salary is considered middle class in this country. I think of my family as being middle class, and I don't need a tax cut. Obama and McCain can keep the money that I send them at the end of the year. Repair a bridge that's falling down, pave the highways, give struggling families a break on college tuition, pay for a month or two of health insurance for some guy who can't work, feed the hungry, etc. IT IS PATRIOTIC!!
2. We have a health care insurance problem is this country. The fact that we're in debt doesn't make that less of a problem. Obama is right not to ignore that problem and use the financial crisis as an excuse to let people go without health care.
Sig,
Bloomberg was incredibly honest about the coming real estate bust, even when he had absolutely nothing to gain politically from being so. I also give Governor Paterson high marks for honesty, by the way. "Obama's package" is populist pablum and highly deceptive -- just like McCain's.
To be fair, McCain did say that restraining spending is critical and Obama promised to raise (someone else's) taxes. It is a bit unfair to say they are both promising to continue in "La-La land". Of course, Obama is promising that he will raise the taxes of everyone but the audience he is currently addressing and McCain isn't specific about what spending he would cut, but they are both at least talking about sacrifice in some form.
Sigaliris,
It seems to me that you want to shoot the messenger. If you didn't take on a loan that you couldn't afford, then he isn't talking to you. I think that he's talking about the people who couldn't see down the road. They did fancy financing with balloon mortgages and didn't worry about paying when the balloon got big and fat. They didn't ask themselves what they would do if they lost their job. The bottom line is that a lot of people took out loans that they couldn't afford, and it's not wrong to hold them accountable.
Living in NYC, Bloomberg is a nanny state eat-your-vegetables corporate statist. He's a capitalist only in the sense that he wants government to bear the risk rather than investors and brokerages houses; agood deal if youc an get it. And it's always good to control a media company when you got yourself fired from Salomon Brothers for conducting yourself in a manner that would make Bill Clinton blush. This lisping midget used to walk around the office bragging to anyone and everyone how he had ___ed(his exact words as per law suit filings) this young lady and that one.
As per many reports, with the Fannie/Freddie bailout, up to 34% of American homeonwers will now essentially be living in publically-owned housing.Sig, if you didn't buy more house than you could afford or get a mortgage way beyod your means, you missed out. The rest of us who treated the purchasse of a home like an adult decision will be paying for the stupidity of those who treated it like the junior prom with checks.Our government is now rewarding that 34% of homeowners and penalizing those who save for a realistic downpayemnt(and will now find housing prices stay artificially high and many otherwise affordable houses off the market thanks to government intervention) and those who acted responsibly when they made these decisions.
Rod, did you read Newt Gingrich's post over at The Corner at NRO? It's excellent (he does engage in a bit of pie-in-the-sky about oil, but overall, very good). The man's character is vile, but he's smart as hell and I wish more people would listen to his policy ideas.
This might be a dumb question. How are those who defaulted on a loan rewarded? They don't get to continue to live in the house that the government will own. Just like the house sits empty when the bank holds the note, the house will sit empty when Uncle Sam holds the note. They will be out of a house and need to try to get a loan to purchase another home......somewhere.....somehow.
Mike Shedlock (Google him) has summed up the real problem nicely:
Problem Defined
Before one can work out a solution, the first step is to identify the problem. The problem is not a lack of liquidity, it is not a lack of trust, it is not lack of consumer confidence, it is not subprime lending, and in fact the problem is not housing at all.
The problem is consumers and corporations are deep in debt with no way to service that debt.
Attempts to bail out banks and brokers at taxpayer expense will do nothing but add to consumer debt, weaken the US dollar, and literally waste $700+ billion dollars that can and should go to more productive uses.
What Caused The Problem?
[...]
The root cause of this problem is the Fed micromanaging interest rates, the Treasury cheerleading every step of the way, and Congressional sponsored spending that went wild. The critical issue that ties everything together is fractional reserve lending allows banks to borrow money (credit really) into existence with insane amounts of leverage.
To top it all off, Greenspan slashed rates to 1% fueling the biggest global housing bubble the world has ever seen. Congress needs to figure out a way to eliminate the Fed.
* * *
I agree with the whole thing except for one word in the last sentence. I would change that from "eliminate" to "curtail".
pyrrho, I defer to your expertise, which I certainly don't have. There were some things in the Bloomberg speech that sounded good, particularly toward the end. What pushed my buttons was the use of his comments to provoke another wave of breast-beating and personal austerity touted as some kind of solution. Putting ordinary people into sackcloth and ashes isn't going to solve anything, as managers of bankrupt institutions continue to draw million-dollar bonuses.
The other thing in Bloomberg's comments that made me suspicious was where he says that yes, we need greater accountability and transparency, but we don't have time to discuss that, because we need to give them the money, RIGHT NOW. We can talk about regulation later.
Bugg's comments were enlightening. I did not know those things about Bloomberg. Let's hear it for transparency in public office . . . . As far as rewarding the greedy and short-sighted--is this not consumerism at its finest? Incentivize bad decisions, let the con men/sellers take the profit, then blame their marks for being stupid. Agents were hard-selling subprime mortgages all over the country, often lying to the client about the terms and consequences. As Mr. Sig frequently reminds me, "You have to remember that not everyone is as smart as you." I'd still put more of the blame on those who knew what they were doing. Anyway, I have a house that suits my needs, and that I can afford, and I don't have to worry about losing it. That's enough to make me happy.
"The rain is raining all around
It rains on the just and the unjust fella.
But mostly on the just, because
The unjust hath the just's umbrella!"
It is well to remember that the moment WW2 ended the British voters turned Winston Churchill out onto the street.
Thank you all for the history lesson on Churchill, my cynicism has been increased by 1%.
You know, if there's anything this crisis should do, but won't, is put a nail in the coffin of 'private social security' accounts.
If anyone can tell me an investment that hasn't dropped since 'private social security' accounts were first put forward, I would be happy to hear of it.
Stocks have dropped, even money-market accounts are failing. Pensions invested in 'completely safe' securities are now worthless as governments are finding out. Homes bought as investments are (predictably) not working as investments. Where, exactly, would these 'private accounts' have been?
So what I'd like someone to do is take a hypothetical time machine back to 2000, and construct a plausible 'private account' system for social security that would, at this point in time, have actually had higher returns, on average, every year since then. You even get to use all the knowledge we have now, but it has to be a plausible system, it can't be 'invest in gold' or something that would have never made it through Congress.
Incidentally, WRT to the health care system, there is a reasonable argument to be made that it will be cheaper, in total, than the system we have now. Obviously, it will include more government spending, but in theory that's more than offset by the reduction in private spending, which will allow the government to raise taxes to pay for the system.
Obama is not suggesting reducing the amount of money people will have left over. He's suggesting less money to the health insurance industry and more money (But, in theory, less than the first amount.) to the government. He's not suggesting more government spending and higher taxes without more financial benefit to taxpayer than he's taking away. (Whether this is actually what would happen is unknown.)
Sig,
I wasn't disagreeing with your points.
I'd like to see a bailout that is transparent and allows the public to actually profit from the turnaround. This privatization of profits and socialization of risk has got to end.
I'd also like to see a much more progressive income tax combined with lower corporate taxes and capital gains taxes, and with no taxes on savings (subject to restrictions). Those bonuses at Lehman Brothers should be subject to a 99% tax.
If anyone can tell me an investment that hasn't dropped since 'private social security' accounts were first put forward, I would be happy to hear of it.
This is the same fantasy as those who tried to say Fannie & Freddie didn't cost the taxpayers anything. Had the money been put into Treasuries, you'd be up. Sure, stocks are down, but no one was talking about putting all their money in stocks, it would have been a balanced portfolio. And even with an all-stock private account, you could point to the reduced money and say, "Mine." What exists is a fantasy, and when Congress cuts your SS and Medicare benefits, it will be equivalent to a greater than 100% drop in the stock market.
Yes, less money will be going to healthcare, Medicare is on the chopping block. If Obama is elected, Medicare will be cut, SS will be cut and the retirement age raised, and taxes will be raised to make up the small difference. If McCain wins, because he is Republican, the Democrat Congress will fight Medicare and SS cuts.
Incidentally, WRT to the health care system, there is a reasonable argument to be made that it will be cheaper, in total, than the system we have now. Obviously, it will include more government spending, but in theory that's more than offset by the reduction in private spending, which will allow the government to raise taxes to pay for the system.
The United States of America, right now, spends more per capita on health care than any nation in the world. (And gets less for it, by the way.)
We don't need to spend more. If anything, we should spend less, but spend smarter.
Drudge now reporting McCain as owning 13 or more cars, along with his 7 or more houses: how can he blame corporate greed with a straight face?
Drudge now reporting McCain as owning 13 or more cars, along with his 7 or more houses: how can he blame corporate greed with a straight face?
I don't need the guy to take a vow of poverty (a vow of chastity or a vow of fidelity is out of the question, considering how he behaved around his first marriage), but 13 cars? Get out of here, how can he understand the lives of most of the people in this nation?
Had the money been put into Treasuries, you'd be up.
...which, of course, isn't 'private' by any stretch of the word. And hurt the government's fiscal position a lot more than social security.
What exists is a fantasy, and when Congress cuts your SS and Medicare benefits, it will be equivalent to a greater than 100% drop in the stock market.
To rephrase you: The money you have loaned the government is fantasy, because the government will not be able to pay it back. Instead, you should have loaned the government money via some other means which is more expensive for the government.
Seriously, that's complete nonsense. If the government isn't going to be able to pay social security, it sure as hell doesn't need to be issuing Treasury bonds, which cost it more. (Because, as you pointed out, they return more.) Your 'solution' would just exacerbate the problem, turning what is currently debt we don't have to pay interest on, because we can borrow from the social security excess into general revenue, into debt we do have to pay interest on.
It's absurd to postulate that this would, in any manner, make the government more solvent. Unless, of course, the system included an 'opt-out' that let people fail to invest at all, and enough of them choose to do that.
'Private' social security requires investing the money in private industry. Just coming up with other ways to 'invest' the money in the government is sheer semantics, and your idea just increases the amount of money the government is paying out.
"I should also add that, while I don't have much confidence in McCain, I respect his willingness on several occasions to take on the PARTY of MONEY in Washington. He seems to have learned something from the Keating Five scandal."
Precious little, given his record for supporting deregulation over the years. Now he is for increasing regulation and holding these crooks accountable.
Johnny Come-Lately? Sorry, I trust him as far as I can throw the Empire State Building. His record speaks MUCH louder than his words.
If you were a stockholder of a corporation and one of the officers had conducted business as poorly as McCain has, would you reward him by making him CEO?
Obama may not be the be-all-end-all in this either. But we know what McCain as done, and it has helped pave the way to where we are today. Can we really afford four more years of the same failed policies?
Under the current plan, all my income is consumed (if I am the typical American), either by me or elderly through transfer programs, and the government borrows from China or Dubai to cover the shortfall. Under a private plan, I am forced to save more. Consumption declines and investment in plant & equipment increases, which can then provide the income necessary.
It wouldn't cost the goverment more because instead of borrowing from China, they would borrow from me. There's already more than enough debt in existence to satisfy savers, and more money would flow into other investments.
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