Sunday, September 21, 2008

Politics: The Bailout Plan--A GOP Trick or Obama's Opportunity?

Note: This is intended for cross-posting, so I apologize for what may seem to be needless repetitions from what I've previously written.

After reading the Administration's bailout proposal for the financial-services industry, it's hard not to think it's some sort of joke. In essence, it would authorize a no-strings-attached transfer of $700 billion from the U.S. Treasury to Wall Street. They get to clear what Atrios so aptly referred to as the "Big Shitpile" of devalued securitized mortgages from their books, the U.S. taxpayers get to foot the bill, and Wall Street has no obligations in return for the money. Further, Treasury Secretary Henry Paulson has absolute authority over the disbursement of funds. There is to be no check on his actions beyond having to issue a report to Congress after three months, and he or his successor having to make additional reports every six months after that. As the draft of the proposal states, ""Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." They have got to be kidding, right?

Well, maybe they are, but perhaps the joke is on the Democratic Party, and by extension the vast majority of the nation's people.

Apart from Hillary Clinton, who demonstrated on Thursday a firm grasp of the underlying problems, and who offers strong proactive solutions, Democratic leaders seem absolutely clueless. Harry Reid probably leaves one shaking one's head the most--his immediately infamous statement that "No one knows what to do" just did so much to inspire confidence--but Obama hasn't been much better. This is a time for sober analysis and proactive solutions, not finger-pointing and name-calling, no matter how accurate. However, solutions don't seem to be forthcoming on the Democratic end.

Which means one of two things: the Democratic Party is going to sit back and watch the biggest looting of the U.S. Treasury in the nation's history, or they're going to play obstructionist and nothing else. Either way, they give John McCain something to run against. He can bolster his maverick image by ostensibly coming out against the Administration plan, or he can blast Obama and the Democratic Party as a bunch of do-nothing scolds.

Obama would be well-advised to get completely out in front of this issue. Yelling long and loud about the failings of the Administration's proposal is imperative, but it needs to take a back seat to putting forward an alternative that, at the very least, attaches significant strings to this money and gets Paulson and his successor on a good, strong leash.

Obama should work with Hillary Clinton when it comes to putting together a proposal; this is another chance at healing the fracture between the bourgeois and working-class divisions of the party. It would also be best to support her if she's interested in taking over the Senate Democratic leadership, as it's obvious that Harry Reid doesn't know his elbow from his kneecap when it comes to the challenges the country's currently facing.

Whatever Obama does, he should avoid falling into his bad habits by trying to coast, thinking that because he isn't the Republican he'll win by default. McCain has turned the tables on Obama at least twice before, first with the post-Berlin advertising and then with the selection of Sarah Palin, and there's no doubt he has the capacity to do it again. Obama should not make it easy. He needs to follow Bill Clinton's lead in 1992: make people feel he understands their concerns, and offer a practical solution. I know Obama has it in him; the energy policy speech he gave in Lansing on August 4 is proof of it. We need to see more--a lot more--where that came from. This isn't just about winning an election; this is about doing right by the American people.

One other thing: Obama should publicly demand ASAP that the focus of Friday's debate be shifted from foreign policy to economic issues, specifically the current crisis. That's a quick step in a proactive direction right there, and McCain would have no choice but to go along.

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