Campaign Updates and Media Headlines 9/23/08
In making his push to administer the largest federal bailout of Wall Street in history, Treasury Secretary Henry Paulson is seeking unfettered authority. McClatchy poses the question today, “can you trust a Wall Street veteran with a Wall Street bailout?,” referring to Paulson, the former CEO of Goldman Sachs: “But the conflicts are also visible. Paulson has surrounded himself with former Goldman executives as he tries to navigate the domino-like collapse of several parts of the global financial market. And others have gone off to lead companies that could be among those that receive a bailout.”
Daddy doesn’t know best (by Paul Krugman)
I’ve had more time to read the Dodd proposal — and it is a big improvement over the Paulson plan. The key feature, I believe, is the equity participation: if Treasury buys assets, it gets warrants that can be converted into equity if the price of the purchased assets falls. This both guarantees against a pure bailout of the financial firms, and opens the door to a real infusion of capital, if that becomes necessary — and I think it will. Can this be done? Can the Paulson juggernaut be stopped? I’m starting to think yes. Paulson displayed a lot of arrogance here — he basically marched in and said Daddy knows best, don’t worry your pretty little heads about the details. He offered no, zero, zilch explanation of how the plan was supposed to work — just “it’s a crisis and we need to act now.” And he overreached, especially with that demand for immunity from any review.
Now we’ve had a lot of pushback from economists and financial analysts, and the realization has sunk in that this particular daddy has shown very little sign of knowing best. So there’s a real chance to do something quite different.
The Way Forward (by Stirling Newberry, writing at Daily Kos)
The correct response is to expand the FDIC, begin taking over institutions as a whole, providing immediate debt relief through an HOLC, and declare a national emergency to enforce austerity and prevent any short term attempts to profit from the financial chaos. A windfall profits tax on oil companies isn't a bad idea either, since it would bring in tens of billions of dollars right when they are needed the most. This solution, or some version of it, is in line with proposals from economists and political figures such as Robert Reich, Paul Davidson, Nouriel Roubini and others. It also leads to the correct solution to the larger fiscal crisis, which is removing the oil bottleneck to the growth of wealth, and therefore the growth of wages to pay financial instruments, and the cramming down of instruments which claimed the profits of a new economy, while at the same time tried to prevent it.
In that future come a great drive to reduce consumption, increase savings, increase exports, globalize opportunity for all and not just for some, and create a very different system of work. But that is another day. Today's purpose is to say no to dictatorship, and to craft a counter which is yes to insurance and accountability.
Click through to read the whole post. It’s very informative, and not so wonky that a person like me, who hated studying economics, can’t get the gist of it.—Caro
Newsweek: America is a center-right country (County Fair, Media Matters for America)
And that for "40 years, Democrats have been mostly out of stop with the nation."… So for all those years in the last four decades when Democrats controlled Congress (and often the White House) they were out of step with the country? And when Democrats threw out the Republican majority in recent years, they were out of step?
Also note that Newsweek's Jonathan Darman, in making his case, does not point to a single poll or survey result to back up his claim that America is a center-right claim. We're not surprised. Because as a Media Matters study indicated, the relevant polling data suggests just the opposite; that across the board Americans side with a Democratic, or liberal agenda, in terms of big government, gun control laws, gay rights, abortion rights, tax cuts and foreign policy.
I’m going to pound this and pound this and pound this until somebody finds me dead with my head on my keyboard or until somebody listens.
DEMOCRATS DON’T BUILD THEIR BRAND OVER THE LONG TERM.
Not only that, even many in the Democratic leadership seem to have fallen for much of the right-wing propaganda that right wingers HAVE been propagating over the last 40 plus years. America is a center-left country, but the left isn’t informing Americans that’s what it is, so in the absence of a contrary message, many folks, highly paid Newsweek commentators included, just accept what they DO hear—from the right.—Caro
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