The bailout problem

David Axelrod is right:

Pundits will spend a lot of time predicting who will win in November. But more is at stake than the fate of Democrats or Republicans. What's at stake is whether the powerful corporate special interests will go back to writing our laws or whether our democracy will remain where it belongs -- in the hands of the American people.

It is more important than either Democrats or Republicans. Unfortunately though, when push comes to shove, neither the Democrats or that Republicans are willing to side with the people over the contributions/corporations. Axelrod is all affront because he views a disproportional percentage of the money going to the Republicans instead at least equally to the Democrats. Least of all Obama, who Axelrod had no problem with taking the most amount of campaign cash ever, from Wall St  financial interests.

And of course, Wall St got their backs covered, 100 cents to the dollar on bad investments, without even a haircut, by President Obama. This is a mere rehtorical exercise on the margins for Axelrod to try and claim a substantive difference. A few billion here, compared with  trillions there.... sorry, there's no contest.

I guess there are partisans out there who will buy Axlerod's spin, but they are part of the problem. I don't think the Democratic establishment realizes how huge the shot in the foot was over the TARP bailout move (and the corresponding Ben Bernanke-led fed move on behalf of the banks-- it really meant no difference whether Bush or Obama was President in this regard).

The Republicans in DC are beginning to get it in their primaries. I would agree with this assessment that its the galvanizing issue over which the Tea Party candidates have defeated establishment Republicans:

Paul... didn't need to remind voters that McConnell was the one doing the pushing. And he didn't need to point out that Bunning had defied McConnell by refusing to vote in support of the bank bailout in October 2008. No matter how muddled and contradictory the Tea Party message can sometimes be, the TARP legislation, as the bailout is known, has always been a fundamental part of its creation myth. When you talk to Tea Party leaders, they'll express their disgust with Obama, for sure, but they'll also point out that the movement was formed not in response to the president but in response to the bailout—which was voted on before Obama entered the White House—and that those who supported it should be held accountable.

That's how McConnell, a guy you'd think would be wildly popular with Republicans in Kentucky (he'd spent the last three decades turning it from blue to red and now, as minority leader, is masterfully using Senate procedures to obstruct and frustrate Obama's agenda at every turn) came to be a target of the Tea Partiers within his own state. The fact that he'd been in Washington so long—and had been one of thirty-four Republican Senators to vote for TARP—was proof that he was tainted. "There's a difference between a Republican with a little R by his name and a conservative," a Tea Party leader named Mica Sims said of McConnell when I spoke with her in Lexington. "The next time he has an election, he'll probably have a primary challenger."

Paul capitalized on the rage toward the bailout and toward McConnell (who himself isn't on a ballot until 2014) to hammer Grayson throughout the primary. It didn't matter that Grayson also opposed the bailout; Paul attacked him for holding a fund-raiser with seventeen senators—including McConnell—who voted for the TARP legislation. Grayson was McConnell's guy, and Kentucky conservatives were going to use him to send a message. Paul wound up trouncing him by twenty-three points.

Its akin to the vote in favor of allowing the Iraq Resolution to open the door to invading Iraq, among the Democrats. The polls show an interesting divide of late.

Among Republicans, a mere 25% or support the bailout saying it was needed; among Democrats, its a 50-50 split. Now, the only reason why its 50-50 among democrats is because Obama is the de-facto face of the bank bailouts, and its a pretty good bet that a large part of that 50% whom back the bailouts among Democrats do so out of loyalty to Obama rather than wanting to bailout Wall St on principle.

If the Republicans take control, its very likely they will not change at all, and be just as owned by corporate interests as they have in the past. That could provide an opening. Its tough to see how Democrats regain footing on this populist issue, because even thought they have improved, its on the margin and pales with the bigger mistake. Basically, Democrats are left waiting for Republicans to let down the populist anger that is bringing them into power.

I'm not convinced though that it swings back to the Democrats that easily, and instead believe that the opening for populist insurgencies in both party primaries will increase, and ultimately, in the '12 GE, is open to happening at the Presidential level.

 

 

 

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7 Comments

Smarts, not loyalty

"Among Republicans, a mere 25% or support the bailout saying it was needed; among Democrats, its a 50-50 split. Now, the only reason why its 50-50 among democrats is because Obama is the de-facto face of the bank bailouts, and its a pretty good bet that a large part of that 50% whom back the bailouts among Democrats do so out of loyalty to Obama rather than wanting to bailout Wall St on principle."

I like to think it's because most democrats don't have the memory of a pin, and remember those fraught days between the Lehman Collapse and the second TARP vote. Most Republicans ofcourse have a very selective memory, not restricted solely to the economy. Infact the only thing they can remember seems to be Carter...

 

by vecky 2010-09-23 03:52PM | 0 recs
RE: Smarts, not loyalty

So, assuming your characterization of the President is correct, that he is a corporate dem.  Why does big business not support him?  How has he failed to win the support of Wall Street and other big corporate interests? 

He seems to be hated.  Are they so stupid they don't understand that he plays for their team?

by zmus 2010-09-23 04:15PM | 0 recs
RE: Smarts, not loyalty

Well, they don't like the hand that is feeding getting bit with rhetoric is the simple answer.

by Jerome Armstrong 2010-09-23 04:24PM | 0 recs
People don't read news these days

Can't blame them. Not long ago Andrew Ross Sorkin had a great piece in the NY Times about how the Wall Street people had embraced Obama as one of them (Columbia, Harvard etc) and who would be part of their team. Indeed he was, until the passage of the fin-reg bill, which even though institutionalizes too big to fail is somehow taken as this great insult by these same people. In short these guys wanted to party all the time.

by tarheel74 2010-09-23 05:01PM | 0 recs
RE: Smarts, not loyalty

Of course, perhaps the Wall Street Powers that Be are just not that strategic minded, but a tough sounding President that then gives them everything they want when no one is looking seems like the ideal politician.  Of course, perhaps all the money being sent to his political enemies is all part of the ruse. 

by zmus 2010-09-23 05:55PM | 0 recs
RE: Smarts, not loyalty

I hope we can agree that the health industry is pouring literally hundreds of millions of dollars into the campaigns of democratic congress members to protect their hard earned gains from the last health care bill. 

That is happening.  Right? 

Because the republicans want to take this away from them by defunding the corporation friendly health insurance bill.  Surely, we must be seeing an industry wide push to protect the democratically provided profits.

Right?

by zmus 2010-09-23 06:25PM | 0 recs
RE: Smarts, not loyalty

Why you harshin' everyone's anti-hope buzz around here?

Accepting major steps forward is soooooo 2009.

by the mollusk 2010-09-23 06:31PM | 0 recs

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