The WALTHER REPORT
By Tony Walther
The word this morning is that John McCain will take part in the debate this evening and apparently those pushing the $700 billion Wall Street bailout bill are hell bent on getting it done today (tonight).
I find myself in the strange position of being on the side of those House Republicans who yesterday were holding out for some different type of bill that would use private money (government guarateed, I guess) instead of the straight bailout. I don’t know what the status of all that is now and whether they were sincere or just making a show for the folks back home who are skeptical.
I thought the political cartoon in my local newspaper this morning said it all: A big fat cat Wall Street tycoon was sitting up against a wall and begging to a little older couple with a sign that reads: “Please get me out of debt, or I’ll be forced to ruin us all.” The little slender old man is standing there with his hands in his pockets while the wife hands the sobbing tycoon some cash from her purse. I think we are all asked to be that lady.
It is hard to swallow that a whole society can be dependent upon those who borrow and leverage and borrow on what they borrowed and leverage and anyway, make money on money they never had in the first place (and pardon me if I don’t tell this is strict or correct financial language, I’m a layman).
Perhaps as a society it is our collective fault for not paying enough attention to the inner workings of our economy and letting ourselves be misled by leaders who don’t understand it themselves and that goes for those in both major parties.
And I am still scratching my head trying to figure out what the urgency is in this bailout thing. I realize it would not be a good thing to let the financial market go down the tubes in a panic because it thought phony money was not available anymore. But folks, if it is all that bad, we need to fix the system. That should be the urgency, and that may take a little more time.
And by the by, I plan to watch the debate tonight. I think this could be the most important presidential debate that has ever taken place. I plan to blog on it afterwards. And now for anyone who is interested, my previous blog follows:
I now recall seeing an earlier tape – was it Monday? – of Republican Alabama Sen. Richard Shelby asking Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernake if they had thought of an alternative to the $700 billion Wall Street bailout plan. I don’t think Paulson answered – he seemed to just sit there bewildered and speechless (maybe he did mumble something), anyway I didn’t think much of it.
But a self-satisfied Shelby, chairman of the senate banking committee, came out of the specially-called Bush meeting Thursday afternoon before anyone else and told reporters: “There’s no deal.”
Where it all stands today, who knows? It’s like a Howie Mandel Deal- No Deal game.
What will Wall Street, picked up Thursday by hopes for a deal, think today?
This $700 Billion giveaway plan for Wall Street is one of the most bizarre, implausible and maybe even frightening turn of events ever. A Republican president proposed to bail out gambling investors on Wall Street, threatening that failure to do so would be the near instant ruination of the whole nation’s economy, with implications world wide.
(No one argues that there is not something terribly wrong right now with the economy. No one, not even the administration, though, is claiming to know exactly how to fix it. Supposedly, the government might eventually recoup losses – make money, I don’t know – in the plan to buy up bad debt. While the official price tag is put at $700 Billion, the $1 trillion figure is often used, especially when the already-approved bailouts are counted.)
And it gets stranger all the time. Now we have Democrats seemingly pushing for a quick movement on a bill, but one with “safeguards” and help for some distressed homeowners who can’t make their mortgages and provisions to prevent Wall Street executives from getting multi-million dollar perks after receiving tax-payer dollars to bail them out. Some Republicans are on board too, but reportedly some 100 House Republicans are not.
A poll I heard on Thursday said that one third of the voters are against it, one third for it, and one third undecided.
The latest is that the objecting Republicans are proposing that it all go back to the drawing board and that a plan that would use private capital (probably much less than $700 billion), with some government incentives, such as tax breaks, be presented. And actually, that in principle, sounds reasonable to me.
It’s hard to tell what the motivations by the various parties are.
I suppose the original idea just to hand over $700 billion with no questions asked was never popular with most Republicans, let alone Democrats, especially since it was from a Republican president. On the other hand, they might have supported it if they really thought the world would come to an end otherwise. And some Republicans may have deviously thought, well at least it will help business and if the Democrat Barack Obama is elected it will tie his hands somewhat in getting social legislation through.
Then came the outcry from the constituency. Especially staunch conservatives or just citizens with a sense of fair play. You can’t just say when the man on the street makes a poor or unfortunate financial decision that it is his problem, don’t go crying to government, but when Wall Street investors make a bad or a just plain reckless move, the taxpayer must bail them out.
Meantime, Democrats saw the hypocrisy of the bailout and the cost, but thought, oh well, if it must be done let’s at least tack on some programs we want – and that was good politics.
Republican presidential candidate John McCain did not know what to think. But now he seems to be pushing some type of bailout (he was against it before he was for it), what type, we don’t know. And of course, meantime, he has suspended his campaign and threatened not to take part in tonight’s (Friday) presidential debate. Many think this is all a ploy. I suspect for the most part it is. It is a rather weak argument to suggest one cannot run for president and make decisions at the same time. Isn’t that after all, making decisions, pretty much the job of the president? Why even George W. Knows that – “I’m the Decider” (although not-so-much now).
Both presidential candidates were at Thursday’s meeting at the invitation of Bush. Actually McCain apparently was the one who came up with the idea to drop everything and put the debate on hold so he could run back to Washington to play hero (he didn’t seem to get anywhere Thursday). Obama reluctantly agreed. And in a statement late in the day, long after Shelby made his “no deal” announcement, Obama implied that he and McCain due to the politics of the whole thing may have actually been a distraction (of course they are politicians). McCain for his part said he was hopeful something (what?) could be passed soon.
P.S. That Hillary might replace Biden as VP thing I inserted as a new lead in my last blog came out of the Drudge Report (as reported somewhere else) and the report said that while it was just a rumor, the usual myth debunkers, such as Snopes and one the Obama campaign has set up, are neither confirming nor denying it. I usually would not bother with something so thin, but I couldn’t pass it up. It seems plausible (if a little Eagleton-like risky). It’s hard to know where the presidential race stands now with polls contradicting each other. Some say McCain is falling on his face, others say he’s made some crafty or clever moves, such as the suspending campaign move and picking Palin – and then there’s always the race card. And if Obama says he’s “behind Biden one hundred percent”, don’t quit your day job Joe.