Bush's gambit

Posted By Blake Hounshell Monday, September 22, 2008 - 2:30 PM Share

I see now that Democratic Sen. Chris Dodd has come forward with his own proposal for fixing the U.S. financial system. Dodd, who chairs the Senate Banking Committee, is calling for more oversight of the Treasury Department, limits on executive pay (a red herring), and for the government to be able to get equity stakes in companies that take the bailout (potentially a good idea, but also a can of worms).

You'd have to think that even President George W. Bush and Treasury Secretary Hank Paulson, who sent Congress a bare-bones bill with zero oversight provisions, had to see this coming. In fact, I think they want Democrats to take this legislation and run with it. Why? Because once the Democrats put their stamp on the bill, they'll no longer be able to hang any failure around Bush's neck. It'll be their failure, too.

UPDATE: Republican blogger Patrick Ruffini evidently agrees:

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

EXPLORE:BUSH ADMINISTRATION, FINANCE, U.S. CONGRESS
 

BLOGESQUE

3:06 PM ET

September 22, 2008

Maybe so, but...

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

[...]

Sec. 8. Review.

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.

It looks a lot like another iteration of the "Unitary Executive" theory to me. Any attempt to modify it will likely elicit cries of foot-dragging and legislative interference with the authority of the Executive (Treasury, in this case).

 

GABEH73

3:31 PM ET

September 22, 2008

according to the patriot act

According to the bipartisian patriot act, even doubting the motives of this legislative railroading may be considered an act of terrorism.

 

CEOLAF

3:57 PM ET

September 22, 2008

On his way out the door

I entirely disagree with the Mr. Hounshell's suggestion.

This fix will not take effect quickly enough for Bush to be party to the blame game that will follow. He'll be sipping lemondae/iced tea back on the ranch.

In fact, he's rather in a no-win, on this.

If whatever plan the congress comes up with actually works, congress (or particular congressmen) get credit. But if it doesn't work, it's just a continuation of the problem that resulted from Bush Administration oversight -- or lack thereof.

Mr. Hounshell's basic mistake is falling for the Bush arguement that this problem needs instantaneous action, and their implicalation that it will be solved quickly.

In fact, the impact and fallout will be months or years in the making and analysis. Mere implementation of whatever is passed will take weeks, at the very least. Success or failure won't really be discussed until later, and Bush won't have the standing to really engage in that debate.

The reason why Paulson and the Bush Administration had so little to offer is more basic than what Mr. Hounshell suggests. Frankly, they don't believe in regulation or a strong role for government. Therefore, when faced with this kind of crisis that demands a active and/regulatory response from government, they are at a loss. They simply can't come up with anything.

I don't blame them. I couldn't come up with a good deregulation plan. I don't believe in it, or think in a way that could come up something worthwhile along those lines. Of course, I could criticize the hell out of whatever deregulation plan is put in front of me, with most of my criticisms being mostly valid.

Bush & Co offered what they know: When finance people screw up, reset the score and give them another chance. You know, next verse = same as the first.

 

JGARZIK

11:44 AM ET

September 23, 2008

What is your proposed

What is your proposed alternative to "resetting the score and giving them another chance"?

I don't see anyone seriously suggesting that we abandon markets altogether, moving to a planned economy, or even more drastically, a money-free barter-based economy.

Unlike what Air America and Rush Limbaugh would have you believe, "deregulation" as presented is a false dichotomy. Pretty much all commerce is regulated in one way or another. Regulation is often responsible for the creation of a market, in fact. A WSJ article has more. I don't agree with all his conclusions, but this paragraph is spot-on:

"The idea that there is this thing called "the free market" that governments tame or muck up with regulation is a fiction. Governments create the legal conditions for markets; markets shape what governments can do or are willing to do. Regulation versus free-market is a false dichotomy. Maybe in some theoretical universe, if we could start with a blank slate and construct society anew, it wouldn't be. But we exist in a web of markets and regulations, and the challenge is to respond to problems in such a way so that we decrease the odds of future crises."

Jeff @ Armchair FP

 

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