God, I hate the politics of this Wall Street bailout. More than any other issue I can recall in my four decades as a political junkie, this one leaves me agitated, dissatisfied and more than a little baffled. The usual moorings of political philosophy don’t apply: unlike most complicated issues of public policy, the opportunity to riff off of one’s political “heroes” doesn’t really exist here. More likely than not those heroes are at each other’s throats.
Let’s say, for example, like me, you consider yourself to be something of a populist. Most likely, in that case, your favorite US Senators include Bernie Sanders of Vermont and Tom Harkin of Iowa. And what did these two lions of modern populism do last night in the Senate?
Sanders, while agreeing there’s a very real financial crisis that must be addressed, found the bill repugnant and voted no.
Harkin, while agreeing the bill stinks and will need to be amended and improved in the coming year, held his nose and voted yes.
Paul Krugman and James Galbraith, liberal economists with a long history of concern over this nation’s growing economic inequality (a subject of particular concern to populists), both find themselves in the Harkin “hold your nose and vote yes” camp. Like Sanders, they think the current bailout plan stinks; but they also believe that it’s better than nothing. And Krugman, in particular, makes a compelling case that while there are better options available, as a matter of political reality, none of these other approaches stand a ghost of a chance of being adopted by Congress before the end of the year.
And let’s be clear: no one with any credibility in economics denies that we’re in a hell of a mess, or that for the government to do nothing under the circumstances would be an invitation to disaster.
Credit is already dangerously tight. Even state and local governments are having trouble obtaining access to funds: banks are increasingly reticent about lending to other banks. And make no mistake: these are the very things that recessions (or worse) are made of.
So, do we say “go screw yourselves” to Wall Street? Doing so certainly would feel oh so good (at least until we check our 401(k) reports). But, of course, if doing so results in a severe recession it’s the working stiffs (or am I now supposed to say the Joe Six-Packs?) who will be hurt the worst. They always are.
Or do we follow Krugman and Harkin et al. in swallowing hard and settling for the lesser of two evils?
As I said at the beginning, I absolutely hate the politics of this thing. How the hell am I supposed to know who’s right in as complicated a mess as this, especially when the leaders I normally turn to for guidance are themselves all over the map on the issue?
At the end of the day, I suppose I’m still in the Krugman /Harkin camp: the risk of inaction is simply too great. Experts across the ideological divide seem to agree that some action is necessary and for me to tell the experts to go to hell so I can follow my own uneducated “wisdom” would be, well, just so GOP.
As I said recently, sometimes you have to actually govern. Besides, if Obama wins and the Democrats increase their numbers in Congress the opportunity for a more progressive response to the crisis will still exist.
So I say pass the crappy bill then try to make it better later. But I don’t like it. I don’t like it one little bit.