A Note on 'Democratic Deal-itis'

by: Matt Stoller

Thu Sep 25, 2008 at 19:53


So the deal fell apart.  I reported this first, and because I was out on a limb I was getting pressure from various insider operatives throughout the day telling me that I was wrong, that there was a deal in place.  I knew that Pelosi was negotiating with her own caucus at 3pm for a meeting with Bush at 4pm, so how could there be a settled deal in place?  Nevertheless, it's a scary place to be to directly contradict political leaders because you look really really stupid if you're wrong, and it's not like I have an institution to bail me out when I'm wrong.  Note that even reporters scared to say what was right in front of them; they were putting into their stories that points of contention hadn't been ironed out even as they titled their stories 'deal reached' and started them with four paragraphs on how a deal had been hashed out.  And now all of a sudden it 'fell apart'.

This happened with FISA as well.  Steny Hoyer kept saying 'we're near a deal' every few days, and eventually after getting it wrong for months, it came true.  It seems like Democratic political leaders are more interested in cutting deals just to cut deals, they like forming gangs in the Senate and just generally passing legislation.  It is how they see their job, it is what they do, it is in many ways who they are.  Let's just get something done, and by that they mean 'let's eat some shit and pass a bill'.  Don't stand in their way because then you're making things 'too political'.

That's why they are angry at McCain and the House GOP for screwing this up.  Now I'm mad at McCain because he's crazy and wants to use this chance to cut more taxes (and probably start another war if he can).  But that's not what these bureaucratic Democratic leaders dislike; they had a deal that the leadership thought it could shove down the throats of the caucus, the Bush Dogs being the only group that willingly enjoys eating shit.  They had cut a deal.  A deal.  Don't you understand, they were going to pass something, get something done, isn't that awesome?

And so they are mad that McCain came in their and injected 'Presidential politics' into the negotiations and fucked it all up.  Another way of looking at it is that McCain saw the writing on the wall, decided that he wanted to take advantage of a sour public mood, and acted like a narcissistic drama queen.  But on one level he's right.  Politics is how we're going to solve this, there's an election in forty days and the public is going to be able to weigh in.  And that's how it should be, that's called democracy.

So fuck these people and their 'deals'.

Matt Stoller :: A Note on 'Democratic Deal-itis'

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A Note on 'Democratic Deal-itis' | 38 comments
Bravo!!! ... (4.00 / 4)
and credit where credit is due ... if a deal isn't done .. and the market drops 600 or 700 points tomorrow .. we can blame St John the Maverick .. so we'll see
Now with no deal, McSame has to stay away from the debate? (0.00 / 0)
McSame loses all ways - unless he actually gets to vote against the deal - or is somehow is seen as the savior of the deal.

Seems likely that negotiations will continue through the weekend. And now we can blame McSame for screwing up the deal.  

It's not all about the Blue Dogs (4.00 / 1)
How are the Blue Dogs vital in this?
The whole bailout crisis looks like it was set up to take advantage of the election season--not the collapse of Lehman but the efforts by Bernanke and Paulson to stoke the panic.  If there was not a full-scale crisis of confidence they succeeded in creating one.  The gambled on using time as their ally, but appear to have lost.

Is there any deal that the Republicans in the House can agree to that is not absolutely insane?

The problem is that the Blue Dogs give away the store before it opens... (4.00 / 3)
...They insist on starting negotiations from the center moving right, giving up vital ground before any actual negotiations begin.  We need the negotiation/debate to start as far left as possible, and concede very little towards the center as a compromise.

Traditionally, moderates work behind the scenes with their own party on such major issues, getting a framework for what they are willing to agree with established before the leadership negotiates with the opposition.  The leadership knows they have to give x, y and z away to get their own votes solid, but the opposition doesn't know what x, y and z are.  The Blue Dogs have just skipped the process in a blatant power ground - with the added bonus of increased greed and corruption from the center outward.

Somehow we need to reclaim the party and process, putting the Blue Dogs back in a secondary position to the Party as a whole.  They receive all the benefits of the Party Brand, Infrastructure, Organizations and Funding, with few of the disadvantages.

Of course the Democratic party differs from the Republican party in many ways, one of which is that in times of crisis and strife, the Republican party coalesces while the Democrats are more apt to scatter.  The Republicans have much better infrastructure in all aspects (media, ground/field/community), and are more willing to demand what they want with force and confidence.  Our party has trended to the center over the last two decades while theirs has moved farther out to the wing, the lack of a significant quantity AND quality of true liberal voices has made it difficult to properly express the position of the left - it goes a step further and allows the Media/Republicans to label centrist Democrats (Obama, H&B Clinton, etc, etc) as "wildly liberal."

More and Better Democrats, move the fight to the left and stop being ashamed of the word Liberal.

[ Parent ]
cutting deals just to cut deals, (0.00 / 0)
Matt had a great essay on "better" not "more" Democrats.  Or was that Chris?  They're both so good.  In any event, the points he made were right on target.  A coalition of better Democrats that are necessary to passing anything and everything.  It would take the power away from the Blue Dogs and REpublicans and give it back to the people and the Democratic wing of the Democratic Party.  
[ Parent ]
A Real Risk (4.00 / 2)
McCain decides that the public hates this bailout and notes that his ring wing base hates it too, so he goes to Oxford and plays Huey Long to the people, opposing any bailout, while rallying his base and pealing off luke-warm Obama supporters who hate this deal.
but how? (4.00 / 1)
He basically endorsed the compromise by going to DC, and claiming the future of the country depends on passing it. Of course, he can reverse on anything at a drop of a hat, but it seems like a bizarre plan.

New Jersey politics at Blue Jersey.
[ Parent ]
Because McCain is a Gambler... (4.00 / 4)
and this is his all-in knock-out punch.  What's there to lose?

I just listened to Rahm Emanuel on Countdown brag about the great job the Dems had done negotiating the bad Paulson proposal into a good bill that protects the little guy (while ragging on consumers who foolishly made "liars" loans).  But, no reputable economist likes the deal, agrees to the immediate need Bush pimped last night, or even thinks that buying bad loans and socializing Wall Street losses is a good way to address tight credit in the financial system.  The deal sucks and any congressman I can like should vote no.

That is the sentiment that House Republicans support as do some 65% of Americans.  Why would McCain NOT go all-in and oppose any deal as bad for Main Street Americans?  What has he got to lose?  He has so f--ked up his campaign, he needs to connect on this Hail Mary pass, and he might pull it off.

[ Parent ]
That'll be weird (4.00 / 1)
Because as recently as Wednesday the McCain campaign was claiming that if we didn't get a deal literally by monday, "we'll see 12 percent unemployment".

Of course, though a turnaround like this would be weird, it would not in fact be the weirdest thing McCain has done this election...

[ Parent ]
Also, according to his "soul-mate" (0.00 / 0)
we need this deal for insurance and reducing taxes in order to cut them and remember that foreign trade is good and not scary.

Or something.

[ Parent ]
Also, health care (0.00 / 0)

[ Parent ]
Thank god (4.00 / 2)
I was afraid that they were going to pass something before the debate, giving McCain an excuse to attend.

Can't wait to see that empty chair...

awesome (4.00 / 2)
i've never been more grateful to McCain.  Too bad the Democrats wouldn't do this.  Your analysis on why is really helpful too - it helps to understand what people do believe in who are in politics when they don't believe in politics.  Funny creatures.  Why didn't they become bureaucrats, I wonder - it's much more of that mentality.

Anyway, I'm really happy for the time being, though now i wonder what the best strategy is.  If the leverage to stop the deal came from the House Republicans and it's likely that a deal of some kind will probably be reached -for economic reasons if nothing else, what's it going to look like.

Hopefully like this: http://www.unionvoice.org/campaign/step_up/forward

(please sign :)

Or Roubini's.

His intent was ill (4.00 / 1)
But the effect good. 700 billion dollars to prop up junky mortgage securities was worse than a waste of money - it would do actual harm by distorting the prices of the junk and slowing adjustments. Best of all, he looks like a blundering idiot too!
[ Parent ]
Exactly what I heard today (4.00 / 4)
from students in my high school honors government class (seniors), a direct quote:  "so what if he is a jerk and that he is doing it for political reasons, right now he is doing the right thing by trying to blow this up."

From the secretaries in the school's front office, "do these assholes really think they can get away with this thing...they're robbing us blind!  They should all be in prison."

The people...listen to the people.    

[ Parent ]
i think people don't understand what "blow this up" means (0.00 / 0)
which is fair for a high school student unless they've already read about the history of the Depression (buying on margin + bad information + government encouragement = financial collapse...not really that hard, but it seems to have been hard enough for the American elite).

What I would like to see is a proper glidedown so that we can have a 1.5 year recession, not a 10 year one, and along the way build in enough social programmes so this NEVER HAPPENS AGAIN because of domestic American politics.  Can you imagine what people who lived through the Depression would be saying if we asked them about this bailout bill?  Or all the people in the early 20th century that fought and died so that we could have a 40 hour workweek or all the people who still do in poorer countries so they can have similar rights/power now?  It's absurd!

[ Parent ]
sorry disregard that comment (0.00 / 0)
i got so used to replying to people about the bailout itself that i didn't realize you were referring to the mccain bill.  Good to know there are some sensible high schoolers out there :)
[ Parent ]
GOP not credible actors (4.00 / 1)
our leaders refuse to acknowledge that. It sometimes seems a lot more complicated, but that's really all there is too it.  The modern GOP sees politics and government as a means to enrich themselves and their supporters.  Dems see it as some noble endeavor ala West Wing to do what's best for the country.  And they get pwned every time because they negotiate under the incorrect assumption that their counterparts approach politics as they do.  Thus what comes out of the legislative sausage maker is half sane and in the public's interest and half insane and grossly in favor of powerful special interests.  


Rock Fucking On House Republicans!!! (3.20 / 5)
at least for tonight I say amen for sticking hard to their anti-government principles. too bad Dems in the house aren't smart enough to hear Americans when they are really pissed off and completely revolt against the crap being fed by Paulson.

Rock it out house GOP - kill this sucker.

Obama sadly is going to take a hit for sitting on the sidelines too much. but thats what you get when you have a lead and play defense.

Michael Bloomberg, prince of corporate welfare

Sort of sad, isn't it. (0.00 / 0)
When "conservatives" have more brains than the Democratic leadership, it makes me wonder why I'm a Democrat.  
[ Parent ]
great work Matt (0.00 / 0)
Thanks for getting it right and for the unforgiving, razor-sharp analysis on this one.
Does anyone know about this mortgage insurance plan (0.00 / 0)
speaking of the GOP house, they want to "rely on mortgage insurance, provided by the government, rather than taxpayer purchase of frozen mortgage assets."

anyone have any insight into what that is about, how it would work, and what the liabilities are. doesnt sound much better than buying the assets.

Michael Bloomberg, prince of corporate welfare

McCain is doing his best to scuttle a flawed but necessary (4.00 / 1)
deal with bullshit objections and our in-house Pitchfork Perfectionists are cheering him on.

The deal was nearly done; it was done in at the last minute by McCain for political reasons and everybody knows it.

Something very similar to this is going to passed; it's just going to get done a few days or weeks later than it would have otherwise. In the meantime, the debate is off and the stock market is headed way down.

This Dodd bailout, or something resembling it, is the only thing that stands between soft and very hard landings of this battered, fragile economy. McCain has just greatly increased the odds of a rough landing.  

Not really (0.00 / 0)
The argument is that this problem was caused by too much credit and that we should prop up these institutions so they can keep on giving us too much credit.  Its a serious mistake.  

The liberal wiki
Send an email to terra@liberalwiki.com
[ Parent ]
Extreme oversimplification (4.00 / 1)
So you're prepared for the grinding halt this nation will come to when it makes the immediate transition from too much credit to frozen credit?  You've got to realize that you'd be more fucked in the process than any rich guy on Wall Street would.

The argument is that this problem was caused by too much bad credit, and that the only way investors in the global pool of money will even touch our banks with a ten-foot pole again is to get the junk bonds off their books.  Yes, it's Wall Street's and Washington's fault entirely that we are in this situation, but it's you and I who are going to suffer the consequences regardless of what bill they pass.  This country's economy cannot survive without credit.  Jobs cannot be created without credit.  People cannot get paid without credit.  It's fucked up and horrendous, but it's where we are, and wielding a pitchfork and a simplistic argument ain't gonna do a damn thing to help.

You owe it to yourself to listen to This American Life's fantastic and common-sense explanation of the economic crisis.

[ Parent ]
then you'll probably be able to pick up some financials tomorrow at a discount (4.00 / 1)
honestly a week of delay won't make a difference. so credit will be a little tighter for a week. it will loosen up when the bailout goes into effect.

Michael Bloomberg, prince of corporate welfare
[ Parent ]
"Hard Landing" for the Economy? (4.00 / 1)
What is your basis for that?  Because the blue suits who brought you Wall Street's rape of our economy, while earning salaries that account for 20% of New York City's tax base while paying low taxes thanks to the Bush tax cuts?  Is that your source?  The same guys who started out wanting to buy bad loans from their buddies while leaving them to resume profit-making at those low tax rates?  The same administration that sold the AUMF to invade Iraq using the same tactics?

I just don't see the urgency.  My B.A. in Economics from Williams is 42 years old, but it has served me well for decades.

[ Parent ]
Thanks (0.00 / 0)
My B.A. in Economics from Williams is 42 years old, but it has served me well for decades.

True. You're showing us a very wise head with your comments today.  

[ Parent ]
No it's because my lack of a B.A. in economics (0.00 / 0)
hasn't caused me to reduce all of modern economics into a daffy Grand Unified Theory of Fat Cats.

Already WaMu is going under. If a lot of banks and financials go under, which they have begun doing and look well on their way to continuing, then we've got a hard landing.

We're talking about a lot of job losses, a relative lack of credit, a crashed stock market, a guaranteed sped up worsened recession, and global market that will tank. And all you've got is a desire to stick it to the Fat Cats, like something out of a 2-act Soviet-produced Socialist Realist play.

The Dodd plan, as opposed to Bush/Paulson and the execrable emerging Republican monkey wrench alternative, appear (because we haven't seen the details and we need to) adds in protections for homeowners, punishment for CEOs, equity, and it potentially cuts the money in half.

[ Parent ]
Not to mention (4.00 / 2)
that if the "Economic Rescue Principles" proposal that the House Republicans are backing emerges the victor, there will probably be no leverage anymore to include provisions that will protect homeowners facing foreclosure.  With that "solution," the capital gains tax gets halted for a few years, the private sector supposedly buys the bad debt (although who the hell would buy it, I don't know), investors as a whole get richer by the repeal of that tax regardless of whether they are taking on the bad debt risk or not, and taxpayers as a whole get royally screwed by the loss of revenue from capital gains taxes.  And who wins in the end?  The Market, of course, and the very laissez-faire attitude that got us here in the first fucking place.

I'm starting to feel like the evils here are equal between the Dodd-style bailout and the one I described above, but that at least some good for the common guy could come from the Dodd plan.

You owe it to yourself to listen to This American Life's fantastic and common-sense explanation of the economic crisis.

[ Parent ]
Exactly (0.00 / 0)
The Pitchfork Perfectionists have been pretending that Dodd=Paulson and not recognizing that Dodd very much doesn't equal Boehner (or whoever the hell is writing up the alternative.)

They're also equating our problems with a daffy Grand Unified Theory of Fat Cats that sees this as 700 billion going immediately into the pockets of Fat Cats. That's not how this works, as you have figured out.

[ Parent ]
I personally assumed that a deal was dead from the go (0.00 / 0)
Democrats probably assumed that Republicans would fall in line but Bush wields negative power over them and they hate this.

McCain didn't fuck things up as the basis for the deal was always nonexistent.  I think the only two people who really wanted this passed were Bush, Frank, and Dodd (along with a financial district republican or two).

They were trying to argue that hey if we don't complete this by friday the market will collapse on monday, but Bush just has no credibility.

Now we get to enjoy the fun of a campaign about actual economic issues.


The liberal wiki
Send an email to terra@liberalwiki.com

Why don't the Dems feast on the GOP disunity? (0.00 / 0)
Now, this is a point that should be hammered into the public mindset: Republicans don't even support their own administration! You just can't trust them to support their own president. And that's not the way to get America's problems solved. So, voting for this party of disunity is a sure recipe for disaster.
[ Parent ]
Washington Mutual failed tonight. (4.00 / 1)
Its assets and deposits will be bought by JPM Chase.

I'll bet you we have the Dodd deal done by Sunday.

for those who haven't seen the account of today (4.00 / 2)
this from Huffington Post is a good accounting.

So far, it's as I said.  The Republicans are trying to stick the democrats with this, period.

Even the headline "McCain scuttles talks", can be turned into a great ad from him - he took on those wanting to bail out the fat cats, and won.

Presidential chicken... (0.00 / 0)
McCain said that we would have a DEPRESSION on MONDAY if no deal was reached, which was the reason why he was scuttling the debate.

So now his strategy is to blow up the deal, force the Democrats to pass something because it may be necessary to avoid a depression, and then blame them for it?

Fan-fucking-tastic.  I hope people realize what the hell is happening.

[ Parent ]
Hoyer is an idiot (4.00 / 1)
By spreading his mantra "we're near a deal" to the public, he makes it look like Dems are accomplices of the horrible Bush/Paulson plan, while the rethuglicans are the ones determined not to bail out the greedy bankers with public money. Great negative PR by that moron Hoyer, as usual. No surprise the reputation of the Dems in the House is so low. Those appeasenicks don't deserve any better.  
Democrats get outplayed once again (0.00 / 0)
Bush is Lucy, setting up the political football.

The Congressional Democrats are Charley Brown, moronically convinced they have no choice but to once more try and kick the ball.

But this time, instead of Bush snatching the ball away, it's McCain who intercepts the play, grabs the ball and runs with it to the opposite goal line.

The score: Bush and the Democrats look like a losing "team" while McCain boasts of saving the taxpayers' $700 billion.

And Barney Frank is once again revealed to be a capitulating tool.

[ Parent ]
A Note on 'Democratic Deal-itis' | 38 comments
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