Writing at TPM, former Secretary of Labor Robert Reich provides a useful perspective on the political machinations to secure a Wall Street bailout. Useful in two senses: It can help us cope both psychologically and politically with the strong possibility of losing the upcoming vote in the House of Representatives. He writes:
An important distinction here. While more Americans are coming around to "supporting" the bailout bill, the vast majority still hate the idea of bailing out Wall Street. They're for the bailout bill now only because they fear that a failure to pass it will have worse consequences -- drying up credit at a time when Main Street is struggling. But make no mistake: America is mad as hell. They resent what they perceive as extortion by the Masters of the Universe.
The GOP is trying to steal the mantel of angry populism that should rightfully be ours, now that their treasured faith in the "free market" has been thoroughly discredited. Even if they do manage to save a few House seats this way, they are running on fumes. The much more difficult challenge will be dealing with Obama's championing of "bi-/post-partisanship", which has shown it's moral bankruptcy once again in support for the (lipstickized) Paulson Plan. Reich represents the hope that this is, in the larger scheme of things, more means than ends.
Reich balances outrage with the bailout with some hope about long-term opportunities that remain:
Democrats should be angry populists, given their traditional role of protecting and championing the underdogs in American politics, and especially considering the absurdly wide gap that's opened up between the rich and everyone else. But in recent years Democrats have ceded the mantle to Republicans, who now mimic the faux populism of Sean Hannity and other right-wing talk show demagogues....
In fact, the bailout bill isn't really taxpayer supported. It will be funded by additional federal debt, issued mostly to foreign governments -- especially the Chinese and in the Middle East. And, strictly speaking, it's not even a bailout. The Treasury will buy and hold mortgage-backed securities whose value is now unknown because there's no market for them, until housing prices start rising again, by which time the securities should be worth something -- perhaps even more than the Treasury pays for them....
But whatever it's called and however it's financed, it's still an outrage. America's foreign policy is made no more flexible by going into deeper hock to the Chinese and the Middle East. And the deal still subjects American taxpayers to some risk, especially if the housing market doesn't bounce back for many years. Worse, the bill can't help but prop up the earnings many Wall Street executives whose malfeasance, greed, and stupidity got us into this mess in the first place. And it does nothing for average Americans except avoid economic calamity....
The larger economic outlook is not encouraging. All signs point to the economy worsening, bailout or no bailout. Unemployment will continue to rise. Median earnings will continue to drop, adjusted for inflation. More Americans will lose their health insurance.
The Era of Angry Populism has only just begun. Let's hope Obama wins, and is able to mobilize the anger into fierce pressure on Congress to get his agenda enacted, as well as reform Wall Street and Washington.
What Reich is doing here is preserving hope--with what I believe is a rational, fact-based argument. As ever, hope is not a plan. But it points quite clearly to what a plan should or at least could be all about.
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