The best headline that is making the rounds: “House to Wall Street: Drop Dead.” Our dysfunctional political system has done in our dysfunctional economic system, which only seems appropriate. What happens next? If Pelosi and Boehner can’t twist the appropriate number of arms hard enough in the next few days, I suspect the congress will let Paulson let things go ad hoc-ing along until after the elections. Of course, it is the Republican’s fault, and Boehner evidently let members vote their “conscience” (or their likely election consequences) with predictable results. But every political and economic player in this debacle have their own responsibility for its failure. Prophylaxis is always a tough sell, Bush is the greatest wolf-crier in American history, and our faux populists are comfortable offering faux solutions to very real problems. If 25% of the workforce is selling apples next Monday, critics right and left will say that reports of the economy’s death were exaggerated. It wasn’t a good bill, in many ways. Almost nothing for homeowners, enough loopholes in the executive compensation restrictions to drive a $10 mil salary through, and perhaps most importantly, very weak provisions for government take over of failed institutions. Perhaps, as many lefty bloggers have written, now is the time for the Dems to write a good bill, and force Bush to sign it, though I doubt they will do so.
Perhaps the problems was thinking of this as a “bailout” a sop to the status quo, rather than what was really needed, a first step in the transformation of our financial system. In any event, pious and pusillanimous appeals to bipartisanship evidently aren’t going to work; and appeals to self-interest, however disguised in the usual palaver, will appear as they are; small and self-interested. If there is any good to come from this, perhaps the country needs a continuation of this crisis for a few more weeks, with a few more dramatic bank failures, to really concentrate its attention, and create a real Rooseveltian moment. Now is the time for the Democrats to educate the people on what the problem is, and what sort of pain and burden will have to be borne, and how to fix it. For a country that has been wandering about in the deserts of free markets for forty years, the entrance into the next promised land has to be carefully planned. Barack Obama you have to explain to the American people what they need to do, as if you were already president. And Barack Obama, now is the time for you to come to the aid of your party, and now is the time for you to come to the aid of your country.