THIS BAILOUT IS NOT A DONE DEAL! [09/28/2008]
On Friday, I spent some time watching the Senate session on C-Span. More than a few Democratic Senators were taking the time to express, at length, their skepticism regarding the bailout. Specifically, Brian Dorgan, Tom Harkin, Jon Tester, and others.
Several facts became clear. The feedback from home has been overwhelmingly negative. Every Senator I heard talk about the bailout was setting up absolute criteria for what had to be in the bill for them to vote for it, and I doubt that this agreement is going to pass muster with many Senators and Representative. Also, Democratic Senators are paying attention to the blogisphere, and to the economists who are expressing doubts about the entire structure of the bailout. Harkin and Dorgan were entirely aware of Krugman and even of James Galbraith.
In fact, Dorgan had a great line, from his father, who used to remind him of this worthy thought: Never buy anything from a man who is out of breath. NOW, NOW, NOW is being out of breath.
They know this is being rushed through, and they already have doubts that the "crisis on Monday" mentality.
NOW MORE THAN EVER IS THE TIME TO CALL DEMOCRATIC SENATORS AND REPRESENTATIVES.
Do it today. Many offices won't have staff answering, but fill up their voice mail. I understand that Senator Clinton's was filled up by eight pm last night.
So send emails through their websites.
And then do it again tomorrow.
WE ARE NOT ALONE
The reaction across the blogisphere is the same; go to OPEN SECRET, or Kos, or MyDD, or Newsbusters, of ThinkProgress, or TPM or American Prospect; everyone agrees that the Democratic leadership is in danger of being royally snookered, once again. Matt Stoller has a petition signed by members of the House progressive caucus. I left a comment there and at least two people picked up on it - yes let's try and get Obama to realize that he's watching the near sure failure of the first two years of an Obama administration, happening right before his eyes, and he's doing nothing? At least he's equivicating.
One caveat here: The short version of what Pelosi released, which you can see at Calculated Risk doesn't sound as bad as I might have expected. As many commentators note, however, the devil is in the details.
This in particular interested me:
The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year.
That could become an HOLC, come January, if Obama wins, and Democrats no longer have to have a sixty margin majority in order to get anything past a Bush/McCain veto.
The problem is we just don't have enough information to know.
Now the message we give is important.
They know we hate this. What they need to know now is that we know what we are talking about. We have to put real fear into the non-leadership - not that we are going to take revenge against them - fear that their own leadership is once again leading them down a path where they are going to end up holding the bag, while the bagmen make out like the bandits they are.
The message, I think, should be SLOW THIS DOWN. There can't be that much of a crisis that there is no time for a hearing on the bill. Not one economist has been consulted. Yes, the oversight sounds impressive: here is how it is described in the Pelosi summary:
# Four separate independent oversight entities or processes to protect the taxpayer
# A strong oversight board appointed by bipartisan leaders of Congress
# A GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse
# An independent Inspector General to monitor the Treasury Secretary's decisions
Transparency -- requiring posting of transactions online -- to help jumpstart private sector demand
# Meaningful judicial review of the Treasury Secretary's actions
But how is it going to actually work? Do you know, Senator, Representative, how it is actually going to work? Will you know how the prices to be paid for all this leveraged debt is going to be established before you have to vote on this bailout package?
Another clear messsage: We, the taxpayers, want the same deal as Warren Buffet got, because we are being asked to do exactly what he did, fork over our money, so why don't we get the same deal - shares of the company.
Another point - transparency - how has there been any transparency in this entire process? And oversight is meaningless unless there is some attempt to establish what is in those securities so that someone besides Treasury and the seller has some input, or is given some ability to analyze what we are buying.
I'd also add that anyone who lives close enough should get themselves down to Washington and spend Monday in the offices of Democratic Senators and Representatives. Bring your friends, relatives, and signs.
I know that is a difficult suggestion, because it's a lot, probably too much, to ask people to do that outside of an organized effort in which there is some assurance that more than a few people are going to show up. Easy for me to suggest, since I live in California and can't possible do it.
This inability to spark some sort of organized action swiftly is my biggest disappointment in the progressive blogisphere. We have shown that in longer-range actions we can organize and get results. The Lamont insurgency against Lieberman in Conn - ACT BLUE, all good things. But going forward, no matter who wins the White House, and even more so, I would say, if Obama wins, we need to be ready to mount intelligent grassroots public action to press an Obama administration and a Democratic congress with a bigger majority to act quickly and decisively for the benefit of their core constituency, which, as it happens, will be the great majority of Americans, the ones who aren't in the top 10 % of income earners. I am including in this category, organized civil disobedience, something which Al Gore mentioned in his speech at the Clinton Initiative conference, in reference to the notion of allowing oil and gas producers to mine oil shale, which produces an even more toxic (with CO gases) version of gasoline.
If it's McCain in the White House, who knows, organized taking to the streets.
So, think about this post as having a farther reach, at least for the sake of discussion, than what is going to happen in congress next week.
However, next week matters.
Those are my best suggestions. What are yours?