Monday, September 29, 2008

Republicans say "fuck the economy"

So the bailout plan has bitten the dust with less than one third of Republican representatives voting for government intervention to prevent widespread economic melt down.

Have they developed a new found distaste for feathering the nests of their chums in "Wall Street"? Sadly no. Republican Thaddeus McCotter explained why he voted against by saying "In the Bolshevik Revolution, the slogan was 'Peace, land, and bread... Today, you are being told to choose between bread and freedom. I suggest the people on Main Street have said they prefer their freedom, and I am with them."

That's right George W. Bush is advocating Bolshevism, God preserve his pinko soul.

When news of the vote, which was close at 228 to 205 (of which 140 were Dems and 65 Reps), broke there was an immediate reaction on the stock markets. "The Dow Jones industrial average recorded its biggest closing point drop in history, closing down 777.68 points — or nearly 7 percent" (1) Meanwhile the stock markets in France lost 5% and in Germany 4% (2)

So either the market is taking a nose dive because it's suddenly become an advocate of Lenin's April Thesis or it knows that without immediate intervention there could well be catastrophic consequences. Actually there could be pretty dire consequences even with the bail out - but at least this way there is a chance that if the rescue package can get passed when the House reconvenes on Thursday they could prevent a domino effect among financial institutions which would wreak havoc in every single sector of the economy.

To my mind it's actually much more likely that Republicans did not vote for this plan because of the fact that Obama's campaign had managed to ensure some vital caveats in the deal. Firstly, that there would be limits on executive pay for those who take advantage of the bailout and secondly that there would be proper oversight of the Treasury's implementation of the bailout plan. The New York Times also reports that the right hoped to tack in a suspension of capital gains tax to the bill but were unsuccessful.

The fact is that the Republicans opposed this plan, despite the fact that it does untold damage to Bush and McCain, because they'd rather capitalism burn than accept the idea that anyone has the right to hold the private sector to account. Years of Bush deregulation and playing poodle to the giant corporations has left these irresponsible morons completely unable to comprehend that if the government doesn't step in, in a measured and accountable way, there is going to be real trouble ahead.


James said...

Hi Jim,
I still think you're wrong on this. The market's taking a nosedive because it was denied the virtually free money Paulson's plan would have offered it. Your poodles are lined up elsewhere.

Here's five more leftish reasons for it to have gone down. Even when they go too far, surely your sympathy should be with the protesters, too?


James Patterson said...

I often think that hardline neoliberals display a cultish zeal that encourages them to ignore facts, logic and reason.

Actually, neoliberalism, when you think about it is pretty irrational.

Jock Coats said...

Of course the other "fact" is that the Dems could have got this through with their own votes and it was as much Nancy's interventioin, from the chair if you please, that scuppered it.

Nonetheless, they are right to scupper it. These bankers deserve to feel a lot sicker before they can be allowed to get better.

Matt Sellwood said...

I don't agree with you on this one, Jim. I take the Bernie Sanders line (a good Green pedigree in his family!) - this bailout should be paid for by a supertax on the rich.

Jim Jay said...

Jock - it's certainly true there were Dem rebels, and enough of them to allow the Reps to scupper the deal.

Matt - supertax sure. I'm for progressive taxation. But how the state uses its money and where it gets it are two related but seperate issues.

Here I'm advocating that this would be $700 billion wisely (ish) spent as long as there are safeguards. But we can move on to how we raise those funds for sure. I think Bernie is for a bailout in principle (that's how I read the Huff post piece)

James (1) I think that's an interesting point about sympathy being with the protesters. I think only some of them deserve sympathy.

I've heard quite a few variants on "If my ice cream stall goes bust I don't bailed out so why should they?" which I think is basic idiocy mixed with a bit of class hatred to make it more paletable (for me anyway). Essentially if their icxecream stall goes bust it doesn't bring down the housing market, banks, and large portions of the economy. Some things are more central that others.

Of course things shouldn't be organised this way - and we should expand on alternatives, yes, but in terms of a response to this crisis thinking of financial institutions as discrete economic units is damn dangerous.

On James' link: I'm unconvinced by it. Although some of the arguments laid out there (like a massive investment in public services) are things I agree with, but aren't addressing the current crisis.

the most convincing concerns, like financing corruption, should be addressed with proper oversight which is, in my view, an essential prerequisit for any bailout to have a *chance* of helping the current situation.