Rachel has presented a very important question in her show at MSNBC (9 pm ET, after Countdown): Who is running the Republican Party? In this entry I will try to give an answer to that question. Tied to this answer, there is a suggestion for the Obama campaign. If somebody can really reach them, he could be doing a great service to the cause of getting our country back.
In the second part of this entry, I will answer Jay Ambrose’s article published today October 1 in The Examiner in which me makes use of his financial skills to embarrass Obama on the bail-out issue. No. Seriously, I am ridiculing him again.
In case of an involuntary grammatical mistake, same excuse: I am writing in a rush.
- In her show, Rachel presented a question that has made me rethink some of my positions presented in my entry "Obama needs you. You won’t have a second chance". After the Republican revolt in the House, Rachel asked who is running the Republican Party. The bailout was supported by an each time more irrelevant President Bush, even as it was modified by Democrats in the House. The Republican revolt embarrassed him. McCain said to have interrupted his campaign to make possible the bailout in the House. The Republican revolt embarrassed him too. The same embarrassment was shared by the Republican Minority Leader of the House, John Boehner [See an interesting article appearing today in Politico on this end, pages 1 and 12] and the Republican Minority Whip Roy Blunt has demonstrated to be irrelevant again. So the question is who is left in the Republican Party with the stature enough to challenge all the above mention Republican leaders, the Presidential nominee included, and get political gains as a result? Who could that person be who would date to get gains even sacrificing McCain, even putting the country at the risk collapse? More important, what can we do about it? When a RNC’s commercial against the bailout could still be in the air, these questions are more relevant than ever.
Let’s begin with the easiest question: Why does that person do not show his face of the leader of the revolt but just his opinion in political talk shows? Because it is such a bold move that could backfire. That is when puppets are very useful.
Remember the lines of Rachel’s show, when she mocked the Republican reasons to step back of the bailout ("No nice words, no policy. Miau")? Who was at the side of a clearly diminished John Boehner? Virginia Representative Eric Cantor. Eric Cantor! The same Eric Cantor who previously was only known for his anti-immigrant rants?! Could Eric Cantor have the power to challenge Bush, McCain, Boehner and Blunt and make the RNC take his side? Of course, not. If you believe so, you may still be putting your fallen teeth under your pillow expecting to find money the next morning. So, if Eric Cantor was the pathetic puppet of a ventriloquist, who that ventriloquist could have been? Who benefits most of this situation? The answer is Newt Gingrich.
Gingrich is the only high ranked Republican who has expressed his opposition to the bailout. Gingrich represents that side of the Republican Party that never liked McCain and reluctantly followed him only after he chose as Vice Presidential nominee an ultraconservative like Palin. As Palin is deflating and McCain is losing ground, the ideal scenario for Gingrich would be unleashing the negative expectations that could tarnish an Obama first period with the effects of a prolonged recession and give him an opening in 2012. To achieve that goal, Gingrich needs to direct his artillery not towards Obama but to the Senatorial and Congressional races. The best way to do that is to make Democrats to buy totally the bailout to avoid Obama inherited a total collapse and then do what they have already have said they are going to do: Make the bailout stick to Democrats and the unpopular White House and run (believe it or not) as the opposition to the status quo they created in the first place. In such conditions, a win-win situation for Gingrich, he would have an open way to take over openly the leadership of the Republican Party and run in 2012 against an Obama wounded by the crisis unleashed by Gingrich himself.
What to do then? Those Democratic Representatives who foolishly are playing Gingrich’s tragic comedy [You can see some of them in the same edition of Politico, page 9] would do a great service to their country reading a few pages: Page A8 of yesterday’s Washington Post, about the contagion effects abroad and the European bailouts to contain the effects of that contagion, and the above edition of Politico, page 6, that explains the effects not on the Dow but on the credit margin of the present crisis. These Representatives are about to unleash a dark night over the administration of their own Presidential candidate and the country as a whole with the most moronic arguments ["Why then do bail me out too? Ah! Ah!"]. In our overindebted economy, the effect of collapses abroad hitting back home could be devastating, especially for the exporting sector that has helped the economy not to look that bad in the last months. That’s why serious economist are not comparing the present crisis any more with that of the 70s but with the Great Depression with a scary energy crisis at doors. On the other side, it is naïve to wait for the Republicans to come to avoid a collapse. Conceding on tax cuts, as Harry Reid could be about to do in the Senate, is a sign of weakness that does not guarantee results in the House and could easily backfire in the hands of Republicans.
Then there is nothing to do? Actually, there is. In my entry "Obama needs you. You won’t have a second chance" I wrote:
"I also support Pelosi’s position of requiring Boehner to bring at least the majority of Republicans to support the compromise. Believe me or not, Republicans want to picture the bailout (resulting of the situation their party created) as the Democrats-White House bailout to run their congressional campaigns against the bailout. In one of his very few good moments, Chris Matthews made Eric Cantor, Republican representative from Virginia, face that fact that he has to assume responsibility for the 8 years his party has had the power in Washington."
What I say now is: If we have to own the bailout to avoid a disaster in an Obama administration, let’s do it in our own terms. Then it is when my suggestion for the Obama campaign comes:
Obama must make an especial presentation with Robert Rubin. In that presentation, he introduces Rubin as the Secretary of the Treasury of the Clinton years of economic prosperity [This achieves the fist, more immediate goal: many voters still distrust Obama on the economy, whether because they distrust any politician or because they consider that Obama is still inexperienced to direct the country through this challenges. Voters may distrust Obama but they cannot distrust their own memories of the Clinton years. It’s a fact. Rubin, as a man who has provided results on his professional work as Secretary of the Treasury, can give Obama a plus that not even the best Obama’s speech can and, by suggesting voters a comparison with Phil Gramm, gives Obama a comparative advantage McCain cannot match]. Together, Obama and Rubin explain the effects of this crisis in the credit market and how it will strangle small business and individuals if we don’t do something now.
Part of the disgust (that I share) with the idea of the bailout is the idea that some crooks, who collected millionaire packages up front, are going to get benefited from this bailout. That’s when Obama makes a promise: The first or one of the first tasks of his General Attorney is going to be to investigate and prosecute the crooks who benefited from the havoc created by Republicans. Despite Paulson’s fierce opposition, future executive packages are already limited in these cases in the failed bill of the House. So Obama promises ACCOUNTABILITY. As we will have to own the bailout in such a situation, we can advance some regulation and accountability from the Secretary of the Treasury: Thus, we can use that $700 billion to rescue mortgages before the titles backed by them; give the Secretary of the Treasury the power to buy the mortgages covered by the Housing Bill signed into law on July 31 at the initiative of the borrower if the lender does not do so; and, provide additional help for lenders, not for borrowers (what would exclude investment banks). This could work with another measure already announced by Obama like increasing the federal insurance of deposits from $100,000 to $250,000 [This achieves the second goal: giving Obama a not so desperate economic situation as we would receive if we continue playing Gingrich’s game: expectations negative enough to guarantee a very long recession].
[As Gingrich’s game in the short term seems to be to weaken the Democratic gains in the House and the Senate and Obama needs as many votes as possible in both Houses to avoid filibusters, this will help Obama help himself helping Pelosi and Reid. This is the third goal: to protect his very necessary majority in both Houses. Remember FDR?]
You can always say that such a bill could be stop at the Senate. In that case, so be it. Let Republicans block the bill at the Senate before November 4 and then pay the price Gingrich paid due to the multiple obstructions he imposed on the Clinton administration.
If somebody automatically jumps and shouts "conspiracy theorist!, Conspiracy theorist!" after reading this entry, my remaining questions are: Could Gingrich be so monstrous to destabilize the country for partisanship reasons? Remember 1994? And the Lewinski impeachment? Still, could he that irresponsible with the economic health of the country? Let me bring you a quote from the moment when Clinton had to raise taxes to clean the public finances from the Reagan-Bush I legacy:
"I believe this will lead to a recession next year. This is the Democrat Machine’s recession, and each one of them will be held perpetually accountable." Rep. Newt Gingrich (R-GA)
- For those who still can read a bit more, let me answer to two articles published today in The Examiner:
a) "Time Machine: Joseph Biden tells all" by S. J. Masty.
Answer: Iloperidon has been approved by the FDA to treat schizophrenia.
b) Jay Ambrose’s weekly involuntary parody of analysis "Obama’s proposals collide with reality" (with the subtitle "Just my opinion". Yes, Jay. Everybody can have one) [A canvasser could find somebody sharing these opinions. You never know]:
- Ambrose decries that Obama do not share McCain position on "federal spending freeze". Jay, in a depression you need to be very flexible and so you need liquidity. Maybe you are thinking in the conservative mantra of the crowding out but we are talking about a depression. Just on the opposite side. You need liquidity to help the economy, and especially the most vulnerable sectors of the population, to absorb the adjustment of the economy through a soft landing instead of a traumatic slump.
- You say Obama has to face "budget realities". I agree, the budget realities resulting from the Bush administration has destroyed all the achievements of the Clinton years. But then you attack Obama for promising to try to not affect investments in health care, education and infrastructure. Yes, Jay, despite the way these items are counted in the GDP, they are really investments. You could ask any economist; real economist, I mean. We need to detract expenses from current expenses and increase savings. Infrastructure, education and even health care are widely considered, in economic terms, investment. I agree that Obama could not reach the total amount of his promises because your buddy Gingrich can still wound the economy beyond any present estimation.
- You ask "Are the programs themselves vital to the public good? Only if you believe in the sort of welfare state that is now sinking Europe and led Europeans to search out such conservative reformers as President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany." First, do you consider investments in education, infrastructure and health care the agenda of a welfare state? Have you noticed that Jose Maria Aznar was defeated by Zapater in Spain and that Tony Blair was replaced by James Gordon Brown, also from the Labour Party. Curiously Blair and Aznar paid a political price for siding with Bush. And have you noticed that both Sarkozy and Merkel have bailed out banks in their respective countries to avoid a widespread credit crisis in their domestic markets?
- Then you say "Obama says he has figured out how to pay for all of his proposals, but that’s an absurdity only believed by economist on his payroll". I must confess you have blinded me with the solidity of your estimations. Then, can you explain me how Clinton could make compatible fiscal responsibility with social policies oriented to help the poor overcome their situation? Or you share Neil Cavuto’s scientific conclusion that the present crisis has been originated in lending to minorities?
- You also say "huge deficits are to be feared". To clean Bush II’s mess we could have to wait some time to recover the surpluses that gave sustainability to our growth during those years. Nevertheless, it is going very difficult to beat Reagan, Bush I and especially Bush II on deficits.
- Then you say "The crucial need is to reduce spending". On that end you are also wrong but not that much. The first crucial need is to bring regulation back to the market to make of it the virtual place where companies and individuals can find opportunities and not the paradise of moral hazard where crooks can take advantage and increase the risk and costs for honest participants. Gingrich’s anarchy only promotes negatives externalities (I swindle honest participants, default and pass the costs to them while I run away with a millionaire severance package). Remember Kenny Boy? Enron’s Kenny Boy? Then, could you expect something different from the same kind of irresponsible deregulation that made Kenny Boy possible? In what you have some reason is that costs like those related to the war are not going to diminish in an important way because effectively many of the resources distracted by Bush in Iraq will have to be diverted to Afghanistan and other places where the real war against Al Qaeda has to be fought.
7, You also attack Obama for wanting to "reformulate trade deals". I believe in free markets and in free trade but when you want to connect economies, you must see that they have reasonably equivalent rules to avoid the enraged poses of those Republicans that suddenly realized that China manipulates his exchange rate to promote its exports. Suddenly they realized that China has very big positions in federal titles of debt and moved on to an easier issue. And who overindebted the country? Yes. Bush II. Who has neglected to enforce labor and environmental clauses in our trade treaties or engage the Chinese artificial devaluations inside or outside the WTO? Yes. Bush II again. W!
One last question, Jay? In that parallel reality you live in, does the law of gravity works?