Paul Krugman is my personal economic compass. I have been tuned in to his economic thinking since the 1998 Asian crisis (Before he got his NYT gig). He is a pragmatist and a progressive. I have looked to him, in addition to Obama and other Democratic leaders to judge the bailout.
I have stated my support for the bailout in yesterdays diary. Today, I'll lead with Krugman's final verdict, then discuss what happens next.
His verdict on what seems to be the final language of the deal (8:54 P.M. Blog Entry):
It passes my test of no equity, no deal; that, plus the danger of financial panic if it doesn’t go through, makes it worth passing, though celebration is not in order.
It's not as good as it could be, but it's better than doing nothing, and we should support it.
What comes next? After the break.
Krugman ends his blog entry praising Frank and Dodd and looking to the future.
Overall, Dodd and Frank succeeded in pushing Paulson a fairly long way back; probably as good a deal as they could have gotten. But someday we’ll have an administration that actually proposes good policies to start with.
Yesterday, I posted the following comment:
Bailouts are bad in principle, but I'm not in the mood to stand on principle.
Step 1 Bailout
Step 2 Elect Obama and other good Dems
Step 3 Regulate the industry and demand transparency
Step 4 Write the history so people don't forget
Step 5 Repeat Step 2
I think that there is a lot of dissension on Dkos about point #1. I've stated my position, but I'm not so sure of myself that I fail to see the other point of view.
I do think that we need to make sure that dissension about the bailout does not distract us from Steps 2-5. As Krugman says, we need a better administration (and more good people in congress) to get better legislation. We can't relax and gloat about the poll numbers. We need to work hard to fight the republican spin machine and make them own the mess that caused the crisis in the first place. We need to work the ground game, and guard against vote suppression. We need to work like we've never worked before to get Obama elected.
Starting 1/20/2009, no excuses. Things need to look a lot different. We need sensible regulation and mandated transparency passed pronto. We need to make sure that careful histories of this time get written so that we can educate people about the need for good government. People who believed that government was the problem caused it to break so that we got all of the crises of the Bush administration. People who think government can provide answers will demonstrate that it can do great good.
Finally, 1/20/2009 is just the beginning. I am a novice political activist, at the age of 44. There are many out there like me. We cannot slip back into complacency. We need to harness the energy at the local, state, and Federal levels to keep the change momentum going.
Yes! We! Can!