Politically, this was an almost perfect week for Democrats. They reach a tentative agreement on a modified treasury proposal last Wednesday that shows them working out a deal with Bush after the Secretary of the Treasury and Chairman of the Fed warn of apocalypse. They persuasively show the McCain interruption to be a political stunt. They win the debate. They show House Republicans, who seemed first to open their mouths on Thursday, to themselves be acting for political purposes by having failed to engage the Senate confereees for days, then having no new ideas. They demonstrate they don't hold grudges by paying lip service to dumb House Republican ideas like the insurance provision, which is inserted as a harmless option but will probably never be used. They win the debate. They get even the House Republican leadership on board in time for the Asian markets to open on Monday.
McCain prematurely claims credit for passage of the bill. A majority of House Democrats vote to approve the bill. Incredibly, the bill is voted down, and on cue, the Dow instantaneously and conspicuously dives to new lows, adding an exclamation point to their Country Second approach. McCain, who I feared would now redouble his efforts to develop a consensus and yet again attempt to scale Mount Rushmore as the Hero of the Bailout, incredibly screws up a ninth time, and instead mutters something about "going back to the blackboard", which suggests that he thinks we should start completely over, further spooking the markets. The bill was expected to pass, and the Republican leadership is totally embarrassed when they can't control their own members. So, all that's left for the democratic leaders to do is to sit back and wait for the poll numbers to come in, right?
Right--as long as:
*what Democrats are striving for is to become a more liberal version of Republicans.
*the past eight years were simply about obtaining enough power to have the freedom to be as opportunistic as them.
*getting elected is more important than working now to make sure the country is in less of a mess in January, so that it's possible to actually accomplish things once Obama gets elected.
*all of the rhetoric from the Democratic side was simply expediency
*the only positive steps worth taking are the ones taken on our watch
My first thought after the bill went down yesterday was: OK, so here's the part where the Democrats get punished for negotiating in good faith and putting party second the past two weeks, and putting their own issues (bankruptcy reform, foreclosure relief, low-income housing assistance) on the back burner--now we get to give up the changes to the Paulson bill that were negotiated over the past two weeks, all to make the "renegade House members" of extremists "come aboard" so that we can "end up with a bill everyone can live with" (not that I would ever be so cynical as to suggest that the House Republicans and the Senate Republicans might be "good-copping/bad-copping" the Democrats). And then we are back CNBC, bitterly watching as each further retrade and give up moves the 15 or 20 GOP votes to the YEA side of the ledger.
Anybody who has ever gotten a better deal on a car by threatening to walk to the dealership across the street is familiar with the drill. You want to build support for your deal, you generate a little competition, and push the other side to the choice you want them to make, rather than waiting for them to give you an ever-worsening menu of choices for their support. I actually support the way the Democrats played the vote yesterday--but I also know that the quid pro quo the Republicans are going to ask for in exchange for the "we need to see at least 80 Republicans voting yes" is more give ups from the already-agreed compromise.
There is another way. The first choice the Democrats had to make--putting country above partisanship--was in my view a complete success. Now IS the critical moment. This is the same movie the Republicans have been playing for 8 years--take advantage of Democratic good faith by acting in bad faith and try to push a compromise towards an unreasonable position. (Remember "offshore drilling", which the Administration's own experts admitted it would have no effect for 10 years?) And that is where, time and time and again, Democrats make their mistake. There has to be a line that isn't crossed, a point at which the Democrats say, and continue to say: NO. We have done what YOUR president asked for and what YOUR leadership agreed to and YOUR treasury secretary has proposed and VOTED FOR IT even though we gave up a lot of what we wanted, and even though YOU are responsible for creating the problem in the first place. THIS TIME, we are not going to enable your bad faith by backing up further from the compromise we already agreed to. Country above partisanship is the easy decision, because you get to use your willingness to compromise to win brownie points with the voters. We're now faced with the hard decision: country above bIparisanship. Easy? Not so much. It means that if you are wrong, you may have to pay the consequences. But it also means that there is a point somewhere in the world where the Venn diagram of right and wrong contains no areas of overlap, where, if you have the power to do it, you do what's right, not because you are pigheaded or trying to wear the other side down, but because they are refusing to be reasonable, and you have to answer them in kind and for once not incentivize them to beat the crap out of you.
So here is what I think needs to be done here--and I hold out some hope that Barack's announcement earlier this morning that he favored expanding FDIC cover to 250K (though I'd like to hear projections on maximum exposure and likely pricetags, and note that the increase of FDIC insurance issometimes cited as reinforcing reckless banking practices that necessitated the last bank bailout ) was a step in this direction--we need to generate some competition for the modified bailout bill that was voted down. Quite simply, we put a second option on the table--a bill designed to win more disaffected Democrats over to support it. We basically say to the Republicans:
"OK, we are still willing to support the bailout bill in the same numbers, but we have been reasonable, we compromised, and you sandbagged us. This is too important for something not to get done. We tried to do it your way, with the compromise. We are STILL willing to do it your way. But having you undercut the rescue while our economy burns is simply not an option. So we've added these 3 things that we wanted in the first place that will help middle class Americans, in the hope that, even though Democrats already voted up the compromise, we get enough additional Democrats so that we can actually get the bill through and stop the bleeding. And we say into the camera: political cover be damned. You want to call this second alternative a Democratic bill, and blame us if it doesn't work out, go right ahead. We were willing to approve the compromise bill, and even though you torpedoed it, we are STILL willing to approve it and not stand on ceremony. But the one thing we are not willing to do is to stand by while you let the unbridled fury of the unregulated, safeguard-free free markets decimate the lives of millions of Americans. This isn't 19th century England, it's 21st century America. We're not going to let things fall apart just so we can dance on your graves in January.
"So, Republicans, you pick: the compromise bill that was teed up for a vote on Monday, revoted on, or the Democratic bill, the way we wanted it in the first place, with BOTH the liquidity our economy needs to keep small businesses running and retirement accounts safer, but also more protection for individuals so that people can still get college loans and help with their mortgages. A vote on the Democratic bill will be scheduled for Thursday, immediately following the revote on the compromise bill."
Riskier approach for Democrats? Absolutely. Against the conventional wisdom, when the polls seem to be going so well? Certainly. But Democrats should treat their political moves the same way they claim our leaders should act toward the country--by taking a long-term view, and by, at some point, simply taking a stand. The benefits of letting the Republicans see and feel that Democrats, too, have their limits may make the 40-day run up to the election a little tougher and a little more scary, but it will have benefits that last a lifetime. It will make Republicans see that Democrats will be reasonable, but that if Republicans push too hard, THEY will be the ones to suffer the consequences.
Congressional Democrats, you tried to compromise, and they shoved it back in your face. The chairs on the sidelines are comfortable and safe--and not where we are looking for our leaders to be when we can lose 10% of our retirement savings in an afternoon. Show that in the absence of Republican leadership, you are not willing to countenance a situation in which no one leads just because the moral highground from which you point a finger is only slightly higher than the moral highground from which Republicans are pointing back at you. We don't run our family budgets and small businesses that way; don't run our country that way. Democrats, remember that it's not only country over partisanship but, now that you have actually been forced to make a choice, it must also be country over bipartisanship. Don't be vindictive, but also don't be cowed. Have the courage of your convictions. Be strong. Lead. You may be surprised at how many follow.