So what are they up to: trying to sell the public on more deregulation. The Republicans are not going to vote for any bailout plan that doesn't include deregulation. From
Krugman:
On (2), the call is tougher. But putting myself in Barney Frank or Nancy Pelosi’s shoes, I’d look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms — basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary. That’s what the plan
should have looked like.
Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.
But such a plan would have had next to no Republican votes — and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.
Separate mostly everything the Republicans are doing to address this crisis from Bush. He's irrelevant and desperate.
Republicans don't want a deal that doesn't include more deregulation so they're out their making BS arguments feigning concern for the poor taxpayer, even as they blame them (and big government) for the crisis:
So in addition to rewarding irresponsible lenders and borrowers, we taxpayers are now to be "protected" by buying the toxic debt of states, cities and municipalities. It's one thing to throw a life-line to the credit industry; local governments, by contrast, have the ability to cut spending drastically or raise taxes if their inhabitants want government services. Elected politicians are then accountable for runaway spending and mismanagement. If Detroit or Chicago is sinking because of big-government policies, that's what the citizens of those cities asked for by voting for Democrats year in and year out. Why should the rest of us be on the hook for that?
Basically, the agreement struck over the weekend with key participation from many of the guiltiest politicos provides no mechanism for valuing the debt that Americans are being asked to assume; places few meaningful limits on the public/private recklessness we will be forced to underwrite; would go into effect right before an election which, if Obama wins, would turn management of the bailout over to a new, big-government administration; and protects not the taxpayers but the defaulters to whom Democrats compelled the banks to extend credit beginning in the nineties (lighting the fuse for today's big bang), while responsible borrowers are denied what would otherwise be available credit and a more honest housing market.
linkWeekly Standard blames the crisis on
unions and pensions
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