This is by William Greider of The Nation, from this morning’s Boston Metro.
All of the political leaders blessed the deal, but the House of Representatives spit it out anyway. The political bedlam in Washington is as real as it gets.
The party leaders will probably try again. I doubt they have the energy or courage to renegotiate the terms in any serious way. A majority of Democrats voted for the measure, but most Republicans took a walk. They will be scolded for being “irresponsible.” But I doubt the public will agree.
In all of elected Washington, representatives are closest to the people and they know a vote for this outrageous measure is going to end the careers of some colleagues — maybe many of them. This time, the dissenters can claim principle and say they are voting with the folks, while also voting to save their own hides.
It adds another deep shock to the system, both in politics and economics, but what an invigorating moment for democracy.
The financial bloodbath will continue, but unless the deal on the table changes significantly, Henry Paulson gets to decide who lives and who dies. The former investment banker from Goldman Sachs would be empowered as treasury secretary to play savior or grim reaper, the liquidator who essentially pulls the plug on some banks and financial firms or the man who rescues them from ruin. This is still a massive bailout of imploding Wall Street, financed with the public’s money. And it is still a massive crapshoot for the American people.
If the billions from Washington somehow restore temporary calm and balance to global financial institutions and markets, then the usual cheerleaders will proclaim the “system” has worked. Most Americans, I predict, will not join the cheering. Too much destruction lies ahead.
Congress did not step up and assert the full emergency powers of government in this epic crisis, that is, take temporary control of the entire financial and banking system. This rescue plan remains essentially voluntary.
A new federal agency will be needed to supervise and enforce the bailout. The government will have to assert its powers forcefully, because by then it will be obvious the “voluntary” approach helped some losers to become winners, but it neglected to save the country.
William Greider is The Nation magazine’s national affairs correspondent.