President George Bush, Securities and Exchange Commission chairperson Christopher Cox, Treasury Secretary Hank Paulson and Federal Reserve chairperson Ben Bernanke. Photo: AP
Like noxious fumes leaking from a corpse the controversy over the failure of the Bush administration’s unpopular emergency financial bail-out plan is infecting every aspect of government and the 2008 presidential election campaign.
Eminent reputations lie in ruins; the august institutions of Congress, the Treasury and the Federal Reserve tremble; the presidency itself is shaken. From America’s year of living dangerously few will emerge unscathed.
The consensus view, if there is one in so divided a nation, is that the United States has suffered a calamitous, across-the-board failure of leadership. The bankruptcy is political as well as economic. This view is widely held among both supporters and opponents of the bail-out.
”Monday’s crash-and-burn of the Paulson plan on Capitol Hill reveals a Washington elite that has earned every bit of the disdain that Americans have for it. This crowd can’t even make sausage,” snarled a Wall Street Journal editorial. Black Monday’s shambles marked an ”historic abdication”.
Republicans and Democrats in the House of Representatives were excoriated for political cowardice, childish disputatiousness and a selfish desire to get re-elected in November at any cost. It is clear that whatever they do next the public does not trust them to do it right.
”A political establishment held in higher regard may have been able to hold together some kind of coalition of the willing,” wrote Joel Achenbach in the Washington Post. ”But distrust of the nation’s leaders, from the leaders of Congress to the president, foreclosed that possibility.”
This was not mere rhetoric. Congress’s public approval rating was down to 18% before the crisis; some estimate it is now 10% and falling.
Like some others, Gingrich is calling for the resignation of Hank Paulson, the treasury secretary, for presiding over a train wreck and then failing to persuade people why $700-billion was needed to get back on the rails.
Other heads enthusiastically recommended for the chopping block include those of Democratic House speaker Nancy Pelosi for being ”too partisan”, and Republican House minority leader John Boehner for not being partisan enough.
An unhappy Boehner said before the vote that the bail-out was a ”crap sandwich” that he and his colleagues were obliged to eat. As it turned out, 133 Republicans and 95 Democrats found it too much to swallow.
Boehner’s lament led Los Angeles Times columnist Jonah Goldberg to extend the analogy: ”Two decades of crapulence by the political class has been prologue to the era of coprophagy that is now upon us. It is crap sandwiches for as far as the eye can see.”
As they contemplate their vanished savings and plundered pension plans, you can almost hear voters grimly grinding their teeth in agreement.
Many members of Congress sought to explain themselves: ”We are now in the golden age of thieves. Where I come from, we put thieves in jail,” said Pete Visclosky, an Indiana Democrat who voted no.
The signal failure, as critics see it, of President George Bush to show a lead out of the morass has provoked a new crop of political obituaries. ”No longer a lame duck, he’s a dead duck,” said Democratic strategist Paul Begala.
Bush’s resort to fear tactics and warning of national disaster if the bail-out failed reminded many of his previous alarmist attempts to justify the Iraq war and ”war on terror” curbs on civil liberties. Yet in his public appearances, Bush has looked abject, almost humbled — much reduced from his bumptious, ”Yo, Blair” days. ”We know why Bush has not attempted to play [a leading] role in this crisis,” said the veteran columnist David Broder: ”His second term has so depleted his personal credibility and political influence that he is crippled as a national leader … Attaching his name to almost any proposition costs it public backing.”
Amid expectations that some form of bail-out will eventually pass, Barack Obama is trying to project the image of a cool, calm leader behaving judiciously in a time of trial. Polls suggest the crisis is breaking his way, although it could backfire. Republicans are bent on painting him as ineffectual, untested, and unengaged.
John McCain is plainly struggling to explain why he couldn’t hold his party together despite his dramatic rescue mission to Washington last week. But the Republican camp hopes to blunt the Democrat’s advantage, claiming this week that Obama would increase federal spending by $800-billion, raise taxes and make everything worse.
Here’s McCain speaking after the bail-out flopped: ”I went to Washington last week to make sure that taxpayers across this great country were not left footing the bill for mistakes made on Wall Street and evil and greed in Washington.
”As a matter of record, Senator Obama took a very different approach. At first he didn’t want to get involved. Then he was ‘monitoring the situation’.” McCain paused as the crowd sniggered, gave a wry smile, shrugged, and then went for the kill. ”That’s not leadership. That’s watching from the sidelines.” —