Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Thursday, September 25, 2008

The Implications of the Disorganized Right

Hi Everyone,

So the deal that was rumored to be in the offing fell through.  I'm overseas right now so I'm depending on the web and CNN International.  CNN International is reporting that the deal fell through largely because of divisions between the White House and Congressional Republicans, particularly in the House of Representatives (the House of Reps is known to be more ideologically polarized - I can explain why if anyone is interested).  CNN International is also reporting that both Republicans and Democrats are saying that McCain has been surprisingly silent in the meetings.  In other words, McCain's bold posturing about suspending his campaign was not backed up by any substance...not even bad substance.  

The problem seems to be mainly disunity on the right.  From what I gather, the Democrats are largely on the same page:  They want more oversight over the money, restrictions on using the money to pay CEO's their golden parachutes, and inclusion of some help for individual mortgage holders.  But the Republicans are deeply split.  The White House says, "Trust us" as usual.  They want a blank check for $700 billion to be spent by the Treasury Secretary without oversight or check on his authority. House Republicans want provisions on bankruptcy that would allow judges to modify mortgage terms if they are involved in a bankruptcy case and a bigger role for private money instead of tax payer funding bail outs.

What this is means that is that even as the Democrats and the White House begin to make progress towards a compromise, the House Republicans are able to disrupt it by causing problems within the Republican Party - not because of their legislative power (which is rather small).  If even a few Senate Republicans get on board with the Democrats in a compromise with the White House a deal would pass.  But if House Republicans rebel, they would threaten McCain's Presidential campaign, and I think that is what this is really about.  By injecting himself into the process, McCain offered himself as a hostage to the ideologues in the House.  I think it will go down as one of the most boneheaded political moves in the last century.


Dr. Strangelove said...

Actually, I think McCain showed up to disrupt the deal. I think he wants the House Republicans to hold out.

There is a big game of chicken going on. The bailout is extremely unpopular and no one wants to vote for it, but everyone knows it has to happen. So the Democrats at least want to get a little credit for acting quickly, and they also want the Republicans to take the heat along with them.

McCain showed up to ensure that did not happen. McCain wants the impasse to drag on as long as possible, making the Democrats look incompetent. McCain also wants to be seen as opposing Bush and the bailout. Then at the last minute, McCain wants to claim credit for arranging a statesmanlike, bipartisan compromise, putting "country first" to save the economy.

It is an insidious, nasty move. If McCain is successful, he can take the credit for saving the day while also opposing the bailout and opposing the Bush administration. The Democrats need to present a united front tomorrow and stop this from happening.

Raised By Republicans said...

I agree. If the Democrats present a unified front presenting a clear set of criteria, it will make it look like the Republicans can't get their ducks in a row.

Mike Stevenson said...

I think when you say "The problem seems to be disunity on the right," you should say "The only ray of hope seems to be ...".

The bailout is horrible (don't take my word for it, but maybe those: As long as no deal has been finalized there's still some hope to get a smaller magnitude or more restrictions. I would love it if those republicans would block the bailout completely, but not even I can be this optimistic.

Raised By Republicans said...

Well, I think some sort of bail out is the smart thing to do. All that is being haggled over is the exact nature of it.

Bush and Paulson seem to be the highest demanders: $700 billion with no strings attached and no oversight.

The Democrats are in the middle: $700 billion in phases as necessary starting with $250 billion to approved by Congress an additional $100 billion if needed - without additional voting and an option of an additional $350 billion IF Congress approves again.

The House Republicans are claiming they have an alternative plan that won't cost taxpayers as much but I have yet to hear many details. What I hear is rumors about insurance policies against financial losses. How are these to be paid for if the banks in question are effectively insolvent?

Mike Stevenson, I sympathize with your reluctance to see any bail out with big numbers. But I'm wondering what you think the ideal response to this crisis would be.

The Law Talking Guy said...

Dr.S, McCain didn't show up to disrupt a bailout. That's way too sophisticated an analysis. Much simpler: He showed up to claim credit for it. That's why he "suspended his campaign" and all that crap to try to be the bipartisan maverick white knight. He is silent at the meetings because he doesn't really understand what is happening, and he is dumbfounded - dumbfounded - by the conservative Republicans refusing to make this thing happen.

Obama has decided to be supportive of the concept but insist that homeowners get helped too.... somehow. I believe he is with the Democratic leadership in demanding the Chapter 13 residential mortgage writedown. Note that under Chapter 11, a business can write down a commercial mortgage. I believe this because Dodd is definitely pushing hard for it and Obama has repeatedly embraced bankruptcy reform in his speeches. This will be a big victory for Dems if they get it, and will take the edge off the bailout.

As for the bailout being unpopular, that's easy: it all gets blamed on Bush. That's why everyone is making him take center stage right now, while previously he hoped that it woudl be a deal between Paulson, Bernanke, and the Democratic Congress.

The Law Talking Guy said...

RBR: You made a mistake. House Republicans OPPOSE giving bankruptcy judges the power to write down residential mortgages. This is a nasty problem with bankruptcy law, because in Chapter 11, any business can write down any commercial mortgage - or any secured loan. The only exception to the general principle is for residential mortgages, where you can't write off the unsecured portion of the loan even if the loan is upside down. Making the law fair like this will be a big win for consumers. That's one of the major sticking points right now. If House Republicans agreed with House and Senate Dems on this, the WH, which also opposes it, would have to back down. But House Republicans always side with big business.

By the way, my comment about executive compensation in the bailout is simple. They're lucky to get any compensation. They should be shot.

The Law Talking Guy said...

Dr.S. - The House Republicans have decided to try to pin the blame for bailout on the Democrats. That's why the NYTimes reported this morning that Paulson was "on one knee" before Pelosi begging her not to withdraw her party's support for a bailout after the Republicans did. Pelosi and Reid are going to be firm that House Republicans stand with them when the deal is done, because they don't want this to be on their heads.

McCain is not there: he is trying to triangulate and be the white knight savior. This is totally not helping.

Dr. Strangelove said...

"Dr.S, McCain didn't show up to disrupt a bailout. That's way too sophisticated an analysis. Much simpler: He showed up to claim credit for it."

I think we kind of agree, really. It appeared there was a deal until McCain showed up. I just think McCain quietly scuttled the deal because he wanted the impasse to drag on for *at least* another day, so then he could then claim the credit for fixing it. And letting House Republicans off the hook (letting most of them vote against the bailout) is the icing on the cake.

USWest said...

I agree with LTG. McCain and his campaign aren't as sophisticated as Dr. S would assume.

Obama has made the right move on this. Just a quick comment: Obama has been working closely with Pelosi and Reid to arrange a plan for his first 100 days. So he is in very close contact with them and that is a very good thing. Pelosi is a very smart mover.

Raised By Republicans said...

LTG, in my defense, I'm in a foreign country right now and spending an inordinate amount of time and money on consuming the local booze.

Funny, no matter how much wine and beer I drink, my outrage just won't be quenched! ;-)

Dr. Strangelove said...

This Washington Post article indicates that McCain rallied the House Republicans, coordinated their resistance, and scuttled the deal on Thursday.

According to several of WP's sources, McCain told the private gathering of Republicans, "I'm not going to sign on to a deal just to sign the deal. Just like Iraq, I'm not afraid to go it alone if I need to."

WP goes on to quote Sen. Graham saying, the reaction was, "You could hear a pin drop. It was just unbelievable." WP says the aftermath was "Pandemonium" and, "by the time the meeting broke up, the agreement touted just hours before--one that Sen. Lamar Alexander... estimated would be supported by more than 40 Senate Republicans -- was in shambles."

It appears that House Republicans wanted to renegotiate the deal, and McCain sided with them to kill the nascent agreement. This is a very, very interesting article, including discussion of behind-the-scenes House leadership battles, so I'd be interested in reading anything other Citizens get from the article!

Raised By Republicans said...

As I read that article I think my initial assesment that this is a story of disunity among Republicans is bang on.

To this I would ad a modified version of my statement about McCain and the House GOP. Now I think that McCain tried to swoop in, piggy back on the House Republicans but without really considering the details of their plan (thus the silence in response to Obama asking him what he thought of the insurance plan). I think McCain was hoping for a lot of deference and quick, cheap PR victory. But the Democrats were unified and that forced him to really demonstrate that he was the leader of this new faction. His silence shows me that, in fact, he was not much more than a figure head for the House GOP.

I think this makes McCain look like an erratic, opportunistic and weak politician, not a strong leader. I am more concerned than ever at the prospect of a McCain-Palin administration!!!!

Raised By Republicans said...

By the way, The Democrats and the White House announced that they just made a breakthrough thanks to a suggestion by Nancy Pelosi. Details to follow in the next 24 hours.