Bailout Update

There is so much information out there right now that it would be impossible to sum it all up for you.  I'll just offer a few things that make some sense to me, and a general conclusion.

First, it looks like McCain's decision may be working out in his favor.  McCain, as you've probably heard, said he is suspending his campaign until a bill to deal with the financial crisis is finished.  Obama, by rejecting McCain's invitation to do the same, looks not only very partisan, but also appears to be missing the enormity of the situation.  This goes straight to two of the main points Obama has been pushing: he's a uniter, and he's got good judgment.  And, as the presumptive leader of the Democrat party, it just doesn't look good for Obama to say he's staying in Florida to prep for a debate rather than deal directly with the biggest problem on Americans' minds.  With President Bush calling for an emergency meeting of Congressional leadership, thus dragging Obama back to Washington anyway, he also looks weak.  This entire situation is a McCain ad waiting to happen!

Now, what about results?  If McCain is able to swing a bill that is noticeably different than the one Bush proposed, and get it done fast, he'll come away with huge kudos for leadership and decisiveness, and that could be a death blow to the Obama campaign.  If he does not, well, that's going to create a problem that he'll have to explain away, which will be very difficult to do.  But it doesn't sound like the existing bill has any reasonable chance of passing, given that both the Left and the Right oppose it.

Some say McCain's actions are simply a stunt to try to make the election all about himself.  While there's no doubt that this is a politically calculated move, that doesn't negate its impact.  I've also heard that Paulson met with House Republicans and, after discovering that only a handful would support the bailout, he asked McCain to come back to Washington to help get things moving.  Hardly a stunt.

Here's the bottom line: how will the American people view it?  Will they understand that, even as candidates for President, these guys still have a job to do as Senators?  Will they understand that when situations become critical, leadership is needed from all who can provide it?  I think they will.  If McCain generates a good result, he'll take the credit, and deservedly so.

Now think about this...if the bill happens fast enough, McCain can then come out and say that Friday's debate should go on, but be centered on the economy.  Obama would be hard-pressed to deny the applicability of the suggestion, but since his prep has been around national security, he would be caught flat-footed in a situation (live debates) where he is already vulnerable.  If it comes down to debating national security at the last minute, McCain needs no prep - he's been living his prep for decades.  He can't lose here.

Anyway, back to the main point.  If nothing else, people want to see their leaders acting decisively.  Many would rather see unsuccessful action than complete inaction.  Obama's only action has been to seek a joint statement with McCain, and then to say 'call me if you need me to help out'.  Not exactly decisive leadership, there.  While I disagree with Bush's proposal, at least he stepped up and started the conversation!  While we don't yet know what McCain's efforts will have on the outcome, at least he stepped up and took a decisive leadership position.  By not doing anything, Obama is essentially voting 'present' on the crisis.  Unfortunately for him, the President doesn't have the luxury of voting 'present'.  The buck stops in the Oval Office.  At the very least, McCain is dictating the terms of the race right now, and Obama is simply reacting.  That alone gives McCain an edge.

Here are a couple pieces of professional analysis:

McCain's move carries fairly little risk, and the potential for real reward. Obama now looks like he's being dragged back to Washington to do his job at McCain's insistence, and whether the debate happens or not McCain can say that he had his priorities right and there's no reason the country couldn't wait a couple of days to hear them say the same things they've been saying for months. He should debate if Obama insists on it, but if a deal hasn't been struck yet by tomorrow night he should say, "I'll debate and then I'll go back to work in Washington while you go back to talking about yourself in front of screaming fans."

I don't think either candidate could vote against a modified package, so if you have to vote for it anyway at least put your name on it and call yourself a hero. If a deal happens quickly (which it very well might, as soon as today or early tomorrow) McCain can say it was worth a day or two away from the trail to fulfill their actual responsibilities as senators and as nominal leaders of their parties in a national crisis, and meanwhile Obama's rehearsal schedule is disrupted and you've taken temporary control of the election narrative while saving money on advertising for a few days. Why not?

And:

THERE'S A REASON voters in presidential races tend to shy away from electing senators. The primary skills of a legislator--talking, compromising, "representing"--are different from those of an executive--deciding, choosing, "executing." There are individuals who have the ability both to deliberate patiently and act energetically--but it's a rare combination. The best legislators tend not to be great executives, and vice-versa.

This year, for the first time in U.S. history, both major party nominees for president are sitting senators. The winner may be the one who can convince some portion of the electorate that he's less "senatorial," and more "presidential," than the other.

That's why McCain's action Wednesday--announcing he would come back to Washington to try to broker a deal to save our financial system--could prove so important. The rescue package that was so poorly crafted and defended by the Bush administration seemed to be sliding toward defeat. The presidential candidates were on the sidelines, carping and opining and commenting. But one of them, John McCain, intervened suddenly and boldly, taking a risk in order to change the situation, and to rearrange the landscape.

Of course his motives were partly election-related. But "the interest of the man must be connected with the constitutional rights of the place." If candidate McCain, for whatever mixed motives, ends up acting in a way that results in a deal that is viewed as better than the original proposal, and that seems to stabilize the markets and avert a meltdown--he'll benefit politically, and he deserves to. For McCain will have acted presidentially in the campaign--which some voters, quite reasonably, will think speaks to his qualifications to be president.

As for the question of Friday night's debate, which some in the media seem to think more important than saving the financial system--if the negotiations are still going on in D.C., McCain should offer to send Palin to debate Obama! Or he can take a break from the meetings, fly down at the last minute himself, and turn a boring foreign policy debate, in which he and Obama would repeat well-rehearsed arguments, into a discussion about leadership and decisiveness. And if the negotiations are clearly on a path to success, then McCain can say he can now afford to leave D.C., fly down, and the debate would become a victory lap for McCain.

So the action of these few days becomes more important than the talk of that hour and a half Friday night. One could even say the contrast between the two men in action becomes the true debate over who should be president. The media, being talkers and debaters, love debates, overestimate their importance, and are underestimating the possible effect of McCain's dramatic action. In the debate itself, McCain should mock the media's greater concern for gabbing than solving our economic problems, and should associate Obama with such a talk-heavy media-type approach to politics. If the race is between an energetic executive and an indecisive talker, the energetic executive should win.

Now, here are a couple more things that are important to know.  First, we continue to see some major backhand slaps from Bill Clinton.  On the bailout, he actually defended McCain:

He praised McCain again today, telling Good Morning America that he understands why McCain wants to delay Friday's debate. ""We know he didn't do it because he's afraid, because Sen. McCain wanted more debates," Clinton said. "I presume he did that in good faith since I know he wanted -- I remember he asked for more debates to go all around the country and so I don't think we ought to overly parse that."

Ouch!  Even worse, he admitted that it was Democrats who allowed the Fannie Mae/Freddie Mac mess!  It appears that Clinton is flipping off not only Obama, but the Democrat party at large for kicking him and Hillary to the curb.  Liberals would eat their own young if it gained them a political edge, and that makes for some powerful notions of revenge.  I think we're seeing that now from Bill Clinton with all of these backhands to the Obama campaign.

But, once again, the question we really need to answer is: what do we do now?  In my opinion, it comes down to who you trust to fix things, and what method of 'fixing' they're going to use.  I see it as a choice between socialist solutions and capitalist solutions.  The Democrats are out there saying that this was a failure of capitalism, but that's not true.  The root cause of this mess is too much government, which is a central aspect of socialism.  If too much government created the problem, how is even more government going to fix it?  It won't.  It can't.  The way to resolve this is by falling back to capitalist principles, which means getting government out of the marketplace.  Micheal Reagan has some good ideas (emphasis mine):

Put simply, that system is shackled around the ankles with chains fashioned by a series of Congresses, many of whose members either don't understand the principles of free enterprise or simply despise it as a mortal enemy of the Marxist dogma many of them embrace with near-religious fervor.

The clear and simple answer to our current economic dilemma is to take those shackles off and allow our free enterprise system to function unimpaired with unnecessary bureaucratic meddling.

Turn America's economic engine loose and all by itself it will create the kind of prosperity that saw a rustic combination of 13 British colonies transformed into the wealthiest and most powerful nation in world history.

American businesses and America's small businessmen and women who make $250,000 a year — the people who create most of the jobs in the marketplace — are groaning under the burden of corporate and personal taxation. At a corporate tax rate of 35 percent we have the second-highest in the world.

There aren't enough people making $250,000 a year to finance Barack Obama's extravagant spending plans, let alone the ability to pay for the $700 billion bailout. He has to look elsewhere — in this case the only place he can look — to the middle class.

Eliminate capital-gains taxes, cut individual and corporate tax rates to the bone, and watch the economy soar and unemployment shrink.

Don't allow boneheaded ideas like Barack Obama's plan to increase taxes at a time of economic crisis become a reality. He tells us that his tax plan would reduce the taxes of 95 percent of the American people, but doesn't say how he can give a tax break to the 40 percent of them who don't pay any income taxes at all.

Since they can't get a tax refund for taxes they don't pay, he wants the people who pay taxes to send them a check.

Obama also wants to throw a monkey wrench into the economy by allowing the Bush tax cuts, which set off an economic boom, to expire. That would be a massive tax increase and it would have a deadly effect on the incomes of the very middle class Obama professes to champion.

Congress should waste no time at all in repealing the ill-conceived Sarbanes-Oxley Act, which was allegedly designed to reform American business practices but instead drove scores of American firms abroad to foreign nations.

These are the keys to the recovery kingdom: less government, more free market.  Cut the taxes and regulation -- even temporarily -- and you'll see the market skyrocket on its own, without taxpayer bailouts.  There are other things that can be done, too, such as a comprehensive energy production bill, but the point is that it is capitalist solutions that will not only recover from the current mess, but also set us in good stead for the future.

There's my two cents.


Sources:
http://corner.nationalreview.com/post/?q=NjEwZTZiYjkyYWFkMTI0Yjc2MjM1YTEzMTY2N2NiZjM=
http://www.weeklystandard.com/Content/Public/Articles/000/000/015/606rmpbt.asp
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092403918.html
http://online.wsj.com/article/SB122226574427971151.html?mod=Best+of+the+Web+Today
http://www.newsmax.com/reagan/economic_bailout/2008/09/24/134073.html
http://newsbusters.org/blogs/noel-sheppard/2008/09/25/fox-news-blames-democrats-financial-crisis-bill-clinton-agrees
http://www.slate.com/blogs/blogs/trailhead/archive/2008/09/24/why-bill-clinton-is-such-a-lousy-surrogate.aspx


***UPDATE***
It sounds like the deal being worked on by Congressional leaders is nearing completion.  It's no surprise that it happened fast, because once McCain and Obama meet with Bush at 4pm today, McCain suddenly gets a whole lot of credit for making things happen.  If the deal is done first, that steals some of his thunder, so the Democrats want that to happen.

Here's another wrinkle: Republican House Minority Leader John Boehner doesn't agree that there's a deal:

"As I told our Conference this morning, there is no bipartisan deal at this time," Boehner said. "There may be a deal among some Democrats, but House Republicans are not a part of it."

Boehner may be helping McCain by delaying a deal until the meeting with Bush tonight, but he also might be legitimately expressing the sense of the House Reps.  They are the primary movers and shakers of fiscal conservatism (along with a handful of Senators), so it is very realistic to see them holding firm against this bailout.  Ultimately, we'll probably never know, but it sure makes things fun to watch!

http://www.foxnews.com/story/0,2933,428021,00.html
http://blogs.abcnews.com/politicalpunch/2008/09/deal-or-no-deal.html