There is a rumor, which you may have heard, that John McCain's famous return to Washington actually scuttled a deal last week, plunging us into the weekend's negotiations which resulted in . . . no deal. The nastiest interpretation is that he wanted to position the Republicans as against the bailout so he could run on that "principle". But the thing is unprovable, and so I haven't blogged it.
Now, however, I find it somewhat suggestive that the entire Arizona delegation voted no, whether their seats were safe or not. But perhaps there is some more benign explanation. Even the New York delegation--which overwhelmingly supported it--split a little.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
I can assure you that Shadegg and Flake, at least, don't take orders from McCain.
The entire Arizona delegation was composed of Dems and Repub who voted no! But as the thing is unprovable just putting it out there is blogging about it shame on you. Thanks for letting us know that you would publish the nastiest interpretation and then absolve yourself. Nice try Enjoy the slide down from standards to anything goes to win.
I am starting to feel guilty for having used the term "bail out" myself.
"Buying potentially undervalued assets at bargain prices on behalf of the American people and in order to save the economy" means the same thing in this case but sounds oh so much better...
This "bail out" discussion is turning into a classic case of Framing. Tversky, Kahneman, Zelinsky... where are thou to help us pose the right questions? we know the answers we want to hear...
The entire Nebraska, South Dakota, Montana, Alaska and Hawaii delegations also voted no. Granted, only the first on the list have a delegation of more than one.
So, fly boy McCain "buzzes the tower" and everyone goes looking for "meaning" in it, apart from the obvious ...
The theory was sound until McCain said he supported yesterday's bill. It would have been proven had McCain come out against it.
McCain had no plan, it appears.
This doesn't make much sense. how can McCain run on principle if he is on record saying he supported it. I would have thought by now he would have come out against it and proposed something else (better?).
Other than the fact John McCain's actions and public statements contradict your conspiracy theory, there's no reason not to go with it. Yesterday McCain was claiming credit for helping the bill pass! To most people (at least those of us in Arizona), McCain has egg on his face from the deal blowing up. I'm not sure, Megan, how you can possibly square that with your circle theory that he really wanted the thing to fail, but have at it.
I think a more likely scenario is the one that was reported in the press over the prior couple of days: McCain went to Washington because Paulson, Reid, and Pelosi told him they could not get a deal done without his help. He went there to try and get things done and, after having publicly pleaded for his return, Reid chose to play politics and announced McCain's return had killed a done deal.
Megan, aren't politicians who vote against something because the other sides leader was mean to them, even though they believed the bill to be a good idea, exactly the kind of people you don't want in office?
The fact that the bill would be transferring money from Arizona (and Nebraska, South Dakota, etc.) to New York might have had a little to do with the result as well.
Megan, since you seem to have tossed your libertarian bona fides in the river, I'm just going to recommend Daniel Larison here:
http://www.amconmag.com/larison/2008/09/29/as-much-as-the-next-guy/
Megan, Flake and Shadegg are two of the most conservative/libertarian members of the House. They're part of the Jeb Hensarling, Marilyn Musgrave, Mike Pence coalition (the Republican Study Committe, I think) who were all elected by the Club for Growth (which has been against this bailout). So it's not surprising they voted the way they did. Interestingly, both Eric Cantor and Paul Ryan who also were elected with the Club for Growth's help and are part of the same cabal voted yes. But, they are in leadership positions whereas Flake and Shadegg are not.
Also interesting, Paul Ryan is the Congressman the creepy FM^2 lobbyist started stalking in Wisconsin (read Paul Gigot's columns in the WSJ about this).
There's a rumor going around that you ate a baby after secretly carrying it to term. Now, I doubted this at first because that seems like a very unusual thing to do. But I have never seen a picture of you with a baby. So make of it what you will. I'm just putting it out there.
Oh, and just like I always says "Edwards" when Democrats say "Palin", I now say "Kling" and "Miron" and all those economists who opposed this bill, when you say we must support it and are irresponsible not to.
Has there ever in recent history been a more classic example of "Something must be done. This is something. This must be done"?
I'm at a loss to understand how the world's greatest community organizer failed to organize support for the bailout amongst his own fellow Dems in Congress.
Usually I love conspiracy theories...
But it seems obvious that McCain is HURT by the failure of the vote.
Doesn't it?
What's the next part of his supposed dastardly scheme??
Question about the bail out - since no one knows what these securities are worth that the Treasury would be buying:
1. Who is to say we would truly get them at a low enough price to profit in the future?
2. If we do get them at a low enough price, will treasury have paid enough money to get capital flowing again?
I think a more likely scenario is the one that was reported in the press over the prior couple of days: McCain went to Washington because Paulson, Reid, and Pelosi told him they could not get a deal done without his help.
Yikes, if they really thought the needed McCain's help on this then we're in worse shape than I'd thought. I know McCain's great at grandstanding, and always willing to parachute into a tough negotiation and say "Fuck you" to his colleagues, but I didn't know those were useful skills in this particular crisis.
There's a rumor going around that you ate a baby after secretly carrying it to term. Now, I doubted this at first because that seems like a very unusual thing to do. But I have never seen a picture of you with a baby. So make of it what you will. I'm just putting it out there.
Is that you, Andrew Sullivan?
David Walser:
McCain "suspended" his campaign until a deal was done. He obviously backed off that pledge. He took credit for the deal yesterday morning at a campaign stop. He has all sorts of egg all over his face. It is obvious the House Republicans don't care for McCain one bit. They didn't bring the votes they were supposed to. You can't pretend otherwise. McCain = epic fail on this one.
The secret plan of the economy gnomes:
Phase 1: Torpedo the bailout
Phase 2: ???
Phase 3: Profit!
Isn't it possible that they thought it was a bad idea?
Bailouts are for Pu**ies.
Systemic or operational change is the only way to correct destructive behaviour.
The reason capitalism works is because of the self regulating NEGATIVE feed back loop that is an intrinsic part of the capitalist system. This always leads to untold riches for many and peace and prosperity for the vast majority of the rest.
The so-called bailout is a prime example of the POSITIVE feedback loop of socialism (reward failure and decry success) which always leads to chaos and destitution for the masses and untold riches for the fearless leader and his minions.
Anyone with even a rudimentary knowledge of systems who doesn't understand this is not competent to talk about the economy. A perfect and visceral example of this is when in a musical performance or a speech the microphone gets too close to the speaker or the volume is turned up too high you get the ear splitting shriek from the sound system --that is called positive feed back. Positive feed back ALWAYS causes a system to go out of control in a chaotic way. Negative feed back will keep a system operating correctly-- the bailout is positive feeback (rewarding or alleviating failure).
Thank you Republicans and Nancy P (for her hubris and fecklessnes) for keeping the barbarians at the gate. We have dodged a bullet for now.
thedaddy
Perhaps McCain's Plan B is to have Arizona secede from the Union
Charlie--this is Andrew writing. I am feeling very welcome at Meghan's site now that she's decided to post ignorant conspiracy theories with zero evidence.
I'm not sure which is worse: that Meghan somehow really--and ignorantly--believed that there could possibly be any secret "Arizona" plan that would include members with wildly different agendas, or that she doesn't really care, she just wanted an excuse to post the rumor she had not posted.
I'm pretty sure it's total ignorance on her part, which I normaly find forgiveable. Except that she is trafficking in rumors on a very high-profile site. And except that she is lecturing on why everyone should follow the latest instructions of the great and the good on this deal, and one of the biggest objections (Kling, et al..) is that the great and the good really don't know what they're getting into. Just like Meghan here.
The more benign explanation being that McCain has zero juice in the Capitol. Obama doesn't have any juice, either, but he's only been around for twenty minutes.
If McCain wanted to kill the bailout so he could run against it as a man of principle, then wouldn't he have, you know, opposed the bailout?
Arizonan's are fairly libertarian. Many people here aren't native to the state and are the type to move to a different location to make a better life for themselves and their families. Forgive us if we believe life will continue for us even if we ignore the Chicken Littles in DC and NYC.
Also we're one of the primary locations that had a housing bubble. The general sense here is things will work themselves out eventually and if a house is sitting on the market too long it just means the asking price is too high. And seven hundred billion dollars won't help bankers face that fact.
You know, this post reads like
"I'm not going to come out and say that Megan is a slut because I've no proof of it. But the girls in her neighborhood are all sluts, so she must be one too. Hmm, wonder how slutty she is?"
Folks, anybody who reads this blog knows that Megan suffers a bit from McCain Derangement Syndrome.
It makes you overlook simple facts - such as the fact that McCain has been actively lobbying for passage of a bailout bill (not necessarily this bill).
I don't particularly care for McCain, but Megan's intellectual dishonesty is fascinating. And amusing.
Joe Klien's consience - I'm not sure in what manner you think we disagree on this. McCain has egg on his face because the deal did not go through. Ergo, Megan's conspiracy theory makes absolutely no sense.
More along the same lines: Here's Mickey Kaus today - If Nancy Pelosi had wanted to screw Sen. McCain, could she have done a better job? Just asking!
For the record, I think McCain went back to Washington intending to help get a deal done. I also think he thought that doing so would benefit him politically, but I don't think that was his primary motivation. (That's based on years of close observation of the man. He's old school. He really believes in doing the right thing and letting things be sorted out in the wash at the end of the day.) I just think he underestimated the Democrats' willingness to put their own political advantage over getting a deal done. YMMV.
I don't believe McCain had any real agenda in going to Washington last week outside the scope of his own campaign's agenda.
By McCain's own admission, he saw his role as a concerned leader on a mission to buld consensus and advance negotiations. He didn't take a strong position on Paulson's proposal or discuss the merits of the House Republican's alternative plan. This somehow provided evidence of his diplomatic role in the process.
McCain continued to talk about the bailout in terms of his own leadership role, and his desire to build consensus that benefited taxpayers. But never taking a principled position on plans or ideas beyond that.
If McCain was really wanting the Republicans to kill the bill all along, then why would he claim victory on as perceived consensus was reached? Furthermore, why would he allow the House Republican Leadership to the floor with pleas for a yes vote? And lastly, why would he blame Pelosi, and the dems, for the bill failing?
It doesn't add up. If McCain flips tries to change the narrative now, he could effectively kill the bill forever, which I doubt he wants, or ever wanted.
There was no original deal. That's why Harry Reid was screaming for McCain to come to Washington - he wanted McCain to pursuade Republicans to support something they'd not had much input on and which was laden with pork for Democrats. Reid wanted McCain to commit to supporting this bill, so Obama could, in effect, vote "present". He also wanted Republican cover to allow certain Dems to vote "no".
When McCain said the next day that he was coming to Washington, the tune immediately changed to "Go away, we don't need your help. We almost have a deal anyway." Of course the MSM immediately chipped in to help the Democrat party line.
There was no deal. If only 1/3 of Republicans voted for this last deal, which had more of their input and some changes they approved of, how could you possibly think they'd have had more Republicans on board for the "Christmas tree" version of the bill, laden with gifts for the likes of ACORN and La Raza?
What you heard about a nearly done deal was Democrat talking points amplified by their mouthpieces in the media.
So does anyone know why every Arizona Representative, whether Republican or Democrat, favored to win or not, voted against the bill? Glancing at that Slate page, it looks like they were the only state delegation to do so. Granted, they don't have many reps, so maybe they should be regarded essentially the same as Georgia, say, where 11 of 13 voted no. Oh, wait, Nebraska, with 3 reps, entirely voted no, but - 3 votes, that doesn't seem relevant. Anyway, MM's post here didn't strike as irresponsible slander because I also thought that Arizona's vote looked weird. Any explanations for it? Nelson offers one; anyone agree with him?
I almost considered this, but
1: He supported the deal.
2: Arizona Republicans are of the more Libertarianish end. It's a "Club for Growth" thing maybe, but it might also relate to Goldwater.
However the Arizona Democrats, including Grijalva who is quite on the Left, also voted against it. I don't see why they'd want to help McCain make a principled stand on anything. I don't think state loyalties trump party loyalty that much.
Why do you people love to bash Megan in often nasty language on her blog? Really, if you hate her so much go post over at the "I hate Megan" blog that was started not too long ago. Really now. I disagreed with Megan on this point but somehow, avoided spewing black bile (which is very uncharacteristic for me, I might add) and instead informed her of the facts. I disagree with Megan a good bit of the time but what will posting something like "Megan, you dumb b*tch, why don't you agree with my superior wisdom. You libertarian/socialist/communist/corporatist/Republican/Nazi/Bolshevik slut" achieve? What, she'll all of a sudden agree with you? Seriously, what is wrong with you?
Wow, what else can I say?
Every time I think I've heard the most ridiculous, crazy anti-McCain diatribe, the media and pundits keep on proving me wrong. It was all John McCain and the Arizona delegation that did it. Good lord, are people really either this stupid or this vested in an Obama presidency?
So, let me get this straight....Harry Reid says there will be no deal without John McCain, this is a fact. John McCain then comes to DC to help carve out a deal. As soon as he gets there, Reid turns on him like a viper and claims he should have never shown up. The MSM media attacks McCain for daring to say that the presidential campaign should be put on hold until the bailout is done. Everyone climbs on board the "It's John McCain's fault" bandwagon. Obama is available by phone. McCain then leaves DC, basically with his tail between his legs. Pelosi, who can't convince 95 of her own people to vote for the bill makes a partisan speech that convinces the last handful of Republicans not to support the bill. And this is really John McCain's master plan, because it helps him, how?
Wow again.
So much for the apocalypse, all the markets up today after yesterday's necessary correction.
lol @ megan
here's the 411.
McCain's suspension of his campaign was just a fresh horse after the Palin bounce was exhausted.
in order to pay for their treachery on the BIPARTISAN vote, the GOP will now have to put 40 more seats at risk with a yes vote.
I for one welcome Our New Liberal Alignment Overlords.
Gene2, I don't think anyone here is saying anything with nasty language. Any wild accusations (baby-eating, slut) have been clearly tongue-in-cheek.
That is in contrast to Meghan's ridiculous floating of a rumor that John McCain may be part of an Arizona conspiracy to threaten our financial stability for gains in November.
And she is so wildly off-base here, that it's fair to question how she posted this. Was it a profound lack of knowledge about Congress? I say yes. Was it a deep hatred of McCain? Yes again. Was it a desire to tweak people who think Nancy Pelosi and some Democrats may have been doing the same thing Meghan accuses McCain of? Maybe yes to that too.
But no matter why you think Meghan posted this, it's simply moronic. I tried to read the post as a joke, playing off of people like Mickey Kaus saying that this failure helps Obama. But that's not the way it reads. She fell off in the deep end this time.
crusader, i realize that you are a conservative....and thus fiercely opposed to teh booklarnin an ed-yu-ka-shun on general principles.....but the market has stabalised on the premise that there WILL be some sort of bill passed.
ask Megan.
;)
"Pelosi, who can't convince 95 of her own people to vote for the bill......"
Does anyone really believe that the Dems in the House needed convincing to vote yes on this bill? This is right up their ideological alley. Wealth distribution and nationalization of the financial sector…seriously now….
I am convinced that dems were told to hold back in order to foster the perception that this is a republican only fiasco.
No, I don't think that is the case, what I believe is that the Democrats are cowards, not that the Republicans are much better...but the Democrats don't believe in this bill either, many of them weren't willing to vote for it in case it turns out to be a disastrous boondoggle.
There was a NY Rep on TV last night who said he didnt' vote for it because he thought it would pass and he was shocked, shocked it failed. He should be ashamed for such a stupid, cowardly, nakedly political move, but that's America.
The Democrats are the ones who are playing politics with this legislation.....they're going to do the same thing they did wtih the Iraq War...they will say they voted for it because Bush lied to them and refuse to take responsibiltiy for their own votes.
Not that I don't believe Bush did lie to them, he did, or that I trust Paulsen and Benake, I don't. But, its' time to man up and do what you think is right. If you think this bill sucks, then don't vote for it and come up with something else.
But four of the Arizona members are Democrats, including two from safe seats. I don't understand why they would want to help Sen. McCain.
Similarly, there was no chance that Reps. Flake or Shadegg would vote for it, and I don't think that had to do with Sen. McCain. They're both pretty hardcore libertarians, as far as elected Republicans go.
This is getting rather silly for the 'conservatives' posting here. Was there a deal between the Democratic side and the Rebpulican side, at least among the leaders of both parties? Yes.
Before wasting any more space on these 'conservatives', could we at least get them to acknowledge this? If they don't, they're just making themselves deliberately unreachable.
Okay, so there is a deal. Did the Democrats keep up their end of the deal? Yes. Did the Republicans keep up their end? No. So people are free to blame the Democrats all they want . . . provided that they absolutely excoriate the Republicans in the same venues that they are blaming the Democrats. Not gonna happen, of course.
Finally, as to conspiracy theories: word on the street is that it was _Newt_Gingrinch_ of all people who was working behind the scenes to sabotage the deal. After which he made a bit of public noise claiming to 'reluctantly' favor the deal.
Way to go, Newt. Let's see if any 'conservatives' are going to step up to the plate and field this one.
Here's a more cynical version:
NYC may hold a lot of bad debt, but Arizonans are the ones with the houses. We don't benefit from the bailout at all.
The failure of our financial system can be traced back directly to the Democrats and it is why they wanted Bipartisan cover. Pelosi is just an idiot, who blew the thing up with her rantings.
In a year 2000 City Journal article entitled, The Trillion-Dollar Bank Shakedown that Bodes Ill for Cities, Howard Husock warned how "community organizing" groups, such as Acorn, were using new rules being enforced by the Clinton Administration to strong arm banks into making risky mortgage loans.
In a 2004 Washington Post article by David S. Hilzenrath entitled, Report Slams Fannie Mae, it makes the following point - "Federal Reserve Chairman Alan Greenspan and Treasury Secretary John W. Snow have called for tougher oversight of Fannie and Freddie because they worry that, given the huge scale of their operations, serious financial troubles at the companies could put nation's financial system at risk."
This call for oversight was vehemently rejected by Democrats, such as, Maxine Waters, Chris Dodd, Barney Frank and Charles Schumer. Look it up. Now these same bunch all get up in front of the cameras and hypocritically say it was the fault of the Bush administrations failure to regulate the markets. Guess who was getting large campaign finance donations from the executives at Fannie Mae and Freddie Mac. Yes, Chris Dodd and that "community organizer" Barack Obama.
They should all be thrown out of office and criminally prosecuted.
The sub prime mortgage debacle--giving millions of people mortgages who couldn't afford them--is the fault of the Democrats.
However, the sub prime morgage securities being traded and turned into ever more exotic financial instruments, which is what is causing the liquidity and solvency problems on Wall Street, is largely the fault of the Republcans, who have steadfastly rejected calls for more regulation of Wall Street.
Greenspan's monetary policy also exacerbated the situation and so he must also take substantial blame for setting the stage with low interst rates and easy credit, never allowing for any real market corrections to occur.
Neal, both sides are guilty.
Unfortunately the repubs have the brand as deregulators and have had their hand on the tiller for the past...ooo gobs of years.
the downballot punishment for a mccain loss is going to mean a realignment....from conservative to liberal.
Megan, the conservative party has lost the youth demographic.
I think that is the most potent signal.
Gore had 4%, Kerry had 9%.....but Obama will have between 15% and 35%.
Hey Ms. McArdle, check out the Euro.
It does look like one definite upside to scuttling the deal is that whatever comes out, if anything, we won't be bailing out any Europoean banks like we would of if Paulson's plan had passed, and the Euro's are going to, and have gotten started on, bailing out their own banks.
The Democrats dominate the House and the Senate. They can pass anything they want. Pelosi is an excellent vote counter. She arranged for 95 democrats to vote "NO!" because this is how many votes she needed to defeat the bail-out.
But she sensed that some Republicans were weakening and might vote "Yes" so she gave a speech blaming the economic catastrophe on Bible Thumping Republicans who forced disaster on the US in spite of efforts by noble Democrats to save free enterprise.
Pelosi planned for the vote to fail in order to blame the Republicans and help Obama. Pelosi is a very brilliant, capable, knowledgeable, well-educated, Beloved Leader. She is the best the Democrats have.
Read this link to understand why we have a crisis and why the Democrats are solely responsible (if you dare).
http://pajamasmedia.com/rogerkimball/2008/09/29/who-caused-the-biggest-financial-crisis-since-the-great-depression/
However, the sub prime morgage securities being traded and turned into ever more exotic financial instruments, which is what is causing the liquidity and solvency problems on Wall Street, is largely the fault of the Republcans, who have steadfastly rejected calls for more regulation of Wall Street.
You have this a bit backwards. Since Wall Street thought that they could properly securitize the loans and make them risk free, despite the quality of loans, they didn't demand that they purchase only quality loans. Toxic loans were able to be sliced up, re-packaged and sold as AAA securities. This is the same credit rating as the US Treasury. I still don't understand how people thought that repackaged toxic debt, was anything but toxic.
The banks now had a way to sell the loans, and the quality didn't matter because the loans would not be on their books. So, they stopped doing any sort of due diligence because there were billions to be made, loosening credit standards meant they could sell more loans and not doing their due diligence saved money on personnel. There was far more money for purchasing loans than buyers could afford to pay back with traditional mortgage products, so banks did everything they could to loan people the maximum amount of money possible.
This was all based on a prediction that "housing always goes up" which ended up being wrong. The money for crazy loans ended up running out, people couldn't refinance their debt and now it's all unwinding.
I agree with all that, but I still think if there had been stricter SEC and banking regulations it could not have happened.
I know a lot of people disagree that the repeal of Glass Steagal set this in motion, but I can't see how deregulating banks didn't have an effect, and that was a Republican led initiative, though Clinton could have veto'd it...
There is plenty of blame to go around, but I suspect the Republicans will end up getting stuck with it, even though it isn't any more their fault than the Democrats and the Democratis constituency of poor, irresponsible deadbeats will get to keep their houses.
For the record, I think McCain went back to Washington intending to help get a deal done. I also think he thought that doing so would benefit him politically, but I don't think that was his primary motivation. (That's based on years of close observation of the man. He's old school. He really believes in doing the right thing and letting things be sorted out in the wash at the end of the day.) I just think he underestimated the Democrats' willingness to put their own political advantage over getting a deal done. YMMV.
You think McCain really wanted to help? He's a self admitted know nothing about economics. He's a political opportunist. He was hoping to take credit for the successful passage of the bill(See his campaign stop yesterday morning). Was Pelosi playing politics? Sure, she was. It's always about politics. Why do you think Bill Kristol wanted to scuttle Clinton's health care bill so bad? Put it another way. Pelosi was playing hearts while McCain was playing no limit Texas Hold 'em. And McCain got played, largely of his own doing. The again, McCain is a complusive gambler(Is that a quality you want in a President?).
Libertarian sums it up quite nicly.
I would add that the rating agencies (moodys and S&P)that assigned A+ ratings to these toxic timebombs own some of the blame here as well.
Some CDOs were given top triple A ratings (high quality, minimal risk) by Moodys. How was this possible?
Christ, talk about through the looking glass.
Let's agree that CRA is the cornerstone for this mess, apparently since it's inception in 1977. Let's further agree that the Democratic fronts of Fannie Mae & Freddie Mac provided the rest of the foundation for this mess. Let's ignore that investment banks and their teams of quant jocks came up with scads of new investment instruments that ostensibly bundled the risks away in this mess. And let's ignore that ratings agencies had some serious conflict-of-interest issues going with their ratings in this mess.
There. Now with the playing field tilted so heavily tilted in favor of all the favorite Republican talking points, all the conservative yakkers out there can't complain about bias.
But don't we have to wonder why a Republican administration that has been in office for the past eight years was apparently unwilling or unable to deal with the shabby foundation that it so clearly inherited? Don't we also have to wonder why a Congress controlled by Republicans for the first six of those eight years couldn't identify this mess and deal with all those problems that were so clearly in place?
And now, with the mess in full bloom, with a rescue plan put together by the Republican administration, presumably for the benefit of the nation and not for the benefit of the Democratic Party, don't we have to wonder why the House Republicans couldn't get more than one-third of their members to vote yes on the rescue plan (while the Democrats mustered 60% yes votes)?
Why of course we do not!
It was the Democrats who caused this mess in the first place, it was the Democrats who exacerbated this mess in the second place, and it is the Democrats who caused the Republicans to vote against the Republican administration's for-the-good-of-America rescue package in the third place.
Ergo, everything is the Democrats' fault including the Republicans not dealing with any of the problems even when in power for multiple election cycles.
Christ, talk about through the looking glass.
There is plenty of bi-partisan blame to go around, but unfortunately, politicians who rarely put 'country first' are seeking to blame each other so they can use the debacle to gain more power.
The truth is, the single person MOST responsible for this is Alan Greenspan, and he was appointed and reappointed by both Democrats and Republicans, but he didn't do it for political gain, he did it because he apparently either wasn't paying attention or really believed it when he said that a housing bubble was impossible.
We are reaping what we have sown on many levels, economically and politically.
Stephen,
CDO's weren't given these ratings, senior and super-senior tranches were. These tranches, which the bansk ended up holding, were protected for something like first 15-30% of losses. These were way outside projections of historical mortgage defaults (which turned out to be wrong, since standards in underwriting were totally lax). The equity tranches (typically first 3 or 5% of losses) were given, appropriately, junk or near-junk ratings by Moody's.
People should perhaps learn the definition of the terms before making claims. And I don't even like the ratings agencies.
Libertarian --
Just saying, "deregulation must have had something to do with it" is just not going to cut it. Gramm-Leach-Bliley bit of deregulation had absolutely nothing to do with the current crisis. Interestingly, the number 2 of that "evil" trifecta, Jim Leach, tried to regulate Fannie and Freddie and that was killed mostly by Democrats, but also by Bob Bennet, the ranking Republican on Senate Banking committee, whose son was head of Fannie's branch office in Utah. Convenient, no, how he and Barney and Chris and Chuck are now leading the charge for the bailout? My guess is they're scared out of their wits that if the S*** hits the F**, there might be investigations into their campaign coffers. But anyway, the kinds of regulations that would have prevented this (e.g. those in place in Spain that Felix Salmon wrote about this morning on Portfolio's blog) were not ones anyone proposed.
Pelosi is an excellent vote counter. She arranged for 95 democrats to vote "NO!" because this is how many votes she needed to defeat the bail-out...
If this were true, then Pelosi must have known exactly how many House Republicans would vote for and against it. That would take an extraordinary amount of insight; a crystal ball.
I wouldn't make such innuendo. Arizona is Goldwater town, and constituents expect all their politicians to vote according to their Wild West culture. I'd bet it's more of a reflection of the place than any McCain meddling.
As someone who grew up in Arizona this doesn't surprise me. Obviously, Jeff Flake's vote had nothing to do with McCain, he is what Megan refers to as a "True-Believer". As for the rest of them, I'm not sure if they're voting on conviction or because the electorate in Arizona doesn't like the deal. Arizona, despite the recent influx of people from other states, still has deep libertarian streak. There has been tremendous growth in then past decade or so, but I think there is a feeling especially in rural areas that they'll be able to make it no matter what happens. I actually find this sort of self-reliance refreshing this day in age.
What's the next part of his supposed dastardly scheme??
Completely suspend his campaign, again, and ride his 10-point deficit in the polls all the way to the White House!!
If it doesn't make sense to you, you're just not thinking Maverick-y enough.
in reply to Freddie:
Essentially Obama led his reply to the first presidential debate question with Pelosi's argument that 'the crisis was due to the Bush economic policies of the last 8 years which McCain would continue.' McCain later said that 'he didn't want to get into a back and forth' on this (apparently not wanting to bash the Democrat errors with the FMs for the sake of not scuttling a bipartisan deal) but clearly Obama has a political advantage in this crisis and the House Republicans could be said to have certified that advantage by voting for the bailout after Pelosi's speech. 'But John the bailout passed after the Speaker pointed out why the problem arose. Do you not agree with the House Republicans?' The political price began to seem too high.
I'm a loyal Democrat, but I think this is way far-fetched about the Arizona delegation. I think that there was little in the way of "planning" or "organization" on McCain's part and that's why his actions, and the results look so messy. It was an off-the-cuff response to a serious situation, what else would result?
I also think you were unfair to Pelosi, who has stated that she wanted a bi-partisan vote because this was critical given the gravitas of the situation. She delivered 2/3rds of Democrats, but the Reps couldn't do even 50%. (I know, I know, others have said this ad naseum)
OTOH, Look at one of the updates (5:30 from Timothy Noah) on that Slate analysis of the vote (http://www.slate.com/blogs/blogs/trailhead/archive/2008/09/29/the-house-vote-roll-call.aspx). The Michigan (esp. Detroit) delegation voting against it even though they may have the MOST to lose from this. I recall hearing late last week that there was a "bailout" (low/no interest loan) for the Big 3 coming down after this bill passed (which it didn't). IF TRUE, that would take brass plated huevos to turn down saving the entire banking credit system, but propping up Detroit.
People who defend Pelosi should take the time to listen to her speech on the House floor before the vote.
She was NOT in favor of passing the bill.
It could just be that this kind of thing conflicts fundamentally with Western values.
Miss McArdle,
Reflect a moment. The Paulson plan offered John McCain two opportunities to reinvigorate his campaign. He could play to his perceived strength and look Presidential supporting unity in a crisis; or he could distance himself from Bush on a major pocketbook issue. If he chose the latter, his best tactics were to stand clear of the negotiations and denounce the plan - but only if he was sure he could carry the bulk of his party with him. For the latter option, he needed to go to Washington; and if he went there he could judge whether he could carry his party in denouncing the plan. So he went, and fell into temptation debating improvements to the plan. That stuck him with the second strategy; but in keeping his options open he failed to commit his weight to getting the Republicans to go with the plan. So he ended with the worst of all possible worlds - support for a plan that was so unpopular Congress refused to pass it.
McCain's (and Pelosi's) handling of this fits Tallyrand's phrase:
" It is worse than a sin, it is an error."