September 28, 2008


Bailout plan makes strange bedfellows: The financial crisis and the proposal to address it with billions of taxpayers' dollars have exposed deep fracture lines in both political parties and have fostered some unusual alliances. (Tom Hamburger and Peter Wallsten, 9/28/08, Los Angeles Times)

[T]he crisis exposed sharply different outlooks among Republicans who consider financial markets and big corporations the main engines of the U.S. economy, for example, and those whose sympathies are closer to small business, as well as conservative purists who see government intervention in the marketplace as an intolerable violation of basic principles.

For the Democrats, those who consider strong financial markets vital to the United States and its place in the global economy found themselves at odds with others who identify more with working Americans and nurture a long-standing distrust of Wall Street.

In both parties, that meant that some of the hottest reactions against the $700-billion plan came from core constituencies. [...]

Obama has gone further on the specifics than McCain, rankling some Democrats and labor advocates by suggesting that a proposal to ease bankruptcy provisions as a way to help homeowners -- an approach that is anathema to many Republicans -- does not belong in the final bailout plan.

"It's not a secret that Obama's closest advisors come from Wall Street," snapped Dean Baker, an economist who advises labor and community activist groups in Washington. "He has decided to run a low-risk campaign from the center, and that's what we are seeing here."

Because of their shared indignation at the idea of taxpayers bailing out the financial industry, some Democrats find themselves sharing common ground with conservative Republican activists, who fear their party too is bowing to pressure from Wall Street.

One result is that dissident liberals and conservatives have been reaching out to each other. "There's a lot of people in their conference who are not thrilled with the plan . . . and they are looking for options," said Rep. Jeb Hensarling (R-Texas), chairman of the Republican Study Committee.

"The different factions of the Republican Party have always been held together around the basic understanding that we were going to keep the government out of people's business," said Matt Kibbe, president of FreedomWorks, a conservative advocacy group.

"I'm afraid that McCain is making the same mistake."

Such comments about McCain and the criticism of Obama over the bankruptcy issue reflect the risks of getting involved in the crisis, but their efforts have also drawn praise from some participants.

"Both McCain and Obama are playing a significant role" moving a deal forward, said Rick Hohlt, a prominent Republican lobbyist representing banking and other interests. "Both candidates are perceived as change candidates who are anti-Washington."

Those credentials are important to win over skeptical Republicans and Democrats, he said.

GOP lawmakers credit McCain with working quietly Friday and Saturday to coax some of those skeptics into supporting a deal of some kind. On Saturday, McCain worked from a call list of at least 20 lawmakers, aides said -- and some lists even included skeptical Democrats.

"He understands what the House Republican concerns have been and has been helpful in moving the bill in that direction," said Rep. Adam H. Putnam (R-Fla.), a member of the House GOP leadership. "But he has done so in a low-key, under-the-radar way that doesn't defeat the larger purpose."

Putnam, who received a phone call from McCain on Saturday morning, said both McCain and Obama have, in the end, helped push lawmakers closer to a deal.

"I thought the most helpful thing they can do is come together and detox this town to essentially give their blessing to a bipartisan deal," Putnam said.

"It appears that that's what they have done."

While Barack Obama is outside the mainstream on social issues, his economic triumvirate--Paul Volcker, Robert Rubin, & Warren Buffet--would do a Republican administration proud.

Posted by Orrin Judd at September 28, 2008 6:40 AM
blog comments powered by Disqus
« DEAL! (via Ari Mendelson): | Main | MAVERICK'S NEW PRISON WIFE?: »