Here’s a shocker: No one likes the risks involved in Paulson 2.0 or the precedent of using so much public money to rescue reckless bankers, both private and semi-private..
But there is a very good chance that (1) it will actually make money for the Treasury and (2) without it the financial crisis will spread and the small businesses of America and the people who own and staff them will be deeply injured. These businesses are the backbone of the economy, and they are in danger. This isn’t just a bailout of Wall Street; it is a breakwall for Main Street.
The GOP lost the majority and therefore doesn’t get to shape the bailout except on the margins. That’s the cost of past fecklessness, and intransigence in the minority during a crisis is nothing except a suicidal indifference to both the economic emergency and the reality of the possibility of panic. Gather with John McCain this morning –he is the leader of the party— and invest him with the authority to conclude or walk from the deal. And then work to get the majority back that will allow a greater role in the future by going to the country with a persuasive case on the origins of the crisis and the reality of future crises unless serious fiscal conservatives replace Nancy Pelosi and her gang.
Some of you will say you cannot make such a case on the heels of a bailout. Wrong. You are at a fork in the road, and the public can be trusted to understand exactly how this crises evolved and why Paulson 2.0 was the best of the options available to you and why urgent action is needed to both use tax cuts and energy exploration to recharge the prosperity of the past twenty years.
But you cannot stand by and watch people’s business and savings hemorrhage and expect them to reward you for your purity of purpose and incompetence of execution.