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The Fine, Fresh Scent of Consensus

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Continuing our ongoing series on elite bailout discourse, the Washington Post dedicated all five of its op-ed slots and its lead editorial to the topic today. If you enjoy the smell of consensus in the morning, this MSM's for you:

Editorial Board:

The fine points of financial reform can wait. For Congress, the immediate task is to avert economic disaster.

David Broder:

Congress cannot afford to delay for long taking up and passing the financial bailout legislation urged by the administration. It can tinker with the details, but inaction is not an option.

Ruth Marcus:

Nothing concentrates the mind like the prospect of a market meltdown. A good weekend's work at Andrews [Air Force Base] ought to be enough to hammer out the complicated parts[.]

David Ignatius:

[M]arkets, left to themselves, will not solve this sort of crisis. They need government help—in this case, on a scale that would have daunted even [John Maynard] Keynes—including underwriting mortgage loans, backstopping the market for credit swaps and other steps. […]

[I]f the taxpayers are going to acquire a stake in the nation's largest insurance company, perhaps that company can be the cornerstone of a new system of universal private health coverage. If the taxpayers are going to acquire $700 billion in real estate assets, perhaps the eventual profits can fund new investments in infrastructure or energy technology.

Harold Meyerson:

McCain wants to retain tax cuts for the wealthiest Americans; Obama wants to create tax cuts for all but the wealthiest 10 percent of Americans. Obama favors policies—through investments in infrastructure and education and through legislation enabling Americans to join unions without fear of being fired—to build the base of the economy, while McCain's record is one of opposition to such policies. Obama favors trade agreements only when they raise labor and environmental standards with our trading partners and protect them here at home; McCain has supported every trade pact that has weakened such standards and has never said one word about protecting our standards or raising them abroad.

James K. Galbraith:

What to do? Reenact Richard Nixon's great idea: federal revenue sharing. States and localities should get the funds to plug their revenue gaps and maintain real public spending, per capita, for the next three to five years. Also, enact the National Infrastructure Bank, making bond revenue available in a revolving fund for capital improvements. There is work to do. There are people to do it. Bring them together. What could be easier or more sensible?

Here's another problem: the wealth loss to near-retirees and the elderly from a declining stock market as things shake out. How about taking care of this, with rough justice, through a supplement to Social Security? If you need a revenue source, impose a turnover tax on stocks.

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  1. Oh sweet Jesus!!!!! Okay. Now I’m worried . . . we are so fucked!

  2. Or… inother words… Rape US!

  3. Does anybody think that Wayne Allan Root would ever support such socialism for the rich?

  4. It is, at best, dishonest to say that “taxpayers” have a stake in the nation’s largest insurance company. It would be more accurate to say that voters have a stake in the nation’s largest insurance company, bought with taxpayer money.

  5. The entire political/talking head establishment seems to be of one monolithic opinion here, and it’s the wrong one. Great.

  6. Does anybody think that Jeff Rense would ever support such a massive redistribution of wealth fron those that produce to crony capitalists?

  7. The worst part of all this is the precedent they’re establishing. Are we never going to allow another major business to fail?

    I have this awful vision of an economy dominated by state-supported buggy whip manufacturers.

  8. Epi-

    But, why would any sane, rational person ever pay attention to the likes of David Broder, Tom Friedman, Ben Bernanke, Paulson, George W. Bush, John McCain, Barky Obama, Mitt ROmney, Warren Buffet or Lindsey I always look like I just got it in the ham Graham?

  9. The entire political/talking head establishment seems to be of one monolithic opinion here, and it’s the wrong one.

    No one is willing to trade short-term pain for long-term viability, esp. with a close election a month away.

  10. I call a foul!

    Did you even read that Galbraith Op-Ed you exerpt? Here’s a hint: it’s titled “A Bailout We Don’t Need.”

    It’s a strongly contrarian view of the crisis saying that we don’t need a bailout, but do need federal intervention in other ways. It’s clearly not libertarian, but it’s not part of this consensus either.

    This is easily the sloppiest post I’ve ever seen from you, Matt.

  11. Daunting Keynes, now that’s an achievement!

    Say, I keep hearing about how stock market downturns hurt retirees. Has no one told them to switch their savings to safer places if they’re gonna need them in less than 10 or 15 years? People, the stock market does not always go up!!! It’s only a safe investment over a LONG PERIOD of time!!!!

  12. But, why would any sane, rational person ever pay attention to the likes of David Broder, Tom Friedman, Ben Bernanke, Paulson, George W. Bush, John McCain, Barky Obama, Mitt ROmney, Warren Buffet or Lindsey I always look like I just got it in the ham Graham?

    Most people are irrational and borderline insane. I know I am. So I see your point.

  13. The Washington Post editorial board says:

    “The fine points of financial reform can wait. For Congress, the immediate task is to avert economic disaster.”

    No time to think clearly about fundamental principles! Act now, now, now, to avoid disaster!

    It must be Nostalgia Week over at the Post’s editorial board. They’re recycling the sentiments they expressed in

  14. Let me try this again:

    The Washington Post editorial board says:

    “The fine points of financial reform can wait. For Congress, the immediate task is to avert economic disaster.”

    No time to think clearly about fundamental principles! Act now, now, now, to avoid disaster!

    It must be Nostalgia Week over at the Post’s editorial board. They’re recycling the sentiments they expressed in

  15. OK, never mind the link, it was from a 1920 editorial in favor of the Palmer Raids: “There is no time to waste on hairsplitting over infringement of liberty.”

  16. we don’t need a bailout, but do need federal intervention in other ways. It’s clearly not libertarian, but it’s not part of this consensus either.

    It’s the urgent need for “federal intervention” that’s the consensus.

  17. Mad Max–

    Don’t forget the PATRIOT Act and the Iraq war, the WaPo said ACT NOW ACT NOW ACT NOW on both.

  18. Um, one of those Op-Eds is not like the others.
    One of them just isn’t the same.

    For fuck’s sake, was I the only one that actually skimmed them? Meyerson’s is about presidential politics and trade policy. The others are directly about the bailout. Trying to conflate the two is irresponsible at best.

  19. The only connection I see with Meyerson’s is the following line:

    Change the terms of the nation’s economic discussion from the course we should take, and the defects of the laissez-faire model that got us here, to the indispensability of John McCain, leader of leaders.

    Not sure how that connects with the rest.

  20. Hopefully this post will repair Max’s dirty work above…

  21. Say, I keep hearing about how stock market downturns hurt retirees. Has no one told them to switch their savings to safer places if they’re gonna need them in less than 10 or 15 years? People, the stock market does not always go up!!! It’s only a safe investment over a LONG PERIOD of time!!!!

    Exactly. I would add: if you are about to retire, and you have had a diversified portfolio for several decades (one in which the market value of the portfolio closely followed the stock market that entire time); you would still get a decent long-run return on investment even if you sell now – shortly after a fall in stock prices. (Though you still may wish you had sold a bit earlier.)

  22. I really wanted to read that Galbreath excerpt all the way through, but after I saw “What to do? Reenact Richard Nixon’s great idea: “, I instinctively covered my eyes with my hands and began screaming. Not a good lead.

  23. It is, at best, dishonest to say that “taxpayers” have a stake in the nation’s largest insurance company.

    No kidding. I keep seeing people say that the taxpayers could make a profit on this deal. Bullshit. At best, the government could make a profit – I’ll never see a penny, no matter how it goes.

  24. Tulpa: Indeed. But then you missed his brilliant suggestion to counter stock market losses for retirees by a supplement to Social Security paid for by a turnover tax on stocks. Which, of course, makes investing in stocks less profitable, and around we go.

  25. To David Ignatius and the other editorial writers of the Washington Post this bailout is there Berlin Wall as if the fictive Laissez-faire monster has been slain for all time. They sound almost rapturous about the coming New Deal II that it represents.

    Reminds me of how Mark Shields was near to salivation after 9/11 that the phrase ‘the era of big government is over’, could be put to rest. What they are writing isn’t really so much ideological (though Ignatius is using
    ideological cover to justify these actions) as it is establishmentarian.

    What ever increases the scope and power of government makes their once sleepy little swamp town an exciting and interesting place to live in.

  26. can’t believe I overlooked the homonym error in the key phrase. No caffeine in the coffee here.

  27. alan: Yes, it is amusing to see decades of the government backing mortgages for less-qualified buyers ending in tears, and that somehow proves the free market is a failure.

  28. Shit, out of whiskey. This sucks ass.

  29. I keep seeing people say that the taxpayers could make a profit on this deal. Bullshit.

    Based on how the RTC worked out, I’m inclined to agree. See table 4. (pdf)

  30. On a more serious note, all Galbraith is doing that’s different is shilling for garden-variety Keynesian interventions rather than quasi-Keynesian corporatist interventions.

    I’m not sure if that statement was a load of bullshit, but it sounds good.

  31. Question: Can the federal government show one instance in which taxpayers actually profited from government loans, buyouts, or other “investments” with taxpayer money that we were told would not be complete boondoggles.
    -$21,900 and counting.

  32. I don’t keep track of FICA and Medicare so the loss is actually higher. I’m gonna go get a little more drunk.

  33. Has no one told them to switch their savings to safer places if they’re gonna need them in less than 10 or 15 years?

    Ha. Exactly. Retirees should not be making risky stock plays.

    In 1999, my (retired) dad had a broker who wanted him to put all his money in this great new thing called “Internet stocks,” explaining he could have a lot more money that way. I vehemently insisted Dad put his money into nice, safe AAA-rated muni bonds, which might not return as much but which were very reliable. After months of berating them both, Dad reluctantly agreed.

    Since then, I think I’ve been forgiven for every bad thing I ever did as a kid.

  34. Question: Can the federal government show one instance in which taxpayers actually profited from government loans, buyouts, or other “investments” with taxpayer money that we were told would not be complete boondoggles

    I have read (second hand, off the cuff type statements) that the Chrysler Loans were paid back in full with interest, yielding a slight net to the US treasury.

    Haven’t been able to confirm if this is true.

  35. I love the smell of bipartisanship in the morning.

  36. Screw these bastards. Even if by some miracle these bailouts (no point in pretending they’re investments) do turn a profit later, that money will be rolled into more government spending, not into reducing my tax burden.

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