By Dan Froomkin
Special to washingtonpost.com
Monday, September 22, 2008 1:34 PM
Does President Bush's support for a radical financial bailout represent a reversal in his political ideology? Not likely.
For one, it seems to be less a reversal than a recusal. Bush appears ideologically spent, rather than transformed. He has for all intents and purposes become the bystander-in-chief, letting others in his administration do the heavy lifting.
Furthermore, the plan concocted by two Bush appointees features some distinctive characteristics of major Bush initiatives past: It would be spectacularly expensive, primarily benefit the very rich, and grant the executive branch unlimited power with no transparency or accountability.
In Saturday's Washington Post, Michael Abramowitz and Dan Eggen described the bailout proposal as the latest in a series of shifts: "After a first term in which he largely adhered to conservative -- or neoconservative -- principles, Bush has moved away from long-standing positions on a range of foreign and domestic issues. In the final year of his second term, he has reached out diplomatically to North Korea and Iran, engineered a dramatic midcourse correction on the Iraq war and increased the government's role in the daily workings of the economy to a degree that would have seemed unimaginable when he first pursued the nation's highest office."
So how to explain it?
Former House speaker Newt Gingrich (R-Ga.) told The Post: "I believe that the president is exhausted and the vice president has been marginalized, and what you now have is the Washington interests . . . dominating the administration."
Another view is that Bush simply had to accept reality. Abramowitz and Eggen: "Some in both parties considered the administration's moves a welcome abandonment of ideology to cope with a global economic slowdown, instability in Pakistan and Afghanistan, the ongoing war in Iraq and the nuclear ambitions of Iran."
And then there's the argument that it's just more of the same. "Longtime conservative activist Richard A. Viguerie argues that Bush moved away from conservative principles long ago, saying the president did not fight hard enough to limit the growth of government and defend conservative social positions, such as opposition to same-sex marriage. 'He did betray us, just like his father did,' said Viguerie, who has written a book that sharply criticizes the current president's tenure. 'He promised he would govern like a conservative, and it just hasn't been the case.'"
Abramowitz and Eggen called attention to the post-2006-election "overhaul of personnel at key Cabinet agencies, particularly State, Defense and the Treasury, where secretaries pursued -- or were allowed to pursue -- much more pragmatic policies than their predecessors."
But, as they noted, national security adviser Stephen J. Hadley on Friday took issue with the notion of reversal: "I see a lot more continuity, certainly in terms of who this President is, what he stands for, what his values and principles are," Hadley said. "I mean, I think you've heard him, you've been listening to his speeches over the last eight years. This is a man who is remarkably unaffected by eight years as President, in terms of who he is, what he stands for, how he thinks of himself."Bush's Words
The president finally took his first two questions about the exploding financial crisis on Saturday, in a joint appearance with Colombian President Alvaro Uribe: "I know -- look, I'm sure there are some of my friends out there saying, I thought this guy was a market guy; what happened to him?
"Well, my first instinct wasn't to lay out a huge government plan. My first instinct was to let the market work until I realized, upon being briefed by the experts, of how significant this problem became.
"And so I decided to act and act boldly. It turns out that there's a lot of interlinks throughout the financial system. The system had grown to a point where a lot of people were dependent upon each other, and that the collapse of one part of the system wouldn't just affect a part of the financial markets; it would affect the average citizen -- and how. Well, it affect their capacity to borrow money to buy a house or to finance a college loan. It affect the ability of a small business to get credit. . . .
"I asked Hank Paulson -- who, by the way, in my judgment, is doing a fabulous job; he's got a lot of credibility and he's working, and his team are working hard, as are the people at the Fed and the SEC -- I said, what's it going to take to make sure Main Street doesn't get affected by the policies of Wall Street? And this is what they came up with, and this is big ticket, because it's a big problem. . . .
"And I believe this is going to work. We had the considered judgment of a lot of capable people. It's not only just here in Washington, but our people were listening to a lot of other voices. And we took our time to come up with a strategy and a plan that would address the problem. . . .
"And, you know, I know a lot of people here in Washington, Mr. President, saying, well, who to blame? Now is not the time to play the blame game. There's plenty of time to analyze the situation. But from our perspective, it's time to solve the problem, and that's what we did."
In a written statement issued this morning, Bush warned against trying to make any major changes to the proposal: "Obviously, there will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process. But it would not be understandable if Members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan," he said.
"Failure to act would have broad consequences far beyond Wall Street. It would threaten small business owners and homeowners on Main Street."Some Critiques
Sebastian Mallaby wrote in his Washington Post opinion column: "With truly extraordinary speed, opinion has swung behind the radical idea that the government should commit hundreds of billions in taxpayer money to purchasing dud loans from banks that aren't actually insolvent. As recently as a week ago, no public official had even mentioned this option. Now the Treasury, the Fed and congressional leaders are promising its enactment within days. The scheme has gone from invisibility to inevitability in the blink of an eye. This is extremely dangerous."
Paul Krugman writes in his New York Times opinion column: "Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now. . . .
"Mr. Paulson is demanding extraordinary power for himself -- and for his successor -- to deploy taxpayers' money on behalf of a plan that, as far as I can see, doesn't make sense."
As Krugman explains, the bailout only has the desired effect if "the federal government hugely overpays for the assets it buys, giving financial firms -- and their stockholders and executives -- a giant windfall at taxpayer expense."
He concludes that "if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to -- a share in ownership, so that all the gains if the rescue plan works don't go to the people who made the mess in the first place."
Gretchen Morgenson writes in her New York Times column: "Taxpayers deserve better than this, of course. But we have no lobbyists, so we get skinned."
William Greider writes in the Nation: "If Wall Street gets away with this, it will represent an historic swindle of the American public -- all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called 'responsible opinion.' If this deal succeeds, I predict it will become a transforming event in American politics -- exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion."
Glenn Greenwald blogs for Salon: "[T]he events of the last week are the most momentous events of the Bush era in terms of defining what kind of country we are and how we function -- and before this week, the last eight years have been quite momentous, so that is saying a lot. . . .
"What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism -- where they reap tens of millions of dollars and more every year while their reckless gambles are paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapse? We've retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses. . . .
"If there is any 'pitchfork moment' -- an episode that understandably would send people into the streets in mass outrage -- it would be this."
And yet, Greenwald writes: "The way it works is that Bush officials decree how things will be, and then everyone -- from Congressional Democrats to the Serious Pundits -- jump uncritically and obediently on board, even if they were on board with the complete opposite approach just days earlier, and then all real dissent vanishes."Deja Vu All Over Again
Glenn Thrush writes for Politico: "Sen. Patrick Leahy (D-Vt.) says he's seen this movie before: The Bush administration, citing an unprecedented national threat, puts the hammer on Congress to ram through gargantuan legislation with a minimum of review -- and the murkiest of repercussions.
"'We will do something this week -- but if we learned anything from right after 9/11, it's that the biggest mistake is to pass anything they ask for just because it's an emergency,' Leahy says."
Yale Law School Professor Jack Balkin blogs: "The country is currently enmeshed in a very serious financial crisis, one of the most serious since the Great Depression. The causes of this crisis are many, but one of the most important is the deregulatory philosophy that has suffused this Administration. This philosophy has proved intellectually bankrupt and now threatens to bankrupt the country as well. Had the Administration been willing to rein in the financial excesses of the past seven years, the crisis might have been avoided with far less cost to the country.
"In response to the crisis created in part by its own incompetence and ideological blinders, the Administration now asks for enormous new powers to run the economy. . . .
"Oversight and regulations of public contracts are designed to prevent malfeasance, corruption, self-dealing and conflicts of interest in the distribution of federal monies. . . . The Administration wishes to dispense with all of these restraints and precautions, just as it sought to run the Iraq war on no-bid contracts. That was bad enough, but here the dangers of bad deals and conflicts of interest are staggering. . . .
"The modus operandi of the Bush Administration has been to use crisis to seize unreviewable power for the executive. Have we learned nothing from the last seven years?"
Ali Frick writes for Thinkprogress.org: "Given Bush's history of gross fiscal mismanagement -- including an unprecedented number of no-bid contracts and Bush's resistance to closing fraud loopholes or increasing oversight of contracts -- why should Americans trust another $700 billion to his care?"
Richard Adams, writing in the Guardian, is furious that no one in the Bush administration is willing to hold a proper press conference to fully answer questions on the proposed rescue plan. But, he writes: "No one should be surprised. This is the Bush administration we're talking about, upon whose tombstone history will write three place-names: Iraq, New Orleans, and now Wall Street. In each of these three events we can pick out the same pattern -- initial incomprehension, a long period of stasis during which conditions got worse, an inability to adopt appropriate policies because of objections based on ideology, until finally, at vast expense, a resolution of some sort is stumbled upon. And in none of these instances has answering questions about the administration's conduct been a strong point."Meet the Man in Charge
Daniel Gross writes in Newsweek: "At a time when President Bush seems to have largely checked out, [Paulson] has emerged as the nation's most powerful leader--the investment banker in chief."
Kevin G. Hall writes for McClatchy Newspapers: "Making the rounds on the Sunday morning talk shows, Treasury Secretary Henry Paulson repeatedly said today's financial problems were long in the making. He should know. He was part of the Gold Rush that has brought the global financial system to the brink of collapse."
And Dean Baker blogs for the American Prospect: "At every point along the way, Secretary Paulson has failed to see the extent of the crisis resulting from the collapse of the housing bubble. This raises serious questions about his judgment. Reporters should be discussing Paulson's track record in the context of this bailout proposal."Bush's UN Reversal -- Or Not
Howard LaFranchi writes for the Christian Science Monitor: "When President Bush stands at the podium of the United Nations General Assembly Tuesday morning, his last speech as American president to the global forum will mark the administration's trajectory from disdain and disregard for the UN to pragmatic acceptance and even, according to some US officials, whole-hearted engagement. . . .
"The image of Bush as antagonistic toward the UN was sealed with his belittlement and marginalization of the world body over its failure to support the US invasion of Iraq. The bad blood continued to flow as the UN confronted the oil-for-food scandal and as the Bush administration, led by former ambassador John Bolton, pushed an all-or-nothing approach to UN reform in 2005.
"[T]he Bush administration's approach began to evolve markedly in the second term. The administration sought international assistance on security issues like terrorism and nuclear proliferation as well as on 'soft power' issues, from the stabilization of Iraq to reduction of poverty and disease in Africa."
But, as LaFranchi writes, some experts "see little real change in Bush's estimation of the UN and of multilateral diplomacy in general. Rather than any change of heart, what these critics see is a reluctant recourse to the UN when Iraq did not unfold as the administration had planned."
Deb Riechmann writes for the Associated Press: "His farewell address to the world body on Tuesday will stress the need for multination diplomacy, but it comes at a time when many of these collective diplomatic ventures he's championed are stuck in reverse.
"A prickly North Korea is backing away from pledges to abandon nuclear weapons. A Palestinian-Israeli peace pact before Bush leaves office is highly unlikely. Violence is flaring in Afghanistan and Pakistan. Iran is pursuing its nuclear work in defiance of U.S. and international demands. The West is trying to restrain an increasingly aggressive Russia that drew condemnation for its recent invasion of U.S.-backed Georgia."A Divide on Russian Policy
And who says the hard-liners are entirely down and out?
Josh Meyer writes in the Los Angeles Times: "Nearly six weeks after Russia sent troops into neighboring Georgia, the Bush administration remains deeply divided over whether to retaliate against it -- and some officials fear the internal conflict is already undermining strategically important national security collaborations.
"Some senior administration officials, including Vice President Dick Cheney and some hard-liners in the Pentagon, are advocating the continuation of what they confirm has been a White House-imposed communications blackout on most dealings with Russia and a halt to nearly all bilateral initiatives on security matters. . . .
"On the other side are officials at the State and Justice Departments and Pentagon, including Defense Secretary Robert M. Gates, who have fought behind the scenes for a continuance and even a rededication of national security alliances with Russia. They believe such ties, particularly on joint counter-terrorism and counter-proliferation efforts, are too important to jeopardize over the conflict in Georgia.
"'Those who want to scale back are winning,' one State Department official said Wednesday, referring to those advocating the harder-line approach."
Meanwhile, Robert Burns writes for the Associated Press: "Defense Secretary Robert M. Gates said Friday the world should keep its powder dry as it reckons with a newly assertive Russia, avoiding military confrontation as U.S. presidents did during the Cold War. . . .
"Injecting a bit of self-deprecating humor, Gates noted that the Bush administration is the first in history with secretaries of state and defense who both hold doctorates in Russian studies.
"'A fat lot of good that's done us,' he said."Locking Things In
Jim Hoagland writes in his Washington Post opinion column: "In its final months, the Bush White House -- along with the Pentagon -- is laboring to avoid crippling disruptions during the coming transition by locking in policies for the year to come. The idea is to move down in Iraq, up in Afghanistan and sideways on Pakistan.
"This triple-play strategy was essentially put in place during a July 23 meeting involving Bush, Defense Secretary Robert Gates and the Joint Chiefs of Staff in the 'tank,' the chiefs' secure conference facility at the Pentagon."Stop the Shredders!
Christopher Lee writes in The Washington Post: "A federal judge issued a preliminary injunction yesterday ordering Vice President Cheney and the National Archives to preserve all of his official records.
"U.S. District Judge Colleen Kollar-Kotelly's order came in response to a lawsuit filed this month by the watchdog group Citizens for Responsibility and Ethics in Washington. The group, joined by several historians and open-government advocates, warned that Cheney might destroy or withhold important documents as the Bush administration winds down if he interprets the Presidential Records Act of 1978 as applying to only some of his official papers.
"That, in turn, could deprive historians and the general public of valuable records that illustrate Cheney's role in forming U.S. policy over the past 7 1/2 years, they argued. . . .
"'It's a pretty strong opinion,' said Anne Weismann, chief counsel for the watchdog group. 'They will be prevented from destroying anything. It basically means they have to preserve everything in the broadest possible interpretation of what the law requires -- not their narrow interpretation.'. . .
"In court filings, Claire M. O'Donnell, Cheney's deputy chief of staff, offered a narrower definition of vice presidential records than the one in the law. She wrote that the statute applied to records relating to the 'constitutional, statutory or other official or ceremonial duties' of the vice president that fall within 'the category of functions of the Vice President specially assigned to the Vice President by the President in the discharge of executive duties and responsibilities' or 'the category of the functions of the Vice President as President of the Senate.'
"But that definition excludes many records, including those relating to Cheney's work on the National Security Council and those where he acted without instructions from the president, such as his efforts to win reauthorization of a top-secret warrantless wiretapping program, the plaintiffs argued.
"Kollar-Kotelly agreed and ordered all records preserved until the court can sort out the legal arguments on both sides before the presidential transition in January."Fundraising Watch
Bush is expected to find time for a political fundraiser today on his way to New York.
How desperate are the candiates seeking his help these days? This one is being outspent 10-to-1.
Erik Larsen writes in the Asbury Park Press: "The details of President Bush's visit to Colts Neck this afternoon were being kept private, just like the fundraiser he is expected to attend there for Republicans Chris Myers and Leonard Lance, who are running in the two most competitive congressional races in New Jersey. . . .
"According to a copy of an invitation for the event, guests . . . have been advised that they can snap photos of the affair, but must disable any video recording feature on their still cameras. . . .
"'Republicans in both the 3rd and 7th (Congressional Districts) here are faced with a Hobson's choice,' said Patrick Murray, director of the Monmouth University Polling Institute. 'The president is incredibly unpopular here in New Jersey. His numbers have been in the lows 20s (percent) for the past few years, and so being seen with the president is something the Democrats would just love. The problem is these candidates are far behind the Democrats in terms of fundraising. The president, whether you love him or hate him, is a fundraiser -- par excellence, bar none -- for the Republican base.'
"As of June 30, Myers' opponent, state Sen. John Adler, D-Camden, had almost $1.5 million in his campaign war chest, compared with $155,407 for Myers, according to the Federal Election Commission."Poll Watch
The latest American Research Group poll has Bush's approval rating at 19 percent, matching that survey's all-time low.
"Among Republicans . . . , 48% approve of the way Bush is handling his job and 46% disapprove."Late Night Humor
Jay Leno, via U.S. News: "President Bush has issued a new warning to Iran that it faces new economic sanctions after reports by the UN atomic watchdog committee that Iran is still enriching uranium. President Bush promising new economic sanctions. And believe me, if there's one thing the President is an expert on, it is ruining a country's economy."Cartoon Watch