The Paulson "bailout" and right-wing ideology

I'd been debating writing about the financial crisis and the Paulson Plan, these last couple days, because while I have strong opinions about it (executive summary: "BLEARRRGH") I don't have anything to add to the debate that Krugman and Dean Baker and Barry Ritholtz haven't already said.

But then I saw this, via MyDD, and holy crap (emphasis mine):

U.S. Sen. Norm Coleman said the massive government bailout of failing financial institutions is not only necessary but could make money for the federal government.

“The government could make 10 or 20 times what it pays on this, possibly,” Coleman said during a campaign stop at Christy’s Cafe in North Mankato Saturday morning.

Let's leave aside for now the point that Coleman is insanely wrong on the facts and clearly doesn't know what he's talking about. (In brief: it's basically unimaginable that the gov't will make ANY money on these assets, considering that to achieve his goals Paulson will have to buy them at ludicrously inflated prices, and these things are basically worthless to begin with. [Calculated
Risk explains this well.] Even breaking even is an optimistic estimate; Coleman's comes from La-La Land.) Let's look instead at what this line of thinking says about the conservative mind.

Liberals and those further left, like yours truly, have seen a silver lining to this crisis in that it seems to conclusively discredit free-market-ism. "Aha!," the argument goes, "as soon as Wall Street's in trouble all these so-called capitalists go crying to the government for help. Hypocrites!" This is true as far it goes, and it's great fun for us skeptics (my favorite comment is still Atrios' pithy note "Capitalism! Fuck yeah!"), but it's not the whole picture. Other, more restrained observers see the bailout as a panicked flight to pragmatism, in which crisis demands that Paulson and Bernanke set their ideologies aside and try anything that might work. (This argument naturally reaches back to 9/11, another case of seemingly-pragmatic government rapid response that turned out to be way more ideological than we thought. But that's for another post.) This also makes sense to us; but neither of these frameworks, I think, would resonate with the conservative mind.

Pretend you're Norm Coleman -- a roughly average conservative legislator, no intellectual but bright enough that you at least understand the GOP talking points. You love markets, and you think that private enterprise almost always knows better than the government. So when you see this situation, you assume that something fluky has happened, and there's an imbalance in the markets. Well, that's not a crisis -- that's an investment opportunity! Just like a business, the government should buy low and sell high; pick up these assets at fire-sale prices, get the market rolling again, and you'll get returns of 1000-2000% once everything is back to normal. What better use of public money could there possibly be?

That's the logic -- it is still, even now, market fundamentalism. So when Chris Dodd comes to your office and says the government should get contingent shares in these companies it's buying junk assets from, you'd just blink at him; why put that burden on them when they're already doing us a favor? Plus it sounds like creeping socialism, and that scares you. Then when David Sirota's outside your window with a megaphone, shouting about a massive transfer of public money into private hands -- i.e. taking from the many and giving to the few -- you'd just get confused and blink even more, because isn't investing in a healthy economy the best thing we can do with the people's money? After all, it'll trickle back down to everybody again!

It's old-fashioned, unvarnished, trickle-down economics. Right-wing lunacy from beginning to end. They still believe this stuff, even in the face of market meltdown; the conservative capacity for rationalization is unmatched. And though they're not vocal about it these days, this ideology is exactly what motivates Republicans in Congress. I know this because it's the only way you can possibly justify Paulson's plan as vs. Dodd's (which, in addition to contingent shares, also adds independent oversight, executive pay caps, profit-sharing to the HOPE program, and court-administered homeowner mortgage restructuring, all eminently practical things which make conservative ideologues nervous); you just have to be a wingnut, and then it makes sense.

So we shouldn't delude ourselves into thinking the Paulson plan is "pragmatic" or acceptable in any way, and we should pray that Dodd and Barney Frank are smart in their negotiations -- or else, the Democratic Congress will wind up passing by far the biggest piece of right-wing corporate welfare in American history. That would make me sad.

And meanwhile we should work on getting these nutcases out of our government; defeating Norm Coleman would be a good start. You can contribute to the Franken campaign here.

Missing the point

Ed Kilgore at Democratic Strategist, who has been refreshingly readable in recent years, is back in the old DLC mode today with a silly argument attacking criticism of Obama's perceived move to the center. Basically Kilgore's case comes down to "Obama's not moving to the center, but if he is it's just because he's awesome, SHUT UP ARIANNA HUFFINGTON," and it's not really worth our time. (Especially his dreamy-eyed contention that Obama is a "remarkable man" who can operate outside existing political paradigms, which is startlingly credulous for a man of Kilgore's intellect and experience.) But there's one bit I do want to take issue with, because it's important -- it has to do with concepts of "swing voters." Kilgore writes:

Second of all, as the TDS Roundtable on swing and base voters earlier this year illustrated, there's plenty of disagreement about the definition and nature of "swing voters." They don't necessarily all reside in the ideological "center" of the electorate on every issue, and moreover, "base" voters don't necessarily have inconsistent or antagonistic points of view from "swing voters." The two things that are pretty hard to deny are that (1) undecided "very likely" voters are indeed a disproportionately important electoral prize because winning each of them produces two net votes, and (2) most successful campaigns in a competitive environment manage to energize the partisan base while expanding it into the ranks of independents and even the other party's base. Huffington's horror at swing-voter pandering, and her manifest contempt for swing voters themselves, probably reflects the fashionable but very dubious Lackoffian belief that swing voters are cognitively confused, perhaps even stupid or amoral people who can only be appealed to by an even more strongly expressed partisan "frame."

This is wrong on a very profound level, and it misunderstands both Lakoff and the entire political-strategy argument of the netroots (which Huffington is making a facile version of). If I can arrogantly presume to speak for Lakoffian progressives for a minute -- we don't think that swing voters are confused. We think they don't exist.

Longitudinal research has shown, consistently, that people who claim they are "independent" or "nonpartisan" or whatever overwhelmingly display identical voting patterns to partisan voters. They may not say they're affiliated, but they vote like they are. A few people are out there whose votes regularly switch from Democratic to Republican or vice versa depending on the election in front of them, but there are so few of them that they're politically and statistically insignificant; most are just partisans who won't admit it. What DOES actually define that self-identified nonpartisan group, meanwhile, is that they're predominantly lower-information voters who are much less engaged with the political process and turn out much less frequently. (Which makes sense: the more time you spend following politics, the more likely you are to take a side. It's not that they are "stupid and amoral," and frankly it's rather offensive that Kilgore put those words in Arianna Huffington's mouth. It's only that they're politically disengaged.)

Therefore, outcome-decisive changes over the course of an election, so often assumed by the best analysts to be the product of swing voters changing their minds, are more likely the product of these marginal voters deciding whether or not to vote. (Traditional polls, not being longitudinal, cannot measure this.) Hence a focus on turning out the "base"; there is nobody else to turn out! Of course that's a controversial thesis, and I imagine Kilgore and lots of other people disagree, but it sure makes more sense to me than the alternative (that elections are decided by a tiny cadre of cerebral David Brooksian independents who are somehow engaged in the political process yet fail to identify with a political group).

So even if we grant Kilgore the argument that Obama's not moving to the "center" per se in his pursuit of swing voters, it doesn't matter, because pursuing swing voters at ALL is a wild goose chase. The way to win those valuable marginal votes is to campaign confidently and persuasively, using -- here comes Lakoff -- a cognitive FRAME which can be easily adopted by voters who aren't particularly political in nature. Republicans have done very well since Reagan in establishing their frame (and winning over all kinds of marginal Democrats, both so-called independents and their "Reagan Democrat" cousins, in the process); Democrats are only starting to do so. (I'm beginning to think that Obama's "Change" thing is a good step in that direction, actually, which is for another post.)

From this perspective Obama's movements away from progressivism, then, actually do direct damage to both the Democratic voter coalition and to his own electoral prospects (which are closely tied), by cutting up the party's frame for no damn reason. Hence Arianna Huffington's outrage, and hence the netroots' frustration at those within the party who still (insanely) think nonpartisanship and "triangulation" is a route to victory. Kilgore's total failure to understand this, and to instead treat the argument like he's defending Obama from hordes of raging hippies, is a saddening reminder of how out-of-touch -- how ignorant -- DC-elite centrism is of the way politics works in real life. But what else is new?

A moment of deja vu

So I read that Glenn Greenwald is railing, as he does, today about "New Republic syndrome" as part of his continued jihad against the FISA compromise. While this particular issue fails to move me, I'm with Greenwald in spirit -- I've spent a long time decrying elite, establishmentarian, "serious," nominally liberal journalism and how it consistently enables the worst conservative evils.

This topic sends me on a Vietnam-style flashback to my Dem Apples halcyon days, in 2006 and 2007, when I spent much of my time arguing these matters with the brilliant Josh Patashnik '07. Josh and I, with help from people like Kyle Krahel and periodically Garrett Dash Nelson on my side and Third Degree & Max Mishkin on his, would spar over things like centrism, bipartisanship, and Joe Lieberman, all of which Josh was for and I continue to be against. Josh used to write things like this, from October 2006:

Certainly it's pretty clear at this point that the invasion was ill-advised. But the fact is that in 2002 and 2003 a lot of calm, thoughtful, intelligent people were in favor of the invasion.

[...] We now know that Saddam did not have WMDs and that rebuilding the country and establishing a new political order have proven to be exceedingly difficult. The question is, should we have known those things back then? We certainly should have been more diligent in asking questions. But I still don't think it was unreasonable to believe that Saddam had WMDs and that we might be able to help the Iraqis set up a better form of government. [...]

If the U.S. had gone in, found WMD, and set up a moderately stable, moderately liberal democracy with limited American and Iraqi casualties, I think Iraq would have to be counted as one of the greatest successes in the history of American foreign policy. I don't see a huge downside here.

Or this from the Lieberman/Lamont fiasco of August 2006:

[Democrats should] be careful not to swing too far in the opposite direction, toward dovishness and partisanship. I believe in a Democratic Party that eschews both Lieberman's kowtowing to the GOP and the vicious, narrow-minded partisanship of the Daily Kos wing of the party. There are any number of Democrats--Hillary Clinton, Mark Warner, Barack Obama--who stand on principle and are proud members of the party, but who maintain civility and are willing to work in good faith with the other side when it is willing to do the same. I believe in a Democratic Party that thinks seriously about our problems in Iraq but also recognizes that we are indeed locked in a struggle to the death against jihadism. Joe Biden and Tony Blair understand this; I agree with Jacob Weisberg that many on the left don't.

Yes, Josh actually cited Jacob Weisberg. (He also regularly referred to Peter Beinart.) Today, on any liberal blog, this stuff would receive an immediate and righteous smackdown; but the atmosphere, on Dem Apples and in liberal politics in general, was different then. There was still a substantial contingent that was completely establishmentarian in character, earnestly advocated DLC politics, recoiled from antiwar or other progressive rhetoric, and despised everything Howard Dean and the lefty blogs stood for. This was before the magnitude of the 2006 midterms and the total vindication of Dean began to push those ideas backward into elite journalism and the margins where they belong (a process which, as we can see, is still ongoing). Harvard was and is an incubator of this kind of thinking -- Josh in particular was editor of HPR and active at the IOP, two of our most noxiously centrist and elitist institutions (the Crimson completes that trifecta). Those of us who were further left and outside that establishment had to push hard against it, and spend weeks arguing about crap like "civility" as a result. It was one of my formative political experiences.

Anyway, so off I go to read Greenwald and WHADDAYA KNOW -- turns out the TNR post that infuriated him so was by none other than Josh Patashnik himself! Josh after graduation went on to bigger and better things, now blogging full-time for TNR's The Plank, and apparently he's doing the same damn thing to Greenwald he used to do to me. The genesis of the argument is different -- and weirdly, I lean to Josh's side on the issue, if only because I lack that part of my brain that makes you libertarian -- but Greenwald takes it to familiar territory:

The reason these posts are worth noting is because they so perfectly capture the mindset that needs to be undermined more than any other. It's this mentality that has destroyed the concept of checks and limits in our political system; it's why we have no real opposition party; and it's why the history of the Democrats over the last seven years has been to ignore and then endorse one extremist Bush policy after the next. It's because even as The New Republic Syndrome has been proven to be false and destructive over and over -- even its practitioners have been forced to recognize that -- it continues to be the guiding operating principle of the party's leadership.

The defining beliefs of this Syndrome are depressingly familiar, and incomparably destructive: Anything other than tiny, marginal opposition to the Right's agenda is un-Serious and radical. Objections to the demolition of core constitutional protections is shrill and hysterical. Protests against lawbreaking by our high government officials and corporations are disrespectful and disruptive. Challenging the Right's national security premises is too scary and politically costly. Those campaigning against Democratic politicians who endorse and enable the worst aspects of Bush extremism are "nuts," "need to have their heads examined," and are "exactly the sorts of fanatics who tore the party apart in the late 1960s and early 1970s." Those who oppose totally unprovoked and illegal wars are guilty of "abject pacifism."

...[Institutions which should restrain conservative lawbreaking] have failed because they have been, and continue to be, defined by the meek, amorphous, principle-free New Republic Syndrome, which thinks that its restrained tolerance and complicit embrace of patent Bush extremism is some sort of mark of political sophistication and Seriousness... Good, smart, adult Democrats -- like the sober, Serious geniuses at The New Republic who have been so right for so long, and like Steny Hoyer -- understand that these matters are very complex and difficult and it's best if the Right not be opposed with too much vigor, if they should be opposed at all. It's precisely that mindset, and those who are guided by it, which needs to be targeted if the guaranteed Democratic majority is to mean anything other than an endless perpetuation of The New Republic Syndrome.

Preach it, brother. He's like a more eloquent and less profane version of me.

I don't really have a larger point here, except to point out how interesting it is that Josh is now having the same fights on a national stage that he used to have in this little sandbox. The more things change...

Obama's latest on the economy

MyDD's Josh Orton is right to cite Obama's speech today in Raleigh as evidence he's pivoting to a broadly ideological critique of conservative economics, and tying them directly to the present crisis. This is exactly what our discourse needs. Now, I wish he'd be more forceful and explicit in his criticism -- but I always wish that about Obama, and this is still a good start:

We did not arrive at the doorstep of our current economic crisis by some accident of history. This was not an inevitable part of the business cycle that was beyond our power to avoid. It was the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.

George Bush called it the Ownership Society, but it's little more than a worn dogma that says we should give more to those at the top and hope that their good fortune trickles down to the hardworking many. For eight long years, our President sacrificed investments in health care, and education, and energy, and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs - trillions of dollars in giveaways that proved neither compassionate nor conservative.

And for all of George Bush's professed faith in free markets, the markets have hardly been free - not when the gates of Washington are thrown open to high-priced lobbyists who rig the rules of the road and riddle our tax code with special interest favors and corporate loopholes. As a result of such special-interest driven policies and lax regulation, we haven't seen prosperity trickling down to Main Street. Instead, a housing crisis that could leave up to two million homeowners facing foreclosure has shaken confidence in the entire economy.

I understand that the challenges facing our economy didn't start the day George Bush took office and they won't end the day he leaves. Some are partly the result of forces that have globalized our economy over the last several decades - revolutions in communication and technology have sent jobs wherever there's an internet connection; that have forced children in Raleigh and Boston to compete for those jobs with children in Bangalore and Beijing. We live in a more competitive world, and that is a fact that cannot be reversed.

But I also know that this nation has faced such fundamental change before, and each time we've kept our economy strong and competitive by making the decision to expand opportunity outward; to grow our middle-class; to invest in innovation, and most importantly, to invest in the education and well-being of our workers.

We've done this because in America, our prosperity has always risen from the bottom-up. From the earliest days of our founding, it has been the hard work and ingenuity of our people that's served as the wellspring of our economic strength. That's why we built a system of free public high schools when we transitioned from a nation of farms to a nation of factories. That's why we sent my grandfather's generation to college, and declared a minimum wage for our workers, and promised to live in dignity after they retire through the creation of Social Security. That's why we've invested in the science and research that have led to new discoveries and entire new industries. And that's what this country will do again when I am President of the United States.

Also, here's a quote that certain Harvard friends of mine should ponder for a while:

We do the cause of free-trade – a cause I believe in – no good when we pass trade agreements that hand out favors to special interests and do little to help workers who have to watch their factories close down. There is nothing protectionist about demanding that trade spreads the benefits of globalization as broadly as possible.

Tonight's required listening:

Chris Hayes, social-democrat hero and Nation editor (read his blogs here and here), debates redistributionism, capitalism, and oil profit with conservative radio host Mike Gallagher. This is a fascinating and revealing argument, believe it or not, from both sides. (Although of course Hayes is right.) 13 minutes.

No embed sadly, but you can hear the discussion at Gallagher's site (click "Listen Now").

A legit question to Obama supporters

If Eva can ask Clinton supporters a question, I figure I get one too -- although this is a less practical and more basic one. Here goes...

When I'm arguing with my Obama-supporting friends, inevitably the "unity" thing comes up. More particularly the fact that Obama likes to reach out to conservatives -- "broadening the coalition," so to speak. (By most accounts he's doing a good job of it.) Temperamentally, Obama wants to expand the Democratic Party out to include people who are substantially further right than he is; there isn't much doubt about that.

Why?

Everyone says this like it's a good thing and I just don't get it. There are plenty of reasons not to let conservatives near our party -- for starters, the historical fact that everything they touch turns almost immediately to shit -- but there aren't any reasons for it. The Democratic coalition is plenty big already, and it'd be unstoppable if only we had an infrastructure to turn it out (which will come from the left, not the center or right). We don't need conservatives; why would we want them?

A thought about the "divided" Democratic Party

I realize that for many of us hyperpolitical types, the Obama-Clinton contest looks like a HELLACIOUS APOCALYPTIC DEATHMATCH that will tear the party asunder, make small children cry, etc. But is it not equally possible that this close margin -- 48.7% to 48.4% if you aggregate yesterday's votes -- is a result of Clinton and Obama being functionally identical? You would get just that same result by flipping a coin 15 million times...

...as opposed to Republicans, who are actually splintering along real ideological lines. McCain seems poised to win despite minimal support from conservatives, and the absolute visceral hatred of the right wing; meanwhile, evangelicals are stubbornly clinging to Mike Huckabee no matter what their leadership tries to tell them, and you have to assume that lots of those people -- critical to GOP strategy since the Reagan years -- are willing to go down with the ship. In any given scenario, between now and the Minneapolis convention some critical portion of that party will be marginalized.

So when you hear analysts saying that the GOP is ready to rally around John McCain, while Democrats face a bitter and damaging struggle between two frontrunners, I think they've got it exactly backwards. Democrats are fighting over a miniscule and arbitrary difference in image, one that can be easily healed with a few kind words in Denver (only the most passionate Clintonites or Obamaniacs would really think of leaving the party); Republicans face existential crisis. Despite the illusions produced on Super Tuesday, and the scorched-earth campaigning that's likely to come, our position overall is still much stronger than theirs; I wouldn't worry too much about a protracted nomination battle damaging our general-election prospects. Just sit back and enjoy the ride...