In an attempt to ease back into rhythm, a simple question. Paul Kane and Lori Montgomery bring us the news:
In a narrow vote, the House today rejected the most sweeping government intervention into the nation’s financial markets since the Great Depression, refusing to grant the Treasury Department the power to purchase up to $700 billion in the troubled assets that are at the heart of the U.S. financial crisis.
The 228-205 vote amounted to a stinging rebuke to the Bush administration and Treasury Secretary Henry M. Paulson Jr., and was sure to sow massive anxiety in world markets. Just 11 days ago, Paulson urged congressional leaders to quickly approve the bailout. He warned that inaction would lead to a seizure of credit markets and a virtual halt to the lending that allows Americans to acquire mortgages and other types of loans.
This whole episode seemed sketchy from the outset. On the one hand, the economy does appear to be falling apart, and such an event falls well within the purview of the federal government’s concern. To the other, though, it seemed suspicious that, after waiting so long to acknowledge the situation, the Bush administration wanted Congress to pass a seven hundred-billion dollar solution in a matter of days.
Politics does, indeed, make for strange bedfellows. I was taken aback a few years ago when I found myself nodding to the television in the background as a pundit went on about the administration’s misplaced priorities in the age of terror, and then looked up to find myself agreeing with Pat Buchanan. I should not have been surprised; after all, I do recognize his voice.
But last week—a week ago, to be exact—I nearly drove off the road while staring at my car radio. I wasn’t seriously hearing what I thought I heard … was I?
Turns out, I was. Former GOP congressman and Speaker of the House, none other than the aptly-named Newt Gingrich denounced the bailout in an interview with All Things Considered‘s Melissa Block:
You know, when congressional leaders met on Thursday night with Secretary Paulson and with the Fed chair, Ben Bernanke, the message was dire. You heard Sen. Chris Dodd saying they were told we are maybe days away from a complete meltdown of our financial system. Don’t you think that there’s an imminent crisis here, that if they were to wait, there could be really drastic results?
To be honest, I don’t know. Secretary Paulson has been consistently wrong for a year-and-a-half. He told us for a year-and-a-half this wasn’t a dire crisis; this wasn’t going to happen. So the very people who told us for a long time not to worry about it are — I know they’re panicked. Whether that means that we should be panicked, I’m not sure. And I think the purpose of the Congress, the purpose of the House and Senate, is to be a check and balance on the executive branch, not to automatically write blank checks ….
…. What are you saying the incentive would be for, say, Secretary Paulson or Ben Bernanke to be rushing something through if it weren’t urgently needed? What would their motivation be for that?
A couple of things — first of all, they’re probably genuinely panicked. And I think that’s real. I think they’re tired; I think they’ve been consistently wrong, and now they’re looking at a precipice that’s very frightening. I think, second, that they have a very Wall Street-centric view of the world. And I think that rather than saying, ‘What are the big, profound changes we need to fix America?,’ they are saying, ‘What are the immediate quick fixes for Wall Street?’ — which I think, in the long run, just makes us weaker and sicker.
I think, third, they know that if they don’t rush it through, it has no hope, because as the American people learn the details, they’re just going to scream at their House and Senate members.
Now, there is an underlying suspicion about the bailout plan. Expecting Congress to rush through a bill of such magnitude and, furthermore, expecting them to do it right is a notion near to B-class macabre. And while I’ve learned a few things not worth delving into at the moment—indeed, I started hearing about vital sectors of the economy I never knew existed—there seemed to be something missing from all of the discussion.
It is, after all, election season. And while we’ve heard plenty about “Wall Street vs. Main Street”, and taking care of the taxpayers, a certain word—a magic word—has been absent from the discussion.
Now, it’s not unimaginable that all sorts of people working for the firms in crisis—VPs, analysts, and even the mailroom clerks, to say the least—are or will be losing their jobs. Indeed, public radio has included tales of how difficult things have gotten for corporate headhunters, as well as the talent they seek. But that’s it. That’s all there has been about that most important of words: jobs. In fact, at some point in there, I recall one analyst pointing out the 6.1% unemployment rate, that it was a mere quarter of Depression-era joblessness.
Thus, the simple question.
Presently, the labor situation seems to be about as good as we might expect at a time when the financial center of the United States is in freefall. But what is the long-term outlook? Given that candidates often talk about “jobs”, and how their own platform will “create jobs”, and how their opponent’s position will “destroy jobs” or “send jobs overseas”, why is this aspect so suspiciously absent from the discussion? Certainly, I could just be reading the wrong newspapers, listening to the wrong radio shows, hitting the wrong blogs. But, still:
- When will this “crisis” take hold in the employment figures? When will the local Costco or Motel 6 start laying off workers? Light manufacturing? Small business, the “backbone of the economy”? And how big will those cuts be?
In all the discussion about the bailout plan voted down in the House of Representatives today, I never once heard anyone say, “We need to do this or else it will cost X jobs.”
What is X? And why, especially in an election season, does it seem a secondary—at best—consideration?