Our country has never witnessed, nor has ever imagined, the banking system as being this exposed and vulnerable. It was previously inconceivable for a financial institution like Bear to implode. If you work on wall street or at an investment bank you are scared right now, probably waking up at ungodly hours in a cold sweat.

The point is nobody had ever seen anything like this before or even knew how bad the situation even truly was besides the companies who know what is on their books. Something had to be done in order to at least make an attempt to protect the jobs that would be lost and investments that would be recalled. There was and is zero liquidity.

I don’t know if Bush and others actually thought it would work, but what I do know is that it was dangerously close to election and the Republican party had to do something to save face. Politics, unfortunately, isn’t always about doing whats right, but what will get votes.

Pick a number, any number, but $1 trillion is nice and round. Come up with a formula based on population, unemployment, foreclosures, etc. Send it all pro rata to the states.

Sure, there would be a lot of bickering in Congress over the formula, but what congressman would vote against it. Money for the home state. Federalism. Pork. Home rule.

Since the money came from the states, return it to them, just like a tax cut except the recipient would be the public, not a private corporation or an individual.

I dont think Congress would like this much. Especially the committee chairman who like to try to manage these funds. But would Pelosi or Lindsay Graham really vote against it? All that money for California and South Carolina. Even Ted Stevens, if he were still in the Senate, would go along, although his state would probably “short changed.”

Jack

Bob Johnson

You are exactly correct. As I suggested in my post, in principle there’s no reason why Rich isn’t right – the Democrats oppose the bailout bill because they believe it wouldn’t work, but supported the stimulus bill because they believe it will work. On the other hand, there’s no reason not to believe Republicans are opposing the stimulus bill because they believe it is larded with pork and is not well designed to stimulate the economy or produce jobs either. Yet Rich dismisses this explanation without providing any evidence. Why? My guess is because of his ideological leanings, rather than any evidence. My point is this type of inference without evidence is perfectly fine for pundits. But as a political scientist who takes teaching seriously, I can’t simply take Rich’s word for it, and I don’t want my students to either. Moreover, I would go a step further to argue that all the evidence political scientists have gathered to date suggest that Rich is in fact wrong in inferring different motives to Republican and Democratic lawmakers. Both respond to the same mixture of incentives based on political beliefs and electorally-based incentives. Neither is more pure at heart than the other.

Bob chastises me, quite correctly I think, for writing as if Obama’s promised “change” centered only on bipartisanship. Moreover, he suggests, again quite properly, that given my earlier posts documenting the widening partisan gulf in Congress between Republicans and Democrats, it is unfair to criticize Obama for not somehow bridging that gulf by fashioning a stimulus bill that attracted more Republican votes. Let me make two points in response. First, it is true that Obama promised substantive policy change, for example, in the areas of foreign policy, health care, and the environment. But if you look at his three major nationwide addresses, the first in June, when he unofficially accepted the Democratic nomination to be president, the second in late August when he made his convention acceptance speech, and the third this past January 20th in his inaugural address, you will see that the emphasis on change centered as much or more on changing the tone of Washington debate by bridging the partisan divide separating Republicans and Democrats than it did on bringing substantive policy change. (unfortunately the software doesn’t let me put condensed hyperlinks to the speeches in comments, but I’ll append the full links below.) That promise was certainly part of the reason he won election. Now, it may be he was insincere in making those promises (I tend to think not) or unusually naive (more likely). But I don’t think we can go fully in the other direction to suggest by change he meant ONLY policy change. I think he wanted bipartisanship too. As you point out, the data I provided on the ideological placement of legislators suggests that the roots of partisanship run deep. But the evidence that I can see is that during his first major legislative test, Obama was unwilling or unable to do what is necessary to achieve any semblance of the bipartisanship he advocated in those three speeches. Was it wholly his fault? No – the congressional leadership of both Republicans and Democrats must share some of the blame. But here’s my crowning point: “we” – by which I mean everyone else – have just spent eight years bashing Bush for being a divisive, polarizing leader. In that period, meanwhile, I’ve cautioned my students that this is at best a facile analysis of the Bush years – that the cause of this polarization transcends Bush’s actions as president. Obama’s failure to be any less divisive than Bush – and admittedly this is only the first piece of legislation – bears my analysis out, at least in preliminary fashion. The lesson is clear: yes, presidents can be bipartisan, rather than polarizing. But there is a huge price to pay for making the effort and in the end, in order to achieve their policy goals, most presidents decide the price for achieving bipartisanship is simply too high. It’s not impossible to do – but it is very very costly. Obama is discovering what Bush and Clinton discovered. In that respect, nothing has changed at all – nor should any sober-minded analyst have thought otherwise. I cannot tell you how many people sincerely believe that with Obama’s election we have entered a new anti-Bush era where everyone works together in sweetness and light. Wrong, wrong wrong! It betrays a fundamental misunderstanding of how Congress works and why the political polarization of the previous 8 years existed – it had very little to do with Bush. By lowering expectations for Obama, I hope to cushion the inevitable disillusionment with his presidency a bit. The sooner we realize that to achieve his policy objectives Obama will be every bit as divisive as Bush, the better, in my view. The fault lies not in Obama any more than it did in Bush. They are both rational people trying to achieve policy goals in a system that makes it hard to do so in a bipartisan fashion.

Here are the links to Obama’s three major addresses – you can judge how much of each address promise an end to partisan bickering:

http://www.demconvention.com/barack-obama/

http://www.foxnews.com/politics/elections/2008/06/03/transcript-obama-democratic-nomination-victory-speech/

http://www.presidency.ucsb.edu/ws/index.php?pid=44