On bailout, presidential debate was a disappointment
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I watched last night’s presidential debate hoping to learn whether either candidate favors the Bush administration’s push for an immediate $700 billion bailout. To my disappointment, I didn’t hear clear answers. Does either of these guys favor the Paulson plan? Got me.The L.A. Times watched the debate and concluded:
‘Neither would commit without knowing the details.’The New York Times, watching the same debate, concluded: ‘Both expressed general support for the concept underlying Mr. Bush’s proposal, to buy as much as $700 billion in toxic securities as long as the program meets certain criteria of transparency and accountability.’
I’m not sure that’s true -- even though Sen. John McCain said last night he would likely vote for the bailout, I haven’t heard him support the Paulson plan. He has given himself wiggle room to oppose a bailout deal built on the Paulson plan, and instead side with House Republicans in opposing the bailout. This would allow him to campaign as the anti-bailout candidate in the final weeks of the campaign, a potentially potent appeal to ticked-off middle class voters. Not wanting to be alone in his support of the bailout -- that is, not wanting to be the pro-bailout candidate -- Sen. Barack Obama has also hedged.
Last night was just more hedging. More dancing. Profiles in courage this was not.
I fully understand that both candidates have laid out various conditions and principles they believe are necessary in order for the Paulson the plan to be acceptable (protection for taxpayers, limts on CEO pay, oversight). For lack of a better word, I’ll call these concerns ‘lipstick.’
But what about the pig? The pig is the Paulson plan: $700 billion in taxpayer money for government purchases of distressed assets, a messy, historic, controversial, and risky use of government money. There is no question it is a big, fat, ugly pig in the eyes of many voters.
Are these guys for it or against it? And do they think it will work? And what is so special about $700 billion? Why not $525 billion? Why not $900 billion? Here’s the debate transcript -- by all means, read it and let me know your thoughts.
Prior to the debate, Calculated Risk laid out its hopes for the bailout discussion, writing:
I’d like to see both Senators McCain and Obama explain the economic problem, why they see a need for the government to be involved (or not), what the purpose of the plan should be, and specifics on the plan they would propose or support.
I didn’t hear either candidate address any of those questions.
As of Saturday afternoon, there is no indication the White House and the Democratic leadership are moving away from the core of the Paulson plan. This is from The New York Times’ report Saturday afternoon indicating progress is being made in congressional negotiations:
Officials said the core of the proposal, put forward a week ago by Treasury Secretary Henry Paulson, remained intact: The government would purchase up to $700 billion in troubled assets from financial firms as a way to free their balance sheets of bad debts and to help restore a healthy flow of credit through the economy.
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