People know that something is odd in Washington
3 comments October 1st, 2008
Here’s Thursday’s column:
By Chuck Sweeny
RRSTAR.COM
Posted Oct 01, 2008 @ 07:08 PM
The mood of the world’s leaders is growing ever angrier against the United States as this country fails to deal with the financial crisis that we created with our trademarked brand of hyper-capitalism on steroids backed by phony mortgages. After all, their countries were encouraged to buy our debt, and buy they did.Now, they’re all hurting, and the vaunted “world economy” that excites opinion gurus like Thomas L. Friedman is in danger of collapsing. Der Spiegel, the respected German magazine, banners this headline: “America Loses Its Dominant Economic Role.”
So, after the House of Representatives devolved Monday into a sandbox fight typical of four-year olds, failing by 12 votes to pass a $700 billion Wall Street bailout bill, senators looked on, aghast. They figured they had to set a better example for the world and lead the lower chamber out of the wilderness.
The Senate came back to Washington to vote Wednesday after sundown — the end of Rosh Hashana — on a moderately revised version of the one House members turned down. According to advance news reports, Senate leaders planned to add middle-class and business tax breaks as well as assorted Christmas tree ornaments to the plan. The revised plan was also to include a boost in the amount of savings account cash insured by the Federal Deposit Insurance Corporation, to $250,000 from the current $100,000.
Because I’m writing this in advance of the Senate vote, I don’t know whether they were successful. Barack Obama, John McCain and Joe Biden planned to vote for it, and based on an Editorial Board interview Tuesday with Senate Majority Whip Dick Durbin, D-Ill, I believe it will pass. House members return today to take another stab at the plan.
“I would have voted for the House bill or come up with a few changes,” Durbin told us. “ We’re working on (the changes), consistent with the general approach of the House. I don’t argue with their vote, but I do argue with the premise that we can do nothing. I sat in on a meeting with (Fed Chairman Ben) Bernanke and (Treasury Secretary Hank) Paulson and they said that we are about to face meltdown, the collapse of the American economy.”
The problem with this crisis, Durbin said, is that people sense that something is wrong, but it isn’t like the Great Depression, when unemployment rose to 30 percent or more and people begged on the street corners. And I can tell you from my recent travels, people don’t trust their leaders, and they are angry at the prospect of their money being taken from them to bail out naughty investment bankers.
“People aren’t seeing their bank closing down and not being able to get their money out.” The other difference, Durbin said, was that in the 1930s, “you had FDR’s leadership and political muscle. In this case, the president is a lame duck and he has no political muscle. I was told (Monday) that less than a third of Republican House members took his phone call.”
Durbin said the financial crisis we’re in stems from “the prevailing sentiment that government is not your friend, it’s your enemy, and the net result is, we created a shadow banking system that is not transparent. Your bank down the street gets audited, but investment banks don’t have that level of regulation,” he said.
I think it’s safe to say that era has ended.
