Purely as a question of self-interest, John McCain’s exit-the-stage gambit makes sense. With cries of impending doom filling the air, he’s got nothing to gain by sticking around to discuss a subject he ill understands and to be pelted with quotations of the Hoover-like things he’s already said, such as proclaiming the economy “fundamentally strong” at the start of last week. Since Wall Street’s latest and grandest blowup just hours later, he’s lost ground in the polls day by day.
There are those who think the real point of McCain’s whole exercise is to can the vice-presidential debate between Sarah Palin and Joe Biden, but that’s a grace note if it happens, far less urgent than McCain’s own immediate need to find a pretext for disappearing until a bailout is done and the acute phase of the crisis seems past. The ploy also serves the larger Bush administration push to get a deal through Congress with a minimum of reflection and revision, as they so spectacularly succeeded in doing with the Patriot Act and the Iraq War resolution.
But if McCain’s move makes sense for McCain in a narrow and craven sense, the implicit (and sometimes express) embrace of it by news media and the opining classes is a measure of how theatrical and unserious our politics, and especially our presidential campaigns, have become. There’s a political issue of grave consequence at hand? We must cancel politics at once!
The economic crisis on Wall Street is fundamentally a political crisis. The decisions being weighed now, about how to intervene in the economy to keep it from lurching to a halt, and how to minimize–or maximize–the long-term losses to the public at large, will shape the country’s options for decades to come.
We are already vastly in the hole from an Iraq War tab that Nobel economics laureate Joseph Stiglitz estimates at an eventual $3 trillion. If the Paulson plan is adopted substantially as proposed (with no provisions, or just token provisions, for recapturing bailout funds from future financial sector profits), that additional debt will guarantee that for practical purposes, only two lines exist on future federal budgets: the Pentagon and debt service. In fact, we are already facing a domestic future that’s drastically circumscribed by Iraq War debt, but that’s hardly a reason to double down.
The enormous national debt functions in part as a political tool, a lesson the Republicans learned a generation ago. After David Stockman, Ronald Reagan’s budget director, got over his initial disappointment at being unable to make deeper cuts in federal spending, he came to recognize that the political payoff of supply-side economics lay in the future, when accruing deficits would compel the dismantling of spending programs that were too politically popular to do away with under less dire budgetary circumstances. If Henry Paulson and friends sell this bailout with no consequential payback provisions, it won’t matter whether future presidents and congresses continue to subscribe to neoliberal austerity policies in principle. They will have no choice in the matter, because they will be broke.
In theory this is a moment of great potential for the Democrats, not just in this election but in reclaiming a popular constituency distinct from that of the Republicans. Apart from the half-a-loaf Dodd Plan–which, make no mistake, seems unmistakably superior to the Paulson heist–they have had remarkably little to say about the remedies for a crisis they ought to have recognized as a real election-season possibility.
Barack Obama’s refusal of McCain’s bait was one of the more gratifying things he’s done in this campaign. It was heartening to hear him say that now was emphatically not the time to stop talking. There’s no question that Obama has seemed far more measured and presidential than the erratic, dithersome McCain–but who wouldn’t? Obama’s list of conditions for a bailout deal were quickly parroted in essence by McCain, and both amounted to affirmations of what internal dissent in Congress–driven in large measure by intransigent House Republicans–had already made an accomplished fact: On its own terms, the Paulson plan wasn’t going to fly. Finally even George W. Bush said as much last night.
Like the Iraq War, the financial crisis is being framed not as a debate over national direction but one over managerial competency. And managerial competency, vitally important as it may be, is not really a political issue. It is a subject that engenders discussions about the best means of executing a policy, not deliberations over what the policy should be. To the extent Obama and the Democrats accede in this–to the extent their actions suggest only that Obama would be a more responsible manager of crises like the present one–they are taking the politics out of politics, too.