Enough

I still have yet to see any serious explanation as to why Congress absolutely must act within the next week to bail out the financial industry. I’m not saying that it’s not true–only that no one has come up with any justification for it. On ABC this morning, Chris Dodd ran through the parade of horribles, but didn’t connect any of it to a trillion dollar bailout; indeed, he just alluded to “what we’ve been told we must do.”

I’m tired of this, of people on Wall Street saying that other people on Wall Street will be Very Worried and Lose Confidence if you don’t do what they want. It’s just not good enough anymore.

Atrios asked the right question a few days ago, noting that last Monday, Paulson had refused to bail out Lehman Brothers, and was lionized as standing firm:

What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?

Democrats should simply ignore the administration proposal, and write their own–perhaps, as Sebastian Mallaby suggested yesterday (reporting ideas from economists at the well-known Marxist redoubts of the University of Chicago and the Brookings Institution), that the government should either buy equity shares in the banks themselves, or mandate banks to issue new equity and stop dividend payments.

And yes: New Deal or no deal. SCHIP, card check, the works. If this is so damn important to the administration, then they’ll make a deal. And if it’s not, then we will know that they are bluffing.

I’m in the middle of Bart Gellman’s wonderful (and frightening) new book Angler: the Cheney Vice Presidency. In an early chapter, he recounts how Cheney simply ignored the narrowness of the 2000 election results and went ahead with pushing a maximal conservative position at all times. His motto, which eventually became the administration mantra:

You don’t negotiate against yourself.

It’s really not a hard idea to understand. As Mark notes, the bailout idea is not popular. Now we have the negotiating leverage. We should use it.

And Obama should not hesitate to throw the party leadership under the bus if they don’t.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.