Now that there is a bailout deal, the House vote is coming up and there is still reason to think that there may not be enough votes to pass the legislation.  While party leaders have all signed off on the deal, there are enough skeptics from both parties that passage is not guaranteed.  An unusual alliance between the Mike Pences and Dennis Kuciniches of the world is forming.  If it stalls in the House this week, I don’t think anything resembling Paulson’s plan is going to pass later.  The timing of all this is uniquely bad for advocates of the bailout, as there is much greater unwillingness to vote for this bill right before going back to home districts, where opinion seems to be running almost two-to-one against the plan. 

50% are opposed and 24% support the plan in Rasmussen’s latest.  What little support there has been for the plan has actually decreaseddespite the rabid fearmongering of the administration and most of the media.  60% are concerned that the government will do too much, compared to 28% who are concerned the government will do too little.  Near-majorities of both parties oppose the bailout, as does a majority of independents.  51% of investors oppose the plan, and non-investors are equally against it.  Support is slightly greater among high-income respondents, but never reaches even a third of any income group.  Remarkably, the people who have the most reason to oppose the government taking on additional debt, the 18-29 year olds, are most inclined of any group to support the move (36%).  It seems likely that any member voting for this bill will face a nasty backlash.  The absurdly low job approval ratings for Congress and the wrong-track numbers all suggest that populist outrage over this bill will lead to the ousting of many more incumbents from both parties.  Whichever side is perceived as most in favor of the bailout will probably be the one to suffer the most, which could scramble all of the expectations of another big year for Democrats in the House and the Senate. 

Update: More profiles in courage.  This is pathetic evasion by both nominees if they avoid the vote, but it is also pretty smart politically.  Their votes probably aren’t needed in the Senate to pass this anyway if it comes to that, and there is definitely nothing to be gained by voting for it.  It certainly puts their doomsaying in perspective.

Judd Gregg of New Hampshire has been quoted saying, ““If we don’t pass it, we shouldn’t be in Congress.”  Gregg should understand that if they do pass it many of them won’t be in Congress come January.

Second Update: Paul Ryan (R-WI) has flipped and now backs the bill.  That suggests that conservative resistance is crumbling.

Jim Antle replies to my earlier post, and it seems as if we are talking past each other.  My objection was not to the claim that Obama’s positions were nearly identical on most foreign policy questions, but to the idea that he was therefore debating “on Republican terms.”  What makes support for anti-Russian NATO expansion or opposition to Iran’s nuclear program more characteristically Republican when both are thoroughly bipartisan endeavors?  Starting in the mid-’90s, after a brief respite following the end of the Cold War, it has been Republicans who have practiced me-tooism in their hostility to Russia.  The Democrats can lay claim to being the authors of most of the lousy policies that have soured U.S.-Russian relations over the last two decades; Republicans have been imitating them in staking out anti-Russian positions.  While the “brand” of the Democrats may seem to be George McGovern to many conservatives, that hasn’t really been operative for almost twenty years.  To see how far the Democrats have moved away from McGovern, one need only look at the electoral success of a Kucinich in the presidential primaries. 

In postwar America, foreign policy has been debated on the terms of an activist, internationalist consensus that spans both parties.  The one postwar election where a major party nominee seriously challenged that consensus was in 1972, and it has never happened since.  Technically the GOP stood for “rollback” in the ’50s, but fortunately they were just kidding and there was still a strong constituency in the GOP that questioned the need for alliances and deployments overseas.  Starting around 1964 and increasingly through the 1970s and 1980s, the GOP adopted the rhetoric of more aggressive or ‘forward’ policy than the Democrats, but in practice it was Republican administrations that practiced detente and negotiated some of the largest disarmament treaties and the proponents of “containment” who kept getting us into unnecessary foreign wars in Asia.  If there was a bipartisan consensus on anticommunist containment for much of the Cold War, there seems to be even more of one now on maintaining a very active, forward American presence in Europe, various parts of Asia and Latin America.  What differences that do exist are a matter of emphasis and process, not substance.       

Jim writes:

The Democrats never developed a clear response to Republican arguments that the surge was an unambiguous success, they never crafted a coherent alternative in dealing with Iran, and they don’t even have a language to talk about anti-terrorism efforts besides shouting “Afghanistan,”  which was relevant in 2001-03 but is much less so now.

It seems to me that the Democratic response to those arguments has been fairly clear: they don’t think the “surge” was an unambiguous success, because they hold, not that unreasonably, that its results are mixed or at least fall short of the plan’s stated goals.  Whether or not one finds that response persuasive seems to depend a lot on how one conceives of the goals of the “surge.”  They haven’t crafted a coherent alternative in dealing with Iran because they share the same goals as Republicans when it comes to Iran, and there is no coherent policy towards Iran in the first place.  They don’t need a language to talk about antiterrorism, because they simply endorse the administration’s formulation of the “war on terror” and merely want to shift where to locate the “central front.” 

The main point in all of this is that it is not unthinkable that a Democratic nominee holds virtually identical positions on a range of issues as his opponent does, since this is a function of being part of the consensus about America’s role in the world.  What is remarkable is that, to the extent that Obama is willing to deny the wisdom of the Iraq war from its inception, he represents the most significant break with that consensus of any Democratic nominee in the post-Cold War era.  I find that break to be far too small, but I am hard to please.  Compared with the last election, which was the comparison Jim was making, Obama represents the greatest divergence from the consensus we have seen in the last two decades.  I think this holds true whether we are talking about the presidential election in ’04 or the midterms, since the national Democratic leadership in ’06 did not run on a coherent antiwar, pro-withdrawal platform–much to the dismay of antiwar Americans everywhere–but allowed House and Senate candidates to adopt whichever position would best suit their constituencies.  The Democrats got their majority, but were then saddled with dozens of members who would not support withdrawal; the Democrats could not even manage party unity in resisting the introduction of additional forces in ’07.   

To the extent that Obama really is running on a platform of ending the Iraq war (and I think he is, which is different from saying that he will actually end it), that is a significant departure from the stances of national Democratic leaders in ’06 and of the Kerry/Edwards campaign, both of which hoped to capitalize on discontent with Bush’s mismanagement without making firm commitments to get out.  For the non-interventionist voter, Obama’s move is not nearly enough, but it is worth recognizing that Obama has come at least partly out of the defensive crouch on this particular issue, which is far more than can be said for any major Democratic figure since Dean’s candidacy fizzled so quickly four years ago.  It is not how Obama is the same as McCain, but how he is different that is the interesting thing about Friday night’s debate. Post-Cold War Democratic nominees have usually felt the need to mimic Republican tropes of “toughness” and “resolve” in order to be taken seriously, and Obama simply doesn’t feel compelled to do that when it comes to Iraq.  That represents a real change, even if it is not nearly enough of a change.

Jim also says:

On foreign policy, Barack Obama wants to be John McCain without making anybody mad.

But this isn’t really true.  To the extent that Obama wants to reduce the number of soldiers in Iraq and end the war, he is flatly denying a desire to “be John McCain,” for whom both of these things are absolutely unacceptable and who has identified himself completely with the cause of escalation in Iraq.  Obama also doesn’t seem to care whether he makes other people mad (viz. Pakistan).  The distinctive thing about Obama, which is also a very worrisome thing, is that he adopts interventionist positions out of his own support for an expansive American role in the world that is not defined by imitating Republican definitions of national security issues.  On most things he accepts the consensus and is very comfortable with it, but it is because he is comfortable in his own support for American use of force that he feels free to oppose certain instances of using force that he thinks are detrimental to U.S. power.  So, once again, supporting an activist or hegemonic role in the world is not debating on McCain’s terms; one might as well say that McCain is debating on Obama’s terms.

But Obama and a new Labour leader would, almost certainly, push each other in the opposite direction, feeding off each other’s notion that Israel is the roadblock to peace [bold mine-DL].

The dynamics under Obama would be very different. Blair was constantly attacked as Bush’s lapdog. In reality, they acted in concert because they simply agreed on the big picture. A weak Labour leader would, alongside Obama, be far more of a lapdog, with a limp UK foreign policy tugged along by an irresolute president.

The chances are, of course, that a new Labour leader would be a mere caretaker until being turfed out by the Conservatives. But there is little sign that David Cameron would be much different. As his Shadow Foreign Secretary, William Hague joined the anti-Israel bandwagon in 2006, criticising Israel’s “disproportionate” behaviour in Lebanon. And Cameron himself has made a series of worrying speeches, not the least dreadful of which was made on the fifth anniversary of 9/11, in which he argued that recent foreign policy lacked “humility and patience” and that the US and UK viewed the threat from terror in “unrealistic and simplistic” terms. ~Stephen Pollard

Pretty much nothing in this analysis is correct.  We don’t know who will replace Brown, but I would bet a nice steak dinner that his successor as party leader will not adopt a policy towards Israel that is any less supportive in practice than its recent leaders.  However, focusing on this part misses something more important.  If it is true that the next Labour leader will be a wimpy lapdog to Obama, and it might very well be true, it matters very much to know what Obama’s view on Israel is, and there is absolutely no evidence that he thinks that Israel is a roadblock to peace.  Whether he is sucking up to AIPAC or throwing in random “pro-Israel” remarks in his Philadelphia race speech, he constantly refutes and rejects this idea that Israel is a “roadblock” or that Israeli governments have anything to do with the problem.  The hope (or fear) that Obama holds different views is misplaced. 

Funny that Pollard should mention the war in Lebanon.  Apparently how one assesses Israeli actions in that war is the litmus test of “pro-Israel” sentiment; I don’t think supporters of Israel want to define things that way, just as Americans shouldn’t want to define criticism of the Iraq invasion as nothing more than anti-Americanism.  Of course, the Second Lebanon War was disproportionate (and it certainly was if we’re supposed to believe Washington that Russian incursions into Georgia are disproportionate), and Hague and others were right to say so.  Obama, of course, held a position identical to that of Blair in backing up Israeli actions without a hint of criticism, which means that if Labour’s leadership follows Obama it will be as depressingly party-line as Obama is.  There is then the obvious point that criticizing Israel’s disproportionate response in Lebanon has nothing to do with being anti-Israel, and it is quite possible to desire Israel’s welfare and security and criticize stupid military expeditions for that reason.  Recent U.S./U.K. foreign policy has lacked humility and patience, and both governments have handled the terror threat in unrealistic and simplistic ways.  That just seems like common sense, and that’s not always the phrase I associate with David Cameron.  Why it is bad for Israel to have both American and British governments headed by somewhat more sober people is something I do not quite understand.

Does Obama get all this? I understand the politics here. But as policy, the Bush approach to Pakistan is sheer folly. ~Blake Hounshell

Obviously, Iagreewholeheartedlywiththis point and havebeen saying the same thing for over a year, but why has there been so little comment on McCain’s apparent endorsement of the same position?  McCain objected to Obama talking about a stupid policy in public, but he did not say during the debate that the policy itself was misguided.  “If you have to do something, you have to do it,” was the philosopher-king’s remark.  Well, you can’t argue with a thing like that–because it isn’t an argument.  McCain said that we should work with Islamabad, but Obama says the same.  Both appear to be committed to perpetuating one of Mr. Bush’s latest great mistakes.

Here is the new Palin SNL skit.

In the liquidity trap, the problem is that borrowers already are paying minimal rates, but because of deflation the real interest rate is high. Clearly we’re not in that situation. Borrowers’ real interest rates are not high because of deflation. They are high because nominal rates are high, due to hefty risk premiums.

Insttead, we are in a capital trap, because the binding constraint at banks is capital requirements, not reserve requirements. Adding more reserves has no effect. If the Paulson plan is turned down, then this theory says that the binding capital constraint will lead to higher interest rates for borrowers, a slowdown in economic activity, more loan defaults, more erosion of bank capital, and a downward spiral.

I have not seen the “capital trap” theory in any macro textbook. How can we be undertaking one of the most extreme policy measures in economic history based on a theory that no one has ever studied? ~Arnold Kling

Kling’s main points against the bailout are here.  Kling elaborates in a radio interview here.

There seem to be two reasons for why Congress is pressing ahead with the bailout, the details of which they claim to have worked out tonight, and these are fear and deference to administration demands.  For that matter, making those demands requires instilling a tremendous amount of fear in members of Congress, and it appears that this fear and the desire to be seen “doing something” have overwhelmed everything else.  As I said before, the argument the administration has advanced is not persuasive.  It has failed to explain clearly why the bailout is necessary, except to say that it is necessary, no other alternative will suffice and doom awaits those who fail to submit. 

Kling has been discussing the option of reducing capital requirements as part of a solution.  As Kling says:

Lower capital requirements for bank lending to small business. The down side of lower capital requirements is that they raise the risk of bank failures, but we have a good system in place for monitoring banks and resolving failures.

The problem of tight credit and the problem of unmarketable mortgage securities can be separated. Focus on the problem of tight credit, and leave the mortgage securities alone. 

If the main fear is that lending will become impossible as credit becomes tighter, does this not alleviate a significant part of the problem?  Combined with Boockvar’s suggestion that major banks halt their dividend payments and use those funds instead for lending purposes, it seems as if there could be plausible alternatives that would not involve major government intervention.  These seem to be reasonable suggestions, and it sounds as if they would alleviate the main concern that credit would become unavailable. 

Update: Kling criticizes the bailout on bloggingheads.

Ross mentioned Palin’s oldCNBC and C-SPAN interviews as evidence of what she was capable of when she is discussing subjects she is more familiar with, but what becomes painfully clear on reviewing these is that she has an established set of rote remarks on Alaska, energy production and “hungry domestic markets” that she honed over many years and yet she has nonetheless produced confusing or nonsensical answers in connection with her presumed area of expertise in just the last few weeks.  If you watch her interview with Bartiromo, you hear all the same things that you’ve heard over the last few weeks including the apparently incorrect 20% figure she keeps throwing around, and you begin to realize that if you pressed her much on any of these points she would resort to the same bizarre filibustering that she did in the Couric interview.  Her apparent fluency and ease in the CNBC interview in particular were the products of her being allowed to speak uninterruptedly about something extremely specific to Alaska along with the relative unfamiliarity of her interviewer with Alaska.  The questions were not challenging, and there were no follow-ups demanding elaboration or specificity.  

When faced with a challenging question, Palin seems to have a habit of taking the most severe position possible, as if to demonstrate her gravitas by saying that we might have to go to war with Russia or there could be another Depression.  Whether or not she believes this or understands why this would be so, she handles challenging questions by overcompensating and saying more than she needs to say in order to make her point.  This goes beyond a lack of experience handling members of the national media.  Instead of seeing a challenging question as an attempt to elucidate something that is obscure, she treats it as if it were a trick, and she thinks that by her own sort of “straight talk” on war and depression she has avoided falling for the trick.  Follow-ups and specific questions are where she gets tripped up worst of all.  As her old rival Halcro seems to have noted correctly about her debate performances in Alaska, she has a habit of falling back on generalities and “happy talk.”  Her interview with Couric was a glaring example of exactly that, but taken to a gruesome extreme as the cheerfulness and generalities seem to have overloaded all circuits and caused a system crash. 

It isn’t just that she is more comfortable discussing energy issues, but that she used to be able to talk about Alaska without many other people being able to gainsay her, and even on issues relating to Alaska she was not what you would call a detail-oriented person.  As the factcheck.org report suggests, even the details that she does cite may not be reliable.  She is essentially the anti-Romney; she is the antithesis of a technocrat.  If he thinks “getting into the weeds” is important, she wants to race right by them.  That is part of the reason why a lot of people love her, and why most people detest Romney.  This is not because she could not familiarize herself with these details; she just seems to have no inclination to do that.  As she said, “I look out over the audience, and I wonder: Is that really important?”  Her answer to that concerning most of these issues seems to be, as she might say, “Nope.”

If there is another thing that we’re learning from her record it is that she doesn’t respond at all well to criticism, and she has made such a habit of shielding herself from it or ignoring that I suspect she has not learned how to deflect or refute it, which compels her to keep repeating whatever tried and true lines she thinks might be remotely relevant to the question.   It cannot help when she is put on network television after being shielded from any and all contact with the media and asked about subjects she hasn’t practiced talking about very much, and it cannot help her that she probably was told early on that she knew nothing and she became aware that her handlers believed that she knew nothing.  Still, it seems clear to me that her flubbed interviews were not accidental, but were bound to happen when a politician elevated mainly through the “gut-level connection” had to say something coherent about the pressing issues of the day.  Palin’s political style is the logical extreme of the Bushian folksiness-trumps-expertise and McCainesque “authenticity”-trumps-policy approaches.  She is a natural product of mass democracy’s ongoing pursuit of charismatic mediocrity, in which voters not only seek someone with whom they can identify but also actively discourage politicians’ cultivation of expertise.  Expertise grates against their egalitarianism, and so they try to avoid it in their political leaders. 

Ironically, McCain’s efforts last night to portray himself as an expert on foreign policy, combined with his irascibile put-downs of Obama, probably did more to sabotage his cause than anything else.  Like a lot of Palin defenders after the Gibson interview who complained that they, too, couldn’t have explained what the Bush Doctrine was, many of the undecided voters watching the debate probably took umbrage at McCain lecturing on this or that policy that they may not have understood very well, either.  In this way, the candidate so often described as “aloof” and professorial managed to establish that “gut-level connection” with viewers in a way McCain never did, because he expressed empathy and paid at least some lip service to the average voter’s concerns.

Peter Boockvar offers an interesting alternative to the bailout plan, and responds soberly to the preachers of catastrophe.

For years I have read progressives complaining about the Democratic “defensive crouch” on national security, that instinctive, fearful huddling that entails caving all major points of disagreement with the opposing party in order to appear “credible” and “serious” on this issue.  We saw the defensive crouch most recently in the surrender on new FISA legislation, which a surprisingly large number of Democrats told themselves was a good “compromise,” and of course we saw it most completely in the authorization of the Iraq war and both the authorization and reauthorization of the PATRIOT Act.  Both for reasons of political positioning and genuine conviction, hawkish conservative (often Southern) Democrats and some, but not all, neoliberals took up positions that were deemed more pro-“defense” and pro-military, and they showed a greater willingness to use force overseas.  The Gulf War in ’91 was the great chastening of the Democratic politicians who did not go along with this new hawkishness, and those who did were rewarded with dominance in the party.  Overwhelming U.S. military superiority, a Democratic administration, and the re-emergence of humanitarian interventionism (spurred on in the wake of Rwanda) all combined to bring many progressives to support various deployments and small wars around the world.  An activist foreign policy became the attempted inoculation against the charge that Democrats were “weak” on defense and when it came to handling foreign threats.  The zenith of this hawkish liberalism, which was the same as the nadir of progressivism, came in the years 2001-03, and in spite of having rolled over for virtually every piece of antiterrorist legislation and for the Iraq war the Democratic leadership still found itself being painted with the same old colors.

Though it was not limited to them, Howard Dean and the netroots typified the disgusted Democratic reaction against the results of this.  Dean was an odd tribune of antiwar sentiment as a fairly conventional “centrist” Democrat, but when the main rivals in the Democratic primaries were all Senators who had voted for the war resolution he became the natural outlet for many frustrated progressive voters and donors.  However, as I mentioned earlier, Dean was still in favor of most interventions and was particularly outspoken in talking up the perceived threat from Iran.  Overcoming the “defensive crouch” with respect to Iraq seemed to require embracing equally or more hawkish positions on everything else, and so the fundamental Democratic Party posture remained one of cowering and shielding itself from the inevitable attacks that were going to come.  Obama has essentially been following in this same tradition: opposed to the war in Iraq, but otherwise in favor of a very active role in the world up to and including new military engagements and very keen to declare his support for military action in places other than Iraq by the U.S. and allied militaries.  So when progressives listen to Obama’s answers on foreign policy, they tend to cringe because they recognize perfectly well that Obama sounds just like the opposition on most issues related to U.S. policies abroad.  They complain that Obama is being too imitative and passive, but the very thing that makes them cringe is also what has made it possible for them to muster any significant political opposition to the Iraq war without falling into the GOP stereotype of the weak, naive Democrat.  If they were not cringing at Obama’s answers on Iran and Russia, they would still be stuck with the likes of Kerry defensively crouching and trying to prove that he was a better manager of an unjust war.  To more thoroughly antiwar and non-interventionist observers, Obama’s views are completely unacceptable, but it is important to understand that he is operating in a party that was as recently as four years in thrall to Iraq war supporters and the mentality that said that the war was necessary but just poorly-managed.