Can we even remember what democracy looks like?
Free Traitors

Thoughts on Bailout Vote

In no particular order...

Bomb_2 Wall Street might have needed a bailout, and it's conceivable that the Paulson-Dodd-Frank approach was the right one. But this case has to be made by credible people who can distill the problem into soundbytes. There are very few people in the leadership of either party that have such credibility: remember that the Republicans spent years crying that trade agreements with Central America and Oman were vital to U.S. economic prosperity, and many in Democratic leadership spent much of 2007 arguing the same for the NAFTA expansion to Peru.

Now, as the economy tumbles around us, we've got folks in Congress who only want to talk about NAFTA expansion to countries like Panama. You can only cry wolf so many times before you lose all credibility. History will not judge kindly those policymakers who spent the last few years wasting political capital and legislative time pushing ridiculous FTAs with small, poor countries instead of dealing with the housing and financial crises. And as Sirota points out, answering basic questions in a non-fearmongering fashion should be a basic prerequisite for allocating 5% of our national income.

Most consistent fair traders voted against the bailout. But there were consistent anti-fair traders like Rep. Henry Cuellar (D-Texas) who opposed, while very serious fair traders like Rep. Phil Hare (D-Ill.) voted for it. Here's his statement. Nevertheless, with (mostly) left and (mostly) right uniting in shared opposition to the package, you had a bit of an uprising dynamic. As John Nichols writes,

They do not usually unite--although it has happened a few times in recent years on trade votes. And they do not usually hold together in the face of whipping--not to mention outright bribery--by party leaders... on Monday, urged on by two of the Capitol's more consistent dissenters, California Republican Darrell Issa and Ohio Democrat Marcy Kaptur--who developed something of a rogue coalition to whip the "no" votes--the outsiders briefly became the bosses of Capitol Hill."

Financial deregulation and trade are not separate issues: in fact, they're closely linked, since NAFTA and the WTO- style pacts have been used to further tear apart financial safety nets. Bill Clinton, when he failed to get Congress to approve Glass-Steagall repeal in 1998, had his trade team make a WTO commitment to repeal it. If it hadn't been repealed in 1999 by Gramm-Leach-Bliley, the United States would have been in violation of our WTO service-sector commitments, and could have faced trade sanctions. Similarly, backers of the Peru FTA from last year gave Citigroup more tools to lock in that country's failed social-security privatization. Going forward, there may be any number of trade pact blocks on the reregulation of the financial sector. More on this later...

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