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Monday, September 22, 2008

Gaming Theory

Here's my take on the politics of the bailout. If my read of the Sunday shows is correct, this is a classic Center vs. Poles play. The "responsible centrists," who still believe that they exist as a force for good in U.S. politics, say, "be we must act, and act quickly. That is the responsible thing to do." (Sam and Cokie, the Egregious Duo.) The Left, such as it is, and the Right, as evidenced by the opposition to the plan of George F. Will and even, if somewhat tepidly Bill Kristol, are opposed. The Left because it's a hand-out to Wall Street, the ideological Right because it's a hand-out and one of the most fiscally irresponsible things ever proposed in Washington.

This is at the elite level, of course. At the mass level, my guess is that this is going to be one unpopular bill. The president is at, or at least near, the nadir of his popularity and credibility. Although this would be hard sell for a popular president, it will be harder for him. Congressional leaders are similarly unpopular.

Given the bill itself and, more importantly, how easy it would be to demagogue it (i.e., "act irresponsibly," in centrist speak), it is a ripe opportunity for someone to take on entrenched powers.

In the House, it looks like Mike Pence, R-IN, is going to use this issue to take down the Tanned One, current but NFL minority leader John Boehner. Boehner is almost certainly toast after the election (not a tanning reference), anyway. But Pence has his issue now. Boehner is backing the plan. Pence will pounce.

The first question is how many votes Pence can muster from the Right. The second question is who will emerge on the Left to join his ragtag band of flat earthers (term used affectionately). I don't have answers to either question.

The Senate is trickier. I haven't seen a Right or Left opposition emerge yet. One problem is that the northeastern Democratic senators are probably most Left but also probably most compromised by their ties to Wall Street. (I wouldn't expect, for example, either senator from New York to lead the opposition.)

On the Right, it looks like McCain is going to back the plan. Not 100% clear yet, but his backer Kyl on Sunday came out for it. This will make it hard for any GOP senators to lead the charge. I mean, except for Tom Coburn, or Jim DeMint? The party's fringe, in other words (again, not used judgmentally).

This means that the ball is really in Obama's court. If he could find it in his heart to OPPOSE the plan--not to seek compromises, not to look for a fig leaf or a promise to work out other issues later--but to OPPOSE giving Treasury $700 billion without strings--then I think that this thing is over.

I mean both the bill and the election. It's his big chance to show voters hesitating to support him that he really is on their side and that he is real change. It gives him a great opportunity to attack Washington (and Wall Street) credibly and forcefully.

I doubt that Obama will do this, of course. His record indicates that he really is risk-averse, and that he rarely takes on the establishment. So I would say, 15% chance Obama fights the plan, and 85% that he seeks the fig leaf with his fellow Democrats. Obama may be especially compromised here with his running mate, the senior senator from the credit card industry.

There would be big risks for Obama here: being relentlessly attacked by the "responsible center," his experience called into question, etc. But at least he would be right on the policy. And if he does become president, once the bail-out is in place, he won't be able to achieve any of his policy goals with the debt out-of-control beyond bounds. So this may be Obama's last chance to save his presidency, were he to win in 43 days.

IOW, playing it safe now may lead to EPIC FAIL later.

The same opportunity to oppose the bill is available for McCain, but I don't see him bucking his party leadership and Wall Street (his campaign is where the old boys' network is a staff meeting, after all). But look at the play: If McCain supports and Obama opposes, Obama can hurt McCain with the Right of the GOP (at least suppressing turnout).

Have to run. But those are my thoughts on the state of political play.


At 10:11 AM, Blogger Frances said...

A Rasmussen poll last week found that only 7% of respondents favored the $85 billion bailout of AIG. (

One can only imagine that the % of the public supporting a similar bailout proposal would go down if it were increased in price >8 times and (unlike in the AIG bailout) the public actually received NO equity whatsoever in the firms benefiting from the bailout.

To put it mildly, this is an unprecedented political opportunity for even the most dimwitted of ambitious politicians. Any elected leader supporting this proposal ought to recognize the political peril they are placing themselves in.


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