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It was a true September Surprise. A calamitous financial crisis that not only toppled Wall Street’s corporate icons and sent global markets plummeting but may have given Barack Obama’s seemingly mired campaign the one thing he may never have secured on his own: Victory.
Among Obama’s most effective helpers was John McCain. The Republican presidential candidate responded to the crisis’ first burst of pressure with tough-talk — a calculated but wrong-headedly furious call for the firing of little-known Chris Cox as chairman of the Securities and Exchange Commission, charging he had betrayed the public trust. McCain’s response was so lacking in judgment that he was pilloried by his natural party pillars.
The Wall Street Journal editorialized that McCain’s call was "false and deeply unfair" and "unpresidential." Conservative columnist George Will questioned whether McCain’s "boiling moralism and boundless reservoir of certitudes" meant he was "not suited to the presidency."
But before we get to the presidential politics of it all — and opine on outcomes we won’t know until America votes — we need to take note of a mind-boggling truth that has become self-evident only in the past few days. A new chapter of the presidential legacy of George W. Bush has now become clear: He, of all people, will inevitably go down as the president who brought socialism to the citadel of capitalism — Wall Street.
The now necessary federal bailout of the banks and investment entities is the sort of big government effort that often has been labeled by the political right as socialism — also, welfare — when it has been proposed for the have-nots. Now that it is being proposed for the have-lots, it must be called the same — and indeed, that too has come to pass.
Sen. Jim Bunning, R-Ky., called the Bush administration’s $700 billion bailout plan "economic socialism … it’s un-American!" (I think I hear your mind boggling even as we speak. But hold on, for it gets curiouser and curiouser.) The case can be made that this is more rare than anything envisioned by Eugene Debs or Norman Thomas, back when they ran for the presidency as Socialist Party candidates in America’s past.
For the case can be made that this bailout of the bankers will be seen as the Czar’s own Socialist Revolution. After all, Treasury Secretary Henry Paulson’s original three-page remedy gave him unfettered powers to bail out the banks and investment entities holding shaky mortgages — without review by Congress, the courts or regulators. Legislators from both parties warned that he would be acting as "a czar."
This has been a rare burst of bipartisanship — it has been hard to separate the far left from the far right. Try it yourself:
One senator said: "If the government is going to get into the bailout business, shouldn’t we also be focusing our resources on average Americans, rather than sophisticated and well-compensated bankers? The Treasury’s plan has little for those outside of the financial industry. It is aimed at rescuing the same financial institutions that created this crisis with their sloppy underwriting and reckless disregard for the risks they were creating, taking, or passing on to others. Wall Street bet that the government would rescue them if they got into trouble. It appears that bet may be the one that pays off."
Another senator said: "Whatever we do, we have to insist that those who created the scandal do not benefit from the bailout. No golden parachutes. Let them feel the hard landing that my constituents faced when they were laid off from Bethlehem Steel. Let them feel the hard landing of knowing what it’s like to have your home foreclosed upon. … We do not need to subsidize bad behavior."
The first quote was Sen. Richard Shelby, R-Ala., a leading conservative. The second was Sen. Barbara Mikulski, D-Md., a prominent liberal.
(Martin Schram writes political analysis for Scripps Howard News Service. E-mail him at martin.schram(at)gmail.com.)