Obama is playing it safe on the bailout bill, but how long can you play it coy before you start looking like the empty suit your detractors call you? It seems to me that its a win to now bring forward your own plan for fixing this problem. The Obama strategy right now appears to be to run out the clock while McCain bleeds from his own self inflicted baillout grandstanding wounds. If you assume that the economy is not going to melt down imminently, and I don't think it is, then there is no reason for Obama not to put forward other solutions.
Hat tip to Race42008 who bring us this from Mark Levin;
"From an economic perspective, if the problem is liquidity and credit, there simply is no need for the federal government to assume massive amounts of debt on its book by assuming loans in anticipation that their holders or borrowers will default. This seems to me like a brand new expanse of government power that is not justified (if it ever is) by the arguments made on its behalf."
"But the Soviet-style, top-down five year plan a la Paulson’s proposal, and to a significant extent the proposal that was voted down yesterday, could easily do more damage to both the economy and our governmental structure."
Dave G, on the same site hits the nail on the head for me
"It’s been 24 hours since the bailout failed and still no Hoovervilles. Someone on this site who understands economics needs to seriously explain to me why this thing is even needed, and why what Levin is proposing regarding liquidity and credit won’t suffice. Because to my untrained economic eye, it seems that the bailout panic has a lot to do with a few people trying to get the rest of us to bail them out of bad risks they took, and very little to do with the health of our national or global economy."
I completely concur. So Obama has an opportunity to show a little independence from his party, show some leadership and put the brainpower on display.
I don't think we're gonna see that. I think Obama is going to play it cagey and safe and milk McCain's missteps for the maximum mileage he can. If you assume that a Paulson style bailout is necessary, then this can be regarded as the cynical strategy of a politician. If you assume that Obama is betting that the economic crisis has in fact been overblown and we will not go into meltdown on some immediate basis, its a shrewd bet that he has time to play it out and let McCain and the republicans continue to absorb the punishment they are taking. Considering that most of main street America don't want this thing and are shouting it down, its a safe bet.
Republicans are fighting back with a major push on the sins of the democrats in not reigning in Fannie and Freddie. But 32 days is not necessarily enough time to lay the blame for the bailout on the democrats. Look for this line of attack to be pursued heavily in the next presidential debate and expect VP Palin to come armed with it on Thursday. Obama had better have answers to deflect those attacks if he wants to prevent McCain for gaining ground on him with the issue.