Some thoughts on the emerging politics and policymaking of the economic crisis:
- The urge to find a scapegoat seems overwhelming, as Glenn Greenwald illustrates. McCain feels your rage: on 60 Minutes he actually described himself as enraged. Everybody does. The question is whether McCain and others "acknowledging" the public's rage will suffice in place of actual punishment...
- Some are already pointing out that the bailout, representing such a massive government intervention into the economy and characterized by so many of the things Republicans use to scare the public about a bigger government role in, say, health care, will move people toward saying, “If this is socialism, let us embrace it.” At the level of democratic politics, most people would find it more important to have health coverage than to take pride in the fact that our economy is structured slightly (and inconsistently, and thus hypocritically) more like a certain model of capitalism (crony) than it would be if we did national health care.
- Perhaps the most pernicious and vexing kind of affliction is the kind you can’t fight without badly hurting yourself. That we simply can’t, in a relatively consequence-free way (i.e. without the collapse of the credit markets), let the bad Wall Street baddies reap the consequences of their own irresponsibility—as we’re told Americans should do, mind you, just makes us all the angrier. It also reminds us that we’re all at least indirectly culpable ourselves—in the same way that abusive or neglectful parents of a child who tortures small animals or sets fires might be culpable (and that the child might be shown some degree of mercy as a result).
- The rational response to this would be to try and change the rules of the game such that this kind of deep corruption becomes more difficult. But the corruption continues to feed the same people who set the rules… thanks to our campaign finance system. John McCain was really onto something when he focused on that: I always thought it was an admirable indication of his faith in the American people to make smart decisions when donors' thumbs were removed from the policymaking scale. That he hasn't said a word about this in the last couple weeks--arguably his single biggest item of "reform" cred--shows just how far he has gone from his tun-of-the-century heterodoxy.