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By Anonymous Mike, pseudonymously.

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Monday, September 29, 2008
Thoughts on the Bail-Out

When you are negotiating with someone, or even just interrogating someone, you are always aware that whatever they tell you may not be true. So you look for clues. You check their body language, you ask questions to which you already know the answers in order to judge their veracity, and you try to reconcile their words with their actions.

So I'm having some problems with the Democrats on the bail-out package.

First, the bail-out bill was larded with all of sorts of Democratic goodies. Okay I could see the compensation caps as a sop to their constituents, I don't like it, but then again the Republicans lost control of Congress. I could even see the logic behind some of the equity/warrant stuff, dangerous indeed but I could see it. However what's with things in the original proposal such as the diversion of profits to ACORN-like organizations and the union proxy?

The bail-out is being sold as pick metaphor of choice 1) bitter medicine that everyone hates but we have to do or 2) all hands on deck. Why in these circumstances would the Democratic leadership try this if only to try and use the crisis for their own policy ends?

Second, I can understand why the Democrats want bi-partisan support on the bill to provide political cover for the bitter medicine/all-hands-on-deck reason I mentioned above. Why then after support from the leadership of both parties, did Speaker Pelosi go on her partisan rant on the House floor? That's leadership?

I smell a trap. Pelosi is many things but I believe she is competent enough to count votes and she knew such a speech could upset the delicate balance and kill the bill. In fact if you wanted to pass the bill, her speech would be the last thing you would give. The Republicans came up with fewer yes-votes than expected and then turned around and blamed Pelosi for poisoning the well.

So Pelosi benefits politically thrice over. First she makes the Republicans look like fools for putting their hurt feelings above the fate of the country. Second it's possible she thought her own caucus wouldn't support the bill, so the Republicans provide cover for her. Third, Obama is going up in the polls and you have to believe it's because of the financial turmoil. The longer this keeps in the news, the better Obama will do.

Third, the Senate wasn't scheduled to take the bill up until Wednesday. The House won't reconvene until Thursday. You smell an emergency? I mean part of the definition of an emergency is that people actually act like there is one.

So here's my two cents... the Democrats are using the financial crisis for their own political advantage. Call it an October Surprise two days early.

I am not talking about ramming through policy that favors their viewpoint, that's a given after all they control Congress. If the Republicans don't like the bail-out aspect or the warrants/equity positions then they shouldn't have acted like Democrats and lost the election in 2006. I'm talking about using the crisis to milk maximum advantage in the polls come November by continuing to make the House Republicans look like idiots and keeping the issue in play to help win the White House.

Btw... when I say "issue in play" I mean watching market value burn. Today cost the Dow about 7%, how much is going to be gone by the time the House reconvenes by Thursday?

I have a very bad feeling we're watching an historical moment here.