Caving In

It is looking finally like the Democrats, Obama included, will cave in – albeit with “misgivings.” They’ve already agreed, in effect, to give near carte blanche to Henry Paulson to transfer wealth from taxpayers to bondholders and to executives in the financial “industry.” Paulson, George Bush’s Secretary of the Treasury, is, of course, the former Nixon aid who “rose” to the leadership of Goldman Sachs. Thus a financial industry mole will watch over the financial industry at “we the people’s” expense.

No doubt, the financial system really is in trouble – in a way that could affect the real (productive) economy profoundly. With even mildly “radical” remedies “off the table” (along with anything else that might rock Nancy Pelosi’s boat), something ameliorative has to be done, of which the vaunted “markets” will approve. But that inevitable exercise in lesser evilism can be done more or less evilly. Even given the woeful constraints the financial sector has imposed upon us, there is no reason to be precipitous or to acquiesce in a proposal that gives so much to the malefactors and so little to their victims.

Nevertheless, the Democrats will go along, and Obama, being ever “cautious” and “responsible,” will too. It’s the Iraq War resolution and the Patriot Act all over again. The pattern is all too familiar: Democrats let their ostensible rivals concoct a Great Fear, and then, knowing better, they accommodate to it opportunistically. As I’ve been writing recently, for several days running, the Democrats have been showing signs of growing a backbone. Now that’s over; they’ve fallen back into their old ways -- collaborating in good “bipartisan” fashion in yet another blind leap into a dangerous abyss.