Judging from the Sunday shows, it looks like Congressman Frank, thank goodness, still has his wits about him:
But Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, said on Sunday that legislators were told that “we were reaching the point where people wouldn’t be able to get auto loans or home loans.” He foresaw “a very substantial reduction in economic activity.”
Mr. Frank said earlier that Democrats were particularly intent on limiting the huge pay packages for corporate executives whose firms seek aid under the new plan, raising the prospect of a contentious battle with the White House.
“They should accept some compensation guidelines,” he said, “particularly to get rid of the perverse incentives where it’s ‘heads I win, tails I break even.’ ”
But Mr. Paulson said he hoped to defer such an effort. “Pay should be for performance, not for failure,” he said. “But we need the system to work, so the reforms need to come afterward.”
Secretary Paulson, along with the Bush Administration, have their priorities backwards, as usual. Their proposed solution, like so many Bush Administration efforts of the past, will strengthen an unaccountable Executive office, reduce the power of Congress and the courts to conduct oversight over the Executive branch, and funnel billions in taxpayer money from American families into the hands of the very richest.
Congressman Frank, like Barack Obama, recognizes that we have arrived at a defining moment. Since Ronald Reagan’s time, the dominant mantra of politics has been that too much government is the major problem we face. Deregulation and a smaller and smaller government would lead to prosperity for all. This philosophy has now been thoroughly repudiated by reality. Now, with a financial crisis in the midst of a red-hot election, we can and should have a critical discussion. Who needs to be bailed out more? The family about to be foreclosed on and become homeless, or Goldman Sachs? Bush says Goldman. McCain and Paulson say Goldman.
If leaders like Frank and Obama play their cards right, the Democrats can dominate the discussion and create a true bailout with accountability. To do so will require some bravery, especially at first. The mainstream media will side with the Administration. Peter Canellos — whose writing I usually like — got the story backward, writing in the Globe that the crisis will severely tie the hands of the new president.
With political courage, exactly the opposite is true. Because of the crisis, the next President will have a freer hand, if Congress shares his daring, to rebuild America. Serious tax reform will be needed to shrink the yawning gap between rich and poor and make the top 1% finally pay their fair share. A green jobs and infrastructure rebuilding revolution — the action we will need to defeat global warming and staunch the flow of America dollars into the pockets of Saudi oilmen — will require boldness on a scale not seen since FDR. We can do it. Republicans have long used crises to advance their values, as Naomi Klein so powerfully demonstrates in her book, The Shock Doctrine. If Congressman Frank, Barack Obama, and progressives bring our A game this week and through the months to come, we can and should do the same.