I've been thinking about this election a lot lately (obviously). This is a given for a political junkie such as I :-), but its amazing the kind of nation we've become politically speaking. Its especially unnerving what has become of the Republican party and the general political consensus.
Today, in the Washington Post, there are two articles that really sum up two of the most monumental events, both occurring in the last decade, both that continue to shape the political forces in America today particularly so in the Republican party.
Here Robert Samuelson (who actually does not vote by the way and is not affiliated with either party because he believes that voting interferes with his impartiality as a journalist) wonders what would have happened if we would have saved Lehman Brothers.
In the article he lists the events that happened immediately after and because Lehman was allowed to fail:
"-- Credit tightened. Banks wouldn't lend to each other, except at exorbitant interest rates. Rates on high-quality corporate bonds went from 7 percent in August to nearly 10 percent by October.
-- Stocks tanked. After its historical high of more than 14,000 in October 2007, the Dow Jones industrial average was still trading around 11,400 before the bankruptcy. By October, it was about 8,400; by March 2009, 6,600.
-- Consumer spending and business investment (on machinery, computers, buildings) -- together about four-fifths of the economy -- declined sharply. Already-depressed vehicle sales fell a third from August to February.
-- Employment collapsed. Five million payroll jobs disappeared in the eight months following Lehman's collapse. The unemployment rate went from 6.2 percent in September to 9.5 percent in June 2009.
Lehman's failure had dire consequences because it suggested that government had lost control. No one knew which financial institutions would be protected and which wouldn't; AIG soon received a massive loan. Uncertainty rose; panic followed."
All of this happened during the Bush administration and much of what Obama has done in response to this crisis is more of a continuation than a departure. But people are getting punished politically for their votes on TARP and on the stimulus.
Robbert Robb suggests that the way for Schweikert to beat Mitchell (which so happens to be my congressional district) is to emphasize his votes on this issue in particular:
"However, at this point in our country's history, we just cannot afford a congressman who occasionally votes no on small things, such as mostly meaningless budget resolutions. Instead, we need a congressman who will vote no consistently on big things, such as a $700 billion bank bailout, an $800 billion stimulus spending spree, and a trillion dollar health care plan"
I know Robb is speaking strategy here, but its depressing nonetheless. I grant you, the last two items listed are more controversial, but I know of no serious economist (and I read and follow many) who will defend the case that the bank bailouts were a bad idea. So, in essence the way to beat Mitchell is to ride the wave of unjustified populist anger.
Which is why Samuelson's article is so important. Not only was TARP absolutely necessary, we could have rendered it moot if we would have stepped in earlier and more aggressively. And greater intervention early on would have been much less costly then the situation we currently face (considering the massive amounts of GDP we are missing out on because of our unemployment rates).
I didn't mean to spend so much time on this point because I do have another. It is 9/12, marking the day after the ninth anniversary of the terrorist attacks.
Fareed Zakaria talks about our successes attributed to Bush's first responses to the attacks that have basically marginalized and weakened the terrorist threats in Afghanistan. The world is in a much better place, but we are left with something else:
"So the legitimate question now is: Have we gone too far? Is the vast expansion in governmental powers and bureaucracies -- layered on top of the already enormous military-industrial complex of the Cold War -- warranted? Does an organization that has as few as 400 members and waning global appeal require the permanent institutional response we have created?
I've been asking these questions for a few years now and described our 'massive overreaction' in a 2008 Newsweek essay but with little effect. During the Bush years, there was a reluctance on the left to acknowledge that the administration could have done anything worthwhile to counter terrorism. The far greater problem is on the right, where it has become an article of faith that we are gravely threatened by vast swarms of Islamic terrorists, many within the country.
This campaign to spread a sense of imminent danger has fueled a climate of fear and anger. It has created suspicions about U.S. Muslims -- who are more assimilated than in any other country in the world. Ironically, this is precisely the intent of terrorism. Bin Laden knew he could never weaken America directly, even if he blew up a dozen buildings or ships. But he could provoke an overreaction by which America weakened itself."
And to me, this is what the Republican party, at least rhetorically, has been reduced to. Look at the issues their candidates bring up over and over again: HB1070, the mosque at ground zero, and anger over the bank bailouts and "out of control government spending".