The Republicans who voted against the Paulson plan may have been responding to their grass roots constituency who opposed the “bailout”. It is likely that their constituents do not understand that this is a liquidity crisis first and a bailout second and even then it is less of a bailout than a stabilization effort in a panicked market.

But it is also likely that they have very legitimate concerns about a huge amount being spent in a way that is in absolute conflict with their basic principles of governance, and being rushed to do so because of a crisis that few people understand.

The money is not being spent on bonuses and entertainment. It is being used to buy assets at very distressed prices. Some of the guarantees the Treasury is making are in exchange for preferred stock. Much of the $700 billion is likely to be recovered and a profit is even possible. The alternative is a credit crisis and a big chance of a 1929.

The Republicans should not be voting to allay the fears of a constituency that doesn’t understand the urgency or depth of the problem. Leadership in such a crisis requires you to act as you see fit even if it is not understood by your voters and even if it is not popular.

If all we needed was to poll the voters for solutions to such a crisis we could replace our leaders with 900 numbers and let them call in like voting on American Idol.

from Kyle-Anne Shiver (see recommended sites)-

“After several days of rage from conservative activists regarding a provision in the bailout bill that would send some of the profits from the sale of distressed assets the goverment buys into an affordable housing trust fund, congressional negotiators have removed section 105(d) of the bailout proposal, according to aides on both side.”

Before striking this add-on, the $700 billion bailout package included a provision for roughly 20% of funds being set aside for low-income mortages of precisely the type that got us into this mess in the first place. The money would have been given to state and local governments to use at their own discretion, and the chief beneficiary of these type funds in the past has been ACORN. ACORN then plays hardball with lending institutions, threatening them with mass actions, angry protests, etc. if they don’t make it easy for those who can’t pay back to borrow money.

Republicans in Congress had called this provision in the bailout a deal-breaker. Thank the Good Lord someone is watching out for the taxpayers.

HKO comments- It is an absolute outrage that the same partisans who caused this crisis and ignored the warnings would try to perpetuate this crisis by hijacking the bailout to continue making the kind of loans that caused it. The have no shame.

Obama’s search for an economic scapegoat either belies his utter economic ignorance or only seeks to manipulate the crisis for his political gain; a task the larger media is only too willing to assist.

His latest attempt is to blame Graham who pushed a deregulatory banking effort under the Clinton era (with strong Clinton and Democratic support). Conveniently Graham is an advisor to McCain.

Contrary to Obama’s ignorant rants, Graham’s reforms provided the backbone for the resolution of the current crisis, not its cause.

The 1999 Gramm-Leach-Bliley bank-deregulation bill eliminated the existing walls between financial institutions. Such diversified financial institutions have performed much better than most. Bank of America’s acquisition of Merrill Lynch would not have been possible before Gramm’s deregulation. J.P. Morgan wouldn’t have taken over Bear Stearns, and Barclays Bank would not have been allowed to buy Lehman Brothers.

Goldman Sachs and Morgan Stanley have become traditional bank holding companies. Investment banking is dead. Would we prefer to force these two strong companies to remain in a model that no longer works?

In fact the sectors with the most regulations have performed the poorest. The unregulated world of hedge funds and private equity seems to be performing much better than the more regulated world of commercial and investment banking.

In fact the one area of regulation most controlled by Congress,the oversight of Fannie Mae was in fact the biggest disaster of all. Obama will find his own party’s fingerprints all over this smoking gun.

Americans cherish their rights yet we understand these rights have limits. Freedom of religion does not permit polygamy or animal sacrifice. Freedom of speech does not include public obscenity or hate speech.

The right to bear arms does not allow the unlimited choice of weapons for anyone to carry anywhere they choose.

When certain rights fanatics push their rights too far it causes a backlash. I respect the second amendment, but they went too far when they tried (in the Georgia legislature) to over ride property rights by trying to allow concealed carry even on property that the private owner prohibited, and pushed to allow concealed carry in public airports.

Such extreme promotion of rights without restrictions diminishes respect for those rights.

I believe this has happened in the arena of abortion rights.

The court ruling in Roe vs, Wade established a woman’s right to choose an abortion in the first trimester. That ruling became the defining moment for a woman’s right to determine her own fate, and be freed from the control of a male dominated power structure.

It has remained in bitter conflict as those who believe in the humanity of the unborn challenge the woman’s right to have sole determination of it’s (or his or her) fate. It has become the defining issue of the religious right as well.

Yet when the first trimester rights were stretched to include “partial birth” abortions, many saw this as infanticide. Progress in neonatology has removed any doubt of the humanity of the fetus in the last few months. How can it be a human being the day after it is born and any less the day before?

The extreme pushed even further when they debated a bill to withhold medical treatment for babies that survived an abortion. The development of a commonly accepted right, even developed under bitter compromise, to the extreme endangered its support.

The political fact of abortion is that it is supported by the majority, but like any other right, not without limits.

John Zogby’s polls show that 75% of Americans believe abortion is morally wrong yet the overwhelming majority also believes the government should not interfere in a woman’s decision on this matter. The majority are more nuanced than the extremists on either side. They would support a woman’s right if her life was in danger as a result or in the case of rape, or if the child had serious medical problems. But generally they believe this is a private decision; a very serious decision, but still a private one.

Because the majority of women and men support a woman’s right to choose, I have always thought that the strong prolife position was a loser for the Republicans, yet both McCain and Palin have established very strong pro life positions, stronger than any Republican has in recent memory, and they are well ahead in the polls. How can this be?

There are several possible explanations:
1. The extreme push into partial birth abortions has alienated some of the support from the moderates.
2. The removal of the stigma of single motherhood has made an abortion less socially necessary. Single motherhood in some segments of our culture is a right of passage.
3. Widespread birth control has also reduced the need and demand.
4. The abortion rights issue is just relatively less important in light of security and economic issues. It is less of a litmus test issue.
5. Prolife families procreate more. NOW is breeding itself out of existence.
6. If the candidates were closer together on the bigger issues then this debate would become a more important issue of differentiation. But the candidates are so far apart on the critical issues, that this one is less important.
7. There is a broader opposition to abortion. It is no longer limited to extreme right wing evangelical groups. Black leaders have opposed the focus on abortion in black neighborhoods as a form of social genocide and orthodox Jews and Muslims also oppose it. Catholics and Hispanics who are largely Catholic also weigh to the pro life side.

Given the tremendous shift on the issue of the last generation, it will be interesting to see its impact on the election. We remain strongly divided, but it may have less influence that we would ordinarily expect.