Observations On The Senate Banking Committee



(image via usatoday)

Watching the Senate Banking Committee wrestle with Secretary Paulson on the $700 billion bailout, a profoundly sober and historic affair, some thoughts occurred to The Corsair:

1) There are so many male voices on the panel. Senator Dan Kahikina Akaka of Hawaii -- the lone voice of color -- is still masculine in timbre.

2) Banking Committee Chair Chris Dodd of Connecticut has promised at the outset to make "Golden parachutes" an issue in the hearings, which, at the time of this typing, have gone on for 4 1/2 hours.

3) Progressive-Populist Senator Sherrod Brown of Ohio to Paulson: "Does Wall Street owe America an apology?" Paulson to Brown: "Wall Street is an abstraction ..."

4) Senator Chuck Schumer of New York has expressed grave doubts at the Paulson plan as it is presently drafted.

5) From Bloomberg, "Federal Reserve Chairman Ben S. Bernanke said the U.S. economy will shrink if markets don't begin functioning normally, joining Treasury Secretary Henry Paulson in urging skeptical lawmakers to quickly pass a $700 billion rescue for financial institutions."

6) President Bush assured world leaders at his final speech before the UN General Assembly that the US Congress will contain the financial crisis. This recalls to mind Walter Russell Mead's classic essay in Summer 2004 NPQ on The Decline of "Fordism":

"When Europeans read in their morning papers that their government wants to raise the retirement age, cut unemployment benefits, increase co-payments for health care or raise college tuition, many people curse the US and the neoliberal globalization they feel it is forcing on the world. Politicians are eager to assist them with the cursing; blaming unpopular measures on the insidious “Anglo-Saxon” model of capitalism now spreading throughout the world is a good way to deflect hostility for unpopular measures.

In the developing world the attachment to the subsidies, protected niches and social legislation of the Fordist era runs even deeper, even though in many countries only a minority of the population may receive substantial benefits. In countries like Egypt, Peru and Malaysia, governments provide secure and usually not too demanding ways of making a living for a lucky percentage of the population. The 'establishment' in these countries is usually closely linked to the government and fiercely defensive of its own privileged position. When outside economic forces or agencies—currency markets, the International Monetary Fund, the US—push for unpopular changes, the politically active and educated minority is almost unanimous in its resentment and resistance. Again, when concessions are necessary, politicians blame unscrupulous but irresistible pressure from all-powerful and malign 'neoliberals' and 'Washington consensus' bureaucrats. The result is a poisonous mix of anti-American sentiment that grew steadily throughout much of the world while Americans congratulated themselves on their irresistible soft power during the lost years."