Chelsea Green Publishing

Chelsea Green Blog

Kuttner: Fishing in Troubled Waters

The following article was contributed to ChelseaGreen.com by Robert Kuttner, author of Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.

As the events of the past 24 hours have shown, the Republicans lack both the leadership and the unity to bring home any variant on Paulson’s proposed bailout deal. This has been a special fiasco for John McCain, and a richly deserved one.

With the Republicans now in thorough disarray, the question now is whether the Democrats have the wit, the nerve, and the unity to do this right. As the politics stand today, a plan may well have to pass Congress mostly with Democratic votes. If the plan works, the Democrats are heroes. If it fails, they are goats. So it had damned better be done right.

But first, let’s take a moment to savor the Republicans’ self inflicted political wounds. McCain’s ploy to cast himself as an above-party leader in the financial crisis, and incidentally to wriggle out of the Friday presidential debate, backfired. The White House meeting was hastily contrived to help McCain, but all it did was help derail the deal.

Far from demonstrating his claim of putting country above politics, the caper was pure opportunism. Contrary to his high-minded claim to be “suspending his campaign,” he continued to run the negative ads and his surrogates continued to trash Obama. He wouldn’t even say what plan he’d support, and sat largely like a stone at Thursday’s White House meeting while Obama joined the discussion and tried to seek common ground. The meeting was supposed to showcase McCain as a leader, but that role went to Obama.

You can just imagine the thinking over at Team McCain. Hey, let’s send John to Washington to consummate the bailout deal. He’ll can look really presidential, we’ll say we’re putting country above politics, and we can even bump Friday’s debate to October 2, and kill the Palin-Biden debate as well. High fives all around. Ooops.

And imagine these turkeys negotiating with, say, Putin.

Is there a silver lining in this mess? It sure signals severe disarray both in the McCain camp and in the Republican Party. But what about the future of the economy?

The emerging House Republican plan for a “private sector solution” (backed by more government insurance and tax benefits) is pathetic. It’s not really private at all, and it won’t solve the problem. But what will solve the problem?

A better plan would have two core elements: First, most of the government money goes to refinance mortgages rather than buy up bad paper. Once the mortgage market stabilizes, some value returns to the bonds backed by mortgages. That way, homeowners are the primary beneficiaries, not the incidental ones. Second, government takes a majority stake in the major failing institutions, takes a good look at their books, and only then pumps in equity capital as necessary. When the crisis passes, government closes the ones that are beyond repair, and sells off the good bits.

Some Democrats are still hoping to salvage some variation of the Paulson. But the Republicans have done them a favor. It’s time to give that approach the decent burial it deserves, and start over.

Since the House Republicans have deserted the field, the Democrats might as well step up to the plate and do it right. If it takes another week or two, that’s fine. This is not about rescuing the stock market day to day. It’s about fashioning a program that will work.


Economic Development is Broken. Here’s How to Fix It

Economic development today is completely broken. That’s the argument of author Michael Shuman in his new book, The Local Economy Solution. The singular focus on attracting global corporations is not just ineffective but counterproductive, Shuman argues, especially given the huge opportunity costs. Indeed, it’s not far-fetched to suggest that the best way most communities can […] Read More..

5 Shareable Strategies for Creating Climate Action

Frustrated about climate change? You’re not alone. Most people in our society find themselves somewhere on the spectrum of depressed about our climate situation to flat-out denying that it exists. In fact, the more information about global warming that piles up, the less we seem to do to combat it. What is the reason for this […] Read More..

A Mini-Festo for Earth Day – Rebuild the Foodshed

For the past month, author Philip Ackerman-Leist has been on a Twitter MiniFesto campaign – each day sending out a new tweet designed to spark conversation and pass along some lessons he learned whilst working on his last book, Rebuilding the Foodshed. You might also know Philip as the author of his memoir Up Tunket […] Read More..

Books in the News: ‘The Tao of Vegetable Gardening’ & More!

What does Taoism have to do with gardening? That question is being answered in The Washington Post this week with a lengthy profile of Chelsea Green author Carol Deppe—gardener, plant breeder, seed expert, and geneticist based in Oregon—and her new book The Tao of Vegetable Gardening. “Once I read The Tao of Vegetable Gardening, with its […] Read More..

Depressed about Climate Change? Good. Here’s How to Take Action

The facts about climate change are settled. Mostly. In fact, the news seems to get worse, and more urgent, every day. Yet, the more the facts stack up, the less resolve many people seem to have about getting behind solutions that will stem, or turn, the tide. What gives? In What We Think About When […] Read More..