A Frightened President Tries to Scare American Public on Bailout
Stay up to date with the latest headlines via email.
A composite of a day and night of fast-breaking news from the Huffington Post's Jennifer Loven, The Nation's John Nichols and David Letterman.
The Speech -- Jennifer Loven
President Bush said Wednesday that lawmakers risk a cascade of wiped-out retirement savings, rising home foreclosures, lost jobs and closed businesses if they fail to act on a massive financial rescue plan. "Our entire economy is in danger," he said. "Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."
Said Bush: "We must not let this happen."
The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the Right and Left.
Seeking to explain himself to conservatives, Bush stressed that he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.
"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.
The president tried to turn himself into an economics professor for much of the address, tracing the origins of the problem back a decade.
But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac, or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.
Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority. But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.
Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.
In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates -- bitterly fighting each other for the White House but coming together over this issue -- said the situation offers a chance for politicians to prove Washington's worth.
"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."
However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.
White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."
But that has not closed the deal, which for many recalls previous warnings of grave threats from Bush -- such as before the Iraq War -- that did not materialize. So Bush's goal with his speech, his first prime-time address in 377 days, was to frame the debate in layman's terms to show the depths of the crisis, explain how it affects the people's daily lives and inspire the public to demand action from Washington.
He said that more banks could fail, the stock market could plummet and erase retirement accounts, and businesses could find it hard to get credit and be forced to close, wiping out jobs for millions of Americans.
He ended on a positive note, predicting that lawmakers would "rise to the occasion" and that the nation's economy would overcome "a moment of great challenge."
With so many crises hitting the United States at once, the presidential race has taken a back seat, and so has Bush's involvement in politics. Bush canceled a campaign trip to Florida on Wednesday to deal with the problem, the third time in a week that he has scrapped his attendance at out-of-town fundraisers, due to the market turmoil and Hurricane Ike.
The economic crisis also is almost certain to overshadow the rest of Bush's four months left in office and could hugely impact his legacy. It has been assumed that the long-term view of Bush's presidency was to be shaped largely by Iraq, Hurricane Katrina and the Sept. 11, 2001, attacks. Now, the dire economic problems and the aftermath of the government's attempted solution will certainly be added to that list.
The Speech Critique -- John Nichols
Herbert Hoover did not have the option of making a televised speech to the nation as the Great Depression unfolded. That was, undoubtedly, a good thing -- for Hoover and for the nation. Hoover was spared the responsibility of what George Bush took on Wednesday night -- that of trying to explain a dramatic economic downtown without taking responsibility for the defining role that his wrongheaded policies had in causing the crisis.
This time the nation had to deal with the painful image of a scared president clutching a White House podium so tightly that his tension was audible. "We are in the midst of a serious financial crisis," began Bush, who proceeded to tell America what it already knows: Banks aren't making loans, credit markets are freezing up, and businesses and families can no longer afford to borrow essential funds.
Grasp. Grasp. Rumble.
"The market is not functioning properly. There is a widespread loss of confidence," the lamest of lame ducks continued. "America could slip into a widespread financial panic." "Fellow citizens, we must not let this happen," Bush went on. Clutch. Clutch.
"Many Americans are asking: How would a rescue plan work?" "The final question is: What does this mean for your economic future?"
Grasp. Grab. Clutch. Claw.
Nothing that Bush said in an address that lasted barely 10 minutes was sufficient to inspire confidence, which explained why he has invited the two men who are competing for the unenviable task of succeeding him to join him on Thursday to pitch for passage of the most sweeping economic intervention scheme since the New Deal was applied to the Great Depression.
Democrat Barack Obama has already accepted the invite. Republican John McCain, who on Wednesday announced a scheme to suspend campaigning in order to focus on addressing the mess, will have to show up. And the presidential race will become fully linked with the advancement of Bush's recovery plan.
If Obama is smart, he will take another listen to Bush's speech -- not to the words but to the sound of a desperate man trying to claw his way out of a corner. And he will recognize it as the same sound that Americans would have heard if a clueless Herbert Hoover had addressed the United States in 1929 -- or in the last stages of the 1932 campaign.
The question Obama must ask himself is this: If Hoover had tried to get Franklin Roosevelt to help him advance a flawed plan to bail out the bankers who made the mess, would Roosevelt have rushed to Washington for a show of unity? Or would the Democrat who gave us that New Deal have said: "Let the Republicans appear with Hoover. I'm going to keep talking about taking the nation in a completely different direction."
There is no mystery as to why Bush and McCain want Obama to join them in the Rose Garden. They want him to be a part of their process -- as opposed to an alternative to it.
Of course, appearing with Bush and McCain on Thursday may help Obama to appear presidential. But, after eight years of George Bush, America does not need the appearance of a president. America needs a president. Bush's agonizing address reminded a nation that long ago lost faith in his leadership that he is not up to the task. McCain's deer-in-the-headlights dodge of trying to freeze the campaign and avoid the debates confirms that he has nothing more to offer than Bush.
Of course they want Obama to stand with them on Thursday. Hoover would have loved to have Roosevelt at his side rather than proposing sounder solutions. Bush is Hoover. McCain is Hoover on steroids.
Obama, at this critical moment, should not lower himself to their level. He should be Roosevelt.
The Letterman Mock from the Drudge Report
"In the middle of the taping Dave got word that McCain was, in fact just down the street being interviewed by Katie Couric. Dave even cut over to the live video of the interview and said, "Hey Senator, can I give you a ride home?"
Earlier in the show, Dave kept saying, "You don't suspend your campaign. This doesn't smell right. This isn't the way a tested hero behaves." And he joked: "I think someone's putting something in his Metamucil."
"He can't run the campaign because the economy is cratering? Fine, put in your second-string quarterback, Sarah Palin. Where is she?"
The Bait and Switch -- John Nichols
Democratic presidential candidate Barack Obama initiated the sequence of events that led to Republican candidate John McCain's stunning announcement Wednesday afternoon that he would suspend his campaign and propose delaying Friday's first debate between the contenders.
While it was Obama who took the lead, McCain pulled a bait-and-switch stunt in order to try to grab headlines -- and the leadership mantle in a race that is all about who can best guide the country -- for himself.
The Republican did so by leading the Democrat to believe he was willing to work together behind the scenes with Obama to develop a joint response to the current economic crisis, only to have the Republican leap in front of the cameras with a solo announcement.
Here's the scenario as it played out during the course of one of the most tumultuous days in the history of American presidential politics:
Early Wednesday, at 8:30 a.m. EST, Obama called McCain to propose that the two candidates attempt to take a leadership role in responding to the economic crisis. Concerned that no consensus was emerging from negotiations between Treasury Secretary Hank Paulson and leaders in Congress, Obama suggested that he and his Republican rival outline shared goals for any bailout of troubled banks and financial-services institutions.
Specifically, Obama proposed that the two author a joint statement of "shared principles and conditions" for a bailout. McCain responded around 2:30 p.m. EST Wednesday to express his willingness to work with Obama.
Then, at 3 p.m. EST, without alerting Obama or the Democrat's campaign to his intentions, McCain called a press conference to announce that he would stop campaigning in order to return to Washington to focus on the "historic" crisis facing the U.S. economy.
"I am calling on the president to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself," McCain announced in New York.
At the same time, McCain urged organizers of Friday's debate at the University of Mississippi in Oxford to postpone the first debate. In short order, the Bush White House hailed McCain's move, in an apparent attempt to aide a fellow Republican. As the afternoon progressed, Obama graciously announced that -- despite McCain's behavior -- he was still willing to work with the Republican, and that he would go to Washington or anywhere else if it was thought that doing so might help to resolve the crisis.
But the Democrat also suggested that he wanted to debate on Friday. The Commission on Presidential Debates said it intended to go forward with the scheduled meeting between the candidates at the University of Mississippi.
So where does this leave us?
No matter what happens with the debate, and with the broader discussion about the economy, everyone who is paying attention to the 2008 campaign learned something Wednesday about John McCain. The man who so frequently denigrates diplomacy apparently has so little respect for the one-on-one relationship that underpins any serious negotiation between powerful figures that he would play political games even in the midst of what he admits is a "historic" crisis.
While McCain was trying to make himself look like a leader, the Republican contender instead confirmed that he is uniquely unqualified to serve in a position that requires his occupant to win and retain the trust of those with whom he negotiates.