Bailout Backlash: Five Surprising Things That Happened on Thursday

By AlterNet Staff, AlterNet. Posted September 26, 2008.

Even news junkies had a hard time keeping up with a flurry of events on September 25 on Wall Street, Washington and the presidential campaigns. Here's a round-up of what happened:

1. Outrage over the bailout spreads across the Internet and to Wall Street

The Internet is flooded with angst about Treasury Secretary Paulson's proposed $700 billion bailout:

A lot of the online rage is channeled in the form of signatures on petitions and electronic letters to members of Congress. Senator Bernie Sanders (Independent-Vt.) is circulating a popular one on the left-wing blog Huffington Post. The 1.9-million member Service Employees International Union is also circulating a sign-on letter to Congress that reads in part: "No deal. No blank check." StopTheHousingBailout.com reasons: "A bailout tells responsible Americans that they are suckers."

The anger is coming from right-leaning groups as well. The National Taxpayers Union's "No More Bailouts!" petition reads: "Bailouts that keep mismanaged organizations afloat delay natural corrections to unsound business practices . Enough is enough. No more bailouts. Not with my tax dollars."

The conservative site townhall.com features a similar petition. Right-wing blogger Patrick Ruffini, meanwhile, urges Republicans to vote against the bailout, since "God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration."

And as Steven Wishnia reports for AlterNet, protesters took to New York's financial district:

Enraged by the prospect of $700 billion of their taxes going to reimburse Wall Street speculators for their dubious investments, about 500 protesters paraded through Lower Manhattan's financial district Thursday afternoon, their chants of "You broke it, you bought it" reverberating through the narrow office building canyons and off the flag-draped wall of the New York Stock Exchange.

2. White House pow-wow flops

The White House summit originally billed as a bipartisan, non-partisan effort to come to a deal on Treasury Secretary Hank Paulson's proposed $700 billion bailout plan ended bitterly. With the entire Senate and House leadership along with Barack Obama and John McCain in attendance, Paulson apparently got down on one knee at the end of the meeting and begged the Democratic congressional leaders not to publicly disclose how poorly the session had gone:

Inside the White House session, House Republican leader John Boehner announced his concerns about the emerging plan and asked that the conservatives' alternative be considered.

Financial Services Chairman Barney Frank, the feisty Democrat who has been leading negotiations with Paulson, reacted angrily, saying Republicans had waited until the last moment to present their proposal.

McCain, who dramatically announced Wednesday that he was suspending his campaign to deal with the economic crisis, stayed silent for most of the session and spoke only briefly to voice general principles for a rescue plan.

"If money isn't loosened up, this sucker could go down," Bush apparently warned as the meeting broke up. Republican Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee summed up the White House meeting, saying there was "obviously no agreement."

3. The entire bailout discussion implodes entirely

As the Washington Post reports, "A renegade bloc of Republicans moved to reshape a massive bailout of the U.S. financial system yesterday, surprising and angering Bush administration and congressional leaders who hours earlier announced agreement on the 'fundamentals' of a deal":

Democrats accused Boehner of acting on behalf of GOP presidential candidate Sen. John McCain (Ariz.) in trying to disrupt a developing consensus

Democrats say they would not approve the legislation without a significant number of Republican votes to share in any political fallout from the controversial proposal, which comes just weeks before the November election. "We are working to try to get this bill ready, but if House Republicans continue to reject the president's approach, then there's no bill," said Rep. Barney Frank (D-Mass.), an architect of the bailout legislation. "We told Paulson the whole thing is at risk if the president can't get his own party to participate."

Marc Ambinder of the Atlantic Monthly reports that there are less than 100 of the 202 GOP house members who would support the Paulson plan.

4. Obama says he'll host a townhall meeting if McCain doesn't show up

Sam Stein of the Huffington Post reported on Thursday, "Barack Obama is committed to hosting a public, televised event Friday night in Mississippi even if John McCain does not show up," according to an Obama official. "In McCain's absence, the Senator is willing to make the scheduled debate a townhall meeting, a one-on-one interview with NewsHour's Jim Lehrer, or the combination of the two, the official said."

Interestingly, Mississippi governor and former chair of the Republican Party Haley Barbour also said Thursday that he believed the debate would continue as planned. And later in the day, McCain spokesman Tucker Bounds implied that the McCain campaign was going into the debate.

5. John McCain's fake campaign suspension

On Wednesday, McCain said he would "suspend" his campaign and return to Washington to work on the bailout proposal. But it was soon clear that this was a gigantic political stunt. As Think Progress reports, "Five hours after McCain said he would suspend his campaign, aides Nancy Pfotenhauer, Tucker Bounds, and Mike Duhaime appeared on Fox News and MSNBC five times, frequently criticizing Obama and Democrats."

The Huffington Post also reported that:

Across the country, McCain campaign offices are up and running, accepting volunteers, conducting phone banking, literature dropping and other GOTV activities. This held true on a local, state, and even regional level. The Huffington Post called up 15 McCain-Palin and McCain Victory Committee headquarters in various battleground states. Not one said that it was temporarily halting operations because of the supposed "suspension" in the campaign. Several, in fact, enthusiastically declared the continuation of their work. Others hadn't even heard that the candidate for whom they were devoting their time had officially stopped campaigning.

              

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