This Is It

Published: October 28, 2009

By Jim Lichtman
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Sometimes we get so caught up in the bad news du jour that we forget to appreciate some of the good news.

Now, for example, Republicans continue to speak out against the “new” health care bill from Democrats.  Democrats turn around and blame Republicans for the economic crisis and lack of regulation on Wall Street.  (The bad news.)

However, Neel Kashkari “…hears something different,” according to a New York Times report (Oct. 26) the former Treasury official hears “the quiet of the economic bomb that did not drop.”

“It didn’t drop, in his view, because the leaders of America’s rival political armies ceased firing long enough a year ago to pass the $700 billion bailout that prevented Wall Street from imploding,” the Times said.

The players involved in this little adventure in bipartisanship included “President George W. Bush, Speaker Nancy Pelosi, the liberal Representative Barney Frank… conservative Senator Judd Gregg, [as well as presidential candidates] Barack Obama and John McCain.”

“As bad as [the economy] is today,” Kashkari says, “it could have been so much worse.  If the financial system had collapsed, [businesses on Wall Street and Main Street] wouldn’t have been able to access funds to pay their employees, who then wouldn’t have money to pay their bills. It would have cascaded through our economy.”  It was “one of the worst times in our country’s history,” he said. “But it was in many ways the best time, watching all these people come together to put out the fire.”

While a majority of Americans complain about the partisanship rancor in Washington, Kashkari, a Republican and former Goldman Sachs executive see things differently.

“As the crisis in an over-leveraged financial system crested last year,” the Times writes, “that skepticism led [Kashkari] to question the wisdom of seeking bailout money from Congress; he feared that lawmakers would say no and trigger a catastrophic loss of confidence. But lawmakers surprised him, as did the civil servants at Treasury and the Federal Reserve that he calls ‘patriots’ for their frantic efforts to avert disaster.”

Mr. Kashkari himself acknowledges “Treasury’s failures in underestimating dangers to the economy and communicating about its policy response.

“But in the signs of turnaround that President Obama now points to, Mr. Kashkari sees evidence that those policies have worked. In Ben Bernanke, the Fed chairman, and Timothy Geithner, the Treasury secretary and former president of the New York Fed, central players that Mr. Kashkari and Mr. Paulson teamed up with remain in place.

“Notwithstanding partisan gibes, Mr. Kashkari said that a Republican administration would have followed the same course had Mr. McCain won the presidential election — albeit with less populist rhetoric.”

“The way a Democratic administration talks about certain issues is probably a little different,” Kashkari said. “But the substance of the actions, I think, are very consistent.”

Last May, the Capps/Zogby poll, The First 100 Days – Integrity, Leadership, Trust, 3,300 likely voters gave Congress only 18% positive numbers when it came to “restoring trust in government.”

If both parties can put aside the partisan bluster and bickering and work together to solve a crippling financial crisis, they can work together to solve health care, unemployment, housing, two wars, the environment, as well as a host of foreign policy issues.

Memo to Congress:  Want to earn back the trust of the people?  It’s time to step up and demonstrate the same character and courage you showed last year.  It’s time to put politics aside and work together again. This is the moment. This is it.


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