Tuesday, December 02, 2008

The truth is still coming out

By Carol Gee

It is not a pretty picture as the Bush administration transitions out. In an interesting turn of events our current president (OCP) has taken to a bit of introspection. Do not hold your breath for miraculous self-awareness, however. Mr. Bush said, in a series of interviews filled with Freudian slips, that all the bad stuff just cannot be his fault. In The Washington Post, for example:

In the interview with ABC's Charles Gibson, Bush also admitted to errors and regrets in several key areas. He said he wished "the intelligence had been different" on Iraq but declined to speculate on whether he still would have decided to go to war. "That is a do-over that I can't do," he said.

Perpetual denial has been another hallmark of the current administration. Think Progress (12/1/08) headlined, "For Nearly A Year After Recession Started, Bush White House Insisted That 'We're Not In A Recession'."# This most recent instance of avoiding the truth had rather large consequences, an almost 700-point drop in the stock market on Monday. To quote:

Earlier today, the National Bureau of Economic Research (NBER) announced that “the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy.” The group, which the White House has previously pointed to as the determinative body for declaring a recession, said in a statement that the “decline in economic activity” after Dec. ‘07 “was large enough to qualify as a recession.”

White House Deputy Press Secretary Tony Fratto commented on the news “without ever actually using the word ‘recession.’” Instead, Fratto released a statement saying the White House was focused on what they “can do for the economy right now.”

It’s not surprising that Fratto would avoid the word “recession.” Though economic analysts and experts were predicting in late 2007 and early 2008 that the U.S. economy was likely to face a recession, Fratto declared on Jan. 8, 2008, “I don’t know of anyone predicting a recession.”

Democratic leaders and lawmakers are being forced to deal with the truth. The economic meltdown persists and ever-widening ripples affect state and local circumstances. President-elect Obama is doing his part, and Congress will be getting back to work on it this week. Monday, House Speaker Nancy Pelosi was to meet with Governors association leaders to discuss their states' needs that could be included in any possible stimulus package. The ideas include transportation and infrastructure projects that are ready to go, and help with Medicaid shortfalls. The President- and Vice-President-elect are set to meet with the Governors' representatives today, Tuesday. If everything worked perfectly, such a multi billion dollar economic stimulus bill would land on President-elect Obama's desk the day he takes office. Congressional Quarterly Politics has the details.

What should Congress do about the ailing auto industry? The auto executives' last appearances before Congressional committees presented a very discouraging picture of lagging behind, staying in denial, and succumbing to greed. Committee members were not impressed and told them to come back with something reflecting a more realistic picture. Tuesday is the due date for the Big Three car makers to present their separate plans to Congress in order to receive financial aid. To quote the Politico article:

Detroit’s Big Three take center stage in Congress this week, with Democrats working to stave off bankruptcy but insisting that any government loans will be callable if a company fails to live up to the restructuring plans due Tuesday. . . . But with new unemployment numbers due Friday, the immediate priority for Democrats is keeping the companies afloat through the first quarter of 2009 and thereby buying time for the new Obama administration to get its feet on the ground and address the situation.

. . . This week’s hearings — beginning Wednesday at the Senate Banking Committee and then Friday before the House Financial Services Committee — are pivotal given the political landscape. And even if the leadership opts to press ahead with an aid package, it could become entwined with other demands by states for aid to help with food banks and health care for the poor.

Monday’s official confirmation that the nation is in recession punctuated bad economic reports for manufacturing and construction — followed by a nearly 680-point drop in the stock market.

It does not look very good for Charley Rangel. The truth of the matter is not yet known. Because he is facing an enlarging Ethics Committee investigation for several alleged instances of wrong-doing, House Speaker Nancy Pelosi faces pressure to replace Rangel (D-NY) as chairman of the House Ways and Means Committee. The investigation could be settled before the end of the 110th Congress on January 3, but it is not a sure thing. Tuesday's Politico story by John Bresnahan explores Rangel's concerted challenge of the truthfulness of The New York Times, which recently exposed new potential ethics problems for Rangel. And Republicans, of course, are all over those problems.

Democrats also face their own internal divisions in Congress. Politico has a good analysis of how that the differences might play out. To quote:

With nearly complete control of Washington for the first time in three decades, Democrats are entering a treacherous power zone in which many of their priorities could easily be undone by the geographic, demographic and ideological factions that compete for supremacy within the party.

Unless Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) can whip their caucuses into unity, numerous fault lines will be revealed: Southern Democrats vs. Northern liberals on labor law; California greens vs. Rust Belt Democrats on global warming; socialized medicine adherents vs. go-slow health care reformers; anti-war liberals vs. cautious centrists on national security. And don’t forget the anti-bailout crowd vs. the powerful Michigan Democrats in both chambers when it comes to money for Detroit.

Republicans insist they will fight for their issues when they can, but they also might simply take a front-row seat to see if Democrats implode.

The truth is coming out. OCP will not change, nor will his legacy. The economic crisis will not improve very much between now and January 20. And by then, most of the money in the bailout bill will have been spent by Henry Paulson. There will be none available to help states and local governments. That must wait for a new Congress and a new president. Truthfully, the auto makers could also be forced to wait. Speaker Pelosi, rightfully, must wait for her Ethics Committee members to decide what is the truth of Rangel's troubles. And both Senate and House leaders will have to accept the truth of how weak or strong are their law-making majorities. It will be very interesting to watch it all play out.

Hat Tip Key: Regular contributors of links to leads are "betmo"* and Jon#.

(Cross-posted at South by Southwest.)

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