Pass a Better Wall Street Bill

September 29, 2008 at 8:29 pm

Dear Democrats,

I’m not sure if you realize this, but Republicans handed you a fantastic opportunity today by not passing the Wall Street bailout bill.

Facing pressure from constituents, 2/3 of Republicans failed to back the bill.

Here’s the political end-game they are playing and how this works to your advantage.

Republicans are betting that either a) more Democrats will step up to pass this bill – in which case Republicans can blame an unpopular bill on Democrats, or b) Republicans can gain more in negotiations such as permanent insurance for Wall Street if they let this drag out.

Democrats should do neither.

Why? Consider their BATNA – the Best Alternative to a Negotiated Agreement – basically their worst case scenario if negotiations break down.

The worst case scenario is that Wall Street tanks and Republicans try to blame Democrats.

In this case, here is what Democrats should say:

We are not going to pass a bill that does not fix the problem and only encourages more of the same.

The majority of the public believes that the economic failure is due to some combination of Republican deregulation and Wall Street corruption. Sure, Democrats went along, but who’s been driving the issue?

Because the public believes Republicans are largely responsible no matter how hard they try to spin it, Democrats have a stronger negotiation position.

So Democrats should stand firm and work to ensure that the bill doesn’t just benefit Wall Street and includes provisions such as a reinstated Glass-Steagall provision to make sure this doesn’t happen again.

Don’t pass a bill that is watered down or pass a bill without support from Republicans. Pass the bill that truly is best for the country or don’t pass anything at all. You have the stronger negotiation position.

Thank you for listening.


p.s. Here’s two Democrats who say it better than I do.

First, frosh Congresswoman Kirsten Gillibrand, Democrat from New York.

While I am fully aware of the seriousness of the financial problems in the market, I do not believe the bill Congress voted on today was the right approach. The bill has insufficient oversight and protections and does not address the root causes of the crisis or the poor economy. (more Kirsten)

And, Marcy Kaptur, Democrat from Ohio.