Nine days ago in this space, I took a lot of heat for pronouncing John McCain’s selection of Sarah Palin as politically “brilliant.”
My assumption, of course, was that McCain had actually seriously vetted the most important decision of his campaign (I was wrong), but, scandals and ugliness in Palin’s past notwithstanding, that judgment is looking pretty sound. I praised the selection as giving McCain his best, perhaps only, shot at winning in November, and after this week’s convention and media coverage, the McCain strategy has become pretty clear: make November a referendum on personalities, not issues or records. Over the next eight weeks we’ll hear lots from the Republican camp about McCain’s war heroism and Palin’s ability to gut a moose, and virtually nothing about how they would actually govern — because to talk honestly about that would guarantee the White House to Obama.
So is that strategy — and Palin’s selection — working as planned? Judge for yourself. This weekend, from the Sunday chat shows to the daily newspapers to the blogosphere, it’s all about Palin. Meanwhile, an administration that has perfected the art of quietly letting slip bad news in the slow news cycles of the weekend let slip Friday night the worst news of the year — maybe of the decade (and yes, 9-11 was this decade). And thanks to Sarah, it is going all but unremarked:
The Treasury Department is expected to announce as early as this weekend a plan to bail out and recapitalize collapsing home mortgage giants Fannie Mae and Freddie Mac in one of the biggest government rescues in U.S. history. [...]
According to media reports citing unnamed sources close to the negotiations, the government is expected to take at least temporary control of Fannie Mae … and place the troubled firms under the umbrella of the Federal Housing Finance Agency. [...]
Fannie and Freddie hold roughly $1.5 trillion in direct debt, guarantees on what could be as large as $5 trillion and possibly off-balance sheet obligations that could reach $3 trillion, according to recent estimates from Ladenburg Thalmann & Co.
This is a disaster of epic proportions. In the best case scenario, we’re looking at a federal bailout that will make the savings and loan bailouts of 20 years ago (remember the Keating Five?) look like an ordinary earmark for Wasilla. At worst, the federal government just bought itself a major depression:
Today, we are back to the 1930s with large financial institutions reaping huge profits and paying obscene salaries to their CEOs in good times and with government bailing them out with public money when things turn sour.
And that’s not even the worst part. The takeover was reportedly forced by the foreign central banks that own much of America’s debt, particularly the Chinese.
Remember when red-meat conservatives used to rail (rightly) about the “red menace” of China? Well, while John McCain was crowing about his empty (and illusory) “victory” in Iraq Thursday night, his party’s government was capitulating completely to a far more serious global adversary on an issue that will likely spell ruin for tens of millions of Americans. And it was all made possible by economic policies McCain has enthusiastically signed off on, and a deregulatory law (the Commodity Futures Modernization Act) pushed through Congress by McCain head financial advisor and campaign co-chair Phil “Nation of Whiners” Gramm.
So much for “Country First.”
In any educated country, this news would drive a stake through the heart of the McCain campaign (as well as earning Bush unassailable honors as the Worst President Ever). But most Americans don’t even know what a “secondary mortgage market” is, let alone why it’s important, let alone why this news is so devastating. Our media certainly doesn’t help: instead of explaining it to us, we’re being inundated this weekend with moose drool. Which, absent the particulars, was (along with firing up the conservative base, and perhaps snagging a few credulous Hillary supporters) the entire logic behind the Palin pick: bad for the country, but good for McCain and friends.
That shouldn’t surprise us: it’s how Republicans govern. Cronyism and “America Last” is the overriding theme throughout the entire, ruinous eight-year Bush kleptocracy. And now taxpayers will be bailing out all the (well-heeled) decision-makers who exploited banking deregulation, kept all the fabulous profits, and now are sticking us with the inevitably staggering losses — in a course of action forced on the United States by a foreign adversary.
The American Empire may just have been permanently buried (though we may expect what Dick Cheney might call the “last throes” for some time to come). Thanks in large part to Sarah Palin, with a big assist from a lazy, celebrity-based media culture, the American people mostly aren’t even noticing. But when the economy subsequently tanks — and it will — we’ll notice in a big way. Republicans are simply hoping that will be some time after November 4.