I know that Leon has just written a strong defense of Hank Paulson.
I highly respect Leon’s contributions here at RedState, but in this case, when I step back a bit and review the whole drama around this Mother of All Bailouts™, I see Mr. Paulson at several key steps taking actions that directly and selectively have harmed John McCain’s standing as a candidate, an outcome that Paulson could easily avoided or mitigated had he wished to.
And in the process, Mr. Paulson has exploited President Bush’s well-know leadership weakness of putting undue trust in his appointed advisors. Whether Senator Graham is a fall guy or willing facilitator also remains to be seen.
History will have to judge whether Paulson put personal aggrandizement above country.
In any case, Paulson deserves to be fired. And in a McCain administration, which demands accountability, he would have been by now.
Let me outline the key events.
1) Mr. Paulson announces his plan 10 days ago as an emergency that requires immediate action over that weekend, lest the markets crash. This “sky is falling” pronouncement immediately spreads panic and fear, which is key to his maneuver. He has previously convinced President Bush that this sky is falling and that his bill is the ONLY solution, recruiting him as his point person and lapdog, a role that Bush has played throughout up to today.
2) Then, when Congress does not immediately fall into line over the weekend, Paulson backs off and gives Congress until Friday at the latest to pass the bill. This delay maintains a public atmosphere of crisis and turmoil while privately destroying his credibility with Congress (especially when the deadline later slips to the end of the weekend and changes to “agreement” rather than “bill”).
3) By doing this, rather than demanding a clean bill ASAP, Paulson loses control of the process. His wavering surrenders to the majority Democrats in Congress the whip hand, because Paulson is essentially holding the Republican administration hostage to the good will of a Democratic majority in Congress.
4) Paulson, though Bush, also frames this situation so as to allow the Democrats to require bipartisan cover for enacting this bill, rather than putting the onus on the majority party to get this bill passed.
5) That is, rather than negotiating for his bill (which apparently he had prepared months in advance) Paulson invites the Democrats to amend the bill and bludgeons the Republicans in Congress to accede, putting them in the awkward position of their only weapon being to say no. This also put them under extreme duress by forcing them to oppose George Bush, who has signed the blank check and says that the bill must pass to save the country.
6) The Democrats, taking advantage of Paulson’s open invitation, promptly started adding a bevy of pet projects and oversight that turns the bill into a Trojan Horse for socialism if they win in November.
7) Paulson does not call that out on this behavior, does not insist that they strip this stuff out and simply act on his original bill.
8) Now we get to the Presidential politics part of these events. The Democrats continue to abuse the bill in conjunction with a craven Republican Senate leadership, while the Republican House is locked out of the process. They begin to remonstrate and indicate that they are not going to fall into place and vote to approve the clutter attached to the bill.
9) Paulson then privately through Graham asks McCain to come to Washington to help out, probably without informing him of the real situation. He evidently said that if McCain did not come immediately, that the country would go down the drain. McCain, trusting his expertise, responded patriotically, putting country before politics.
10) What Paulson did not do was to publicly ask both McCain and Obama, as sitting senators, to come to Washington to help out. By keeping to back channels, he was acting in his own interests, not wanting to appear weak in public. This was the first sabotage of McCain.
11) As a result, McCain announces that he was suspending his campaign to ride to the rescue, but in keeping with usual protocol does not reveal that Paulson had initiated the request. As a result, the Obama campaign is able to twist McCain’s action as grandstanding, while enabling them to keep Obama away (for the moment). It also essentially puts the onus of success on McCain, without obligation of involving Obama.
12) The Democrats thus are totally free, which they took advantage of on Thursday morning, to announce a so-called agreement before McCain arrived, trying making McCain look foolish and unneeded.
13) When McCain arrives and discovers that he is being asked to bludgeon the House Republicans into submission and learns that they had alternative ideas and were being denied a place of the table (while the Democrats had been allowed to run amok), McCain blows up Paulson’s strategy by instead supporting the House Republicans
14) Emboldened, the Republican House protests and says that there had never been an agreement and that they were not being consulted. The Democrats spin this as McCain destructively blowing up the compromise by his arrival.
15) Paulson never intervenes to set the record straight that he had summoned McCain and there was no agreement before McCain arrived. This was sabotage act number 2.
16) President Bush, meanwhile, had summoned Obama to the White House along with McCain and Congressional leaders. The meeting breaks up in discord with no pubic announcment.
17) We have now heard reports as to how Obama destroyed the meeting with his behavior, and that Paulson, again wanting to appear not to look weak, begged everyone to keep silent on the actual events, appealing to the good of the country to cover his posterior, again with Bush loyally backing him up.
18) McCain and Bush agree and keep silent, for the good of the country. The Democrats, on the other hand, immediately start to lie and publicly blamed McCain for blowing up the meeting and also claimed that the House Republicans had sprung a surprise with their alternative proposals – both clear lies as well.
19) Again, Paulson cowardly keeps silent and does not set the record straight, leaving McCain holding the bag and enabling Obama to escape scot-free
20) This was the 3rd and most serious sabotage of McCain.
21) This also exposed Paulson’s acquiescence to the Democratic agenda. (History will have to determine whether Paulson’s behavior rose to the level of complicity with).
22) That is, throughout the week, Paulson was willing to allow the Democrats do their mischief to the bill, rather than draw a line in the sand. He also was not open much to Republican alternatives and allowed them to become the scapegoats for possible failure. At a minimum, this was cravenness – he was so desperate to get his power that he didn’t dare cross the Democratic leadership.
23) Friday passed without meltdown, as Paulson extends the deadline again, weakening his credibility to zero among Congress.
24) At the end of the weekend, with McCain engaged and Obama phoning it in, a new bill, largely still along Democratic lines, emerges.
24a) Obama gets to crow unchallenged about his being responsible for the main components while the onus being on Republicans to go along with this bill and having to come up with an undefined number of votes in support.
24b) McCain is given no credit for his efforts to date and instead is left holding the bag, expected to get the Republicans to go along with the new bill that Obama has fashioned.
25) Paulson still says nothing except that he wanted the bill to pass, thereby allowing the Democratic and media interpretations to dominate.
26) Next, we have Monday’s drama. While the wreckage is still being sorted out, we see that Paulson did not interfere with Pelosi (almost certainly acting in concert with the Obama campaign) partisan maneuverings, demanding “bipartisal action” while unchallenged the Democrats to, without precedent, define bipartisan action as requiring majorities of both parties.
27) Paulson stands by while that, as others have observed, Pelosi was able to let vulnerable Democrats vote no while vulnerable Republicans were expected to vote yes. When this maneuver failed and Pelosi did not come up with the votes, the Republicans as the minority party were assigned the blame for the bill’s failure.
28) McCain, of course, is demeaned for not having gotten the House Republicans on board, while Obama just floats over everything.
29) As others at RedState and elsewhere have documented, Pelosi’s actions either represented incompetence in execution or, more likely in my judgment on the basis of her partisan attacks on the House floor and her refusal to employ the Majority Whip or to require loyalty from her committee people and allies, a deliberate attempt to send the bill down to defeat.
30) The stock market has a serious hiccup in response, but the world does not come to an end. The press tries to play drama with the numeric point drop, but the public still sees that the country is still running.
31) And now, Paulson’s only public response is to say that he will push the bill through again. He, with Bush loyally following, keep pushing their bankrupt fear-mongering that this time really the world will come to an end if Congress doesn’t pass a bill soon. Armageddon continues to be delayed, and each delay raises the level of skepticism.
32) Paulson’s next step is to rely on stock market carnage (and associated media sensationalism) to put the screws to the Republican to pass some revised bill. And Bush is continuing to preach doom and gloom.
33) The more benevolent interpretation of Paulson is that he hopes to get a revote with minor tweaking, with the House Republican going along because there’s too much pressure put on them –that somehow they will stop listening to their constituents and cry uncle “see the light”.
34) The less benevolent interpretation is that the Monday vote was a sneaky effort to create a situation in which Paulson, with the backing of Bush (who still remains convinced of the need for ANY bill), and the Democratic leadership are positioned to end the necessity for bipartisanship, having molded public perception that the Democrats are the good guys acting in the national interest while the Republicans are obstructionists and bomb throwers.
35) In this scenario, Paulson will cheerlead for a bill crafted to the Democratic wish-list to get this Trojan Horse through the city gates, again so that Paulson comes looking good in getting his bill and can save us all – and Obama looks good because he can say that he successfully enabled the bill to meet his stated requirements that are being met, while McCain and the House Republicans are consigned to the dustbin.
This pattern of behavior is why calls are afoot to dump Paulson and get a new leader on board who has the credibility to recraft a proper bill.
(cross-posted at And Rightly So!)