House Democratic and Republican leaders vowed to go back into negotiations to devise compromise legislation to stabilize the credit markets, but no talks were scheduled. After U.S. financial markets closed, with the Dow Jones industrial average down a one-day record of 778 points, or 7 percent, Treasury Secretary Henry M. Paulson Jr. tried to calm frazzled traders, assuring them that work on a market intervention would resume.But what if Democrats in Congress, along with Barack Obama, put together a financial plan on their own, without the reactionary hard right faction in the House? It would mean taking a risk politically, but the risk would be in the service of principle and patriotism. Democrats have the votes to pass a bill without Republican support, maybe they should try something along the lines suggested by Robert Reich or some other responsible economist. What if Obama brought in Nouriel Roubini (the one economist who seems to have seen the meltdown coming) and came up with a progressive plan? Just let the Republicans fulminate & prove the bankruptcy of the bankrupt ideology of unregulated markets and invisible hands. Republicans are saying that Democrats "injected politics" into the bailout? It is to laugh, but never mind; perhaps it's time to show them what would happen if politcs really got injected into the process. I mean, how many times do Democrats have to get punked by "bipartisanship" before they give partisanship a try? Update: This looks like a progressive plan. And Galbraith makes sense in this article, even before the worst hit yesterday. TPM has rounded up the statements of a number of liberal economists here.
Sorry for the Monty Python allusion, but the last few days have been so politically rediculous it seemed appropriate. And now we seem set to repeat the exercise, not as farce but as tragedy, to reverse another famous formulation. The Washington Post reports: