Dole's pixie dust won't help us out of this mess
10/09/2008 12:00 AM
10/09/2008 12:27 AM
Like it or not, these two things are true:
People are sore as a bee-stung tongue over the federal bailout of Wall Street.
It absolutely had to be done.
Like it or not, these two things are obvious:
When the engine of commerce in the biggest city in your state blows its gaskets, you should bring what muscle you can to get it fixed.
Sen. Elizabeth Dole failed us. Miserably.
Nothing personal. Dole is smart, elegant, honest, accomplished, principled and well-intentioned. She has an admirable record of public service. And so on.
But in this financial catastrophe, she chose a pixie-dust solution.
“To fix the markets,” Dole declared as the economy rumbled toward the brink, “we must deliver a market-based solution, not a government bailout.”
Follow me closely here.
It was the market-based mentality that got us in all this.
Lenders acted recklessly because there were barrels of booty to be made by doing so. Executives bulked up their books by trading toxic assets with the market's complicity. Bosses insulated themselves from the consequences of their free-wheeling ways with severance packages guaranteeing millions.
It got so bad, so deep, so fast that the market was – and still is – unable to heal itself.
A market-based solution to a colossal financial calamity is not a new idea. Wholesale liquidation has been tried and tested. That was 1929.
No, it is not desirable for the government to step in and meddle with the markets. But from time to time, it has to be done. It just has to. Things can get so out of whack, there's no other way. There's too much at stake.
We've bailed out Chrysler, the airlines, tobacco farmers, even New York City. It's a necessary evil for a larger good.
Does Dole get this? Apparently not, though she should. She sits on the powerful Senate Banking Committee.
Yet as Wachovia unraveled hour-by-hour with thousands of jobs at stake in her own state, Dole clung to the notion that we really should chat more about this bailout business and not do anything hasty. On Monday, when potential buyers were snarling over how best to carve Wachovia's corpse, she issued a statement.
She said she'd told leaders of the Fed and FDIC to “allow Wachovia to do what is best for thousands of North Carolina jobs and the city of Charlotte … and cautioned them to not interfere where the private marketplace has clearly spoken.”
Dole is in a fierce re-election campaign. One point her opponent hammers her on is Dole's rating as an ineffective senator. Be careful of these. There's always some group judging officials on their own scale.
Forget to vote for higher tariffs on imported goat scalps and soon the National Council on Hollow Horned Ruminant Mammals is waving your record around and calling it abysmal.
What matters really is Dole's credibility on the street, where the voters live. That's where she is unraveling. Walk Tryon Street these days and you'll find her effectiveness rating has now tanked, deeper than the Dow.
And a marketplace of a different type will be at work on Election Day.
About Mark Washburn
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