The Simultaneous Rejection of the Bailout and a Corrupt Ruling Class

Retired New York Times reporter David Cay Johnston, writing at The New Republic yesterday, makes a critical point, in a piece entitled "Celebrating the Bailout Bill's Failure":

Whether you favor the $700 billion bailout or not, the House vote today should make you cheer -- loudly.

Why?

Because the majority vote against it shows that Washington is not
entirely in the service of the political donor class, by which I mean
Wall Street and the corporations who rely on it for their financing.
These campaign donors, a narrow slice of America, have lobbied and
donated their way into a system that stacks the economic rules in their
favor. But faced with as many as 200 telephone calls against the
bailout for every one in favor, a lot of House members decided to
listen to their constituents today instead of their campaign donors.

Johnston's
celebration that "Washington is not entirely in the service of the
political donor class" is probably premature given that Congressional
leaders are falling all over themselves to assure everyone that this
deal will pass in a few days after it is tinkered with in one direction
or the other. I recall all too well celebrating a similar "victory" back in March,
when House Democrats astonishingly refused to comply with the demands
of the "donor class" -- and the entire political establishment -- to
pass Bush's FISA bill to grant retroactive amnesty to the entire
lawbreaking telecom industry, only to watch them jump into line and do
what they were told a few months later. The corporate donor class and
political establishment may lose a battle here and there, but they
almost never lose the war, since they own and control the political
battlefield.

Still, Johnston's overarching point is absolutely right. For better or
worse, yesterday's vote was the rarest event in our political culture:
ordinary Americans from all across the political spectrum actually
exerting influence over how our Government functions, and trumping the
concerted, unified efforts of the entire ruling class to ensure that
their desires, as usual, would be ignored. Time's Michael Scherer
described quite well what a stinging repudiation yesterday's vote was
for those who typically run the country without much opposition:

There was a lack of trust, a loss of confidence, a popular revolt.

Nearly every major political leader in America supported the
bailout bill. The President of the United States. The Vice President.
The Treasury Secretary. The Chairman of the Federal Reserve. The
Chairman of the Securities and Exchange Commission. The Democratic and
Republican nominees for president. The Democratic and Republican
leadership of the House and the Senate. All of them said the same
thing. Vote yes.

But the leaders anointed by the U.S. Constitution to most reflect
the will of the people voted no. This is a remarkable event, the
culmination of a historic sense of betrayal that the American people
have long felt for their representatives in Washington D.C. Roughly 28
percent of the Americans approve of President Bush. Roughly 18 percent
of Americans approve of Congress. These numbers have been like that for
years.

Now those bad feelings have manifested themselves in the starkest
of terms. Not enough of the American people believed their leaders. And
so the politicians that were most exposed ran for cover.

Can
anyone even remember the last time this happened, where the nation's
corporate interests and their establishment spokespeople were
insistently demanding government action but were impeded -- defeated --
by nothing more than popular opinion? Perhaps the failure of George
Bush's Social Security schemes in 2005 would be an example, but one is
hard-pressed to think of any other meaningful ones. We're a "democracy"
in which nothing is less important in how our government functions than
public opinion. Yesterday was an exceedingly rare though intense
departure from that framework -- the kind of citizen defiance of, an
"uprising" against, a rotted ruling elite described by David Sirota in his book,
"Uprising." On the citizenry level, the backlash was defined not by
"Republican v. Democrat" or "Left v. Right," but by "people v. ruling
class." As Johnston argues, yesterday's events should be celebrated for
that reason alone.

It's true that we don't live in a direct democracy where every last
decision by elected officials must conform to majoritarian desire, nor
should we want that. In general, elected officials should exercise
judgment independent of -- in ways that deviate from -- majority views.
But the opposite extreme is what we have and it is just as bad -- a
system where the actions of elected officials are dictated by a tiny
cabal of self-interested oligarchs which fund, control and own the
branches of government and willfully ignore majority opinion in all
cases (except to manipulate it).

Moreover, even in a model of representative rather than direct
democracy, the more consequential an action is -- should we start a
war? should we burden the entire nation with close to a trillion
dollars in debt in order to bail out Wall Street? -- the greater the
need is to have the consent of the governed before undertaking it. From
all quarters, Americans heard the arguments in favor of the bailout --
"agree to have this debt piled on your back for decades or else face
certain doom" -- and they rejected it, decisively, at least for now.

Anyone arguing that their views should be ignored, that their judgment
be overridden by the decree of the wiser, superior ruling class (see David Brooks and Kevin Drum
as good examples), is simply endorsing the continuation of the
predominant framework for how our country has been run for the last
decade, at least. Whatever else that is, there's nothing "wise" about
that framework. Even if one believes in principle that the country is
best entrusted to the elevated wisdom of a magnanimous and superior
ruling class, and that majoritarian opinion should be systematically
ignored, our ruling class -- the one we actually have -- is anything
but wise and magnanimous. It's bloated, incestuous, reckless, inept,
self-interested, endlessly greedy and corrupt at its core. Ye shall know them by their fruits. It's hard to imagine anything less wise than continuing to submit to its dictates.

Liberation from -- one could say "destruction of" -- the system run by
that ruling establishment class is of critical importance. Yesterday's
rejection of their decree, on such a momentous matter, was a shocking
first step towards that objective (and the doom and panic of yesterday
has given rise to calm and even optimism today, as those with cash have
taken advantage of the market drop of yesterday and, around the world,
are madly buying). There may be, almost certainly will be, even greater financial distress in the near future,
and perhaps Americans will come to view these matters differently. But
regardless of whether yesterday's bailout was a good idea on the
merits, the defeat -- for now -- of those who have enjoyed an unbroken
(and ill-deserved) line of victories is something that ought to be
cheered.

UPDATE: Strictly on the level of
"Democratic v. Republican" political strategizing, Nancy Pelosi did
exactly the right thing yesterday -- she provided just enough
Democratic votes in favor of the bailout so that it could pass only if
there was substantial GOP support (thus preventing Republicans from
cynically blaming the bailout on Democrats), while simultaneously
ensuring that Republicans (and McCain) would be blamed if it failed.
Strictly on a strategic level, it was -- for the reason Matt Yglesias describes -- all very well-played by the House Democratic leadership.

Relatedly, several comments are pointing out that House members only
voted against the bailout out of fear of losing the upcoming election,
not because of any "sincere" concern for what their constituents think.
That's a distinction without a difference. When elected officials take
action out of fear of provoking the anger of voters, that is the
democratic process in action. To say that the bailout failed (in part)
because of public opinion isn't to ascribe noble sentiments to members
of Congress -- it's only to say that they were driven to do what they
did by public opinion.