House Republicans have deservedly been taking it on the chin (including from me in today’s Washington Post) for letting their unswerving faith in the idea that markets are always right and governments always wrong take precedence over any need to respond to the credit crisis in the American economy. Now, a second group of House ideologues -- the Democratic Blue Dogs -- may also put faith over need if they vote down the version of the bailout bill the Senate is likely to approve this evening because it includes tax cuts with no matching tax increases. To be sure, the Senate add-ons certainly don’t look all that progressive. Cutting the alternative minimum tax and doing nothing to extend unemployment insurance? This is the way our government responds to recession? But that’s not the quarrel that the Blue Dogs threaten to pick. Their belief in budget offsets for all expenditures may prove as absolute as the Republican right’s belief that markets should function with no government involvement (even when markets have ceased to function). Beyond their vote on this bill, what do the Blue Dogs propose to do about the recession, which is clearly going to deepen well past where it is today? Their defining belief precludes stimulative spending by government when private credit dries up, as is currently the case and will be for some time. Unless they adjust their beliefs to economic realities, they may emerge as just as much an impediment to recovery, and to sound economic policy, as the wingnut wing of the Republican caucus. --Harold Meyerson
