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Robert Kuttner explains what Treasury Secretary Henry Paulson is doing wrong:
Thus, the stage is set for an epic game of chicken against a very tight deadline. Will the Democrats insist on some serious help for Main Street and constraints on Wall Street as the price of a deal? Nothing would better highlight the differences between the two parties, or better strengthen Obama's hand. Or will Paulson reject anything other than his own approach -- possibly leaving both candidates to vote against the deal?
And in a piece for our last print issue he profiles Timothy Geithner, who will most likely be treasury secretary in the next administration -- Democratic or Republican:
One weekend last March, Timothy F. Geithner, president of the Federal Reserve Bank of New York, fielded a panicked phone call from Bear Stearns CEO Alan Schwartz. Bear was nearly out of cash, owing some $80 billion, mostly in short-term loans, to 5,000 firms across Wall Street. Geithner, joined by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, had less than 24 hours, before markets opened on the next Monday, to decide whether to advance Bear a $29 billion credit line until a buyout could be arranged--or play roulette with the entire financial system. Geithner ended up taking heat for some details of the rescue, but nearly all observers now conclude that it had to be done.
And, in another piece from our last print issue, Paul Starr writes that the reason Obama and McCain have failed to moderate the tone of our political debate is that they each represent culturally polarized camps:
What is really at the root of party polarization is social tensions. Sociologically as well as ideologically, the two parties have become a stark contrast. The delegates to the Republican Convention were nearly all white (only 1.5 percent black and 5 percent Hispanic). Their hearts would not have been in a centrist campaign. What got them excited were the old denunciations of the liberal media and "Eastern elites" by speakers who tried to reignite the culture wars. With a more socially and culturally diverse base, the Democrats seek to downplay polarization, while the more homogeneous Republicans cannot resist trying to inflame it.
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—The Editors
