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How A Failed Vote To Bail Out Wall Street Predicted Trump’s Rise

Candidate Confessional revisits the 2008 fight over the collapsing economy.
WASHINGTON ― Since Donald Trump took office, Americans have come to expect a nearly daily assault on presidential norms. This week the president refused to fully repudiate neo-Nazis who marched with torches in Charlottesville, Virginia. The previous week, he appeared to put the country on the verge of nuclear war with North Korea with a few tweets. Throughout his presidency, Trump has personally attacked politicians and journalists and made plain his contempt for federal institutions.

Concepts such as protecting our air and waterways, providing health care for the disadvantaged and having a fully staffed diplomatic corps now seem in doubt. This can’t all be blamed on Trump. Not only did the Republican Party nominate him, he is staffing his administration with conservative insiders such as Betsy DeVos at the Department of Education and Rick Perry at the Department of Energy.

The erasing of these norms, these beliefs in institutional safety nets, goes back decades. But in looking at Trump and what helped to propel him into the Oval Office, it helps to go back to one vote ― one failed vote ― in September 2008.

On this week’s Candidate Confessional podcast, we look back at the moment when Congress faced the collapse of the U.S. economy and blinked. With Wall Street banks in free fall and the housing market crashing, the Bush administration asked Congress to pass a $700 billion bailout to stabilize the economy. Leaders from both parties agreed that they would get the votes needed to pass this politically toxic but necessary bill.

But the bill didn’t pass. And the stock market tanked.

It was in that moment that the roots of Trump’s political rise were planted, according Michael Steel, who was the press secretary for then-House Minority Leader John Boehner (R-Ohio), and Brendan Daly, the communications director for then-Speaker Nancy Pelosi (D-Calif.).

“I think there is an argument that there has been an increasing break in the nods of trust between the American people and their elected officials and other institutions. The TARP vote was one of the most dramatic turning points in that,” Steel said, referring to the stabilizing Troubled Asset Relief Program. “And that phenomenon in general made President Trump possible.”

Daly thinks this mood is mostly coming from Republicans. “You have a certain element of the Republican caucus that won’t vote for certain things like the debt ceiling or other tough bills, and, as Mike knows, that ended up driving Boehner from office. He was just like, ‘I can’t deal with this anymore.’”

But Steel thought the failure to pass the bailout vote initially is an example of a larger problem: “There is a sense that the institutions that have served this country very well for the first 50 years or so after World War II are not necessarily equal to the problems of today.”

Listen to the full episode above.

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