Good faith

GOOD FAITH…. So Congress thought it was passing some strict limits on executive compensation when it passed the $700 billion bailout package for the financial industry. Bush added a tiny and seemingly inconsequential change, stipulating that penalties would only be applied to companies that received bailout funds by selling troubled assets to the government in an auction. Democrats went along.

And why wouldn’t they? Democratic lawmakers negotiated in good faith, and understood that buying the troubled assets was, in fact, the plan. It was right there in the TARP name and everything. There was no harm, they thought, in adding Bush’s one-sentence provision.

Except they were wrong, and the Bush administration didn’t buy up the troubled assets after all. The tiny and seemingly inconsequential change became a giant loophole.

But at least it wasn’t a deliberate scam that Democrats fell for. Or, on second thought

[Treasury Secretary Henry Paulson] repeatedly told lawmakers that he did not plan to use bailout funds to inject capital directly into financial institutions. Privately, however, his staff was developing plans to do just that, Paulson acknowledged in an interview.

Josh Marshall asks, “Don’t we have laws to cover stuff like this?” That’s not an unreasonable question.

I’d just add, though, that looking back over the last eight years, I’m hard pressed to think of instances in which Bush didn’t ultimately punish congressional Democrats for negotiating in good faith. Policy makers have been confronted with crises, Dems have come to the table with good intentions and a willingness to trust their rivals, and it just never worked out for them.

The relationship between Lucy and Charlie Brown keeps coming to mind.

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Steve Benen

Steve Benen is a producer at MSNBC's The Rachel Maddow Show. He was the principal contributor to the Washington Monthly's Political Animal blog from August 2008 until January 2012.