Tuesday, September 30, 2008

Framing the Bailout

Last night I talked about how poorly the bailout plan was framed by political figures and government officials; since the policy was never clearly explained to the American public, they were against it. This lead to House members who might be facing a tough reelection to vote against the plan... and now a lot of people in the House (and John McCain) and Hank Paulson have a lot of egg on their face. So TPB offers up a little advise to Hank Paulson, members of the House, and any other government official as how to sell the bailout to the American public.

1) Change the Name of Plan - as I said last night, bailout sounds too risky—a last ditch effort without thinking everything though. McCain, who now has a lot to lose with yesterday's failure, has already realized this by calling it a rescue. At this point, I don't think it needs to get fancier than that; as long as policy makers are no longer calling it a bailout I think this problem has been resolved.

2) Explain to the Public Why They Need the Money - As the The Swamp reported today, Hank Paulson and company went about the bailout all wrong:
As the fingerpointing continues following the House's failure to pass the $700 billion bailout, a lot of blame is going to Treasury Secretary Henry Paulson Jr. for first trying to run roughshod over Congress and the sensibilities of taxpayers until he realized that approach was doomed to failure.
No one bothered to tell the American public why they needed handover $700 billion. Paulson and Congressed failed to explain what the money was for and who were to recieve it. By taking this approach, policy makers allowed opponents to frame the issue by focusing on executive pay and how it was bad investments by the guys and gals on Wall Street that lead to this mess. 'Main Street should not have to bail out Wall Street' became the simple rallying cry.

What Paulson, or someone who has fiscal/financial authority in the eyes of the American public, needs to explain is why this money is needed. It shouldn't be too hard, "Over the past few years a lot of people made bad investments, but we are not asking for money to bailing them out for their mistakes. Instead, we need the $700 billion to rescue the American economy from a liquidity crisis—right now businesses are finding it difficult to borrow money from other companies, which means they are having a hard time paying their bills or investing in their business, and maybe even pay employee wages. The money will be used to inject cash into the economy to help increase the flow of money between businesses and avoid anyone from having a pay check bounce."

I think this is the key for supporters of the bailout now—to frame the issue as a personal matter. Your pay check may not cash on Friday if something isn't done. That will get peoples attention even if it is a bit alarmist. But it's a much better message than "give me $700 billion because I said so."

-- Finally, I fould this to be a decent read and worth at least looking at.

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