Pelosi Saved the Global Economy Twice- and Even Made a Profit for Taxpayers Bailing out the Banks in 2008
Just a couple of reasons Pelosi is the greatest Democratic Speaker in US History
In 2001, Nancy Pelosi was elected Democratic Minority Whip as the candidate of the left-liberal majority of the caucus, defeating her rival Steny Hoyer 118 to 95 votes. That victory would set her up to take over as Minority Leader in 2003 and then Speaker in 2007. That victory within the caucus would reverberate over the next two decades as Pelosi, while building an unprecedented unity within the caucus, would also steer it towards far more progressive policy than her predecessors.
Let’s start with the unity, a success which is often underestimated by some Pelosi critics. Because she kept the caucus united, Trump couldn’t find the votes to repeal the Affordable Care Act or pass a range of bills just with the narrow GOP majority he had in the House from 2007-2008.
And while Trump managed to push through his giant tax cut, the remarkable fact is not a single Democrat voted for it. This is in stark contrast to 1981 when 135 Democrats in the House defied then-Speaker Tip O’Neill to vote for Reagan’s tax cuts and in 2001 when 28 House Dems defied then-Minority Leader Gephardt to vote for Bush’s tax cuts. Pelosi’s unified control of her caucus denied Trump any bipartisan cover for his tax cut and made it a partisan attack line on his Presidency to this day.
Once she regained the Speakership in 2019, Pelosi forced Trump to the negotiating table on a number of key bills, most notably forcing a recovery bill for the nation in 2020, just as she forced Bush to the table in 2008 during the financial crisis. I’ve written extensively about how remarkable was the CARES Act that Pelosi helped push through under Trump - as well as pushing the followup recovery bills under Biden. That leadership helped tens of millions through the pandemic recession, as this chart shows in detailing the actual gains for household incomes through the recent recession.
But I want to focus a bit on Pelosi’s masterful turn in saving the economy in 2008. Bush’s first proposal to stop the financial freefall of the financial system was a blank check for the big banks with almost no accountability. Pelosi led most of the Dem caucus to vote down that first proposal, done in the face of insane pressure as the markets were melting down.
Pelosi then demanded that Bush accept a bill that gave the government equity shares in any banks receiving bailout funds, meaning if they recovered, not only would the government get its money back, the banks would have to share any profits with the taxpayers. The Right denounced it as socialism while some left critics were skeptical the money would ever come back, but Pelosi was right. In the end, the TARP bill dispersed $376.4 billion to banks, auto companies, and the big insurance company AIG- and the government got back all of those funds plus a profit of $66.2 billion.
The better solution would no doubt have been to nationalize the banks and kept all the profits for the government, but that was not likely to be on the table with Bush as President. But Pelosi’s combination of progressive vision and pragmatism meant she defied any market panic to drive a bargain that would save the economic system without giving the banks a free lunch as Bush wanted to.
In the face of Tea Party politics, Trump, and billionaire dark money, Pelosi continued to push progressive policy and keep the Democrats politically competitive - notably as social democratic parties throughout Europe suffered defeat across multiple countries in the last decade or so.
Hopefully, Hakeem Jeffries can rise to the occasion, but he has a giant task to outmatch Pelosi as the greatest Democratic Speaker in our history.