Posted on 09/29/2008 10:51:21 PM PDT by goldstategop
It was just two days short of being an October surprise. A historic House vote on the Paulson bailout plan became historic for a reason no one expected: It went down to defeat, and not by a narrow margin.
As the Dow plummeted 777 points, Republicans and Democrats took to the microphones to play the blame game, no holds barred.
Superficially, both parties are to blame: 133 Republicans and 95 Democrats voted against, large numbers in both caucuses. But a majority of Democrats voted in favor.
Republicans said a harshly partisan speech by Nancy Pelosi turned off about a dozen Republicans who were set to support the legislation. That prompted a devastating rejoinder from Democratic Rep. Barney Frank — they voted to tank the economy because their feelings were hurt?
The simplest explanation for the defeat: The public opposed the bill, and all the intensity was against it. Congressional staffers couldn’t pick up the phone without getting harangued by angry constituents. Everyone suffered from taser-level sticker shock from the $700 billion price tag.
Treasury Secretary Hank Paulson was caught between two different audiences. He needed the $700 billion figure to reassure Wall Street he’d have a big bazooka to deal with the crisis, though it’s unlikely he’d ever spend that full amount. But it alienated the very people he needed to pass the bill.
Meanwhile, Paulson and Federal Reserve Chairman Ben Bernanke were underwhelming in congressional testimony last week when explaining how the program would work — basically saying “trust us.”
In the end, Lincoln was proved right again: “With public sentiment, nothing can fail; without it, nothing can succeed.”
What now? If nothing passes and a crash comes, Republicans risk getting tagged for the blame for a long time to come. The vote is a blow to John McCain, who had so dramatically “suspended” his campaign to return to DC and broker a deal. His campaign had explained his role as bringing to the table and coaxing along House Republicans, whose revolt now makes him look ineffectual.
Yet the bill will likely be revived — and deserves to be.
The phrase the “real” economy has become a hallmark of this debate, implicitly contrasted with the “fake” economy of the financial world. McCain talks of the honest laboring man as the strength of America. No doubt he is, but he wants to buy a house (which requires a mortgage), not pay for everything with cash (which requires credit cards), have a job (which requires a business that is very likely dependent on loans) and buy big-ticket consumer items he can’t pay for upfront (which requires car loans, etc.). Freeze up all those sources of credit, and economic life as we know it ends.
Already, the panic has sent investors to the safety of Treasury bills, leaving less capital for consumers and businesses. Few realize how much businesses rely on short-term loans for routine operations like meeting payroll, and how that most characteristic American entrepreneurial figure — the guy with a bright idea he works out in his garage — depends on investment and loans.
Conservatives who make so much of their knowledge of the markets would ordinarily be the ones to point this out, but they have a blind spot for the market’s failures. The financial system is subject to periodic panics that, if left to work their course, will wreak economic havoc out of all proportion to reason. They take down good institutions along with the bad.
If it works, the Paulson plan’s most worthy accomplishment will be saving innocent bystanders from the wildly swinging tail of the blind and panicked financial beast.
The financial crisis is so disturbing exactly because finance is so centrally important. Our sophisticated financial system has been one of the glories of Anglo-American capitalism. “The Bankers, accountants, investors, traders, and corporate officers whose joint efforts brought this system forth have changed the world far more profoundly than virtually any of their contemporaries,” writes Walter Russell Mead in his book God and Gold: Britain, America, and the Making of the Modern World.
Without this system, Britain and America wouldn’t have risen to global pre-eminence, and consumer capitalism as we know it — dependent on credit — wouldn’t exist. We may be about to find out what happens when it is rocked to its foundations.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Someone is trying to cover their portfolio.
NR is claiming some wussy whine from mush-mouthed slob BARNEY FRANK--who's done WHAT outside of being on the public dole?-- is "a devastating rejoinder"?
Bill Buckley must be rolling in his grave.
The article is entirely sensible and responsible and there isn't a drop of socialism in it, anywhere.
And you aren't going to run either my party or my country. McCain is for a bill.
If you want socialism in the US, you should be for a new depression. Do you know what we got from the 1930s? National Recovery Act, CCC, SSA, TVA, etc. It became illegal to lower prices.
So the question is will these financial problems bleed over into the real sector.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
He’s the Hugh Hewitt of National Review. And he’s afraid of Ann Coulter, just like Hugh.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Yea, and Larry Krudow(sp) was shrilling the same, fairweather conservatives I guess...
That’s nice. We’re barely a month away from an election.
How does it feel, working on behalf of an enemy of the United States, as you effectively are?
This SHOULD be a great showpiece to show the American people the true nature of the Dems, but our Republican officeholders aren't articulate enough to explain it, and our citizenry is too damn stupid and/or brainwashed to see it.
I work with teens and people in their twenties, and they believe government's job is to give you stuff you don't have. They are puzzled why this bailout would be rejected--isn't government supposed to just toss money at anything that's losing money?
I almost tried to explain about how the criminals in this case are those people who want a home but don't have any money and the politicans of both parties who want to buy votes with all our tax money, but they are incapable of grasping it, so I don't bother. I am burnt out.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Did you see where people on this forum were agreeing with Michael Moore today in his communist screed against the rich?
You are right...populism is showing its ugly face.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
There is truth in what Lowrey said, but not the whole truth. I am not sure the whole truth will be know for a few more weeks or months. Monday's loss of 700 pts. on the Dow was a 7% loss of the market. October 1987 was over a 500 pt. loss, but 23% of the market. By the beginning of 1988, the market was back up over 100 pts. of where it was a year previously.
I am sorry, but Paulson, the President, and the Dems yelling fire doesn't convince me to want to give them 700 mil. I feel like a used car salesman has told me to buy it now or it will be gone.
I want Congress to take their time, hear from variious economists, not just the young "economic analysts" on tv.and Congress. On Cavuto, Sat. he actually had a varied bunch, and not all were for this bailout.
vaudine
When populism joins common cause with commies, I would take caution.
I haven't heard one even semi-conservative make the outrageous claim that this putrid welfare bill is good for the "cause of conservatism". Any real conservative would gag on those words.
“Its a commentary on our time when some conservatives claim the only cure for market dysfunction is to throw taxpayer money at it!”
Ayn Rand would turn over in her grave.
But it must be understood that the problems we find ourselves facing are due to problematic government intervention. If government broke it. shouldn’t government have to fix it?
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