Led by Republicans, the House of Representatives voted down the bailout. Wall Street reacted like junkies needing a fix, dropping the Dow over 700 points until they realized that this wasn’t the end of the bill, which will still be in play after some backroom horse-trading.
But two things are clear. Give these junkies their fix and they will own this government. The Dow has been down all day, and this bailout is nothing but a salve for the traders. Once they get this one, they will still need a fix tomorrow.
Second, the House Republicans have rejected McCain and Bush, who put his butt on the line by a rare public appearance to tell his followers to vote for the bill this morning. They don’t have enough faith in McCain to believe that he will win in November and they will ride his coattails.
The ride is not over yet.
Update: From Jonah Gelbach at PrawfsBlawg,
The House has just voted 206-227 to kill the bailout bill. It seem unclear what will happen next.
Unclear, that is, except that if nothing is done, our economy is headed for disaster.
What disaster? If you know something, Jonah, let us in on it. If not, is it a disaster because Bush, McCain or Obama says so? Or are you just playing the Chicken Little du jour? So explain yourself, why is the economy heading for disaster without this bailout?
Update 2: House Republicans held a press conference after the vote, and explained that it’s not their fault that the vote failed, as they were just responding to Nancy Pelosi’s partisan speech before the vote, plus the Dems are in the majority and 94 Dems voted no as well.
So the Republicans are saying that they voted it down not because they were against it, but because they were being partisan because Pelosi was being partisan?
Update 3: From Mike at C :
How did Henry Paulson and his corrupt friends comes up with $700 billion? Here’s how :
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
And I was worried that they didn’t have a good reason for pulling that number out of their hat.
I’m inclined to agree with the House Republicans on this one. Scary.
Me too. Very scary. But I think our reasons may be different than the House Republicans.
It is reasonable to suppose the Pelosi knew that enough democrats were going to vote no to kill the bill. If so then she was in the damage control mode. Damage control for the party or the county?
It doesn’t seem possible since a small shift amongst Republicans would have resulted in passage. In other words, enough Dems did vote yea that she couldn’t have possibly concluded that the bill was doomed to fail.
While the Democrats are in the majority in both House and Senate, Pelosi and Reid had made it clear that they were unwilling to take the heat for an unpopular (necessary? I guess we’ll see…) bill without Republicans sharing said heat.
Which is understandable, given the history of the CRA and the attempts to fix it; the number one job of a politician is to take credit for the sun coming up (“It’s our policies, you know,”) and to blame the other side when they’re found with a bloody knife in their hand (“Look — the other guy ran around the building and into my knife. Backwards. Seventeen times.”)
But with what was, at most, a very fragile deal among the Republicans to share the heat, Pelosi chose the wrong moment to, err, wave the bloody knife.
Fortunately, as we all know, the whole bailout bill is totally unnecessary, so there’s no harm done. At least, I wish we all knew that.
Unnecessary or futile, it amounts to the same thing.
As political theatre goes, it makes sense. But it’s impossible to claim any high ground when the purported reason for sinking the ship is that “Pelosi hurt my feelings.” Call Pelosi names all you want, but they should be voting for their constituents, not as a tantrum against Pelosi.
Dear Resident of Richland County, Ohio:
I apologize for not voting for the bailout, but Nancy Pelosi got me sooooo steamed, that I just wasn’t going to do anything that she wanted. I hope you understand. Sorry about your losing the farm.
Sincerely,
Your Congressman
Well, if one’s of the opinion that we’re on the way to a depression whether or not something like this happens, yeah.
Me, I’m finding it depressing, but that’s different.
Futile doesn’t necessarily mean the crisis is unavoidable. It can also mean there is no real crisis. If Chicken Little Paulson hadn’t started screaming the sky was falling, would the sky have fallen? Or would credit have tightened (as it should), business tightened it belt a little more (as it should) and life gone on, except the Dow would be around 11,000 still.
A lot of politics is theater. Bad theater, often; brilliant theater, upon occasion. (Barney Frank, who is — IMHO, and all — one of the great architects of this mess, was brilliantly funny today. I think he ought to audition for Richard III.)
Back when the grownups (corrupt as the present, sure, but grownups) ran the Hill, it was understood that there were times when the heat had to be apportioned, and shared, and deals in those smoke-filled rooms were made and honored, as to the apportionment of blame and credit, as well as money.
Now we got Madame Pelosi knitting and waiting for the guillotine.
Really Bad Things are going to happen to the economy with or without a bailout. I believe that they’re going to be worse if we throw $700 billion at the banks. Nobody has any experience of this situation, so the best anyone can say is “it’s always worked out before.”
“Before”, we had more oil than we needed. That’s not the case now.