So the rescue bill failed and the media immediately began babbling about how the Republicans in the House didn't come through. In fact, the majority Democrats have all the votes they need to pass a bill without a single Republican vote. Democrat Speaker of the House Pelosi did not crack the whip of party discipline and 95 Democrats voted no, when if only 11 more of them had voted yes the bill would have passed.
Much has been made of Pelosi's highly partisan pre-vote speech ladling blame for the financial crisis on the Bush Administration and Republican policies. Is that the way to build a coalition on a must-pass bill?
Some have speculated that Members of the House may have decided Pelosi knew something they didn't know, that perhaps the bill wasn't all that do-or-die or else she wouldn't have leveled such a partisan shot against Republicans. Calls to Congress were running 40 or more to 1 against the bailout bill, so many Members were nervous about voting yes. Well, if Pelosi didn't think the bill was all that important, it's not surprising that a number of Republicans (who despised the bill) and 95 Democrats voted no.
Such reckless Democratic incompetence in economic matters -- and governing -- is taking a savage toll on the American economy and the life savings of all Americans.
Those who track such figures note that the losses in the U.S. stock markets at the close of business after the bill's defeat were $1.1 trillion, some $400 billion more than the rescue bill would have authorized be spent to stabilize the financial markets.
Principally responsible for the housing bubble and its collapse is of course Democratic House Financial Services Chairman Barney Frank, who blocked the many demands for reining in Fannie and Freddie by the Bush Administration and Republicans, including Senator McCain, going back to 2003 and continuing into 2007. Now Pelosi has added one trillion dollars to the Frank-induced losses as American savers watch in horror as their life savings shrivel.
More losses are almost certain to follow as rescue proponents regroup and the clock ticks on without a solution. No official business is expected in Congress till Wednesday or, more likely, Thursday.
UPDATE: A Karl Rove analysis of the vote and other sources indicate that Speaker Pelosi allowed several of her senior colleagues, including House Chairmen, and 16 vulnerable freshmen to vote no. Republicans saw and heard this and concluded that Pelosi apparently had some inside information and didn't think the vote was such a big deal. So many Republicans voted what they felt: It was a bad bill, representing too much government intervention in the economy.
Also, Jesse Jackson, Jr., Obama campaign co-chairman, from Chicago, voted no. A subcommittee chairman on Barney Frank's committee voted no.
SECOND UPDATE: A Republican on Capitol Hill explains why the bill is viewed as bad by Republicans and offers a few alternatives that would be more in keeping with a market economy:
And as for alternatives:- how about reinforcing FDIC to give people confidence in their savings? Maybe more support for money markets?
- How about cutting corporate taxes or cap gains taxes?
- How about buying up (or financing the purchase of) the AAA securities that currently are having trouble moving but are not “toxic,” in order to increase liquidity and help with possible insolvency for healthier institutions rather than the old line investment banks?
- How about doing something about the silliness of the $62 Trillion Credit Default Swap market (e.g. the margin requirements, etc…)?
- How about immediately changing mark-to-market rules?
- And – heaven forbid – how about belt-tightening in Washington? Don’t hold your breath – but imagine what a signal that would send – a freeze in discretionary spending, a moratorium on earmarks and a real plan to educate America about entitlements and talk about the need to get our fiscal house in order.
THIRD UPDATE: It now appears that Pelosi planned it all. She gave her people a pass, figuring the Republicans would provide enough votes to put the bill through anf then the Democrats would use their votes to beat them over the head in the November election. Too clever and her cynical politicizing cost the nation's markets one trillion dollars.
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