. . . in cleaning up Republican messes. There are times when the stinky pile is too high, too wide and too deep. This was the case with the Wall Street Bail-Out Bill, that was defeated today by reluctant Republicans, according to the Memeorandum lead from the NYT. Stocks plunged at the news the WSJ reported: " The Dow Jones Industrial Average plummeted 777.68 points, its biggest one-day drop in history." The vote in the House was 205-228. To quote further from Congressional Quarterly,
Despite intensive lobbying by congressional leaders and the White House, the House rejected an unprecedented $700 billion bailout plan for the financial system.
The 205-228 vote torpedoed a bipartisan compromise and sent the U.S. stock market down sharply. But the immediate falloff was not as severe as some had feared; the Dow Jones industrial average was off roughly 500 points about 15 minutes after the vote.
The startling rejection of the financial rescue proposal was a stunning defeat for the White House and congressional leaders from both parties. It was assured when House Republicans dug in their heels, refusing to support the plan.
House Democratic leaders had long insisted that a majority of both parties would be required to pass the bill, and House Republican leaders proved unable to deliver of their caucus’ majority. Instead GOP members voted against it by a 2-to-1 ratio.
There is plenty of blame to go around. Senator McCain gets blame from pundits for his negotiations grand-standing. Senator McCain blames Senator Obama. House Republicans blame Speaker Nancy Pelosi for hurting their feelings in her floor speech before the vote. Our current president said he is "very disappointed." House Democrats blame Republicans for not scuffling up their share of necessary votes. Among the pundits you can find ones of every stripe to side with each one of the blamers, depending on their biases. David Sirota was prescient about the bill's failure.
House members who voted against the bill, speaking on the floor later, largely avoided blaming. Rep. Marcie Kaptur (D-Ohio) credited the people and the Constitution, saying that's how democracy is supposed to work. Many had felt that it was a mistake all along, including Rep. Dennis Kucinich. Several mentioned alternative interventions that the government could take with tools already present in the law. Several said that the SEC should revamp their accounting rules to accomodate the actual value realities of the troubled instruments. Others suggested ways that the taxpayers could be held much less at risk, and still solve the credit freeze.
Almost all those voting "no," the pundits reported, were in very tough political races. For some reason they got the idea that the people of the United States disapproved of the measure with good reason. I was always of two minds on the question. On the one hand the economic arguments were powerful warnings that some things were terribly wrong that would quickly trickle down to all of us. And on the other hand there were several things inherently erroneous with the Bush administration's approach. Paulson's 3-page package consisted of demands rather than requests; announced terms, rather than consulted; and made assumptions about the amount of money the American public could stomach as a bail-out for "those high-flying rich guys from Manhattan." What Paulson and Bernanke thought would be a decent offer of help to Wall Street, felt like an obscene amount to hurting people on Main Street, to use the cliche.
Not everybody knows what they will do next, though Ian Welsh at Firedoglake says, "Give Paulson 150 Billion and Come Back In January and Do it RIGHT (And here’s how to do it right)." Makes sense to me. Professor James Petras has a number of good ideas also.
View my current slide show about the Bush years -- "Millennium" -- at the bottom of this column.
(Cross-posted at The Reaction.)
My “creativity and dreaming” post today is at Making Good Mondays.
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