NYT: "The House of Representatives voted on Monday to reject a $700 billion rescue of the financial industry ... in stunning defiance of President Bush and Congressional leaders"Ah, finally! The Democrats in Congress have found their collective spine and stood up to Bush. They didn't have the nerve to stop him on warrantless wiretapping or torture, but this was a bridge too far. Seven-hundred billion in corporate welfare for reckless Wall St. firms? Finally the populist soul of the Democratic party was awakened.
Or not.
| Yea | Nay | |
| Democrat | 60% (140) | 40% (95) |
|---|---|---|
| Republican | 33% (65) | 67% (133) |
I don't know why I'm so surprised. I mean, it takes effort to get your approval rating down to 14%. You'd have to be deliberately unpopular, which is a good theoretical framework for understanding Reid's and Pelosi's actions.
Why stop there, Democrats? You're only 4 points shy of the record-high disapproval rating. If you keep this up you could hold both records at once.
1 comment:
Echoing your sentiment, it completely blows my mind that it was conservative Republicans who didn't give in to the administration's politics of fear.
I feel the Democrats voted yes because they've bought the line that the modern world will collapse if they don't step in to save wall street. They mean well and support the idea of Government stepping in to act, but this type of governmental price-fixing is utterly misguided and will inevitably fail.
As you know, I am thrilled to see the bailout fail. The sky is not going to fall if the bailout bill does not pass, and it's not going to make everything smooth sailing if it does. In fact, I argue the bailout makes our crisis worse.
Financial pain and asset re-valuation will have to happen regardless of whether or not the government price-fixes. By fixing a price above market value (illiquid = no market = no value), the government ensures that they will become the only buyer of these assets, further freezing the market for these securities. Further, price fixing is setting up the taxpayer for massive indebtedness to support inflated asset valuations.
Enforcing market pricing of these debt-backed securities is instead the legislation our Congress needs to pass. Allowing insolvent firms to fail and asset prices to reset is a painful but necessary situation in which we find ourselves. Using tax dollars to re-inflate a bubble will prove to be a painful failure good intentions and exacerbate frozen credit markets.
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