Monday, September 29, 2008

Market tanks as bailout sinks


The "compromise version of the bailout was rejected today 228 to 205* with Republicans killing it.

Democrats: 140 voted "yea" and 95 voted "nay"

Republicans: 65 voted "yea" and 133 voted "nay"

*The vote was held open in an attempt to arm twist a few more "yea" votes, but instead Representatives began switching their votes to "nay" at which point the gavel came down and the New York Stock Exchange dropped 700 points.

The main enforcer for the Republicans, John Boehner, House Minority leader (and jerk from Ohio) failed to get a majority of his caucus on board and so he came out to blame Nancy Pelosi, who sold most of her Democrats this illiquid bill of goods. Rep Roy Blunt (MO-07) is Boehner's lieutenant but as Minority Whip for Republicans, he preferred to blame "Jewish holidays" for his failure.

Some young attack poodle representing the GOP (Eric Cantor, VA-07) waved Nancy Pelosi's floor speech and he too blamed her for the bill's failure. Evidently there were originally enough Republican votes to pass the bailout, but so many got their feelings hurt by Nancy that they stamped their feet and refused to play along.

According to Speaker Pelosi, both parties were responsible for corraling votes from half of their respective caucuses. She did her part to sell out taxpayers. It was the Republican leadership that didn't live up to the back room bargain.

I for one am glad this bill failed. Despite what you're being told, it still allows for golden parachutes, it still means an American taxpayer bailout for foreign owned banks and it still allows the Secretary of Treasury to rewards his friends on Wall Street by buying "toxic" financial instruments (ie. junk) at 100% of their origin purchase price (even though they're currently worthless).

So thank you, petulant Republicans for putting your own pride first and scuttling this bad bill at the last moment. Thanks also to Peter DeFazio (OR-04), the Dean of the Oregon delegation to Congress who opposed the bill from the start for the right reasons and amazingly kudos to my Representative, Earl Blumenauer (OR-03) who broke with his leader in the House and voted, no.

I appreciate the gentleman's [Barney Frank's] courtesy, as I credit his mastery for bringing this bill before us today. Thanks to his leadership, the leadership of Speaker Pelosi, the cooperation of the Republicans, it is a far better bill. But unfortunately this is not likely to be the end of the bubbles. ...

We cannot continue to bail out with borrowed money. No bill should be enacted without a payback from the financial services sector. Not a hint of a promise to pay back in five years. And at the core, we are ignoring the fundamental question about the size and scale of the financial services industry that is in trouble not just because of a lack of regulation, but because we had too many people pursuing unsustainable business practices.

We have seen an irresponsible bill change into a responsible bill. It's not as good as it should be and sadly may be beside the point. I will vote no reluctantly hoping I am wrong but fearing that I am right.

Barney Frank (D), whose committee was responsible for the compromise plan and who worked hard for its passage took to the microphone to castigate the Republican leadership for not meeting its target number of votes and then he lit into the 12 Republicans who changed their minds at the end and scuttled the bill after Nancy Pelosi's floor speech. He then said he's taking tomorrow off for Rosh Hashannah.

Members first saw the bill yesterday afternoon according to Speaker Pelosi. You would think given the difficulty of getting majority support from either party that Congress would cancel their holidays until the crisis is averted.

As soon as John McCain figures out what his stance should be, he'll chime in. Barack Obama is already addressing the failed bailout while out on the hustings.

John McCain addresses the bailout.

(Just kidding... he's still napping...)

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