Bailout Politics

So, no deal in Washington. NYT account here; WaPo here. Politico's story contains this detail that, unsurprisingly, has been making waves:

According to one GOP lawmaker, some House Republicans are saying privately that they’d rather “let the markets crash” than sign on to a massive bailout.

“For the sake of the altar of the free market system, do you accept a Great Depression?” the member asked.

Well. I hadn't realised that was the choice. House Republicans are obviously being blamed for the impasse, but I rther think there are plenty of Democrats who will be content enough with the current state of play. They don't like this either. Certainly they don't like it enough to risk going ahead without GOP votes to give them political cover.

As a senior Democratic leadership aide told me yesterday, the plan was to treat the bail-out as though it were a vote to award Congress a pay rise. Let's have 110 of your guys and 110 of our chaps and we'll all hold hands and jump together. The general view, I think, was that "This thing is a flaming pile of shit, but we have to do it."

Trouble is: Congressmen are wary of signing on to an unpopular deal. "Members are scared as hell. Calls are literally running 200-1 against.  And this is not phony Astroturf*, its genuine taxpayer outrage. Getting a deal is one thing; getting the votes quite another."

That was yesterday's mood anyway. Let's see what today brings. Hope you're not too nervous about Wall Street's opening bell...

*ie, fake grass roots outrage, manufactured by a given pressure group in an effort to sway wobbly Congressional votes.

Comments

[toby]

Perhaps it is just that the folk memory of the Great Depression has faded. Maybe some TV station could do re-runs of films like "The Grapes of Wrath" just to remind people.

Alternatively, hesitant lawmakers could wait until a bank or banks starts to fail. The 200-to-1-calls against the bailout might change if voters see their life savings, kid's educational fund, job and business going down the pan.

[Toby Bryans]

Have a look at the latest Market Ticker for some good comment as to whether the Bailout is a Good Thing or not:

http://market-ticker.denninger.net/archives/593-CONGRESS-STOP-AND-THINK!.html

(Hint, Karl thinks it's not and he puts forward a persuasive case and an alternative route forward)

[dearieme]

I saw a blog comment somewhere that said that the Democrats were the party of the Wall St banks. Ah!

[ndm]

toby writes:

hesitant lawmakers could wait until a bank or banks starts to fail.

Uuuum. Washington Mutual failed last night in the biggest banking failure in the history of the US. I promptly got my sorry arse of the chair and headed off to the local branch to retrieve my money - or at least enough to stand a round of drinks in Finnegans Wake. Actually, although I have three accounts at Washington Mutual, I was totally unconcerned about the failure of the bank - other than its effect on the bank staff - and view the takeover as a good thing. Since I was the only person getting money out I have to assume most other customers had similar feelings.

I think a lot of Americans have become pissed off over the last few years about the "smartest boys in the room" - be they at Enron or Wall Street. There is not much sympathy in the country for guys who have made out like bandits for years now that their bandidtry has become undone. This may not be a rational opinion of course - but it is surely no less rational than the idea that John McCain can ride into Washington and save the day.

[Wholesale nfl jerseys]

Alternatively, hesitant lawmakers could wait until a bank or banks starts to fail. The 200-to-1-calls against the bailout might change if voters see their life savings, kid's educational fund, job and business going down the pan.