If the bailout bill had passed the House, your concerns about whether it was necessary would have been put to rest. Had sufficient numbers of Republicans voted against their individual political futures 35 days before the election, it could only have been because the economic results were too obvious to deny.
It turned out the bill did not pass. Two-thirds of Republicans could not vote against their individual political futures. And so they voted against their collective political future. Immediately the stock market tanked. It has recovered today. But absent any bill, credit may be a thing of the past. The recession may double in depth and length. In any event, all economic bad news now comes with a question, "What if the bill had passed?"
The Republican Party must hope this does not come to pass, because if it does, the GOP will not survive.
We posted here in the spring about the imminent systemic meltdown of the financial system. Paulson and Bernanke have been trying everything except the radical medicine that is needed: A return to the Glass-Steagall market structure. (See this recent diary entry.)
But pause for a moment and pity the poor Republican Congressman who has to choose between an Aye vote -- a vote AGAINST 80 percent of his supporters wishes and FOR the language Democrats have crafted -- or on the other hand, a Nay vote -- AGAINST their own political leadership and fFOR accepting responsibility for all future economic problems.
And congratulations to Democrats. They now look like the adults in the room, and absent a bill, they benefit from all future economic problems politically. Not only that, but they don't have co-ownership of a bailout plan that likely would have produced reams of bad press and would likely still not have resolved the financial system's problems or bought more than a few months before collapse.
Progressive Democrats are right that this is not a good or effective way of doing it. It is a scandal that not one professional economist testified in conjunction with the negotiations for this bill. Sweden, Japan and Finland have done it better and more simply. A simple debt for equity swap would recapitalize the system without all this funny purchasing of toxic paper at prices that are sure to be criticized. I encourage Peter DeFazio and the others to hold out. There will never be better leverage.
Free market fanaticism and incompetent or corrupt governance have painted the Republicans into a corner they cannot now escape. One should now expect the tactics of desperation and ultimately more unhappy choices between bad and worse. Blaming Nancy Pelosi who was talking to her base, not to Republicans, is such an act of desperation.
In 1993 Boehner and Roy Blunt watched Democrats fall on their swords for the sake of the economy with the Clinton budget bill, which cut the deficit and set the stage for the prosperity of the 1990s. Blunt and Boehner then threw in with Newt Gingritch in the demogoging of the issue by painting Democrats as tax-happy. This led to the loss of the House by the Democrats. It was not going to happen again.
Republicans have far more to lose politically in an economy that is falling apart.
Had they raised 13 more votes, they could have had their seat at the blame game for the remainder of the campaign, but not mustering those votes leaves them exposed. Their crackpot insurance scheme is so transparently bad they won't even try to explain it. Blaming Pelosi has an additional unfortunate consequence for Republicans. It directs attention to Pelosi's speech. After listening to it, I would be surprised if most Americans did not whisper "Amen."
But for today, idiots of the week, House Republicans.