I remember, back in the halcyon days of last week, when a certain (very) senior Senator from Arizona swooped in to save the bailout plan. Well, today, with 60% of Democrats voting for it and 67% of Republicans voting against it, I'd say he did everything he could.
But 778 points? Ouch. Good work, Johnny Boy.
In a moment of historic import in the Capitol and on Wall Street, the House of Representatives voted on Monday to reject a $700 billion rescue of the financial industry. The vote came in stunning defiance of President Bush and Congressional leaders of both parties, who said the bailout was needed to prevent a widespread financial collapse.
The vote against the measure was 228 to 205, with 133 Republicans joining 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans.
Then Krugman: We are a banana republic with nukes:
So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
Interesting times. Kind of like 1931.
Update (via James Fallows): The Obama-Biden campaign released a statement:
This is a moment of national crisis, and today’s inaction in Congress as well as the angry and hyper-partisan statement released by the McCain campaign are exactly why the American people are disgusted with Washington. Now is the time for Democrats and Republicans to join together and act in a way that prevents an economic catastrophe. Every American should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point, but now that we are here, the stability of our entire economy depends on us taking immediate action to ease this crisis.
I won't be live-blogging the debate; but Josh Marshall is.
Economist Paul Krugman today chastises just about everyone involved in the bailout meltdown this week:
[T]he grown-up thing is to do something to rescue the financial system. The big question is, are there any grown-ups around — and will they be able to take charge?
...
[T]here do seem to be some adults in Congress, ready to do something to help us get through this crisis. But the adults are not yet in charge.
On a related note, I commend to everyone Frederick Allen's Only Yesterday, published in 1932. It's a quick read, and if you lived through the last 10 years, it will seem eerily familiar. (Someone at UVA has put the entire book online, as it may now be in the public domain.)
If John McCain doesn't have the courage to debate Barack Obama, how's he going to stand up to Putin? Or José Zapatero, for that matter?
I don't read Maureen Dowd much any more, but yesterday she gave her column to Aaron Sorkin. Not bad:
BARTLET: Well ... let me think. ...We went to war against the wrong country, Osama bin Laden just celebrated his seventh anniversary of not being caught either dead or alive, my family’s less safe than it was eight years ago, we’ve lost trillions of dollars, millions of jobs, thousands of lives and we lost an entire city due to bad weather. So, you know ... I’m a little angry.
OBAMA: What would you do?
BARTLET: GET ANGRIER!
Good advice, too.
Mark Morford thinks she-who-will-no-longer-be-named-on-this-blog-because-she's-not-running-for-President is per se an insult to women's rights, and I have to agree:
[Thinking women] say: You've got to be kidding me. They say: This is what we get? This could be our historic role model? Two hundred years (OK, more like 2000) of struggle, only to have this nasty caricature of femininity try to hijack and mock and undermine it all?
...
WTF? Could it be true? Are cadres of formerly Obama-leaning white women really so enchanted by [her] gender and motherhood status that they openly ignore the fact that she basically wants to shove women's rights back about five decades? Can it be so simple, crude, sad?
But again, let us all remember, her purpose is to distract voters from the inconvenient fact that McCain is long past his "sell-by" date, and should under no circumstances be allowed anywhere near the nuclear launch codes, just in case he mistakes another NATO leader for Che Guevara.
Via Krugman, a good description of how the Bush-McCain economic program resemples the Coolidge-Hoover program that caused the Great Depression:
The real cause [of the Depression] was the collapse of the banking system, which followed the crash in part because Hoover believed strong fundamentals would protect the economy from disaster.
For the likes of Hoover and McCain, asserting the strength of fundamentals is shorthand for saying that business leaders, with maybe a little cheerleading, can sort out the crisis and that Congress should not try to regulate their behavior. It's too soon to know if McCain will be proved right (I doubt it), but Hoover certainly turned out to be wrong.
At the time, Sen. Robert Wagner, a New York Democrat, characterized Hoover's response to the crisis as "the time-worn Republican policy: to do nothing and when the pressure becomes irresistible to do as little as possible." In fairness, Hoover didn't quite "do nothing," but he followed a script that may sound familiar to students of the modern Republican Party.
Why does the name "Santayana" keep popping up in my head? (Third quote from the bottom, perhaps?)
One of my oldest surviving friends says she's going as Sarah Palin for Hallowe'en. After all, what could be more frightening?
Krugman elaborates on the events that made me say yesterday was scary:
The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.
And as the unknown unknowns have turned into known unknowns, the system has been experiencing postmodern bank runs. These don’t look like the old-fashioned version: with few exceptions, we’re not talking about mobs of distraught depositors pounding on closed bank doors. Instead, we’re talking about frantic phone calls and mouse clicks, as financial players pull credit lines and try to unwind counterparty risk. But the economic effects — a freezing up of credit, a downward spiral in asset values — are the same as those of the great bank runs of the 1930s.
More details as events warrant.
AIG is about to die; Lehmann won't survive the night; and now, Bank of America has agreed to buy Merrill Lynch. Today has been one of the most frightening days on Wall Street since...well, you know:
Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.
The weekend's once unthinkable outcome came after a series of emergency meetings at the Federal Reserve building in downtown Manhattan in which the fate of Lehman hung in the balance. In the meeting Federal Reserve officials and the leaders of major financial institutions were trying to complete a plan to rescue the stricken investment bank.
...
Merrill's chief executive, John A. Thain, and Kenneth D. Lewis, Bank of America’s chief executive, initiated talks on Saturday, prompted by the reality that a Lehman bankruptcy would ripple through Wall Street and further cripple Merrill Lynch, people briefed on the negotiations said.
And who may we thank for the seven-year free-for-all that has brought our financial system to its knees? Who was in power? The Greedy Old Party, perhaps? Hmmm....