Well, the wildly unpopular bailout has died in the House, with 227 no's to 206 ayes (and one non-vote). Malkin has her "live-blogging" interpretation of events, plus a list of the members voting for and against. She sounds happy and pissed-off all at once. What a shocker.
Investors who had been counting on the rescue plan sent the Dow Jones industrial average down as much as 700 points while watching the measure come up short of the necessary support, before rebounding slightly. The key stock reading was down more than 500 points.
The measure needs 218 votes for passage, but it came up 13 votes short of that target, as the final vote was 228 to 205 against. About 60% of Democrats voted for the measure, but less than a third of Republicans backed it.
President Bush is "very disappointed" by the House vote, his spokesman Tony Fratto said.
I, like many others, am not sure if this is a bad thing or a good thing. I would like to see some government intervention--enough to keep the wheel's moving, but I think artificially inflating a bum-market will have the reverse effect, just leading to a greater collapse later.
As we've seen recently, the private sector is coming along buying up failed banks. If the government wants to continue to assist in this effort, and perhaps get some new mortgage-refinancing laws in the bankruptcy books, fine. But $700 billion to the New York banks, virtually no strings attached, simply to inflate this beached whale of a market?
Oy vey. Why is this the only option? Why do we need to rush such a monumental bill through Congress? Is over-reacting really wise? I'd say it's not. It rarely is.
Jim Manzi says it should pass, because no other alternative exists. The question is, do we need an alternative? Or could we just scale back this bailout?
I may ask more questions than propose answers. But then again, this has the best economic minds in the country at odds with one another. I have trouble separating the wheat from the chaff on this one...
~cross-posted at NeoConstant
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