House Republicans Reject Package, Dow Falls Over 700 Pts

[adamdavid80]

Uhmmm....yikes?

http://biz.yahoo.com/ap/080929/wall_street.html

[karlhenning]

Bailouts such as the $700 billion plan for Wall Street firms can help stabilize an economy, but history shows they don't cure the deep economic problems that created a crisis in the first place.

. . . the ultimate cure to what ails the economy would require time, wrenching systemic change, and a good deal of pain.

Many economists are forecasting more pain for the US economy, even with the bailout. They expect the unemployment rate to rise to 7 percent before the excesses of the recent housing and credit bubbles are squeezed from the economy. They don't expect a significant recovery until 2010.

Source of above

[Dundonnell]

While I take the point of the thread's title I understand that 95 Democrat Representatives voted against the Bill. That makes 40% of those Democrats who voted-a not inconsiderable proportion!

[karlhenning]

Good catch, Colin!  Fact is, the bill had opposition from the further wings of both sides.  The news as I've heard it announced read simply, "the House rejected."

[karlhenning]

Oof! McCain sort of walked into this one, didn't he?

[ezodisy]

It's absolutely great entertainment.

[karlhenning]

Good catch, Colin!  Fact is, the bill had opposition from the further wings of both sides.  The news as I've heard it announced read simply, "the House rejected."

For instance, at cnn.com it reads:

Bailout bill fails; Dow plunges

The House of Representatives today rejected a $700 billion plan to bail out the U.S. financial system. The Dow was down more than 500 points after the voting ended. House Minority Leader John Boehner says the chamber will not vote again today, and President Bush vowed to "address this economic situation head on."

[scarpia]

Imagining his "legacy" I suspect.

[Bulldog]

It's good to see that the bail-out package was rejected by the House.  Percentage-wise, the drop in the Dow was not one of the largest declines in stock market history.

What to do now?  Congress and the Administration need to stop the extreme scare tactics and hasty plans.  There's still plenty of time for intelligent discussion among our political leaders and economic experts, and I hope they can come up with a plan that makes some sense.  Although the political finger-pointing is amusing, this also needs to end.

In the meantime, we will likely see some deep declines in oil prices, and OPEC can't do anything about it.  That's rather sweet.

[Philoctetes]

It's good to see that the bail-out package was rejected by the House.  Percentage-wise, the drop in the Dow was not one of the largest declines in stock market history.

What to do now?  Congress and the Administration need to stop the extreme scare tactics and hasty plans.  There's still plenty of time for intelligent discussion among our political leaders and economic experts, and I hope they can come up with a plan that makes some sense.  Although the political finger-pointing is amusing, this also needs to end.

In the meantime, we will likely see some deep declines in oil prices, and OPEC can't do anything about it.  That's rather sweet.

A fair sum of my thoughts on the 'event' as well.

[Bulldog]

A sobering thought that's crossed my mind lately concerns the leaders of our Congress and Administration.  Essentially, the same folks who helped create this crisis are now the one's in charge of coming up with a plan to solve it.  Why would anyone think that those who exercised poor judgement in the past will, all of a sudden, be worthy of our trust?

Also, our two major presidential candidates aren't exactly leading on this matter either.  McCain shows much bluster but nothing else.  As for Obama, he prefers to sit this one out just in case his recommendations lead to disaster or are rejected by the Democrats.  Given that both candidates have many economists at their disposal, each could develop their own plan and push it hard in Congress and to the public.  But that appears to contain a level of risk neither is willing to assume.

[scarpia]

A sobering thought that's crossed my mind lately concerns the leaders of our Congress and Administration.  Essentially, the same folks who helped create this crisis are now the one's in charge of coming up with a plan to solve it.  Why would anyone think that those who exercised poor judgement in the past will, all of a sudden, be worthy of our trust?

Congress's judgment is not what we are depending on.  The necessity of the plan and its basic form were devised by Paulson, and Bernacke, a Princeton economics professor and a former head of Goldman Sachs.  I'm not sure who would be better prepared to determine what is needed.  The fact that two true believes in non-intervention and deregulation would concoct this plan says something about the seriousness of the situation.

[Dundonnell]

A genuine question from someone on the other side of the Atlantic but someone passionately interested in American politics-

Does this not demonstrate how far the Bush Presidency has moved from the Republican party and that party's traditional principles?

[knight66]

I have just heard a Republican say that the Democrats could not get their bill through! Another said that the Democrat leader gave a socialist slant to the introduction of the bill; so it would not obtain Republican support. Playing politics with such an important issue; odd attitudes surely in such a serious situation.

Mke

[Bulldog]

Congress's judgment is not what we are depending on.  The necessity of the plan and its basic form were devised by Paulson, and Bernacke, a Princeton economics professor and a former head of Goldman Sachs.  I'm not sure who would be better prepared to determine what is needed. 

We certainly are depending on their judgment; it's the members of Congress who do the voting.  As for Paulson and Bernacke, they are but two of probably hundreds of experts on economics; I've heard other experts very skeptical of the exisiting plan.  Also, don't forget that the two men you mention have also been part of the problem.  Finally, the plan that Paulson and Bernacke concocted gave Paulson god-like powers even though nobody elected him to any office.

If you simply want to trust those two men, that's your decision.  I see no reason to trust them.

[drogulus]

A genuine question from someone on the other side of the Atlantic but someone passionately interested in American politics-

Does this not demonstrate how far the Bush Presidency has moved from the Republican party and that party's traditional principles?

     Yes. McCain wants to go back to a lower spending model more in line with Goldwater conservatism, while Obama is a cautious liberal who'd probably take a pragmatic approach like the Clintons. They don't really differ that much in practical terms since they both are would endorse "pay as you go" methods for new requirements. Either one would be an improvement.

     

I have just heard a Republican say that the Democrats could not get their bill through! Another said that the Democrat leader gave a socialist slant to the introduction of the bill; so it would not obtain Republican support. Playing politics with such an important issue; odd attitudes surely in such a serious situation.

Mke

     That's the way it works with these things. The first round is positioning and blame-shifting, then the real task of passing a bill starts when they see that no real advantage can be obtained.

[Bulldog]

A genuine question from someone on the other side of the Atlantic but someone passionately interested in American politics-

Does this not demonstrate how far the Bush Presidency has moved from the Republican party and that party's traditional principles?

The Republican Party took a weird turn when it embraced the social agenda of the religious right.  Principles such as balanced budgets and low spending went out the window.  At some point, the Republican Party needs to create a new identity to have a viable future.  That a Republican can have a decent chance at this time to become president just tells us how sick the public is of both major parties.

[scarpia]

We certainly are depending on their judgment; it's the members of Congress who do the voting.  As for Paulson and Bernacke, they are but two of probably hundreds of experts on economics; I've heard other experts very skeptical of the exisiting plan.  Also, don't forget that the two men you mention have also been part of the problem.  Finally, the plan that Paulson and Bernacke concocted gave Paulson god-like powers even though nobody elected him to any office.

If you simply want to trust those two men, that's your decision.  I see no reason to trust them.

What should be done is a matter of judgment.  That something should be done is something almost everyone who understands these matters agrees upon.  The numbers that have been seen in the credit markets in the last days have been equivalent to a cardiac patient going flat line.  What we have here are two doctors arguing about whether the patient needs an adrenaline shot or a defibrillator, but if they don't pick one soon, all the patient will need is an undertaker.
 

[knight66]

There does seem to be brinksmanship being deployed; with the Presidential candidates too scared to come out with any firm lines. Posturing seems to be costing a lot of people a lot of money while they wrangle. Lets hope it is not a case of bald men fighting over a comb.

Mike

[Bulldog]

What should be done is a matter of judgment.  That something should be done is something almost everyone who understands these matters agrees upon.    

Most of the folks saying that the sky is falling know very little about economics or are intimately connected with the financial markets.

However, I do agree that something must be done.  The question is "what to do", and there's been hardly any discussion of alternative measures.  Paulson and company created a "Wall Street" plan in record time and tried to scare its success through Congress.  Not surprising since Bush and his buds have been trying to scare us from Day 1.

Just wanted to add that the mainstream media hasn't been helpful either.  The news it has given has "panic" written all over it, but that's only to get additional ratings.  The problem requires objective analysis, and I don't know that it will be forthcoming.