Congressional Leaders Mismanaging Bailout
By Alan Stewart Carl | Related entries in Congress, EconomyHow long before the finger pointing begins in earnest in Washington? With the Dow recording a 780 point drop, the biggest point drop in Wall Street history, there are going to be a lot of questions as to why Congress can’t pass a bailout bill.
I understand that members of the House do not want to pass flawed legislation. But the longer Congress dawdles, the more chaotic the market is going to be. Everybody is waiting on Washington. I wish to God it hadn’t come to this. I do not like seeing our government intervene in so dramatically in the free market. But after years of unsound government manipulation of credit, too much trust in Fannie Mae and Freddie Mac and horrible decisions within the free market itself, we’re not left with many great choices. We either engineer a bailout and hope for the best. Or we all invest in good crash helmets.
Now, I do appreciate that our representatives are not leaping like lemmings. There should be vigorous dissent in even the most urgent matters. However, Congressional leadership has mismanaged the process by continually promising the immediate passage of a bailout and then failing to assemble the votes. The market is suffering not because there won’t be a bailout (there will be) but because no one knows when the bailout is coming or what the final version will look like.
Our Congressional leaders have done a poor job managing expectations. That includes John McCain, who promised to ride in on a white horse and then promptly fell flat on his face. And that also includes Barack Obama, who may have been politically astute to stand back and nod sagaciously, but should have at least made an attempt to leverage whatever authority he wields to rally Democrats. The fact that only 60% of House Democrats voted for today’s bill is embarrassing for party leaders, Obama included.
Hopefully, tomorrow we’ll get a bill or at least more honest indications from Congress as to when they expect to have a bailout in place. The longer they wait, the more the market will suffer.
This entry was posted on Monday, September 29th, 2008 and is filed under Congress, Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
September 29th, 2008 at 4:11 pm
Out of curiosity, what was the percentage for House Republicans voting for today’s bill? I heard it was low but don’t have exact numbers.
Also I completely agree. Obama was good at not mouthing off to use this event for political gain (as far as I know), but some involvement would have been nice. McCain said everything and did nothing. Obama said nothing and did nothing. Oh well.
September 29th, 2008 at 4:14 pm
Alan,
OK, let’s take another stab at this. I, once again, agree with a lot you said in this post. I do believe, however, that the President and his finance people did the poor job of communicating the extent of this problem and that the leaders in Congress, Dems & Repubs, deserve much credit for all the hard work- for once. What I don’t hear you saying is that it is clearly the House Repubs that have killed this bill.
I know that a lot if House Dems voted against it, and that many average people don’t want this ‘bailout’ to happen. But the proposal was debated in a bipartisan manner with reps from both sides, from both the House and Senate. A head count was taken before the vote and the Republican leaders thought they had the numbers. The Dems had a majority on their side and probably could’ve passed this bill alone, but they were told that enough Repubs came around in the end to do it in a bipartisan way.
Now it was stated time and again by the Dem leaders that they wanted to do this as a bipartisan majority to present it to the American people in the best way possible, the GOP knew it was close but I’m sure had to give their pre-vote approval to go ahead with it - and they got screwed by the far Right ‘Fiscal Conservatives’ in their party, and so have the rest of us. We know they didn’t want to swallow it, when the House Minority Leader calls it a “crap sandwich” we hate to eat, that’s obvious; talk about not selling it. But they did what they had to do to work it out… almost. It only missed by 10 - 12 votes!
Now, what’s really irksome is that the Repubs now want to blame the Dems for crafting a bad bill - it was the Administrations bad plan that painstakingly was made MUCH BETTER by every one involved - except the ‘fiscal conservatives’. Like Obama kept getting accused of, I just don’t understand….
September 29th, 2008 at 4:17 pm
Actually 2/3 of the dems voted for it, only 1/3 of the reps voted for it, all the blame belongs to the reps, the leades of the dems did their job they brought more than half of their side to the rable, the reps couldn’t even muster half. Obama may have played it quiet, but he and the other dem leaders did their role, they managed to rally most of their side to agree to it, it really shows how pathetic the GOP is if their own leaders, can’t get even half of them to agree on something this important. Oh well I guess I better get started on that doctoral thesis on the second great depression.
September 29th, 2008 at 4:20 pm
Ben,
I responded to you on the other post as well, but I’ll take a stab here too. I can’t characterize it as the Republicans “killing” the bill when the Dems only got 60% of their people to vote for it. That’s pretty poor. And, really, my issue isn’t that they failed to pass THIS bill, it’s that we keep hearing a bill is about to pass and then everything falls through. That’s poor managment all around and its giving the market jitters. If they’d just said it will be mid-week before we pass a bill, then the market doesn’t sink so far today.
I don’t blame those who voted against the bill for that market drop. I blame those who convinced everyone that they had a bill that could pass today.
September 29th, 2008 at 4:23 pm
The worst part about this is that the bill could have been much better without the need for “bi-partisan” effort. Instead of the best possible bill we received the best bill under the circumstances but that failed. If the GOP refuses to play ball the dems should just put together the best bill possible in every respect and own it. i would rather see them lose in 2010 having done the best they can for he country than put forth another failed half-measure. Putting it up and having it voted down is worse than waiting and crafting a better bill, it just amplifies the uncertainty and that is what kills the market.
September 29th, 2008 at 4:33 pm
Alan,
If we had a Democratic administration in the White House, I’d agree with that statement.
But seriously, let’s all admit what the elephant in the room is here …
With the election in just a few weeks, Nobody whether they have a D or an R after their name wants to see ads run against them, telling voters that they sided with the Bush administration.
In that context, I actually find it pretty amazing that the Dems were able to round up 60%.
… it’s the Republicans who are running away from their own President.
Leadership is sorely lacking ALL AROUND.
September 29th, 2008 at 4:49 pm
The republicans screwed themselves over with this vote, they are going to be the ones blamed for all the losses in the markets and the economy this week, the dems came with enough people, but the gop failed to do the same.
September 29th, 2008 at 5:57 pm
Alan,
I didn’t get back to my other comment, but I was complaining bout myself - that other comment I gave was way too dramatic. Anyway, I was trying to highlight the irony here; one would expect the Dems to be struggling to support this administration’s proposal, especially when it comes to bailing out the a flawed economic policy that these ‘fiscal conservatives’ played a large role in implementing.
BTW: for anyone still following this thread, Dems voted 140 yea, 95 nay
Repubs voted 65 yea, 133 nay So Alan had it right, 60% of Dems voted for it and only 33% Repubs. Just the opposite of what you’d expect in a world not turned upside down.
But why were the Republican leadership so out of touch with their members on which way they were to vote? Well now they’re telling us it was because of House Majority Leader, Nancy Pelosi’s speech given before the vote today. They were insulted b/c she gave a partisan speech. Deputy Whip Eric Cantor said: “Speaker Pelosi’s speech that, frankly struck the tone of partisanship that was innapropriate in this discussion.” And that is the reason he gave for failing to reach the numbers needed to pass the bill to save America from financial disaster. It just keeps gettin better & better,
September 29th, 2008 at 6:49 pm
So the republicans force this vote (via bush) and are only able to get 1/3 of their people to vote on it, while the dems get 2/3 of theirs.
And your take is, generally the entire congress failed, but mention specifically that only 2/3 democrats voted for it, and not mentioning the 2/3 of republicans that voted against it.
September 29th, 2008 at 10:09 pm
Rob, I don’t care who voted against it. I care that the leadership made it sound like a bill would be passed today. When it wasn’t passed, the markets crashed. That’s mismanaging expectation and that’s bad leadership. And who leads the House? The Democrats should have known they didn’t have the votes within their own party to pass this (which is why I bring up the 60%). They should not have been so quick to promise passage. Nor should Republican leaders have promised what the couldn’t deliver. But, ultimately, the buck stops at Pelosi.