Posted on Wed, Oct. 1, 2008
Monday's financial meltdown was sparked by a bipartisan failure of leadership in Washington, starting with President Bush. His administration crafted the $700 billion bailout, yet two- thirds of the Republicans in the House voted against the bill.
House Speaker Nancy Pelosi (D., Calif.) also shares in the blame. Pelosi angered Republicans with a floor speech that blamed the economic crisis on the GOP: "For too long, this government, eight years, has followed a right-wing ideology of anything goes, no supervision, no discipline, no regulation," Pelosi said.
Some say Republicans are just using Pelosi's speech as cover for their no votes. Either way, given the expected closeness of the vote, Pelosi's partisan speech was out of line.
Plus, she should have done more to get the bill passed. Rule One for any House speaker is to make sure there are enough votes to pass a bill before calling for a vote. If she had corraled more votes in her own party, it would have passed. Ninety-five Democrats voted no.
Bush made a series of last-minute calls to lawmakers, and even changed the name of the bailout to a "financial rescue package," yet it was way too little, too late. With only months to go in Bush's failed administration, even many in his party have stopped listening to him.
Sen. John McCain, the Republican nominee to replace Bush, did nothing to fill the breach. Last week, he said he was suspending his campaign until the bailout bill was passed. On Monday, he was back on the campaign trail claiming victory for getting the bill passed - until the measure failed, of course. Then he tried to blame his Democratic opponent - Sen. Barack Obama.
A handful of area House members - obviously with one eye on Election Day - voted against the bill. So here's whom local voters should call to complain about their shrinking 401(k) accounts: in Pennsylvania, Republican Reps. Jim Gerlach, Charles Dent and Joseph Pitts, and Democratic Rep. Tim Holden; in New Jersey, Republican Reps. Frank LoBiondo and Christopher Smith.
The House hopes to reconsider the bailout bill again tomorrow. Changing those six votes, along with a handful of others, could help to undo Monday's damage.
If the House fails to act, the nation's financial system - already under tremendous strain - could face its biggest test since the Great Depression.
Investors from Wall Street to Main Street experienced a major financial earthquake when the House rejected the bailout measure by a vote of 228-205. Minutes after the measure was defeated, the Dow industrials lost 673 points. The Dow ended the day down 777 points, the biggest one-day point drop ever.
Sure, no one is happy about spending $700 billion in taxpayers' money to prop up the financial system. But after the House rejected the bailout, stock prices plummeted, costing investors more than $1.2 trillion in paper losses - $500 billion more than the proposed bailout.
It was not just fat cats on Wall Street who lost money when stocks sank. Everyone's 401(k), pension fund and other equity investments took a beating as well. The Dow bounced back some yesterday - gaining 485 points - but that doesn't mean the credit crisis is solved. Nor is the bailout a silver bullet.
But lawmakers in Washington did a horrible job of explaining to the American people that the bailout is bigger than Wall Street. If credit markets remain frozen, access to loans will be reduced; spending and investment will dry up, and that could lead to deep cutbacks and layoffs.
The worsening financial crisis could lead to far-reaching repercussions for everyone. But the nation's leaders have failed to make that clear to the millions who urged their representatives to vote no.
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