Here's The Wall Street Journal on the financial markets bailout deal.
Today's vote is essentially a pledge of public capital to defend and rebuild the financial system. Some of that capital has already been committed via the Federal Reserve, albeit with politicians preferring not to notice. With this vote, Congress is at last taking some ownership for the mess its policies helped to create by fueling the credit housing mania earlier this decade.Congress long ago committed taxpayers when it let Fannie Mae and Freddie Mac run wild risks with a public subsidy. It's a little rich to see some of Fannie's most devoted GOP patrons now invoking "free-market" principles to oppose cleaning up their mess. More than one Republican opponent also seems to be angling for a leadership challenge next year, even at the risk of causing a bigger GOP defeat if the bill fails.
We agree with those who say there are better ways to provide this public capital, but Treasury Secretary Hank Paulson's plan should do some good, and if executed properly shouldn't cost taxpayers anything close to its $700 billion showroom price. [...]
Thanks to the House GOP's intervention, the Paulson plan is also better than it would have been. Republicans helped to eliminate the Barney Frank-Chris Dodd slush fund for liberal housing lobbies; a plank to let judges shield deadbeat homeowners from bankruptcy laws; and a ploy to stack bank boards with union members.
Once the bailout kicks in, watch for the flies to come swarming for the sugar. All the more reason to elect as President that McCain fellow who tried hard to rein in Fannie, Freddie and all their Capitol Hill buddies back when it would have done some good.
UPDATE: The vote has failed, with 2/3 of Republicans voting "no". The Dow fell 500 points in a few minutes; down almost 800 for the day. This will reverberate loudly in overseas markets, starting in Asia tonight. Prediction: U.S. stocks plummet tomorrow - down 10%? I hope I'm wrong - if not, recession, here we come and get used to the sound of "President Obama."
Posted by Alan at September 29, 2008 06:25 AM