Monday, September 29, 2008
The Red/Brown Coalition Prevails: Yea 205 No 228
According to one reporter, everyone was in shock on the floor of the New York Stock Exchange when the vote went final. We have just experienced a vote of no confidence in Paulson, Bernanke, Bush and the congressional leadership, with elections forthcoming in just over 2 months. If Obama and the Democrats prevail, one would assume that Reid, Pelosi and Hoyer, among others, would be replaced. If McCain prevails, we will probably see something similar on the Republican side.
But, then again, maybe not: Several Republican aides said House Speaker Nancy Pelosi, D-Calif., had torpedoed any spirit of bipartisanship that surrounded the bill with her scathing speech near the close of the debate that blamed Bush's policies for the economic turmoil. More than two thirds of House Republicans voted against the bill. Was Pelosi inept or Machiavellian? We will soon find out. In any event, stocks are down, but not catastrophically. The last 30 minutes of trading will tell the tale.
My suspicion is that the bailout is dead, and that no amount of back room CPR can revive it. It reminds me of the French vote against the EU constution in 2005, where the proponents unsuccessfully relied upon a similar sort of hysteria to try to frighten a hostile public into supporting it. After they lost, they insisted that there were any number of ways to move the EU constitution forward, but, now, three years later, nothing has happened. Here, Bush and the congressional Democrats possessed the additional advantage of being able to manipulate the public into believing that we faced a financial 9/11 and still failed. Another stake in the heart of neoliberalism, but this vampire is especially resilient.
Representatives received phone calls that went 100 to 1 against the bailout. Even if Congress is able to deliver it to the President's desk within the next week, such an outcome will be a victory of process over substance, a victory that will intensify populist cynicism against a corrupt socioeconomic system. We have just experienced a political earthquake, one that will send aftershocks through the American political and economic system for years. Since last 2006, I have wondered when the bursting of the housing bubble, with its ever expending group of people foreclosed out of their homes, now numbering in the millions, would disrupt the cozy relationship between Wall Street and Federal government. Today, we got the answer.