Americans all over the nation, political pundits, Wall Street workers, and, I venture to guess, even the president, were stunned Monday afternoon to hear that the bailout bill had been defeated in the U.S. House of Representatives. The bailout had been widely accepted as a fait accompli .
Thousands of Americans in all walks of life had phoned in or written to their elected representatives asking them to vote against the bailout. And enough elected representatives actually listened to what the people they are supposed to represent said. This despite all the lobbying power of financial institutions, the powers of moral suasion of the Fed chair, and President Bush’s address to the nation stressing the urgency of the bailout. I couldn’t but help feel proud of our democracy. The vox populi has been heard, and should continue to be heard.
Giving away $700 billion is not a solution to the nation’s serious financial and economic crises. The bailout would be, in fact, an albatross around the necks of Americans for at least one generation if not more. Spending $700 billion of the public’s money at this time to buy up unprofitable mortgage-backed securities (which are being misnamed “toxic” securities) implies giving up the much needed investments in education, health care, and infrastructure for the nation.
House Speaker Nancy Pelosi made an important speech in the House on Monday. Here is an excerpt:
$700 billion. A staggering number, but only a part of the cost of the failed Bush economic policies to our country. Policies that were built on budget recklessness when President Bush took office, he inherited President Clinton’s surpluses — four years in a row budget surpluses on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies, within two years, he had turned it around. And now 8 years later, the foundation of that fiscal irresponsibility, combined with an “anything goes” economic policy, has taken us to where we are today.
Here’s the video clip:
And yet, astonishingly, she supports handing over $700 billion to the same fiscally irresponsible and failed administration!
Let us wait until January 2009, or at least until after the November election, and then let the new president or president-elect take the lead on this matter.
This might yet be a short-lived victory for democracy. The Treasury Secretary and others will be back at their machinations, and Congress is scheduled to reconvene on Thursday.
As Alice Chasan pointed out on Rooflines a few days ago, The people still need to speak clearly to their representatives.