I was prepared to analyze the bailout plan that had apparently been agreed upon, but what we learned today as the legislation failed is that the Democrats did not have the votes to pass the compromised version (95 House Democrats opposed). There have been some inappropriate politics injected into the process by Democrats, as we previously discussed, but politicians in both the Democrat and Republican parties made mistakes today, for different reasons. I want to evaluate the ideological and practical sides of the issue to reveal why this bill was defeated. It’s essential for Americans to understand the decisions made by elected officials, especially with an election coming up.
The ideology behind this legislation is simply a fight between free markets and increased government control, as I previously wrote. Many House Republicans would not support this legislation on principle, even after much of the Democrat pork was removed, because they will not tolerate a government takeover of this magnitude. On the other side, while some Democrats may have been unwilling to accept the legislation without the earmarks, it is more likely that many will not support the bailout for the opposite reason as the Republicans: they want the free markets to fail (UPDATE: Closer examination suggests that moderate Democrats were given a pass from Nancy Pelosi to vote against the bill, meaning Pelosi either knew the bill would fail and liberal Democrats could vote for it and blame Republicans for its failure to pass, or that she really had no clue what support existed for the bill). This may seem extreme, but the hard left is screaming bloody murder to keep Democrats from supporting any form of a bailout (see Michale Moore’s message. H/T Hugh Hewitt). While many liberal democrats voted for the legislation, Nancy Pelosi’s speech today and her inability to swing a mere 12 votes from her own party suggests that she didn’t want to disappoint her hard left base.
Ideology has motivated politics, which is why Nancy Pelosi couldn’t help taking a partisan swipe at Republicans on the House floor just before the vote (EDIT: the clip of Pelosi calling Republicans unpatriotic is here). This was a selfish act of poor leadership, displaying the Democratic leadership’s preference of blaming everything on Republicans and George Bush, and it may have cost the House votes. I wrote earlier about how Democrats could have passed any version of the bill they wanted without Republican support, but they were likely afraid of Republicans being able to highlight a selfish legislation full of Democrat-friendly earmarks. Speaker Pelosi is the leader of the House, of which Democrats are the majority, and today she acted inappropriately and dangerously.
On the ideological front, there are strong grounds for opposing this legislation. Many responsible economists and politicians, however, are warning us of the practical consequences of not passing legislation that will free credit. I’m not an alarmist, and I avoid sensationalism, but we will likely experience a significant economic recession if we don’t create liquidity and free credit. The effects of such a downturn could invoke more temptation for further government intervention.
Is there a better way to free credit and restore the free market while avoiding a long term government takeover? Can the current proposal be amended in a way to ensure that more money doesn’t end up in the hands of government? The answers to these questions may not be certain, but we can be certain that America lost today.
Republicans’ phone lines are jammed with callers opposing the bailout, and it’s likely that Democrats are experiencing the same thing. Just because voters are opposed to this bill does not mean that it is wrong. Many people are uninformed about the removal of the earmarks and the potential short and long term consequences of not passing effective legislation. As we mentioned, many of the Democrat provisions were removed or significantly reduced, and the allocation of treasury funds comes with Congressional oversight and in phases.
On the presidential campaign front, the contrast of leadership has continued to be evident. John McCain has spent the past few days on the phone, attempting to facilitate a deal; Barack Obama has continued to campaign while merely cherry picking all his answers and avoiding risks by taking positions only after the fact.
While leaders on both sides have made mistakes in this crisis, it is apparent which ones are more concerned with themselves and their agenda, and which ones we can count on for true leadership.
