The Village reacts badly
Pravda on the Potomac on the House not handing over that trillion to Hank Paulson's golfing buddies:
How the Numbers Failed the Leaders
Because the numbers didn't "fail" the Leaders.
The people "failed" the leaders.
The people hate this bill, and enough representatives listened to them to send it crashing down; that's what drove the numbers! But don't worry:
"What happened today cannot stand," Pelosi said. "We must move forward, and I hope that the markets will take that message."
Funny, the "cannot stand" rhetoric is usually applied in cases where a perceived act of tyranny is to be resisted. Maybe that's how the Village feels when the voters impose their will on them? Like they're experiencing a coup d'etat?
UPDATE Brooks has a real hanky twister today. First, he excoriates the representatives who actually listened to their constituents:
... let us recognize above all the 228 who voted no — the authors of this revolt of the nihilists. They showed the world how much they detest their own leaders and the collected expertise of the Treasury and Fed.
My goodness! Then, he excoriates the House Republicans:
House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party.
And finally, Brooks cuts to the chase:
What we need in this situation is authority. Not heavy-handed government regulation, but the steady and powerful hand of some public institutions [like the he 3rd Infantry Division’s 1st Brigade Combat Team perhaps?] that can guard against the corrupting influences of sloppy money and then prevent destructive contagions when the credit dries up.
The Congressional plan was nobody’s darling, but it was an effort to assert some authority. It was an effort to alter the psychology of the markets. People don’t trust the banks; the bankers don’t trust each other. It was an effort to address the crisis of authority in Washington.
But the 228 House members who voted no have exacerbated the global psychological free fall, and now we have a crisis of political authority on top of the crisis of financial authority.
You always did, Dave -- if I may call you Dave. The only difference between then and now is that now it's all out in the open. I'd say the crisis has been brewing since 2006, when the American people gave the Democrats control over the legislative branch, and the Democrats then proceeded to destroy their brand and morph into Republicans.
The only thing now ...
besides crafting a bill that the American people could, like, support
.... is to try again — to rescue the rescue. There’s no time ...
the NOW NOW NOW lie, which everybody now knows ws a lie
... to find a brand-new package [Indeed, snicker], so the Congressional plan should go up for another vote on Thursday, this time with additions that would change its political prospects. Leaders need to add provisions that would shore up housing prices and directly help mortgage holders.
And we get?
If that doesn’t happen, the world could be in for some tough economic times (the Europeans, apparently, have not even begun to acknowledge their toxic debt) — but also tough political times.
Dave, you tool, the Europeans just nationalized two banks, following the Swedish model which, unlike your proposals, and Paulson's, has actually been shown to work (the IMF study).
The American century was created by American leadership, which is scarcer than credit just about now.
Indeed, Dave. And you and your Village friends are so part of the problem.
UPDATE Weak-chinned Fred Hiatt is just as bad, if not worse:
Just when it seemed that American democracy had at least temporarily conquered its ugliest habits of partisanship [government of national unity, here we come!], that the people's elected representatives were about to make a tough decision [that is, one their constituents oppose] in the long-term* national interest -- pique and polarization carried the day.
We understand that angry constituents have been bombarding members of Congress with e-mails and phone calls protesting the bailout.
The nerve of those pesky voters! I guess the "pique and polarization" is really their fault, then?
But among the 133 Republicans and 95 Democrats who voted no yesterday, there are certainly some who know better, and their lack of political courage is stunning.
The nerve of those representatives! Representing! And personally, I'm glad they know fear. As Machiavelli remarks, it is much safer to be feared than loved, if one cannot be both loved and feared.
Perhaps their votes will help them get what they want in November: a return trip to Washington.
The nerve of those representatives! Winning elections by casting popular votes! In our democracy! Imagine!
UPDATE And here's a gem from Izvestia on the Hudson:
“I don’t think this was a failure of leadership so much as a failure of followership,” said Thomas Mann, a scholar on Congress at the Brookings Institution. “This is a function of a group of House Republicans who are philosophically opposed to doing anything like this bailout and are prepared to take the risk.”
UPDATE The WSJ is the sanest of all, or at least the most clear eyed and ruthless, of all, no doubt because they feel the absence of our trillion most keenly, and it has concentrated their minds:
The Beltway Crash
Oh? Who placed the bets, sonny?
And they actually report a detail about Paulson I hadn't heard:
One GOP Member who supported the bill told us that before Mr. Paulson spoke to House Republicans last week, the whip count in favor was about 70; afterwards, it was closer to 20. You can't ask Congress for $700 billion without more modesty and a better explanation for how it would be used.
Pesky representatives! Wanting a reason to spend a trillion dollars! Imagine!
And, at least for the WSJ, the sky did not fall NOW NOW NOW:
Given this historic abdication, we're surprised financial markets didn't melt down more than they did yesterday.
Really? As the IMF study of 42 bailouts (which I mention fucking again) shows, there are many successful bailouts involving toxic assets where the government didn't buy those assets, which is the Paulson plan, and those that did were more expensive and less successful. Maybe the market was right, and there's no reason for the writer to be surprised at all.
And the writer even acknowledges the possibility of strategic behavior:
Safe in their think-tanks, some of our friends have claimed that talk of a financial crash is merely a political invention. Perhaps we'll now test their theory. A financial panic isn't an academic seminar, and a flight from all risk isn't something any free-marketeer should want. A recession now seems certain, as falling commodity prices are telling us, but the point is to prevent systemic financial collapse. Maybe the Members who voted "no" figure at least they'd still have jobs.
How disingenous! The country is already in a recession, and as even the writer admits, the case for a financial collapse wasn't made by Paulson, perhaps because it couldn't be made (or, alternatively, since the derivatives have metastatized into more money than there is in the world, the real goal of the program is to let the last tranch of banker get away clean). Who knows... However, the essential point is to pin the recession on the Democrats, even though it started well before this brouhaha. Well done!
And note especially that, while all the other shills are saying NOW NOW NOW and that there's no time to craft a new bill, the WSJ -- who wants to put our skin in the game -- thinks differently:
If Mr. Paulson wants to be a statesman, he could offer a Plan B that avoids giving Treasury such a big blank check. Instead, he could propose more public capital for the Federal Deposit Insurance Corp., which would do more of the creative financial plumbing it has done over the last week. (See here.) This will have to happen next year anyway, and the FDIC has long experience protecting taxpayers for public capital injections through preferred stock and warrants.
At the same time, the Secretary could salvage his own proposal by promising that while Treasury would start the purchase of toxic securities from banks, he would quickly (within weeks) turn the process over to a new and separate resolution agency. Congress could make this part of the legislation. This would remove Mr. Paulson as the political lightning rod he has become, and also give the rescue process the political insulation it needs. Such an agency could also work closely with the FDIC to protect taxpayers.
Funny, though: the WSJ makes no mention of popular opposition to the bailout at all.
NOTE * You mean as long term as today' Dow, Fred?