House Republicans Effectually Say Pelosi Speech Caused Them to Put US Economy in Jeopardy.
Today, the US House of Representatives failed to pass a $700 billion rescue of the financial industry. After the vote, House Republicans held a press conference. I was expecting solid complaints about the bill and how it wasn't ready yet. At most, I thought I'd hear some ideological rhetoric about Socialism. Instead, a succession of three Representatives lead by minority leader John Boehner said a speech late in the process by Speaker Nancy Pelosi sounded too partisan and thusly, the bill lost support from Republicans. All I have to say is how stupid do they we think we are? They repeated that this is problem has no party affiliation so she was in the wrong. Ironic. The Someone delivers a speech that you think is too partisan so, you act partisan in return? The last of the trio, Rep. Eric Cantor (R-VA) stated, "Clearly, there was something lacking in the leadership here." Clearly, the lack was in the Republican leadership since they felt their sensitive sense of pride was more important than the American people.
Reading portions of Pelosi's speech, she said "...tells us only the costs of the Bush administration's failed economic policies--policies built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision, and no discipline in the system." The rest of the speech spoke of Democrats leading the way to change, but I didn't see anything solidly bashing Republicans-- or even naming them. So, House Republicans chose to go against their President because the Democrats delivered an anti-Bush administration speech? Democrats side with Bush and Republicans side against him? Certainly pigs are flying. So, as outlandish as this all sounds, one then searches for the real reason for this. Well, all of the Republican "nays" were from Rep's who are embroiled in tough reelections. At a time of very high news viewer/readership, these politicians chose to make headlines. What I surmise will happen is after they make this splash, they'll demand some cosmetic changes to the bill and it will pass easily. Then, of course, they will be the saviors of the American taxpayer. Simply political theater. Too bad you don't get your money back if you don't like the show...
Here are some very general points as to why this isn't a "Wallstreet Bailout," but a shot in the arm to save our economy. This situation was started by banks taking on exceedingly (stupidly to the extreme) risky loans. It really doesn't have much to do with the other companies on Wall Street, just with banks and investment firms who bought up tons of those now toxic loans. In time, these loans will be foreclosed on, currently at a rate 6,000/day, and all this money that was supposed to be there will not. So, banks are afraid to borrow from each other-- they don't know who's infected with toxic loans. That's step one. Next, they won't give loans to businesses including small business loans-- something many businesses need to exist. Then, they won't give personal loans like home loans, car loans or student loans. The last step is banks will fold. No credit equals no money in your ATM. It also means a global recession. The last US recession was not fun for anyone, myself included. Company spending freezes, wider wage freezes, more massive layoffs and whole companies failing. In other words, if this bailout doesn't pass, then life will tough for everyone, not just Wall Street or bankers. Let's not forget the thousands of homeowners holding onto the other end of those toxic loans. This bill means the government will take the loans and renegotiate them and more people will get to keep their homes.
From what I'm hearing from top analysts and investors like Warren Buffet and Jim Cramer, this is a good deal with sufficient protections for the American people (including if bailed-out companies will have to pay back the difference if this doesn't work fully.) Cramer even said he wished he could get in on it since it's the quintessential buy low-sell high scenario. The taxpayer may even make money on the deal.
One last bit of irony. Before the shenanigans after the bailout vote failed, minority leader John Boehner gave an emotional speech where he pleaded with his colleagues to vote yes with him. Maybe they will when this bill comes up again... because it will.