Bailout Rejected!

The overpriced $700 billion bailout bill? It didn’t pass the House! A coalition of conservative Republicans and liberal Democrats refused to grant the government extra ordinary powers to buy up distressed loans. Opponents said the package granted the U.S. government too much power and was beyond the cost the government should pay to address the worldwide financial crisis. They ignored President Bush and congressional leaders of both parties who said that the economy could nosedive into a recession without it. As the House debate continued all morning Monday, opponents were skeptical that the bailout would staunch the financial bleeding. A member of the house said "We're flipping coins here,"."What happens if this goes down today — the markets tank and you are an accessory to the crime? But what happens if you vote 'yes' and the market tanks anyway?" The vote went 228-205 against, with 95 Democrats and 133 Republicans opposing the Paulson/Dodd/Frank/Pelosi/Blunt plan. With one member not voting. Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor. The Dow Jones Industrial Average fell by more than 700 points at one point as the outcome became clear. After the vote, the Dow remained down by more than 550 points. The Dow is self-destructing. So what now?

It might go back to another vote. According to some people something doesn’t smell right. That’s because usually votes don't go to the floor of the house until party leaders know how the rank and file will vote. Bills don't make it out of committee unless they're going to pass. Some are suggesting that Pelosi lost control of her own party, that this was entirely too volatile and rushed or that Boehner lied to her about how many House Republicans would just go with it.

Due to the upcoming Jewish holiday of Rosh Hashanah nothing will get done until Wednesday. There are 43 Jewish congressman, almost all of them Democrats. Barney Frank stated “It's a well-known rule; God will only hear your prayers if you're in your congressional district." So yeah nothing is getting done until Wednesday. When asked about the next step, Financial Services Chairman Barney Frank (D-Mass.) said it would be up to those who opposed the bill." Whoa what a mess!

"I feel that it is too much bailout and not enough workout," said Rep. Jeb Hensarling, R-Texas.

On the opposite end of the ideological spectrum, liberal Democrat Lloyd Doggett of Texas called the bill too generous to the nation's financial kingpins. "The vultures have no come home to roost," he said.

"It's like a big cowpie with a little bit of marshmallow inside and I don't want to eat the cowpie," said Rep. Louie Gohmert, R-Texas.

The next six weeks will tell whether the coup d'etat in the House on Monday has created a political crisis to match the financial one.

Why can't the government simply loan these institutions the money, with interest? Why can't we just let the financial industry go bankrupt and establish a government commercial lending institutions? Why can’t the government just replace WaMu, AIG, etc.?