Today the House failed to get behind a proposed rescue bill for the financial industry. Some call it a bail-out. Banks have failed. They probably would have failed anyway. At any rate I am hearing that the American people do not want the House Bill. A significant number of Democrats and Republicans would not vote for the Bill. There is probably little disagreement over the inept handling by the Speaker of the House.
What is plan B? Well, the problem seems to be not that the financial markets need seven hundred billion dollars. The problem seems to be uncertainty, or risk. Therefore, if the government can alleviate the risk, the financial markets can rest easy and the proposed disaster can be avoided.
But perhaps that is not what the House majority wants. After all, they proposed a bill and immediately larded it with billions in earmarks. If they were serious, they would have proposed a clean bill with no money in it for Acorn, the suspect political organizers.
But back to risk, which is the underlying problem. If the government were to offer a bill that would alleviate risk, the problem would suddenly become manageable. How to do this? Several people have already proposed such a bill: offer to insure or back the bad mortgages. Some mortgages would have to be declared dead, but many other would not and in any case the financial markets could continue to operate.
Yes, the government might come out ahead with its insurance program as it did with other large programs of offering to backup the finances of a company or a country. It is an idea that the American people might find less offensive.
But, it is a political year in which one party or the other must be seen to save the day, and screw the American people. Those who voted against the House bill today may well turn out to be heroes.
Did you happen to think that today’s bailout bill might have been tossed out by the Supreme Court? After all, it puts too much power in the hands of an unelected official. There is nothing Constitutional about that bill.