Politically the place a lot of members of the House of Representatives probably wanted to be yesterday was voting against the Paulson plan but it passing anyway. There is little public enthusiasm for bailing out Wall Street, both Obama and McCain are now making a concerted effort to call it a rescue plan not a bailout. Oddly enough if the plan passes and works it will become more unpopular as people will say that the crisis really wasn’t bad enough to justify this kind of measure.
But House Republicans, two thirds of whom voted against the bill, now have a different problem: if everything does collapse, they’ll be the ones to cop the blame. So, it is in their interests now to pass a slightly better bill. They can claim to have improved it and still pulled the economy back from the brink.
Politicians on all sides have been staggeringly inept during this current crisis. Paulson’s attempt to railroad Congress was predictably going to get people’s hackles up at the other end of Pennsylvania Avenue, the Democrats tried to play the blame game beforehand not afterwards and the House Republican leadership’s whipping operation turns out to not know what its members are thinking. We wait to see if they can now finally step up to the plate. If they can’t, we could see a stock market drop which wipes out today’s rally and then some.
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