I’ll be the first to admit that I don’t know enough about economics to have an expert opinion about whether or not the failure of today’s bailout bill to pass was a good thing, long-term. But I think the largest single-day drop in the stock market speaks cleary to the short-term effect.
Some kind of bailout bill will get passed– must get passed– sometime in the next few weeks, and maybe it’ll be worth the delay if the bill that passes is significantly better than the one offered today. My question is, how many Republicans voted against the bill based on negotiable specifics, and how many voted nay based on ideological posturing– not wanting to interfere in the free markets now or ever? For the latter group, those worried about reelection and preserving their records as fiscal conservatives, those who fear that support of what is and will be characterized by future opponents as the biggest government handout in American history will damage their career, that group is in for a rude awakening.
The American public may currently be split on the $700 billion bailout in principle, but all academic discussion by mostly non-expert observers (which probably describes 90% of the public, myself included) is about to give way to very practical concerns. What today’s stock market– is it too soon to use the term?– crash means is in practical terms is that any American who is in retirement or anywhere near it just got their plans changed in a very big, very tangible way. As the U.S. stock market continues to slide this week, and the world markets respond in kind, support for government intervention will grow rapidly.
At some point soon, the ideological conservatives who are blocking this bill– and it’s still unclear how many of the 60% of Republicans who voted against did so on principle– will be seen for what they are: zealots. People who are willing to put their Hallmark card mantras (Less government!) and political futures ahead of the practical wishes of their own party’s leadership and the economic survival of the people they were elected to represent.
POST SCRIPT: Andrew Sullivan asks a great question. Now that the economic crisis is considerably worse this week than it was last, now that strong congressional leadership is more necessary now than ever, will John McCain suspend his campaign again to deal with it?
The obvious answer is no, because the suspension of McCain’s campaign had in reality nothing to do with the economic crisis, it had to do with his own political crisis. Since the stunt didn’t work the first time, and arguably made things worse, it’s unlikely to be repeated.