Ross discusses possible scenarios following the failure of the bailout. The idea that the House GOP can really be blamed (credited?) with the defeat of the bill seems strange to me. No doubt many people will blame (or credit) the House GOP with defeating it, because far too many on the Democratic side were unwilling to back it without the cover of bipartisanship, but this must be one of the first times I have heard the argument that the minority party in a lower house of the legislature was able to stop a bill when almost a third of its members voted for it. Obviously, if you think passage was imperative and disaster awaits, the majority of House Republicans would deserve severe criticism along with two-fifths of the Democrats, but this apportioning of blame gets something seriously wrong.
Whatever Boehner promised to deliver (and if he promised 80, he was just making it up), anyone following the political news from the outside could have told you that he was going to get maybe 45-50. As it was, he delivered 65, which was a lot more than expected just a day or two ago, and that’s not too bad considering that the Republican conference didn’t hear about the deal from their leaders first before the media were reporting it. Knowing this, which she should have known, Pelosi should not have scheduled a vote for today. The markets would have remained edgy, but nothing significant would have happened one way or the other.
Bringing the bill to the floor when the result was seriously in doubt raised and then brutally dashed expectations, which I imagine contributed to the severity of the decline in the market today. The Speaker determines what happens in the House, and she has to take the bulk of the responsibility for the success or failure of any legislation that she is promoting. This is not the same thing as what the GOP leadership is now saying (“Pelosi was mean, so our members had to vote no!”), and that particular line of nonsense deserves to be mocked. Of course, you can attack the House GOP on the grounds that the bill was actually a good bill and TARP was a good thing to do, but you’ll notice that no one is actually doing that, because even the people crying, “Irresponsible!” know that TARP is a terrible program. Having called it a “terrible precedent” and “the worst possible course of action,” my Scene colleague Jim Manzi chides the House GOP for not going along with something that he cannot defend. This is one of the worst cases of do-somethingism I have ever seen.
I agree with Ezra Klein that we are seeing, in one sense, the “failure of politics” today, but it is not the failure he means. The failure of politics that culminated in the defeat of the bill was the failure of the proponents of the legislation to make an argument that did not rely very heavily on prophecies of disaster. There was no real attempt at persuasion, and the haste in which everything was done generated far more intense opposition than was necessary. The supporters of the bill wanted to ram it through with as little deliberation and scrutiny as possible. On any other issue, on any other bill, this would be seen as outrageous and you would hear about the wisdom of having a lower chamber that was more responsive to the people. Now opposition to this hasty adoption of a bad plan is derided as irresponsible?
Let me break it down for you: if things are indeed as bad as the proponents say, and if they are the responsible, sober voices of wisdom that they pretend to be, the truly irresponsible thing was to wait up until the last weeks before the recess, rush out a terrible plan, demand immediate adoption of this terrible plan (which they were happy to admit in public was a terrible plan) and then not even correctly gauge the level of support for the legislation before bringing it to a vote. Calling the question when there likely wasn’t enough support (as opponents of the bill had said yesterday!), if you believe what these people claim to believe, was an act of brazen recklessness. If they are wrong about the consequences of not adopting this plan, they are merely politically incompetent.
The most amusing reaction to this has come from Kudlow, as he says that he would now abandon his support for the bailout if a more liberal version of the bill were introduced to bring more Democrats along and he would opt instead for recapitalizing banks through the FDIC. That means that there was another way, and one that very few would have balked at supporting. So now Kudlow will switch to advocating one of the main, plausible alternatives to this horrible, awful, dreadful plan, but only if those nefarious Democrats try to change bankruptcy regulations. That’s more than a little confusing, since it was just last week that the version proposed by Frank and Dodd already had those provisions and they were scrubbed in the (obviously futile) effort to get more Republican support, but at no point did those provisions push Kudlow into opposition. Kudlow, of course, endorsed the original Paulson proposal, which was completely indefensible, but if the bill is cluttered up with some liberal vote-buying junk it must now be time for Plan B. That makes you wonder, especially if the GOP leadership believed that Plan A was terrible, why the Kudlows of the world weren’t advocating some form of this Plan B last week. Oh, that’s right–they were too busy pushing capital gains-tax cuts and complaining about ACORN. Remind me again who the responsible people are?
Update: Kling adds:
I see free markets as very much the underdog going forward. But if there is no bailout, then at least markets have a fighting chance. I would want to defeat this particular revolt of the elites, realizing that larger battles probably lie ahead.