The House has rejected the measure 228 (95 Dems, 133 Reps)-205 (140 Dems, 65 Reps).  The market is responding very dramatically.

P.S.  The vote is still open, so the result might change later today.

Update: Rasmussen released poll results today showing that support for the bill had edged up from 24% to 33%, and opposition dropped considerably from 51% to 32%.  That suggests that non-stop fearmongering can drive public opinion pretty easily, which means that the pro-bailout forces might have been able to turn more people around if they had taken more time.  Ironically, had there not been such urgency on the part of pro-bailout folks the bill might very well have passed at a later time.  The fearmongering was working to weaken opposition, even though just as many people were moving into the undecided column as were coming around to support the bailout.  What these numbers fail to reflect is the sheer intensity on the anti-bailout side, which makes the higher levels of support for the bailout less significant.  In this, what has happened today is very much like the immigration revolt: supporters of the “comprehensive” bill were convinced that they had to pass something, the establishment was fully behind it but had no stomach for a real fight, and the opponents–backed by a grassroots revolt–were extremely motivated.  All of the emotional and rhetorical power was on the side of the opponents, while supporters appealed to necessity.  In both cases, the opponents were also right in rejecting the legislation.  Whenever genuine populism appears on the scene–not the phony, blow-dried kind on display at the Republican convention–it often ends up having a better track record than the consensus of the serious people in Washington. 

Viewed simply as a tactical matter, the administration could not have handled this more poorly had they set out to sabotage their own plan.  First, Paulson’s proposal overreached so much that there was no chance Congress would have accepted it as it was, and then Congress was told that it had no choice.  Never tell people that they don’t have a choice, because they will remind you that they do have one even if it means doing things that you think are crazy.  Instead of making any attempt to persuade members of the merits of the plan, supporters gave up on that out of early recognition that it didn’t have any and resorted to bludgeoning opponents with the blunt instrument of fear.  People also respond poorly to this kind of bullying.  Add in some of the Democratic leadership’s holier-than-thou attitude, the GOP leadership’s half-hearted endorsement and McCain’s absurd theatrics, and you have one of the most impressive displays of establishment ineptitude that I can recall.

It has been vexing to find my old support of Ron Paul so starkly at odds with the my later support of Bob Barr.   I admit that I have been discouraged by the falling-out between them and what is admittedly the mistake of Ron Paul in refusing to make a choice several weeks ago rather than offer a blanket endorsement of third-party candidates generally.  In end, despite my reservations about the disorganization inside the Constitution Party and the various state-level efforts to recruit Paul as presidential nominee, all of which reflect the typical confusion and disorder that I have come to expect from my party, I am actually a registered member of the New Mexico affiliate of the Constitution Party.  I had not watched Barr’s running commentary on the presidential debate on Friday, and I only heard his post-debate remarks today.  Give Barr credit–he is talking about providing leadership, and his remarks on Friday have led me to conclude that I will not vote for him in November. 

No doubt he has the support of various Reason folks who refused to defend Ron Paul against the attacks leveled against him when it actually mattered, and he is welcome to that unreliable support.  The main reason for supporting Barr rather than Baldwin in the first place was that Barr would prove to be a more viable candidate and would win more votes than any Libertarian or rightist third-party candidate in recent history.  The objective in supporting Barr was supposed to be that he would provide someone who would unite both Paul-supporting libertarians with cultural conservatives who remembered Barr’s past record and wanted a conservative alternative to McCain.  However, Ron Paul’s endorsement of Baldwin has made clear that the better candidate to support to pursue that end is Chuck Baldwin. 

Considering how recently Barr has endorsed a whole host of libertarian positions, he is no position to lecture anyone about a lack of fidelity to the cause of liberty.  I was willing to overlook much of Barr’s past record on the grounds that he had changed his mind, but through a series of decisions that he made I am no longer inclined to do that.  If I wanted to hear Chuck Baldwin attacked as a theocrat I could find that just as easily on the left.  In the end, Ron Paul retains a great deal more credibility in my eyes than Barr will ever have.  Whatever mistakes he has made this year, I take him far more seriously and his endorsement has more weight with me than anything Barr might say. 

Vote for Chuck Baldwin for President!

I’m as much a limited government guy as the next fellow, but let’s not pretend that we live in some libertarian utopia in which the state has no role in the market. ~Stephen Bainbridge

Of course, that’s just the point.  Bainbridge isn’t as much of a limited government guy as the next fellow if the next follow is Mike Pence or, say, Daniel Larison, and his position on the bailout is the proof.  He thinks that socializing financiers’ risk on the dubious basis that it will avert catastrophe does not significantly compromise his claim to be “as much a limited government guy as the next fellow,” when it necessarily does.  What these people mean when they say this is that limited government is a nice thing to talk about and it is fine to defend when times are good, but when the going gets tough we basically accept that the welfarists and socialists have been right all along, at least up to a point. 

Bainbridge takes comfort in the distinction between principle and ideology, but what conservative principle has ever approved of the concentration of power in one man’s hands that is being vested in the Secretary of the Treasury?  What conservative principle ever celebrated the accumulation of vast amounts of public debt to prop up financial institutions?  This reminds me of the pathetic and servile response of more than a few conservatives to executive power-grabs and unconstitutional surveillance powers.  They would cry out, “The Constitution is not a suicide pact!”  Perhaps not, but I have never quite understood why that required us to euthanize constitutional government.  

Few on the right are more hostile to the perverse appeal to “creative destruction” than I am when it is used to justify de-industrialization, the displacement of people, the transformation of local communities or demographic upheaval through mass immigration, but what we are faced with this week is the victory of Hamiltonian collusion between finance and government to use the latter’s apparatus of power to shore up the former’s wealth.  Central government is robbing the people to prop up concentrated wealth, and claiming in the process that it is doing us a favor.  Never mind that the government’s alarmism may well be wrong. 

People have been cajoled into submission through fear and intimidation, and above all by the threat that life might become less comfortable.  In other words, advocates of the bailout are quite happy to say that liberty has a price and they are very happy to pay it so long as it avoids most of the unpleasantness.  “Give me liberty or give me a comfy retirement!” is not exactly a phrase that will live forever.  Thus an abject abandonment of liberty is here being implausibly dressed up as a defense of liberty.  Burke and Kirk would, I suspect, feel like retching if they had lived to see their understandings of constitutional government and social order used in this way.

It is easy to talk about principle when there is no crisis happening and no risk attached to standing on principle.  The real test comes when holding fast may actually cost something.  Holding to a principle, if it means anything, means that you value it more than mere self-interest, satisfaction or comfort.  A lot of Americans want to have it all–the pretense that they are free, with none of the responsibilities or dangers that go with it.  In reality, you can either have the latter and remain free, or you can cease being free and then be kept free (temporarily) from responsibility and danger. 

Update: Rep. Mary Kaptur (D-OH) is not going down without a fight.

I have to agree for the most part with Gregory Cochran against Dan McCarthy on the questions of Obama’s chances in the Electoral College and trends in the polls.  National and state polls have tended to go in the same direction with each shift in the campaign, and the state polls have followed the changes in the national tracking results.  Cochran is right that Obama’s margin in the national polls points to Democratic success.  In mid-summer, many swing state polls showed an Obama surge consistent with his national polling lead, and during late August and early September the state polls showed the reverse as McCain leap-frogged ahead of Obama on account of Palin enthusiasm.  Ever since 9/15 when the markets tanked after Lehman’s bankruptcy, Obama has been steadily advancing in national and state polling, and Friday’s debate changed nothing here.  McCain-leaning states have started reverting to toss-up status, and existing toss-up and weak Obama states have trended towards Obama.  Just a few weeks ago, McCain had an outright lead in RCP Electoral College projections without toss-up states; today he trails by 65 votes.  There are today fewer reliable McCain-leaning states and more toss-up states that are running away from him, which makes it McCain’s tough hill to climb to reach 270.  His imploding running mate and his chaotic campaigning style do not bode well for the next five weeks.  Unless we assume that Obama has to have a five or six-point lead before Election Day to compensate for a Bradley Effect problem in his polling, Obama is in a comfortable position right now.

Dan is correct that most of the toss-up states vote Republican more often, and the toss-up status of Pennsylvania, Wisconsin and Minnesota remain worrisome for the Democrats, but I would point to a few states where movement towards Obama is significant and offers a clue to what will happen in a little over a month from now.  Colorado has not voted for a Democrat for President since 1992, but it has been more or less solidly in Obama’s column all year.  The state has been trending Democratic for several years, which is also reflected by the strong Mark Udall Senate campaign.  New Mexico and Missouri are bellwether states.  More than other states, they have voted for the winner; New Mexico matches the popular vote percentages with rather eerie regularity.  Right now Missouri is trending away from McCain after many months in his column, and New Mexico has been leaning Democratic for months.  I assumed that the significant presence of military personnel, veterans and Hispanics, plus being a neighboring state, would make New Mexico favorable territory for a military veteran and pro-immigration Arizonan Senator, but it has not been happening. 

Minnesota, Wisconsin and Pennsylvania are all traditionally Democratic states in recent presidential elections, and despite Obama’s relative weakness in rural and small-town Pennsylvania these states are very likely to come back to the Democratic nominee just as traditionally “red” states such as Indiana, North Carolina and Virginia are going to come back to McCain.  Colorado and New Mexico are going to prove to be decisive, as Obama must have them if he cannot win Ohio and Florida (and it is my estimation that he cannot), and McCain bizarrely seems unable to gain sufficient traction in these Southwestern states.  All that Obama needs to win is to hold the Kerry states and keep his leads in Iowa, Colorado and New Mexico.  That seems the most likely scenario. 

If you assign toss-up states to the candidates where they are leading by some small margin, Obama enjoys a commanding lead of 301-237.  Had the financial crisis not struck two weeks ago, things might have been very different, but that is where things are.

Speaking of Dreyfuss’ sputtering disbelief, here was a key passage of his post on the debate:

He checked all the boxes. Barack (“Senator McCain is right”) Obama couldn’t find anything to disagree with the militarist Arizonan about. Support for NATO expansion? Check. Absurd anti-Russian diatribes? Check. Dramatic escalation of the war in Afghanistan? Check. I’m ready to attack Pakistan? Check. (Actually, on this one, McCain was the moderate!) Painful sanctions against Iran, backed up by the threat of force? Check. Blathering about the great threat from Al Qaeda? Check. It went on and on.

He couldn’t find anything to disagree about because McCain and Obama don’t disagree about very much when it comes to foreign policy.  He checked all those boxes because he thinks, or at least seems to think, that these are the right policies.  Of course, I agree with Dreyfuss that pretty much all of this is terrible stuff, but as many loyal Obama backers have pointed out to me over the months I am not exactly his target audience.  It has never made any sense why Obama, who backed the war in Lebanon of all things, has been judged to be a dove or significantly different when it comes to “America’s approach to the world.” 

This is hard for many a progressive, Obamacon and McCain supporter to accept, but it is true.  McCain supporters need to believe that Obama is the next coming of McGovern, because McCain doesn’t have a chance in this election if that isn’t true.  Progressives desperately want to believe that militarism is somehow just the preserve of Republicans and Joe Lieberman.  Obamacons are hoping to find an alternative to insane neoconservative policies.  Obama necessarily disappoints all of them, because he is not what they expected and, more to the point, doesn’t care how they portray him.  If he has united people from The Nation and The American Conservative against him and prompted their withering scorn, he might think that he is in pretty good shape for the general election.

This is why I keep finding it hard to understand why some progressives have responded so negatively to Obama’s performance, which was all right, and why some observers on the right think that Obama was somehow debating on “Republican terms.”  This is a result of either misunderstanding Obama or expecting too much from him.  To borrow a line from Obama himself, if you were surprised by anything he said on Friday about foreign policy you haven’t been paying attention.  To say that Obama debated on Republican terms on Friday is to accept the stereotype of Democrats as the party of McGovern on national security, when we all know that this simply isn’t true anymore, and to agree that Republicans have some monopoly on interventionism when we know that they don’t.

 Instead, she [Palin] went with the common sense position — Obama’s position. ~Yglesias

This just also happens to be the wrong position, and one that McCain did not explicitly reject on Friday.  He said that you shouldn’t talk about it in public, which means that he favors doing stupid, dangerous things in secret.  You have to admire the sort of willful partisanship and obliviousness to Pakistan’s own hostile response to “the common sense position” that makes it possible for progressives to laud an objectively terrible policy just because Obama has endorsed it.  Frankly, I much prefer the sputtering disbelief of Robert Dreyfuss to the embarrassing spinning that Obama’s defenders on the left enjoy doing.  Dreyfuss may be overreacting (after all, what did he expect?), but at least he is willing to acknowledge that there are sane foreign policy views that Obama could have articulated and didn’t.

The inflationary prospects of the bailout price tag may lead to spikes in oil and crop prices that could hit ordinary Americans in their cars and on their kitchen tables. And government purchases of financial assets could ironically further constrain credit through causing write-downs on even the balance sheets of financial firms not participating in the bailout by worsening the effects of mark-to-market accounting rules. ~John Berlau

There are real reasons why the dreaded wordstagflation has started circulating again.  The bailout genuinely increases the chances of recreating such miserable conditions.  The choice before us is not between nasty economic contraction and the sunny uplands of ceaseless growth, but between a normal, painful, but ultimately healthier adjustment or another artificially-induced mess.  This is not to turn around the apocalyptic warnings of the pro-bailout crowd and deploy the same kinds of alarmist arguments, but I do want to stress that there will be real negative economic consequences that will result directly from the implementation of this plan.  The counterargument is that it will stave off a worse danger, but this is very questionable.

Here’s Reihan in Forbesoffering some very positive comments on Luigi Zingales’ restructuring proposal that I mentioned last week.  Reihan:

In a stinging essay, Zingales essentially argued that Paulson was offering welfare to the rich. Rather than pay premium prices for toxic assets, Zingales called for the federal government to craft a restructuring plan that would involve some amount of debt forgiveness or a debt-for-equity swap, saving taxpayers billions and imposing well-deserved financial pain on the reckless creditor who created the mess in the first place.

So why did the GOP go along with such a profoundly flawed approach? If you can think of a better reason than laziness or cowardice, let me know.

Don’t forget stupidity–that’s always a possibility.

Now that there is a bailout deal, the House vote is coming up and there is still reason to think that there may not be enough votes to pass the legislation.  While party leaders have all signed off on the deal, there are enough skeptics from both parties that passage is not guaranteed.  An unusual alliance between the Mike Pences and Dennis Kuciniches of the world is forming.  If it stalls in the House this week, I don’t think anything resembling Paulson’s plan is going to pass later.  The timing of all this is uniquely bad for advocates of the bailout, as there is much greater unwillingness to vote for this bill right before going back to home districts, where opinion seems to be running almost two-to-one against the plan. 

50% are opposed and 24% support the plan in Rasmussen’s latest.  What little support there has been for the plan has actually decreaseddespite the rabid fearmongering of the administration and most of the media.  60% are concerned that the government will do too much, compared to 28% who are concerned the government will do too little.  Near-majorities of both parties oppose the bailout, as does a majority of independents.  51% of investors oppose the plan, and non-investors are equally against it.  Support is slightly greater among high-income respondents, but never reaches even a third of any income group.  Remarkably, the people who have the most reason to oppose the government taking on additional debt, the 18-29 year olds, are most inclined of any group to support the move (36%).  It seems likely that any member voting for this bill will face a nasty backlash.  The absurdly low job approval ratings for Congress and the wrong-track numbers all suggest that populist outrage over this bill will lead to the ousting of many more incumbents from both parties.  Whichever side is perceived as most in favor of the bailout will probably be the one to suffer the most, which could scramble all of the expectations of another big year for Democrats in the House and the Senate. 

Update: More profiles in courage.  This is pathetic evasion by both nominees if they avoid the vote, but it is also pretty smart politically.  Their votes probably aren’t needed in the Senate to pass this anyway if it comes to that, and there is definitely nothing to be gained by voting for it.  It certainly puts their doomsaying in perspective.

Judd Gregg of New Hampshire has been quoted saying, ““If we don’t pass it, we shouldn’t be in Congress.”  Gregg should understand that if they do pass it many of them won’t be in Congress come January.

Second Update: Paul Ryan (R-WI) has flipped and now backs the bill.  That suggests that conservative resistance is crumbling.

Jim Antle replies to my earlier post, and it seems as if we are talking past each other.  My objection was not to the claim that Obama’s positions were nearly identical on most foreign policy questions, but to the idea that he was therefore debating “on Republican terms.”  What makes support for anti-Russian NATO expansion or opposition to Iran’s nuclear program more characteristically Republican when both are thoroughly bipartisan endeavors?  Starting in the mid-’90s, after a brief respite following the end of the Cold War, it has been Republicans who have practiced me-tooism in their hostility to Russia.  The Democrats can lay claim to being the authors of most of the lousy policies that have soured U.S.-Russian relations over the last two decades; Republicans have been imitating them in staking out anti-Russian positions.  While the “brand” of the Democrats may seem to be George McGovern to many conservatives, that hasn’t really been operative for almost twenty years.  To see how far the Democrats have moved away from McGovern, one need only look at the electoral success of a Kucinich in the presidential primaries. 

In postwar America, foreign policy has been debated on the terms of an activist, internationalist consensus that spans both parties.  The one postwar election where a major party nominee seriously challenged that consensus was in 1972, and it has never happened since.  Technically the GOP stood for “rollback” in the ’50s, but fortunately they were just kidding and there was still a strong constituency in the GOP that questioned the need for alliances and deployments overseas.  Starting around 1964 and increasingly through the 1970s and 1980s, the GOP adopted the rhetoric of more aggressive or ‘forward’ policy than the Democrats, but in practice it was Republican administrations that practiced detente and negotiated some of the largest disarmament treaties and the proponents of “containment” who kept getting us into unnecessary foreign wars in Asia.  If there was a bipartisan consensus on anticommunist containment for much of the Cold War, there seems to be even more of one now on maintaining a very active, forward American presence in Europe, various parts of Asia and Latin America.  What differences that do exist are a matter of emphasis and process, not substance.       

Jim writes:

The Democrats never developed a clear response to Republican arguments that the surge was an unambiguous success, they never crafted a coherent alternative in dealing with Iran, and they don’t even have a language to talk about anti-terrorism efforts besides shouting “Afghanistan,”  which was relevant in 2001-03 but is much less so now.

It seems to me that the Democratic response to those arguments has been fairly clear: they don’t think the “surge” was an unambiguous success, because they hold, not that unreasonably, that its results are mixed or at least fall short of the plan’s stated goals.  Whether or not one finds that response persuasive seems to depend a lot on how one conceives of the goals of the “surge.”  They haven’t crafted a coherent alternative in dealing with Iran because they share the same goals as Republicans when it comes to Iran, and there is no coherent policy towards Iran in the first place.  They don’t need a language to talk about antiterrorism, because they simply endorse the administration’s formulation of the “war on terror” and merely want to shift where to locate the “central front.” 

The main point in all of this is that it is not unthinkable that a Democratic nominee holds virtually identical positions on a range of issues as his opponent does, since this is a function of being part of the consensus about America’s role in the world.  What is remarkable is that, to the extent that Obama is willing to deny the wisdom of the Iraq war from its inception, he represents the most significant break with that consensus of any Democratic nominee in the post-Cold War era.  I find that break to be far too small, but I am hard to please.  Compared with the last election, which was the comparison Jim was making, Obama represents the greatest divergence from the consensus we have seen in the last two decades.  I think this holds true whether we are talking about the presidential election in ’04 or the midterms, since the national Democratic leadership in ’06 did not run on a coherent antiwar, pro-withdrawal platform–much to the dismay of antiwar Americans everywhere–but allowed House and Senate candidates to adopt whichever position would best suit their constituencies.  The Democrats got their majority, but were then saddled with dozens of members who would not support withdrawal; the Democrats could not even manage party unity in resisting the introduction of additional forces in ’07.   

To the extent that Obama really is running on a platform of ending the Iraq war (and I think he is, which is different from saying that he will actually end it), that is a significant departure from the stances of national Democratic leaders in ’06 and of the Kerry/Edwards campaign, both of which hoped to capitalize on discontent with Bush’s mismanagement without making firm commitments to get out.  For the non-interventionist voter, Obama’s move is not nearly enough, but it is worth recognizing that Obama has come at least partly out of the defensive crouch on this particular issue, which is far more than can be said for any major Democratic figure since Dean’s candidacy fizzled so quickly four years ago.  It is not how Obama is the same as McCain, but how he is different that is the interesting thing about Friday night’s debate. Post-Cold War Democratic nominees have usually felt the need to mimic Republican tropes of “toughness” and “resolve” in order to be taken seriously, and Obama simply doesn’t feel compelled to do that when it comes to Iraq.  That represents a real change, even if it is not nearly enough of a change.

Jim also says:

On foreign policy, Barack Obama wants to be John McCain without making anybody mad.

But this isn’t really true.  To the extent that Obama wants to reduce the number of soldiers in Iraq and end the war, he is flatly denying a desire to “be John McCain,” for whom both of these things are absolutely unacceptable and who has identified himself completely with the cause of escalation in Iraq.  Obama also doesn’t seem to care whether he makes other people mad (viz. Pakistan).  The distinctive thing about Obama, which is also a very worrisome thing, is that he adopts interventionist positions out of his own support for an expansive American role in the world that is not defined by imitating Republican definitions of national security issues.  On most things he accepts the consensus and is very comfortable with it, but it is because he is comfortable in his own support for American use of force that he feels free to oppose certain instances of using force that he thinks are detrimental to U.S. power.  So, once again, supporting an activist or hegemonic role in the world is not debating on McCain’s terms; one might as well say that McCain is debating on Obama’s terms.

But Obama and a new Labour leader would, almost certainly, push each other in the opposite direction, feeding off each other’s notion that Israel is the roadblock to peace [bold mine-DL].

The dynamics under Obama would be very different. Blair was constantly attacked as Bush’s lapdog. In reality, they acted in concert because they simply agreed on the big picture. A weak Labour leader would, alongside Obama, be far more of a lapdog, with a limp UK foreign policy tugged along by an irresolute president.

The chances are, of course, that a new Labour leader would be a mere caretaker until being turfed out by the Conservatives. But there is little sign that David Cameron would be much different. As his Shadow Foreign Secretary, William Hague joined the anti-Israel bandwagon in 2006, criticising Israel’s “disproportionate” behaviour in Lebanon. And Cameron himself has made a series of worrying speeches, not the least dreadful of which was made on the fifth anniversary of 9/11, in which he argued that recent foreign policy lacked “humility and patience” and that the US and UK viewed the threat from terror in “unrealistic and simplistic” terms. ~Stephen Pollard

Pretty much nothing in this analysis is correct.  We don’t know who will replace Brown, but I would bet a nice steak dinner that his successor as party leader will not adopt a policy towards Israel that is any less supportive in practice than its recent leaders.  However, focusing on this part misses something more important.  If it is true that the next Labour leader will be a wimpy lapdog to Obama, and it might very well be true, it matters very much to know what Obama’s view on Israel is, and there is absolutely no evidence that he thinks that Israel is a roadblock to peace.  Whether he is sucking up to AIPAC or throwing in random “pro-Israel” remarks in his Philadelphia race speech, he constantly refutes and rejects this idea that Israel is a “roadblock” or that Israeli governments have anything to do with the problem.  The hope (or fear) that Obama holds different views is misplaced. 

Funny that Pollard should mention the war in Lebanon.  Apparently how one assesses Israeli actions in that war is the litmus test of “pro-Israel” sentiment; I don’t think supporters of Israel want to define things that way, just as Americans shouldn’t want to define criticism of the Iraq invasion as nothing more than anti-Americanism.  Of course, the Second Lebanon War was disproportionate (and it certainly was if we’re supposed to believe Washington that Russian incursions into Georgia are disproportionate), and Hague and others were right to say so.  Obama, of course, held a position identical to that of Blair in backing up Israeli actions without a hint of criticism, which means that if Labour’s leadership follows Obama it will be as depressingly party-line as Obama is.  There is then the obvious point that criticizing Israel’s disproportionate response in Lebanon has nothing to do with being anti-Israel, and it is quite possible to desire Israel’s welfare and security and criticize stupid military expeditions for that reason.  Recent U.S./U.K. foreign policy has lacked humility and patience, and both governments have handled the terror threat in unrealistic and simplistic ways.  That just seems like common sense, and that’s not always the phrase I associate with David Cameron.  Why it is bad for Israel to have both American and British governments headed by somewhat more sober people is something I do not quite understand.