"Historic Abdication"

From the WSJ: The Beltway Crash, in which, it is posited, everyone is a schmuck.

The majority party is responsible for assembling a majority vote, and Speaker Nancy Pelosi failed in that fundamental task.

Her highly partisan speech on the floor -- blaming "right-wing ideology of anything goes, no supervision, no discipline, no regulation" for the financial distress -- is no excuse for Republicans to vote no. But it is indicative of the way she has governed for the past two years -- like Tom DeLay without the charm. The cynics are saying Ms. Pelosi deliberately tanked the bill by giving 95 Democrats a pass, knowing failure would hurt John McCain, and given her track record we can see why people would believe it.

I do believe it. No one is that stupid, ergo it was a choice.


House Republicans share the blame, and not only because they opposed the bill by about two-to-one, 133-65. Their immediate response was to say that many of their Members turned against the bill at the last minute because Ms. Pelosi gave her nasty speech. So they are saying that Republicans chose to oppose something they think is in the national interest merely because of a partisan slight. Thank heaven these guys weren't at Valley Forge.

Well...it was stupid for them to put it that way, but as Rove tells us in the post below, it's slightly more complicated. It wasn't that she hurt their feelings, it was that for all those folks in vulnerable races, there was a choice between the bailout and keeping their seats. So... you come to the floor and see five major Democratic committee chairmen spared that choice, and indeed 95 Democrats spared that choice, and they wonder... is it really the end of America if no Democrats think so? I don't need to save Nancy Pelosi if her own party doesn't need to. I'm voting to save my seat.

Paulson doesn't come out shining:

The vote is also a rebuke for Treasury Secretary Hank Paulson, who could barely explain how his securities auctions would work even as he showed disdain for House Republicans. President Bush [not a schmuck! --ed] did his best to provide cover for the Members, but he is a spent political force. One GOP Member who supported the bill told us that before Mr. Paulson spoke to House Republicans last week, the whip count in favor was about 70; afterwards, it was closer to 20. You can't ask Congress for $700 billion without more modesty and a better explanation for how it would be used.

Then the Journalistas get biting:

Given this historic abdication, we're surprised financial markets didn't melt down more than they did yesterday. Equities nonetheless took the worst bath in percentage terms since the aftermath of 9/11, with the Nasdaq falling more than 9%. But that was a sideshow compared to the credit markets, which staged another flight from all risk. The three-month Treasury yield had sunk to 0.132% the last we checked, which means investors will accept essentially no return as long as they can avoid further financial losses.

Safe in their think-tanks, some of our friends have claimed that talk of a financial crash is merely a political invention. Perhaps we'll now test their theory. A financial panic isn't an academic seminar, and a flight from all risk isn't something any free-marketeer should want. A recession now seems certain, as falling commodity prices are telling us, but the point is to prevent systemic financial collapse. Maybe the Members who voted "no" figure at least they'd still have jobs.

There follow a few Plan B ideas, for which you're on your own.

Mark Steyn, meanwhile, is a crash skeptic. I have no idea --I allowed myself to be persuaded by Thomas Sowell-- but I must say for once I think Steyn's argument is weak. Does it follow that because the usual suspects are spinning the crisis (to say that capitalism is bad) that there is no crisis?

I share Steyn's skepticism of precipitous action, but why does everyone with any actual expertise say we really are on a precipice?

See also Dean Barnett on the political fallout. I think McCain probably lost the election yesterday barring something unforeseen. The Reid/Pelosi rope-a-dope has worked brilliantly these past 72 hours.

And Robert T. Miller on why supporting the bailout was the Conservative thing to do.