The Louisiana delegation broke down on whether they faced re-election - McCrery and Melancon voted for it, as McCrery is retiring, and nobody stepped forth to challenge Melancon. Alexander, Boustany, Cazayoux, Jefferson and Scalise, all of whom are facing re-election, voted against it.
Frankly, I don't blame individual Members of Congress for how they voted on this bill. It is clear that something needs to be done, but this bill was not the answer. Nor is the cynical posturing by House Republican Leader ... Rep. Boehnor (R-OH) voted for the bill, and them blamed the House Democrats for the bill's failure.
The majority of the blame goes to President Bush. He told the regulators to take the last eight years off, and look what happened. The Administration also tried to get away with one more boondoggle for their wealthy friends by demanding $700 billion with no oversight and nothing in return for the American taxpayer.
I also blame the House Republicans ... there 202 Republicans in the House, and a mere 65 of them voted for this bill. The politics of this demanded that a significant number of House Republicans back this bill, as the Democrats were not going to pass this bill on their own ... and allow the House Republicans to play politics with the vote over the next 5 weeks.
Further, the House GOP Leader, John Boehner (R-OH) tried to blame a speech by Speaker Nancy Pelosi for the GOP vote against it. Like Pelosi's spokesman said:
"You don't vote on a speech. You vote on a bill."
There's more after the jump ... including why I don't like the bill, as well as discussion of the way forward from here.
I'm not impressed with the 113 page bill that came out of the Congress this weekend. The best one-liner I've seen yet on this montrosity is from Jerome Armstrong over at MyDD:
""We sent a message to Wall Street - the party is over," Nancy Pelosi.
Limiting executive pay: Curbs would be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000.
They also will not be allowed to write new contracts that allow for "golden parachutes" for their top 5 executives if they are fired or the company goes belly up. But the executives' current contracts, which may include golden parachutes, would still stand.
Both McCain and Obama said they wanted to limit executive pay. This doesn't do a damn thing in that regard ... it only curbs the ability of the firms to write off anything above $500,000 on their tax return. As for those golden parachutes ... it only limits new contracts. The current contracts, which almost DEFINITELY contain those golden parachutes would still be allowed!
The Financial Stability Oversight Board would be charged with ensuring the policies implemented protect taxpayers and are in the economic interests of the United States. It will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director, the Housing and Urban Development secretary and the Treasury secretary.
This is letting the fox guard the henhouse, folks. The people overseeing the bailout are the same folks who got us into this mess by NOT providing oversight in the first place! Are ya kiddin' me?!
But seriously, something needs to be done. Right now, only the housing market and the stock market are facing stormy seas. But the confidence level in the markets is dropping fast, as shown by the fact that the Dow is down by 400 as I write this. But the $700 billion bailout was NOT the way to do it. That high number, pulled out of thin air, scared the bejesus out of most Americans. And the fact that the original bill didn't have any equity stakes in the companies we, the American taxpayer, bail out, effectively killed the deal, as Americans have called into their Members of Congress screaming bloody murder if they voted for this bill.
The bill as is cannot pass. Here are some alternative ideas to handing over $700 billion to the culprits:
Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
But putting myself in Barney Frank or Nancy Pelosi's shoes, I'd look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms - basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary. That's what the plan should have looked like.
I agree with the above links, as they take the pound of flesh from the culprits in this mess - the banks. This is what the Democrats ought to do ... write a bill along these lines, and put it up for a vote. Let the House Republicans own this mess.
For even more background info in plain English, go here.
