Bailout falls at House hurdle ÔÇô what happens now?

All things shall pass, the saying goes, unless, perhaps, you are a Republican Congressman voting on the Emergency Economic Stabilization Act of 2008.  ┬á In a quite unexpected turnaround yesterday, the US House of Representatives rejected by 228 votes to 205 the $700 billion rescue package that the top brains from the Treasury, the Federal Reserve, the administration and both political parties had spent the latter half of last week and the whole weekend thrashing into a workable compromise.┬á┬á It was a shocking decision, in more ways than one. Members of Congress chose to reject a bill which their seniors insisted was essential to the stability of the US financial systemÔÇöand by extension that of the entire world. ┬á┬á The deep resentment of Congressmen from both parties had been widely publicized in the days leading up to the revolt. Representatives railed at being railroaded into acceptance of the deal, and were afraid of the backlash of public anger at the November polls, but hardly a soul expected this to translate into outright rejection of the bill.┬á┬á This decision says as much about the current state of politics as it does about the reckless way our financial institutions have been run.┬á┬á Congressmen have now been caught between the rock of White House pressure and the hard place created by criticism of the scheme from ordinary voters back homeÔÇö and the upcoming election is too close to expect the publicÔÇÖs memory to have faded before the ballot box beckons. ┬á┬á So, when you have the fate of the worldÔÇÖs financial system in your hands, and a threat to your own career at the same time, what do you do? You look after No. 1.┬á┬á President Bush, it seems, in the lame duck stage of his presidency, did not have the political clout (for which, read, incentives to offer) to overcome RepresentativesÔÇÖ fears for their livelihoods.┬á┬á Despite the concerted efforts of the countryÔÇÖs most senior figures, the public could not be persuaded that the rescue plan was in the interests of homeowners and borrowers around the world, rather than a bailout for greedy, incompetent fat cats on Wall Street.┬á┬á In spite of their doubts, a majority of House Democrats did back the bill, but many Republicans saw the measure as un-American, turning the basic rules of capitalism upside down and inside out. ┬á┬á Some Republicans were allegedly prepared to vote "yes" until Speaker Nancy Pelosi laid into the ethos of their partyÔÇÖs economics, which prompted them to change their minds at the very last minute. ┬á┬á Unfortunate though PelosiÔÇÖs remarks might have been at a time when all serious minds are calling for bi-partisan cooperation, the public surely cannot be impressed by elected Representatives willing to plunge their country's financial system into chaos in a fit of pique. ┬á┬á So, what happens now? The short answer is that the Bush administration and the party leaders must do it all again and hope they can persuade everyone how important this is. Concessions may have to be offered to individual members to turn them around, but it clearly cannot turn its back on the issue. ┬á┬á The government must continue to behave like a rock. Work must be done to secure the support of Congress, but perhaps the most important issue is to sell the plan first to the public, to soften the hard place the Representatives find so uncomfortable. ┬á┬á Wall Street shares plunged at yesterdayÔÇÖs news, suffering their biggest ever daily points fall of 770 points. But thatÔÇÖs Wall Street, again. Why should Main St. care? ┬á┬á We all hope the public can begin to understand this crisis before it hits them in their own back yardsÔÇöif they still have a back yard by then.  ┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á