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The House of Representatives defeated the Administration's proposed bailout/buyout plan by 205-228.
In the few minutes after the vote, the Dow Jones Industrial Average fell 700 points. After attempting a recovery, it fell again in the last hour and closed on the biggest closing downticks (i.e. the size of the drop between the next to the last trade of the day and the last, closing, trade of the day) that I've seen in 21 years of trading, closing down 777 points. (It looked like it was down about 615 points a few minutes AFTER the bell rang!)
You can bet that the talking heads on TV, Democrats everywhere, and even some Republicans will try to blame House Republicans for putting politics over the well-being of the American public. But the truth is just the opposite.
The House Republicans understand that taxpayers are not as stupid as the rest of our government thinks. Yes, the average person may believe incorrectly that this is a bailout of Wall Street, which it isn't. But he or she also knows that this is the biggest, most expensive expansion of the government into our economy since the New Deal.
In my view, despite what the market is doing now, the House Republicans are heroes...so far. It's just a question of what gets done next.
My guess is that the House Republicans extract some substantial changes to the plan, making the outlay of taxpayer money smaller, and focusing more on rule and structural changes, trying to let the market work rather than just adding taxpayer money on top of a massive failure of GOVERNMENT, not of the market.
The Democrats have given us proof as to why this measure should not be passed. They tried to include funding for a corrupt socialist organization in the original bill. They tried to get money and power to unions indirectly that same way.
The Democrats sent 8 negotiators to a meeting with Paulson when he explicitly asked for two members of each party. The Republicans sent one Senator and one Representative.
In one of the most stupid moves of her political career, Nancy Pelosi called Republicans "unpatriotic" for not going to meetings when even a House Democrat said that House Republicans were not consulted enough in the process.
The House Republicans are heroes today. Now they must make sure to defend themselves against the slings and arrows of ignorant or biased (or most likely both) media reports and Democrat press conferences.
They will probably look to enact substantial changes in the bill, changes which will make the bailout smarter, smaller, more effective, and much better for America and Americans in the long run.
Congratulations to the House GOP for standing up against this massive increase in the size, cost, and intrusiveness of government.