NY Times reports: bailout fails, market tanks

Truthout has posted this New York Times account of the failure of the bailout and the resulting crash of American stock markets on Monday. As far as I can tell so far, mainstream news sources such as the Times have been treating this as catastrophic news. Many progressive commentators have a different perspective. (More in another post soon.)

The US House voted down the measure 205 in favor to 288 opposed. The bill was supported by 140 Democrats and 65 Republicans, while 133 Republicans and 95 Democrats voted "no." The Dow Jones average fell 777 points for the day.

Supporters of the bill had argued that it was necessary to avoid a collapse of the economic system, a calamity that would drag down not just Wall Street investment houses but possibly the savings and portfolios of millions of Americans. Moreover, supporters argued, a lingering crisis in America could choke off business and consumer loans to a degree that could prompt bank failures in Europe and slow down the global economy.

Opponents said the bill was cobbled together in too much haste and might amount to throwing good money from taxpayers after bad investments from Wall Street gamblers.

Immediately after the vote, many House members appeared stunned. Some Republicans blamed Speaker Nancy Pelosi, Democrat of California, for a speech before the vote that disdained President Bush's economic policies, and did so, in the opinion of the speaker's critics, in too partisan a way.

California Democrat Maxine Waters said passage of the measure was crucial to keeping people in their homes and helping financial institutions survive. Both major party presidential hopefuls had also backed the bill.

But Texas Democrat Lloyd Doggett said that no alternative to the Bush/Paulsen plan had ever been considered. Doggett argued that the plan had been modified very little, and gave sweeping powers to the same administration that allowed the crisis to develop.