News events today managed to totally overshadow the post that I worked on this morning. I was going to discuss the moral component of some of the elements of the bailout package – expecting fully that it would pass. I was surprised to see that it did not pass.
Then, the stock market tanked, and people began pointing fingers of blame. The people in favor of the proposal started to look at who they could blame for the failure to get a majority of the House of Representatives to vote for this package.
Some people said that it was House Speaker Nancy Pelosi's fault for giving a highly partisan speech condemning the Republicans for this mess just before the vote was taken – causing a number of Republican representatives to bolt. Some people blame Republicans, who are trying to hold the nation's economy hostage until they can get approval for a reduction in the capital gains tax.
(See, New York Times, Transcript of Nancy Pelosi's Speech)
As somebody who argues for direct responsibility, I hold the 228 representatives who voted against this bill morally responsible for their own actions. They acted on their own volition and for their own reasons. Blaming Pelosi for their vote means arguing that those Republicans are mere robots, that they have no volition or will of their own (and thus no moral responsibility).
I might say something to my neighbor that makes him angry. Let's assume that he gets angry, gets in his car, and drives off. Driving angry, he makes an erratic turn and gets in a wreck.
That accident would not be my fault. It is the fault of the person who decided to drive erratically. The actions he took after he left were his choice, and they were his responsibility.
If a group of representatives leave a speech by Pelosi angry, and decide to wreck the economy, Pelosi is no more responsible for that wreck than I would be for the accident that the neighbor caused while driving away from our verbal fight. Those Republicans are morally responsible for their vote. And if they recklessly, or perhaps intentionally, sought to wreck the economy as a result of a patty dispute with Pelosi, than they are morally culpable.
There are Americans who have been treated far worse than those Republican representatives were treated by this country. Yet, when the country called upon them to stand up for its defense, they were there. There were blacks, segregated at home and under a constant threat of lynching, who nonetheless joined the black units that were being formed to fight in World War II. The same is true of Japanese Americans, whose property was taken from them and whose families were locked in concentration camps.
A lot of them did not abandon the country as a result of maltreatment.
Pelosi did not threaten Republicans with lynching or lock their families in concentration camps. She cast blame for the economic crisis. Yet, if the stories are true, some Republicans saw this as good enough reason to abandon the country. What type patriots are these?
As it turns out, we have reason not to believe the story. We have 228 representatives who disagree with that position. They think that voting against the proposal was a good thing. Even after the voting started, and representatives knew that the bill would fail without switching one’s vote, representatives did not change their vote. Whether their reasons were good or bad, they voted down the proposal. At worst, only a small portion of them were willing to destroy the country to satisfy their ego. The rest of them had other reasons for rejecting this bill.
Maybe it was a bad bill. Maybe those who rejected it were right. Maybe it is not a finger of blame that we should be pointing at those who rejected the proposal, but the finger of credit.
As it stands now, the story we are getting through the Press is that 228 representatives hate and are out to destroy America, and "Why didn't this or that leader do something to contain this threat to our country?" Another alternative exists – that those who voted against this legislation were the ones out to protect this country from decisions made in haste that would have been potentially disastrous.
I am not passing judgment one way or the other, because I do not know enough to have a sound opinion on who was right and who was wrong. I have posted a letter from a group of economists who said that we do not have to rush into things – that we have time. Maybe this is what some of those representatives were voting for. They were not voting against the proposal, they were only voting in favor of taking a few more days to think about what its implications are.
The stock market tanked.
This could be a result of the rats abandoning a sinking ship. It could also be the case that Bush's attempt to frighten the nation into giving him what he wanted backfired. Bush went on the air to tell us that our economic days were numbered unless this bill gets passed. He gave a speech that was the economic version of, "We do not want the evidence that Saddam Hussein has weapons of mass destruction to be a mushroom cloud." And, when some people called his bluff, those who were most prone to fear panicked and ran out of the stock market.
Bush's speech to the nation last week seemed designed to create financial panic in the markets if the bill should fail.
More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.
Compare this to Franklin Roosevelt’s speech when the country faced the Great Depression.
So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself -- nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life, a leadership of frankness and of vigor has met with that understanding and support of the people themselves which is essential to victory. And I am convinced that you will again give that support to leadership in these critical days.
If Bush’s speech was not design to create a panic if the legislation did not pass, it certainly fed that panic, and likely contributed to a drop in market prices (and an excessive degree of anxiety on the part of the people of this country). It is within the realm of possibility that the stock market failure had nothing to do with problems with the economy, but with the direction that the Bush Administration was leading the people – into a state of panic and fear.
I am the first to admit that I do not know enough on this issue to make sound economic policy. However, I can look at some of the arguments being used to address the current situation and the validity of those arguments.
We have a large number of legislators who intentionally voted against this legislation. It is unreasonable to believe that they were the enemy. They obviously thought that not voting for the legislation was the right thing to do. We should not be assuming that the right thing to do was to pass this legislation and any option other than that is unacceptable. We have reason to ask these people why they took the course of action they did, and to see if it makes any sense.