I had MSNBC and CNBC on as white noise for much of the day and was somewhat surprised that the markets saw such a sharp drop on the news that the bailout was rejected by the House. I suspected it would be close, but it really wasn’t. In fact, the stock market fell below levels seen at the start of the first term of our president. Television pundits were interpreting the sharp decline as the market’s way of telling us that the bailout, if to be passed, had to be re-jiggered.
Did you notice how any discussion of the housing market problems has been shouted out by congressional bickering?
In reality, the Constitution worked well today and thats why we have elected officials, no matter how much we complain about them. Conventional wisdom says we will have a revised deal within a week, or even less. And perhaps even a better deal. A different proposal is what 56% of taxpayers want.
It’s interesting because Wall Street has got a bad rap because I suspect many Americans lump everyone in the industry in one big pile. Here’s an example: Dot-Com Billionaires are Good, Wall Street Billionaires are Bad. Even CNBC used the term “fatcat” more times today than I could count. The people I know who lost their jobs over the past week were not “fatcats.”
Speaking of “fatcats,” perhaps there is distortion in news accounts that are dramatizing the “anger” that main street is feeling right now against a “bailout.” It’s all how you phrase the question.
And here’s a commentary written before the vote by Edward Leamer, Professor of Economics and Management at the UCLA Anderson School, who sent me this link to his article: Please Think This Over. The article takes issue with the broad powers to be yielded to the US Treasury. In fact, the wording reminded me of the intimidating legal language commonly used in my flirtation with Wall Street last year. My way or the highway.
The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgagerelated assets from any financial institution having its headquarters in the United States. Decisions by the Secretary pursuant to the authority of this Act are nonreviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Wow. It’ll be interesting to see whether Congress is able to rework this. I am getting anxious to talk about housing again, but for now, it’s all about credit and changing that light bulb in my entry foyer. Its also about remembering that this was the day I was born, as many years ago as the contiguous states and yet I don’t feel red or blue.