A bad day for Wall Street, but a good day for Democracy...

What are we to make of the Congressional rejection of the Paulson proposal? The politics is simple: elections are a rare moment of accountability in our political process, and all 435 members of the House of Representatives are up for re-election in a matter of weeks. The Bush administration has lost the confidence of the American people, and so has Wall Street. 

Those who created the problem are now the doctors offering the prescriptions. A little while ago we were told everything was fine. Then, less than six months ago, we were told that the economy was on the mend. Now we are told the patient needs a massive transfusion; but everyone can see that the patient is suffering from internal bleeding - in California, the number of foreclosures may already be outpacing voluntary sales. Yet nothing is being done to stem the haemorrhaging. 

While the president says the economy faces the risk of economic meltdown, he threatens to veto a stimulus package that would create jobs - and he seems particularly adamant about a stimulus package that includes improved unemployment benefits. Traditionally, this is done when there is a threat of an economic downturn; if the downturn doesn't materialise, it doesn't cost anything. And while the administration and Wall Street promise this is just a temporary loan, not a bail-out, there was strong opposition to making the financial industry pay for any losses. Why would that be, if they are so sure that there won't be losses? More...

See also:

• Yesterday was one of the worst days in decades for the power elite....
• Here's 10cc and the Wall Street Shuffle...
• Bail-out: House gives Wall Street the finger...
• Wall Street and running home to mama... (Must see)
• What nobody's saying: the bailout will kill the dollar...