The Bush presidency is ending in the chaos that so many people predicted it would. The US administration’s failure to get the $700-billion financial rescue through US House of Representatives is symbolic of its failure in so many other spheres. But it is not just President Bush and his team who are going to be labeled as catastrophically incompetent as a result of the astounding House vote. The failure of the bill shows just how wide is the gulf between the political elite in the USA, both Democrat and Republican, and the American public.
The package had the support of the President Bush, of the leaders of both parties in the House and of the two presidential candidates, Sen. Barack Obama and Sen. John McCain. Yet still it failed. It did so because it was seen by a hostile American public as potentially a blank check to a banking industry that has been greedy, irresponsible and incompetent. A sufficient number of representatives, Republican and Democrat, sensed the mood and voted accordingly. With just weeks to go to the general elections, they knew that to go along with it, as it stood, would have been electoral suicide.
It was a suspect package. Firstly, it was that worst of political decisions -a knee-jerk reaction, in this case based on the premise that unless something massive was done, the American economy and the world economy would go down the drain. Bankers desperate for a bailout, eagerly spread the message and the politicians, always keen for instant fixes, went along with it. But that premise has to be questioned. There is a crisis, but it is not terminal; the markets will recover soon enough. Indeed, the way the Asian market rebounded after an initial fall following the bill being voted down and then yesterday the remarkable rises on the European and the US exchanges suggest that the market can survive without such a massive bailout.
Secondly, no one really seemed to know what the package would involve. There were no guarantees of future controls on the banking industry or that, at the end of the day, the banks would pay for their mistakes. After the difficult-to-understand causes of the crisis, the American public wanted clear-cut answers. They certainly were not convinced by the implausible claims by House Speaker Nancy Pelosi and others that the provisions added by Congress to the bailout would protect taxpayers from having to pay for it.
She may well end up as one as the most prominent political victims of the crisis. (President Bush is already on his way out.) The way she tried to make party gain out of the crisis just as the House was about to vote probably did not sway any Republicans one way or the other, despite their claiming so now, but it was highly irresponsible given that the bill was a joint effort and that she wanted it passed. She is certainly in no position to blame Republicans for its failure; 95 Democrats also voted against. All it needed was nine of them to have changed sides and the bill would have succeeded. The Democrats control the House and she supposedly controls them. But if her future is now in question, so too must be those of others. The bill’s collapse and the subsequent bitter recriminations will powerfully reinforce the American public’s view (never far from the surface) that their politicians are, on the whole, incompetent and not to be trusted. That may well play into Sen. Obama’s hands with his call for change and a break with Washington’s self-serving elites. Certainly this is now a full-blooded political crisis and, even if a salvaged bill is passed, it is inconceivable that it will not affect the elections — just as the Iran hostage crisis affected the 1980 election and brought about President Carter’s defeat.
