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WORLD> Govt Reaction
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Wall Street crisis: another inconvenient truth, the vote
By Xin Lian (Chinadaily.com.cn)
Updated: 2008-11-28 11:41 September 25th was a terrible day for Treasury Secretary Paulson. That morning, top lawmakers from both houses held a two-hour closed-door meeting debating Paulson's rescue package, the biggest market intervention plan since the Depression. The Wall Street woes were already being felt by American economy and the world as a whole. This 3-page plan seemed to be a last-ditch effort that Paulson and President Bush were counting on. After the morning session, a consensus was reached in principle and Paulson was hopeful that his rescue plan would pass the House and Senate. However, a few hours later the glimmer of hope was gone. Talks fell apart after a showdown at the White House by President Bush, Congressional leaders and the presidential candidates. The afternoon session was anything but amicable. Conservatives staged a revolt against the huge spending and extensive intervention into the private sector. Republicans even proposed an alternative program. The debate was going nowhere. House Speaker Nancy Pelosi exited the meeting room livid. The President supported the plan, so did the majority of the Democrats, but the Republicans were undoing their efforts. This would be inconceivable under the Representative Government in Europe. Maybe Paulson was lamenting that there was no American leader like Deng Xiaoping. In his South China tour in early 1992, Deng said: "It was my idea to discourage contention, so as to have more time for action. Once disputes begin, they complicate matters and waste a lot of time. As a result, nothing is accomplished." The "non-contention" approach is exactly what America needs during a crisis. Deng also said: "Developing is an unyielding principle." Only by stabilizing the financial market can American real economy remain healthy. However, in the American political landscape, no one appreciated the unyielding principle and there was no room for the "non-contention" approach. To ease the tension, Paulson knelt before House Speaker Nancy Pelosi to plea for her support for the plan. "I didn't know you were Catholic," Ms. Pelosi joked, "It's not me blowing this up, it's the Republicans." September 29th, House of the Representatives Paulson's plan, which started out less than three pages long, quickly expanded into more than 100 pages as the Emergency Economic Stabilization Act, subject to the scrutiny of lawmakers. Early that morning, President Bush had made a televised speech and called on naysayers to agree on the bailout package. Legendary investor Warren Buffett joined his effort and warned Congressional heavyweights of "the biggest financial meltdown in American history" if they did not act to secure the financial system. Paulson didn't seem to be much concerned as leaders of both parties had reached consensus. It was believed that the battered market provided every reason for the bill to pass. The deliberation and voting of the bill was held at the opening of the stock market, a timing designed to give the market a shot in the arm. At 8:00 am, lawmakers began their interplay on saving the US financial market and safeguarding taxpayers' interests. At 13：28 pm, the voting began. 433 lawmakers all knew that suspension of the rescue package might destroy the US economy. But their constituents were furious. "Why should we pick up the pieces for those fat cats on the Wall Street? This is the biggest robbery in the American history!" Voters hostile to the deal deluged Capitol Hill with emails and phone calls, threatening to oust the lawmakers who voted for the bill. The careers of the lawmakers were at stake. As announced before the meeting, House Speaker Nancy Pelosi, House Financial Services Committee Chairman Barney Frank and House Majority Leader Steny Hoyer voted for the bill. Some Conservatives, populists and senators facing tough races sided with their constituents and said no to the bill. Between these 2 extremes, there were others yet to cast the vote, speculating which side would gain the whip hand. They might be scheming, "how great it will be if the bill passes and the people see me cast the "no" vote from the tally." At first, the favorite votes quickly got into the lead to the extent that people thought the bill would pass handily. Wall Street traders who were tracking the tally on television began to buy in, sending up the index. Assured of the bill's passage, the swaying lawmakers sided with their constituents and said "no" to the bill. As a result, "no" votes quickly caught up and even seemed to take over. The stock market declined accordingly, leaving traders and Paulson baffled. Seeing the latest twist, a few lawmakers cast the "yes" vote. |
