I am not much better an economist this week than I was last, but I think I have made some observations about the political climate. Forgetting about the economics, there are clear political reasons why this bailout or loan or whatever you want to call it may never gain any traction:
All members of the house are elected every two years. In essence their job has evolved into one of constantly running for office. Would you, as a house member of either party, want to go home and campaign for the the upcoming election with a Yes voted recorded on this bill that is receiving constituent mail running 100 to 1 against? There are members who reside in bulletproof districts, but how many?
Only one third of the senate is elected every two years, and it is much more difficult to unseat a current senator, so they have less to worry about concerning their voting record. However, this measure is so toxic to so many, even senators might have to consider what their constituents are saying.
It is unclear who are the real opinion shapers concerning this issue. Cable channel talking heads seem to be increasingly won over to the to the “Sky is Falling” view, but they still drag in the occasional Ivy League economist who says the market, given time, will correct itself. And since this is uncharted water, an “expert” is a guy in a suit from out of town. We foot soldiers have no idea what is going on. I doubt that even the Secretary of the Treasury would claim strong understanding or clairvoyant ability.
So can the talking heads convince us this drastic measure is needed. I don’t know. Can the President or Vice President do so? I think the answer to that is no. Can the presidential candidates deliver the needed votes? I think Obama can deliver some, but he will not be able to deliver all the Democrats because they are not going to vote for this treasury busting bill unless Republicans will drink the hemlock with them. I don’t think McCain can deliver many votes, and there is a question about whether he wants to even though he did seem to ride off to Washington to do something. I am not sure what if anything he did.
How is the voting process going to work? I think this is the way it will go in the House. A large opaque bowl will be placed above eye level on a column. Inside will be an equal amount of blue and red chips that add up to the number of house members present to vote. Members will each draw one chip. If you get a red chip you have to vote for the bailout. If blue you vote no. If you actually want to vote for it, you can skip the drawing and do so.
If a bill comes out of the House, I think the Senate will pass it and the President will sign it.