Where Do We Go From Here?

I believe it was Ronald Reagan who noted that the question was not whether his policies were popular; the question was whether the effects of his policies were popular. He was proved right when the media stopped talking about “Reaganomics” once it became clear that his administration’s economic policies had been spectacularly successful.

Members of the House of Representatives report that phone calls and emails coming in to their offices have run as much as 1,000 to 1 against the financial bailout proposal. In both parties, it was essentially the members who face tough re-election campaigns who voted “No” today. That vote was popular; whether its effects will be popular remains to be seen.

A great many knowledgeable people have warned that unless something like the proposed bailout is done, the result will be disastrous for the broader economy. For the first time in my lifetime, serious people are talking about the possibility of a depression. The credit problem is world-wide. If there is a competing school of thought, a view that the credit crisis isn’t so bad or will take care of itself without great damage being done, I haven’t seen it articulated.

Many of those who voted against the compromise proposal today acknowledge that something needs to be done. No doubt politicians are huddling all across Washington, trying to come up with new proposals. Mike Pence spoke against the bill today, saying “there are alternatives to massive federal spending.” He argued that the House should adopt the Republican plan that included an insurance program, “fast-acting tax strategies,” and temporary reduction of the repatriation tax.

But the Republicans are a minority in the House. They were able to get an insurance program included in the bill that was voted down today, even though Pence said that it “falls far short of the substitute that Republicans desired.” But the Republican negotiators no doubt did the best that they could. Does anyone seriously believe that the Democratic House will now turn around and adopt the Republican proposal?

Given the extent to which the bill was modified over the weekend, it is hard to believe that many of those who voted “No” are holding out for a few more tweaks. Presumably they are opposed to any sort of bailout on principle.

Today, that is a popular policy. Whether its effects will be popular is not so clear. Today’s nosedive in the stock market was not reassuring. It may be that by November, Congressmen will not be so eager to remind voters of their “No” vote today.

PAUL adds: Among the House conservatives who voted “Yes” were Blunt, Boehner, Cantor, Kline, Lungren, Ryan, Tancredo, and Weldon. So there’s a conservative case for voting in favor of this legislation — basically the one that John and Bill Otis have made on this blog. There’s also a conservative case for voting “No,” and I respect those conservatives who did so. But under the circumstances — including the prospect that the Dems will pass significantly worse bailout legislation down the road — I think the conservative vote today should have been “Yes.”

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