Bailout Aftermath

Just a couple quick points:

"From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Obama and Reid, Speaker Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families.

"Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill.

"Just before the vote, when the outcome was still in doubt, Speaker Pelosi gave a strongly worded partisan speech and poisoned the outcome.

"This bill failed because Barack Obama and the Democrats put politics ahead of country."

—McCain-Palin senior policy adviser Doug Holtz-Eakin

While this does hurt McCain, who took drastic measures to get legislation passed before the debate last Friday, it also hurts Obama, who not only failed to get an agreement but also failed to even take an active role.  There's leadership for you.

Anyway, Democrats are blaming Republicans for ruining the bill.  Never mind the fact that the vast majority of the American people (who were paying attention) didn't want it, either.  Also never mind the fact that the Democrats have a majority in the House - they didn't need a single Republican to pass this bill!  If you hear this rant, don't let it slide by, because it's blatant misrepresentation.

Larry Kudlow offers the following report:

A number of Republican House members and staff, along with others who are plugged in, are telling me that Nancy Pelosi and the Democrats will come back with a new bill that includes all the left-wing stuff that was scrubbed from the bill that was defeated today in the House.

As this scenario goes, the House Democrats need 218 votes, and they have to pick up a number of black and Hispanic House members who jumped ship because the Wall Street provisions, in their view, were too benign. So things like the bankruptcy judges setting mortgage terms and rates, the ACORN slush-fund spending, the union proxy for corporate boards, stricter limits on executive compensation, and much larger equity ownership of selling banks through warrants will all find itself back in the new bill. Of course, this scenario will lose more Republican votes. But insiders tell me President Bush will take Secretary Paulson's advice and sign that kind of legislation.

Personally, if this scenario plays out, I would probably withdraw my support for the rescue mission and switch to plan B, which would center on the FDIC and its bank-recapitalization powers. The bank-ownership issue, in particular, could lead to heavy nationalization of America's financial system with a three-house Democratic sweep in November.

I'm not forecasting, because I don't know the next bill's content. And while McCain's polls are heading south, he could still win. But a three-house Dem sweep to implement some off the very onerous provisions being talked about could set up the end of the U.S. financial system as we know it.

As you can see, the battle is not over.  Keep contacting your Reps and urging them to adopt fiscally responsible, free market solutions.

There's my two cents.