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bMighty vs. Bernanke -- Senate EditionbMighty vs. Bernanke -- Senate Edition

So the Senate actually <em>passes </em>a revised version of the $700B bailout bill that the House rejected, and the market tanks 348 points. What exactly is going on here?

Fredric Paul

October 2, 2008

2 Min Read

So the Senate actually passes a revised version of the $700B bailout bill that the House rejected, and the market tanks 348 points. What exactly is going on here?The rANT is getting increasingly confused and upset.

First, the Democrat and Republican House leadership and still-president Bush agree on a ginormous bailout bill that nobody likes, but appears necessary. Then it's torpedoed by some rank and file congressman who seem to like it less than everyone else, and market plummets almost 800 points. So they Senate rides to the rescue with a new bill -- basically the same thing augmented with a slathering of pork to make it go down easier. The New York Times called them "politically enticing provisions bootstrapped to the original bill  including $150 billion in tax breaks for individuals and businesses." Much of it is unrelated to the issue at hand, for example a provision to require insurers to treat mental health conditions more like general health problems. A good idea perhaps, but The rANT doesn't see the relevance here. The Senate version passes, but the market takes another massive dive. That's partly due to other bad economic news, but jeez. Do the markets want this bailout bill or not? Heck, does anyone want this bailout bill or not? The rANT is no economist -- we're an ANT for heaven's sake -- but it seems to us that almost a trillion dollars ought to buy us more than just a temporary reprieve. It ought to buy us some real reform that encourages investment in real businesses that actually provide useful goods and services and discourages risky bets on purely financial transactions. There are lots of ways to do that, including tax policy and regulatory changes, but no one in power is even broaching the subject. Not surprising, really. With all the cash the Wall Street folks plow into the political system, even a calamity like this isn't enough to push the pigs away from the trough. The rANT is not impressed. More From bMighty: Financial Crisis Survival Kit

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