And What If It Fails...?The President last night forecasted "dire" consequences and "financial panic" if his bailout plan did not pass muster in the Congress, and warned that quick action is needed. Of course, the plan in question is a largely Democratic proposal built on ideas antithetical to the free market:
The address and the plan for a White House meeting won praise from Barack
Obama's campaign. Spokesman Bill Burton said the Democratic presidential
candidate, who plans to meet at the White House with Mr. Bush, Sen. John McCain
and congressional leaders, "was heartened tonight that the president seemed to
be moving in the direction of the principles that Sen. Obama outlined over the
last week, including limits on CEO pay, independent oversight, and taxpayer
protection" as well as overhauling the regulatory framework.
Mr. Bush also sought to quell a revolt among some conservatives who are
shocked by the program's price tag and its interventionist underpinnings. He
said that under normal circumstances he would be willing to see struggling
companies fail. But he warned that "these are not normal circumstances," and
that "major sectors of America's financial system are at risk of shutting
How do we know that this package is the Democrats' baby? The President was reduced to addressing the nation on the Democrats' whim, largely because the Democrats know full well the political and economic risk they are taking. Since this is their plan filled with their principles, they do not want to shoulder the political blame when it fails:
Republican support has been so soft that Democrats worried
they would have to take on most of the responsibility -- and political risk --
for passing the package. To spread that risk, Democrats on Tuesday called on Mr.
Bush to address the nation.
No one who supports this utterly rediculous and absolutely unconstitutional bailout plan has yet been able to answer the $700 billion dollar question: What should happen if this proposal should fail? Americans will not see the results of that failure immediately, and in fact whether the bailout plan succeeds or fails may not be known for some time, perhaps years. If the bailout does not succeed, however, the American economy will be headed for the greatest collapse since the Depression of the 1930's. Henry Paulson, Ben Bernanke, the President, and the Democrats are all warning that if this foolish exercise in economic devilry goes down to defeat, we shall go the way of 1929 in any event. However, a natural collapse would likely not be near as terrible on the country, its people, or the wider world as a collapse that comes after attempts to prevent it by essentially artificial means. This could be a fall that is so hard that our country will suffer its aftermath for many, many years thereafter.
This bailout plan is the worst economic exercise of my lifetime, and it will probably pass. Members of the party opposite who attempt to place blame solely on Republicans should it fail should be reminded that it is their leadership at this hour which is pushing the hardest to approve it.