American Financial Crisis

FINANCIAL MELTDOWN
Minneapolis, Minnesota

Today the stock market took a historic tumble, the biggest single day point drop in its history when it finished down 777 points. Panic ensued as investors sold off stocks after the $700 billion dollar bailout failed to pass the House. The Market lost an estimated $1.2 trillion dollars today.

Warning of "dire consequences" the Republican Administration and House Leadership pressed the Congress to act quickly in passing the bill. The bill was defeated as conservatives who opposed government intervention were joined by many Democrats who had heard from their Constituents. The vote came down mostly along party lines with Democrats voting 140 For and 95 Against, while Republicans voted 65 For and 133 Against.

Election year politics played a significant role as many of the NO votes came from Representatives facing re-election. The package which included a controversial provision that would allow bankruptcy judges to alter Mortgage terms was met with skepticism by many on the Hill who said it was an unacceptable add-on.

It didn't take long for the finger pointing to begin. Rep. Eric Cantor of Virginia said Rep. Pelosi's "failure to listen and failure to lead" was to blame for some Republican defections and Rep. Roy Blunt, the minority whip, said that "a couple" of Republicans said they were offended by the speaker and changed their minds. But he said those lawmakers were already wavering.

Rep. David Obey, a Wisconsin Democrat who stood watching the Republicans criticize Rep. Pelosi, called their remarks "ridiculous." adding, "The President wouldn't have gotten to first base without the cooperation of the Democratic leadership," he said. "Evidently some of these guys would rather lose the economy than lose the election."

The real question being asked by many Americans today is how did this whole mess happen and why should we have to pay for it?

Securities and Exchange Commission Chairman Christopher Cox said today that deregulation was in part to blame for the economic meltdown, citing "voluntary oversight" provisions that were led mostly by Repulican's. Those revisions were driven by insistent lobbying from the five largest investment banks, essentially letting the fox in the hen house.

Of course there is more to the story than that, it was also the greed of investment banks and large mortgage companies who sold risky mortgages by masking them as high grade investments. Some of these thieves even walked away rich. Such as Merrill Lynch's Stanely O'Neal who pocketed a $66 million dollar package or Chuck Prince who left Citigroup with a gift of $16 million.

While all this was going on, the Republicans were cutting taxes for the wealthy and singing the praises of deregulation. The unemployment rate is rising and we are spending $12 billion a month on the war in Iraq in large part due to the failed policies of the Bush Administration.










Courtesy of The Washington Monthly