Bailout Fails, Now Let the Market Do What it Do!

Bailout Fails to Pass!!

Final vote in the House on the bailout bill:
Democrat, FOR 140, AGAINST 95
Republican, FOR 65, AGAINST 133, NOT VOTING 1
Independent
TOTAL: 205 FOR, 228 AGAINST, 1 NOT VOTING

The Dow was down almost 700 points in the final minute when it was obvious the bill would not pass, and is now down under 500 pts but I predict will recover without government intervention.

They say the road to hell is paved with good intentions, well this thing would have been a freaking superhighway.

So now what?

Assuming that there are not 10 Congressmen who can be forced to change their vote, I offer my quick points on what should be done to fix the economy:

• suspend capital gains taxes to encourage investment here rather than abroad
  
• provide the bare minimum loan guarantees necessary to cover defaults only
  
• introduce a bill providing only the insurance option similar to FDIC the Republicans suggested
  
• Repeal Sarbanes-Oxley regulation, it has failed to provide any warning in advance of the failure of a number of large institutions and is currently freezing the IPO market due to increased costs for compliance
  
• fix mark-to-market ratios to provide a rolling average rather than a spot price for what the bad mortgages could be sold for at 'fire-sale' prices
  
• initiate immediate special prosecutor investigations into all lawmakers who have benefited from lobbyist, PAC and individual contributions from Wall Street
  
• Remove Chris Dodd and Barney Frank from their Committe Chairs for incompetence and potential criminal conspiracy
  
• Remove Sec. Paulson and Sec. Cox for incompetence

Given McCain's long term focus on corruption and reform the obvious influence peddling in this issue would seem to be a tailor made issue for his advantage but it appears calling a spade a spade when it is so damning is not currrently in the strategery for McCain or the Republicans at large.

I think that if the story were properly covered it would end the corrupt Democrat majority for at least a decade - so of course the mainstream media is carrying the water that the cause is Bush and McCain even though there is ample evidence in Administration Briefs, Budget testimony, at least one McCain co-sponsored bill and statements on the floor of the House and Senate that Bush and McCain sought more and better regulation - they were opposed by Barney Frank, Chris Dodd, and more.

UPDATE

Looks like the bill failed because Pelosi came out and carried the anti-Bush blamestorming rhetoric to such a vitriolic point that moderate Democrats AND Republicans who had indicated they would support the bill voted NAY in response to her needless partisan statement.

I am hoping that since it looks like there will not be a real meltdown on Wall Street that Fedzilla will decide to just let the market do what it do. I have made some suggestions above about what I think could work to help the market address the challenges it faces without ridiculous intervention or Joe Taxpayer buying up all the toxic securities on Wall Street.

But we need to remove the people who caused the problem in the first place and we must not allow ourselves to be scared, rushed or bullied into making the same mistakes that caused this to happen.

Some interesting poll results following defeat of the bailout (Rasmussen):

• 6 in 10 voters think the Gov. will do too much
• 3 in 10 voters think the bailout was not enough
• 51% of investors oppose the bailout outright
• 60% of House Democrats voted for the bailout
• 32% of House Republicans voted for the bailout