Yesterday I wrote that "Bush has done to the US economy what no terrorist or hostile country could ever do, that's quite a legacy!"
I was wrong, Bush merely loaded the gun; Congress, in an act of collective madness, has in effect destroyed the US economy by voting against the bailout plan.
Given that the plan was the only one on the table, one might ask why they jettisoned their only hope. Regrettably partisan politics outweighed commonsense and selflessness, as the Republicans used a speech by Nancy Pelosi (seemingly she hurt their feelings) as their excuse for voting "nay".
The result of this collective madness was entirely predictable, Wall Street suffered its worst ever one day fall in history (down 778 points).
The essential truth that those who cite "moral hazard" fail to grasp is this.
If your neighbour's house is buring down, even if he started the fire himself, you do not stand idly by watching it burn; you try to put it out.
Once the fire is out, you can punish him afterwards.
The "good people" in Congress will have a lot of explaining to do, when their constituents realise that falling shares mean that their savings and pension plans are going down the toilet.
Thursday is now slated for a rerun of the vote, let us trust that some commonsense now enters the minds of Congress.