EPIC FAIL!

So the Bailout Bill has failed to pass the House. I can't actually say I'm sorry. What happens from here on will tell everyone whether or not to be sad or glad. What happened first, unhappily, was a drop in the Dow of 700 points until it rose to a mere 540 point loss as of 3:00 pm Eastern. Whee-e-e-e-e!

IMO, the administration and Congressional leaders badly miscalculated the public's mood. Despite Bush and Paulson doing their best to scare the crap out of everyone with doomsday scenarios, voters would rather take their risks and see the fat cats in Hell than bail them out. The weak punitive measures written into the bill sounded like slaps on the wrist when people want bankers' blood to run down the center of Wall Street.

With the unprecedented and ferocious response from constituents, Republican (and many Democratic) House members decided that Wall Street and financial industry lobbyists may have the money, but the people have the votes. It's not surprising.

Another problem with the bill is that professional and academic economists didn't like it. Nouriel Roubini hates it:

Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented - many on the RGE Monitor Finance blog forum - alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.

I don't doubt we're in for a world of economic hurt, no matter what's ultimately done about the crisis. Yet still, I can't say I'm sorry if the Masters-of-the-Universe get their teeth kicked in.

Update: Bravo, Stirling! I'm convinced. No runes here, he's on fire with righteous wrath.

Update 2: Dow down 777. Fasten your seatbelts, it's going to be a bumpy ride.