US Rank-and-File Politicians Bow to Public Pressure
…lawmakers on both sides pointed to an outpouring of opposition from deeply hostile constituents just five weeks before every seat in the House was up for election as a fundamental reason that the measure was defeated. House members in potentially tough races and those seeking Senate seats fled from the plan in droves.
So it appears that constituents have, at least temporarily, succeeded in protecting themselves from a comprehensive bailout of financial elites. With an election around the corner, any incumbent who gave a blank cheque to Hank Paulson for the nationalisation of Wall Street’s problems should have feared being unceremoniously dumped out of office.
And reluctant though I am to stray into party politics, it is noteworthy that only one-third of voting Republicans supported the plan. In contrast, over 60 percent of Democrats attempted to pass what would have been one of the greatest acts of corporate welfare in world history.
Where to from here? We can now be slightly more optimistic about the US economy recovering from its problems without imposing on itself something far worse than the business cycle. Only slightly though. This bailout was a particularly offensive intervention, but of course its failure does not mean that the general trend to interventionism will be reversed. The final phases of the business cycle will now be reached sooner, and it’s hard to predict what could happen in that revolutionary atmosphere.
While we’re on the subject of democracy, it’s clear that the two major parties require extraordinary encouragement from voters to resist intervening. As you could easily predict, both presidential nominees supported this massively unpopular plan.