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Bailout Fails, Dow Drops 700 Plus Points, What Happens Now?

After the Bailout Vote: What Happened and What's to Come

The House failed to pass the historic $700 billion Wall Street bailout this afternoon causing the Dow to crash a historic 780 points, and making President Bush "very disappointed." A roll call of the votes shows that 133 House Republicans voted no, while 65 voted yes. As for the Democrats, 140 voted yes, and 95 voted no. Thirty out of 38 House members in tight reelection races voted against the bailout.

After taking credit for the bill before it failed, the McCain camp had tough words for Obama this afternoon. Firing off the first statement, McCain said: "Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill."

As for Obama, he blamed the deregulatory climate supported by John McCain. His campaign released a statement saying this is a "moment of national crisis" and criticizing "the angry and hyperpartisan statement released by the McCain campaign."

Speaker Pelosi will most likely call for a new vote, but if it doesn't pass — Wall Street might have to wait until the US has a new president. As the stock market certainly falls, the next step toward a solution is uncertain.

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zcoral zcoral 7 years
To answer the question posed much earlier on this post - 95 Democrats voted against the bill in the House. So the finger pointing is completely unnecessary - it was the least partisan vote I've seen in years.
Punk-Glam-Queen Punk-Glam-Queen 7 years
Jillness: "Ok, last comment on this topic, I swear! Eye-wink I think people are so focused on the stock market, when really it is reflective of OTHER things that are happening. You don't have to have money in the stock market to be severely affected by this (and the effects won't happen immediately). When people start losing jobs, it won't just be from businesses that are related to stock markets or housing. It will be the small restaurant owner, the retail store, etc. It is kind of the same thing when people talk about credit and think how it applies on a small scale...but don't give weight to the role it plays in the function of day to day operations of businesses large and small. "Credit" isn't just about people and their personal spending habits. It plays such a role in transactions in our economy. I kind of feel like we are speaking a different language...I just don't know how to communicate how this isn't just about fat cats on wall street. Wacovia and Washington Mutual were part of the beginning (and there is nothing that says that these new owners will keep all of the employees). If nothing gets passed, more and more banks will fail. There are few that will be able to stand up. There is a very big chance that many of these banks will have no one buy them. Money is insured up to $100k, but what about small businesses that have more than that? What about the number of people that will get fired? Failure of more banks will pull back credit even further." No don't stop, its healthy debate and makes people think more about choices regardless of who agrees or disagrees!! Perhaps we are speaking a different language. I thought I made it clear that this process of small businesses going out had already begun prior to the latest developments. Restaurants, bars, retail shops all in business for 10-30 years are now gone. All of those jobs are already gone and have contributed to this mess. Has anyone offered to help them out and stop this job loss? And more importantly would they accept it? Myself and others who lost their businesses didn't expect to be bailed out due to the economic losses after 9/11, we hoped to rebuild. We were offered "grants" which were in actuality high interest loans that were to be paid back in full after 6 months. I said no thanks, as did every single one of my neighbors. We knew better than to get in further over our heads. So yes, jobs were lost, and continue to be lost each day another small business goes out. And the legislation passed (last year I think) which pretty much made it impossible for small businesses to declare bankruptcy. Many of us are still paying off our debts, and will be for some time to come. I never expected anyone to help me, so I should instead support a government bailout? IMO I doubt anyone who lost their job from a small business going out would approve either. Its about taking responsibility. Most of us in the small business world took personal responsibility for our loss of business. Why shouldn't others? Of course there will be job loss with buyouts, its the nature of the beast. In a perfect world no one would fear for losing their job, but we live in an imperfect world where people who felt secure no longer do. But there are also other areas that need to be developed, for instance clean energy which the corporations have the money to develop, thus creating jobs. (Just an example.) There needs to be other solutions and policies that don't allow it to happen again, and create this same mess.
Punk-Glam-Queen Punk-Glam-Queen 7 years
popgoestheworld: "BTW, I do think some "innocent" people who didn't do anything risky could get a little screwed in the process. I hate to be callous, but, isn't that life? Whoever promised that we'd all get richer and richer and that we'd never struggle? Challenge breeds innovation. Plus, we're all so calibrated to a new standard of living that we don't have concept of what we really need to live. We could all give up so much stuff that we take for granted and still live a perfectly good life." We're on the same wavelength... You're comment "Challenge breeds innovation." is brilliant. I hope this challenge does breed some innovative ideas that benefit the American society as a whole. If you travel to other parts of the world and see how the middle class lives, you will see how far beyond our means *many* Americans live. We can definitely live a perfectly good, full life with less.
Jillness Jillness 7 years
Ok, last comment on this topic, I swear! ;) I think people are so focused on the stock market, when really it is reflective of OTHER things that are happening. You don't have to have money in the stock market to be severely affected by this (and the effects won't happen immediately). When people start losing jobs, it won't just be from businesses that are related to stock markets or housing. It will be the small restaurant owner, the retail store, etc. It is kind of the same thing when people talk about credit and think how it applies on a small scale...but don't give weight to the role it plays in the function of day to day operations of businesses large and small. "Credit" isn't just about people and their personal spending habits. It plays such a role in transactions in our economy. I kind of feel like we are speaking a different language...I just don't know how to communicate how this isn't just about fat cats on wall street. Wacovia and Washington Mutual were part of the beginning (and there is nothing that says that these new owners will keep all of the employees). If nothing gets passed, more and more banks will fail. There are few that will be able to stand up. There is a very big chance that many of these banks will have no one buy them. Money is insured up to $100k, but what about small businesses that have more than that? What about the number of people that will get fired? Failure of more banks will pull back credit even further.
True-Song True-Song 7 years
Now that I have platinum, I don't want to do quizzes or guess whos because I like the way it looks better.
CaterpillarGirl CaterpillarGirl 7 years
Pop the secret? do all the "guess whos" or guess the quote/movie things, quickest way to reach diamond.
popgoestheworld popgoestheworld 7 years
Thanks! Cat, I think Diamond looks very sparkly! I don't want to think about how many comments it will take to get me there... BTW, I do think some "innocent" people who didn't do anything risky could get a little screwed in the process. I hate to be callous, but, isn't that life? Whoever promised that we'd all get richer and richer and that we'd never struggle? Challenge breeds innovation. Plus, we're all so calibrated to a new standard of living that we don't have concept of what we really need to live. We could all give up so much stuff that we take for granted and still live a perfectly good life.
True-Song True-Song 7 years
I totally think the platinum looks better than the diamond. The diamonds look so cartoony and hokey.
LiLRuck44 LiLRuck44 7 years
Congrats pop ;)
LiLRuck44 LiLRuck44 7 years
I actually seem to be hearing more "Look at how bad things are going to get, we have to quickly pass this bill to put money in so that won't happen". Point being, using $700 billion will not magically fix the problem! It is a band-aid, in every sense. I am sick of the fear-mongering, I really am. Doesn't mean I don't believe said bad things will happen, only I disagree strongly on using taxpayer money to make something appear to be fixed, when it is so broken it's scary.
Punk-Glam-Queen Punk-Glam-Queen 7 years
popgoestheworld: You said it better than I, and that was my point. I've got a little money in the market as well and that was money I "gambled" with, not money I ever expected to see again. I never expected to pay bills or get rich, it was all a gamble and I would never expect the gov to come and bail me out because I lost it. I totally agree on the credit part as well. I remember when it was harder to get credit, and now they issue Visa cards to 18 year olds (yes my nephew got one, I'm still baffled as to how he got it.) When it was harder to get credit, I didn't live beyond my means, and I made smarter consumer choices. PS congrats on going Platinum!
Punk-Glam-Queen Punk-Glam-Queen 7 years
Jillness: "I just feel there is a bit of this going on (not anyone specific): "Let's teach Wall Street a Lesson...By sacrificing my neighbor's job!" Most economists agree, even the article that was posted, that we need to change the POLICIES that allowed this to happen. Forcing our economy to halt is not necessary to change the policies!!!" Perhaps... but IMO I'm more concerned with fostering the ability to go right back and do it again because they'll feel safe that their backs are always covered by the taxpayers. I agree 100%, policies need to be changed. I've said all along, we need to learn something and devise sane policies that will work towards the benefit of us as a nation. No clue as to what that ultimately would be, but I'm guessing its a little of this, a little of that, and not just one broad bailout. (Purely conjecture on my part of course.)
vireland vireland 7 years
LOL pop--you still have to get to DIAMOND then retire.
CaterpillarGirl CaterpillarGirl 7 years
I miss being all sparkly Platinum, why cant diamond be sparkly?
popgoestheworld popgoestheworld 7 years
I'm PLATINUM!!!!! I'm retiring.
popgoestheworld popgoestheworld 7 years
I don't think it's a matter of teaching wall street a lesson. It's more of a matter of people accepting responsibility for their actions and experiencing the natural consequences of what they do. Most of my money is in the market. I'm not excited that it's dropping. However, I also don't look at the stock market as a guarantee and the money that's in there isn't money that I need to pay my bills next month. I'm sorry, but I'm disappointed by the total lack of personal responsibility displayed by both individuals and corporations. I'm willing to have my stocks dip if it means that we become less of a culture that effs up and then sits there waiting for government to come bail us out. And I don't think it's necessarily a bad thing that credit will be harder to get. It's not like there will be no money at all.
Punk-Glam-Queen Punk-Glam-Queen 7 years
Jillness: "First of all, that article is one man's perspective, and while interesting I have heard compelling arguments that say far different things. You mention that credit will only hurt chains/corporations/large businesses...who do you think employs the majority of workers in America? And it doesn't take much to be called a "corporation". I work with many that would certainly be called small businesses. The article says: "The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company." Shareholders get wiped out...but so do all of the people/companies who are owed money by the institution that goes bankrupt. Massive numbers of bankruptcies will be very bad for our economy. Not just the company itself, but the web of people it does business with." Agreed, one man's opinion that I happened to find plausible. And I've heard other plausible solutions that didn't involve a bailout as well. I never said it would *only* hurt chains/corporations/large businesses. I despise sweeping generalizations. I also gave examples of how it has already hurt the average person, so I don't see your point. I thought it was pretty obvious that I was trying to distinguish between what is commonly referred to as "small business" vs corporations. As a former brick and mortar shop owner I know very well how easy it is to incorporate and how most businesses must indeed be incorporated to protect themselves. But again, the difference between the way a major corporation and a small business corporation operates are vast. When bankruptcies happen yes some people lose their jobs, but more often another company comes in and purchases them. Look at what just happened with Wachovia and Washington Mutual for example. So jobs can also be created or saved. It's not always as dire as we are led to believe.
vireland vireland 7 years
This is a good article and offers perspectives from industries outside of financial services: http://www.bloomberg.com/apps/news?pid=20601170&refer=special_report&sid=a0h7E2HwQpUk
LiLRuck44 LiLRuck44 7 years
pop I should have said I understand how it could effect us :) I certainly understand the constitution (remember that old thing?), and it doesn't back this bill up. I can see your point jillness, even though I haven't gotten that impression from anyone. I don't think anyone is saying this is going to be an easy ride... I definitely don't think it will be.
Jillness Jillness 7 years
I just feel there is a bit of this going on (not anyone specific): "Let's teach Wall Street a Lesson...By sacrificing my neighbor's job!" Most economists agree, even the article that was posted, that we need to change the POLICIES that allowed this to happen. Forcing our economy to halt is not necessary to change the policies!!!
Jillness Jillness 7 years
First of all, that article is one man's perspective, and while interesting I have heard compelling arguments that say far different things. You mention that credit will only hurt chains/corporations/large businesses...who do you think employs the majority of workers in America? And it doesn't take much to be called a "corporation". I work with many that would certainly be called small businesses. The article says: "The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company." Shareholders get wiped out...but so do all of the people/companies who are owed money by the institution that goes bankrupt. Massive numbers of bankruptcies will be very bad for our economy. Not just the company itself, but the web of people it does business with.
Punk-Glam-Queen Punk-Glam-Queen 7 years
Jillness: "That is the thing...it is NOT just Wall Street and the stock market that is being hit by this. More importantly, it is the CREDIT market. Businesses of all kinds use credit on a daily basis to pay their employees and make purchases for the good of the business. With out credit, many businesses won't be able to operate or pay their employees. I think the idea that this is JUST about the stock market has a lot of people not understanding our situation. This isn't about stocks, it is about the consequences that fall off into other areas of the financial market that WILL affect main street." Again, most small businesses do not operate on credit, they can't afford to. Large businesses/ chains/ corporations are the ones who do this. And yes, it will affect us, it *already* has as many major corporations have had massive layoffs, and the small business is becoming something of a legend as they become pushed out by the mass marketers or simply can't operate as in years past. Perhaps because of my regional location I see this more than those in other parts of the country, but I personally know million dollar netting companies who use very little credit to operate due to the economic blows they sustained directly as a result of 9/11. Its been happening since then, starting out slowly, and now its come to a head. (I hope.) I agree that the credit market in general will become more difficult. But IMO the credit market and Wall St. got into this mess because of greed. To bail them out at our expense pretty much says to go ahead to do it again because we'll back them up again. Do you think that same privilege will be extended to the guy who's about to lose his house? Instead, I think we need to find a saner solution, try to help people keep their houses by finding a way for them to pay their debt, amongst other things such as some of the solutions contained in the article LiLRuck44 posted: http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?eref=rss
Jillness Jillness 7 years
" I think most people who are against the bailout are well-aware of the fact that credit may become more difficult to get. Overly cheap credit is part of what caused this mess in the first place." Credit to buy a new TV is far different from credit used by businesses to keep their operation running. Without credit to business, our companies will stop running and start firing people.
Jillness Jillness 7 years
Punk Glam Queen said: "The people with small businesses aren't in the market, and everyone I know who has "played" with the market used money we didn't expect to see again, just like being at a casino." That is the thing...it is NOT just Wall Street and the stock market that is being hit by this. More importantly, it is the CREDIT market. Businesses of all kinds use credit on a daily basis to pay their employees and make purchases for the good of the business. With out credit, many businesses won't be able to operate or pay their employees. I think the idea that this is JUST about the stock market has a lot of people not understanding our situation. This isn't about stocks, it is about the consequences that fall off into other areas of the financial market that WILL affect main street.
Punk-Glam-Queen Punk-Glam-Queen 7 years
LiLRuck44, great article! This is how I understood the bailout. I hope a *sane* solution that doesn't encourage further extravagances can be agreed upon.
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