At 1:24 pm
Reuters reported that the White House claims that they have the votes required to pass the $700 billion bailout bill.
At 2:36 pm
Reuters reported that the bill failed to pass by 23 votes (228 against the bill, 205 for the bill).
The vote ran as follows:
Democratic votes - 140 yeas and 95 nays, Republican votes 65 yeas and 133 nays.
This is the same House of Representatives and the same Republican representatives that overwhelmingly supported and voted to spend $600 billion on the Iraq war, and all with no oversight.
And when voting on the revised 166 page bill with added oversight and additional provisions for the 5 million plus Americans who are about to loose their homes, they decided to draw their line in the sand.
Apart from the fact that it looks good on Bush, who’s enhanced deregulation for deregulation sake and general negligence in everything, is partly responsible for this mess.
The problem now is that the weakness in the US banking system has grown legs, becoming a crisis which is now spreading throughout the rest of world.
To some extent I can understand why the American public and these members of the House would say no.
I mean, imagine the gall it takes for the Bush administration to originally produce a three page plan to spend $700 billion to bail out their countries financial system.
Whether the situation was as bad and the consequences as dire as Paulson and the Bush administration stated a week ago, their sloppy, inept handling of the situation and presentation of the solution have now destroyed the confidence in their institutions.
There is no money available for investments, growth or to maintain corporate cash flows as the world’s banks and governments tighten up lending and spending rules even between banks.
Investors, including the big money funds have responded by selling their stocks and moving to cash.
This Bush backlash by the House has now placed not only the US but the rest of developed nations on the verge of depression.
This is like 1928 and a half, or at least the closest thing to it in my life time.
And the last I heard from Harper and his Finance Minister is that Canada can weather the storm.
But here’s what Bank of Montreal economist Doug Porter and Don Drummond, chief economist at Toronto-Dominion Bank to the Globe today at 4:14 pm
Q. What are the implications for Canada?
A. “Canada definitely is at risk of getting sideswiped in two ways if this bill doesn't go through. One is that the U.S. economy will be even weaker than what we expected and also there is the potential of much slower global growth to undercut commodity prices in a more meaningful way,” Mr. Porter said.
“So, Canada's definitely got a big stake in this vote as well.”
Mr. Drummond agreed.
“You could argue Canada might even get hit worse, because the slower U.S. growth prospects bring down commodity prices and that hits our income and brings down our stock prices.”
Bush is now proven himself to be even worse than being the worst president in American history if that is at all possible and Harper and Flaherty are in way over their heads.
Or as Ignatieff said today that $12-billion dollar surplus that Harper and Flaherty inherited and then frittered away might of come in handy right now.
Or as Tank said to Neo, "Very exciting times".