Taking a stand

I sit in front of my telly, watching CNBC anchors talking with their characteristic rapidity about the rejection of the bailout by the US House of Representatives. I must say, I did not expect this. I thought that after all the drama of the past week, US lawmakers would now acquiesce to the wishes of the presidency and the senior leadership of both parties. Whether this is an admirable stance against creating moral hazard by bailing out private firms, or just a stubborn refusal to "do a little wrong" (Portia, Merchant of Venice), to prevent a bigger disaster (or simply driven by a fear of losing their seats in November's elections by voting for a measure the general public clearly disapproves of); only time will tell. I still think that some bailout will be orchestrated in the near future, but will follow events closely and try to comment regularly.

My opinion about the measures being proposed is very mixed, and liable to change as I learn more. I generally hate interference in the market mechanism, but the spectre of seized credit markets turning a recession into depression is seriously frightening. Additionally, the proposed rescue package has plenty of safeguards to ensure that shareholders (and company management) feel the pain of their firms' misadventures/misjudgments. It also gives the taxpayers a fair chance of recovering most of their money. As things stand, I accept that the bailout is necessary.