Wall st slumps, bill on edge of defeat

Sept. 29, 2008 1:57 p.m.

Wachovia bank has been taken over by Citi group with an assist from the Federal government to prevent its collapse.As I write this the House so far has rejected the Bill by a count of 226 to 207 votes with 141 Democrats and 66 Republicans supporting the Bill. 94 Democrats and 132 Republicans have so far voted Nay. But the vote is not yet closed and the supporters of the bill are trying to pursuade members to shift from the Nay to the Yea side.This may still happen but it is a close call. The market in New York was down over 700 points at one point but has recovered to being down 525 points as I write this. If the bill is rejected ( and it just has for the time being)and a new version not quickly put up for consideration the freeze on the credit markets will continue and deep damage will be done.The stock market will also be driven further downword.Some analysts and traders estimate by as much as 10-20%
The populist driven anger against the bill is understandable but opponents ought to read it more carefully for it contains many provisions designed to help middle and low income people and it imposes limits on the compensation of executives, includes an innovative Republican inspired government insurance program and provision for the Treasury to buy up distressed assets and revend them at a potential profit so as to limit the cost to taxpayers. It also has substantial oversight provisions.It is a good bill which is motivated by a clear understanding of history and the way in which financial crises if not handled properly can spin out of control and result in prolonged economic depression. Members ought to carefully weigh what they are doing by voting Nay and remember that a responsible legislator has also to educate his or her constituency as to complex questions and how best to resolve them.