In spite of bipartisan support from Congressional leaders, the financial rescue measure designed to address the credit crisis proves too bitter a pill for Republican lawmakers who fear punishment in the upcoming elections. After the bill is rejected, stocks plunge around the globe. A new poll indicates few believe that America's "war on terror" has succeeded in weakening al Qa'eda. Pakistan's new president struggles to counter the perception that he follows dictates from the US.
Republican lawmakers reject Wall Street bailout plan
"In a moment of historic import in the Capitol and on Wall Street, the House of Representatives voted on Monday to reject a $700 billion rescue of the financial industry," The New York Times said. "The vote came in stunning defiance of President Bush and Congressional leaders of both parties, who said the bailout was needed to prevent a widespread financial collapse. "The vote against the measure was 228 to 205, with 133 Republicans turning against President Bush to join 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans. "Supporters vowed to try to bring the rescue package up again as soon as possible, perhaps late Wednesday or Thursday, but there were no definite plans to do so. A former Treasury Department official predicted that the administration would try to get another House vote before the end of the week, and with only 'tiny tweaks' to the package, given the relative closeness of the vote."
The Hill reported: "The House adjourned until Thursday in order to accommodate Jewish members celebrating Rosh Hashana. " 'Stay tuned,' Pelosi told reporters Monday afternoon. 'But what happened today cannot stand. We must move forward. And I hope the markets will take that message.' [The House of Representatives Democratic Majority Leader Steny] Hoyer released a Monday night statement that said lawmakers would work 'around the clock' in a bipartisan manner to reach a solution. But [in] the statement it was undetermined whether the House would consider a bill on the economic crisis when it resumes business.
"The most important thing Congress must do to soothe a roiling market is signal that it will stay in session until something is completed, said Douglas Roberts, the chief investment strategist for New Jersey-based ChannelCapitalResearch.com. He said he 'didn't even want to contemplate' how markets would react if Congress left for the elections [without having passed a bill]." In an editorial, The Times of London said: "The Republicans who killed the plan yesterday had misread this plan fatally, as simply a lifeboat for fat-cat bankers on Wall Street. In fact, the collapse of the plan threatens all of Main Street, in America and further afield. The repercussions were already beginning to become evident last night as stock markets around the globe plunged. There will have been no clearer signal to Congress of the havoc that it may reap if it does not rescue the Bill in good time." In The Washington Post, Chris Cillizza wrote: "The failure of the financial bailout bill in the House is a classic example of an old adage: all politics is local.
"Despite the fact that President George W Bush and the leadership of both parties lined up behind the bill, the rank and file of both parties - particularly on the Republican side - rebelled in light of polling that showed the American public is deeply skeptical about a planned $700 billion bailout for the financial industry. "With just over one month left before the November election, politicians of both partisan stripes are concerned primarily about one thing: their own political futures." Ben Pershing attributed the failure of the bill to, among other things, poor salesmanship. "Did you know that the general consensus is now that this bill will not cost $700 billion? If you didn't, it's because the bill's proponents did a poor marketing job. From the start, the Bush administration did not do enough to emphasise the point that taxpayers would get at least some of the money back, and that gigantic price tag got stuck in the head of the public (and the media). "The administration was also too eager and ambitious with its initial proposal, alienating many lawmakers right from the start by seeming to ask for the moon - give us everything we want, with no oversight. This White House has long played political hardball, but this was not the time for hardball. This was the time for begging. The administration also let the 'bailout' label stick to the package right from the start. By the time President Bush started calling it a 'rescue' measure, it was too late."
The Washington Times said: "A furious family squabble is raging among free-market advocates over the Bush administration's economic-rescue plan, between those who say let debt-ridden businesses fail and those who warn of a deep recession if government doesn't bail them out. "The fight has divided conservatives as well their grass-roots supporters, who make up a large part of the Republicans' political base and threaten to undermine party unity in the middle of a close presidential election. That grass-roots backlash has to a large degree fueled House Republican opposition to the Treasury's bailout plan. "Lawmakers say they have been inundated by a wave of voter anger to the proposed bailout of troubled banks and other financial institutions. Republican Sen. John Cornyn of Texas says his offices 'have received more calls and e-mails on this issue in a short period of time than were logged even on the contentious immigration issue in 2007.' "The battle among free-market groups is largely between the more establishment conservative think tanks such as the Heritage Foundation and the American Enterprise Institute, among other well-heeled organisations, and smaller, lesser-known groups who blame the economic turmoil on too much government intervention in the marketplace. Some groups, such as Heritage, admit to deep division within their own ranks."
In The Washington Post, Robert J Samuelson wrote: "What we are witnessing, in the broadest sense, is the bankruptcy of modern economics. Its conceit has been that we had solved the problem of stability. Oh, there would be periodic recessions, but the prospects of a major economic collapse were negligible because we knew how the system worked and could take steps to prevent it. What's been so unsettling about the present crisis is that it has not conformed to the standard model of business cycles and has not submitted to familiar textbook solutions. "A hallmark of the crisis has been the stark contrast between the 'real economy' of production and jobs and the tumultuous financial markets of stocks, bonds, banks, money funds and the like. Even with the 60 per cent drop in housing construction since early 2006, the real economy has so far suffered only modest setbacks. Yes, there are 605,000 fewer payroll jobs than there were in December; still, 137.5 million jobs remain. Meanwhile, financial markets verge on hysteria. The question is whether this hysteria will drive the real economy into a deep recession or worse - and what we can do to prevent that."
"The US's 'war on terror' has failed to weaken its prime target al Qa'eda, according to people in 22 out of 23 countries surveyed in a new poll for the BBC World Service. "On average only 22 per cent believe that al Qa'eda has been weakened, while three in five believe that it has either had no effect (29 per cent) or made al Qa'eda stronger (30 per cent). "And while negative views of al Qa'eda are most common in nearly all of the countries surveyed, this is not the case in Egypt and Pakistan - both pivotal nations in the conflict with al Qa'eda. "In both of these countries far more have either mixed or positive feelings towards al Qa'eda (Egypt 40 per cent mixed and 20 per cent positive, Pakistan 22 per cent mixed and 19 per cent positive) than have negative feelings (Egypt 35 per cent, Pakistan 19 per cent). "Asked who is winning 'the conflict between al Qa'eda and the United States', the predominant view of those polled is that neither the US nor al Qa'eda is winning, with 15 countries holding this view. In three countries - Kenya, Nigeria and Turkey - the dominant view is that the US is winning. In no country does more than one in five - 21 per cent in Pakistan - believe that al Qa'eda is winning." In The New York Times, the columnist, Roger Cohen, wrote: "Asif Ali Zardari, Pakistan's new president and the widower of Benazir Bhutto, does not mince words about the growing Taliban insurgency. " 'It is my decision that we will go after them, we will free this country,' he told me in an interview. 'Yes, this is my first priority because I will have no country otherwise. I will be president of what?' "After the massive bomb attack on the Marriott Hotel in Islamabad, that's a fair question. Its finances in a freefall, its security crumbling, nuclear-armed Pakistan stands at the brink just as a civilian takes charge after the futile zigzagging of Gen Pervez Musharraf's US-supported rule. "I asked Zardari, who took office this month, if the assassination of his wife motivated him to confront Islamic militancy. 'Of course,' he said, 'It's my revenge. I take it every day.' "He continued: 'I will fight them because they are a cancer to my society, not because of my wife only, but because they are a cancer, yes, and they did kill the mother of my children, so their way of life is what I want to kill; I will suck the oxygen out of their system so there will be no Talibs.' " The Los Angeles Times reported: "Sending troops in search of extremists, which has resulted in the deaths of hundreds of civilians, soldiers and suspected militants, has proved unpopular with many Pakistanis, who see Zardari as obeying the dictates of the US. "Even more infuriating to them are the US military strikes in Pakistan from across the rugged, poorly marked border with Afghanistan, including an alleged incursion Thursday in which Pakistani and American troops briefly exchanged fire. " 'This is a moment of national crisis for Pakistan,' said Farzana Shaikh, an expert on South Asia at Chatham House, a British think tank. 'Mr Zardari should call on the support of parties across the political spectrum. It's only by being seen to forge a national consensus that Mr Zardari could then claim that Pakistan is fighting a war that is as much in its own interests as the interests of the United States.' "