Glorious Moment for Freedom
House rejects the bill. This is a magnificent repudiation of the Fed, the Treasury, Bush, Wall Street welfarists, inflationists, and stabilizers of all sorts. The costs of what the Fed has already done are going to be massive and felt for many years. But at least Congress has so far, and this time only, not participated in the evil.
It's a great birthday gift for Ludwig von Mises.
Whatever the case with stock markets--and we can be confident that whatever prices emerge are truer than they would be with a bailout--it is fantastic that oil prices have retreated so dramatically. Drivers cheer. May all commodities follow. How this can be spun as dreadful news is beyond me.
(I keep adding to this post, but I'll try to stop here shortly)
I've recently taken a perverse interest in what the "conservatives" at the National Review and Heritage have been saying about the largest one-week push for socialism in US history. Of course they are all for it. National Review has left its crumbs on all over its Corner blog. I'm especially taken with this blogger who says that this is the worst possible bill with terrible ideological consequences but "But now it's time to swallow hard and vote for the bill." Plenty more where that comes from.
The Heritage Foundation showing is remarkable actually, with a huge headlines urging the bailout. I know that this institution has done some good over the years, but they have thrown away a lot on this on.
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Comments (49)
Comments (49)
Charles Hanes
Congratulations to the Mises Institute! Your hard work over the years has helped to create the intellectual climate leading to this defeat of governmental interventionism.
No doubt, many more battles must be fought. When you win one, the reward is to keep fighting the next one.
Published: September 29, 2008 1:15 PM
theblob
Yippie!
(I still expect something similar after the elections.)
Published: September 29, 2008 1:22 PM
Ed
Wonderful news! Let us hope this is the last we hear of it. However, I doubt it. I must say I am surprised that so many people both paid close attention and cared enough to speak up to our elected officials. It's "Hope We Can Believe In." :)
Published: September 29, 2008 1:22 PM
Pat
Not wanting to be a pessimist, but I would not be celebrating this soon. We have to see why they have voted down. Maybe this bailout is not to the liking of those congressmen. I get the feeling most people argue over who gets the bailout, rather than the bailout itself (Present company being the exception).
Published: September 29, 2008 1:27 PM
Floy Lilley
Do you think, Jeff, enough politicians began to worry about losing their jobs? I am surprised and pleased that the House blocked this bailout for the buffoons and rescue for the fraud street rascals.
Published: September 29, 2008 1:39 PM
Ike Hall
Happy Birthday, Ludwig von Mises! Congratulations, everyone at the Institute!
Pat, I agree, we have to stay vigilant. But we can breathe for a few minutes. I've already called my congresscritter twice--once to thank him, and once to let him know we will be watching him to make sure he does not change his vote. Once the tally comes up, call your critter and give him or her praise or hell, as the case warrants.
Published: September 29, 2008 1:39 PM
Ron
I agree with Pat. While I'm glad it got the boot, the margin wasn't terribly large, so it's not like it was widely unsupported.
On the bright side, it'll be at least another day or two before there's another vote. Maybe the opposition will grow during that time.
Published: September 29, 2008 1:42 PM
Michael Boldin
While I assume that this is only a short-term "victory" I'm still happy that something positive actually happened in D.C.....not too often that we hear of such things.
Now if they'd just allow for monetary competition.
A guy can dream, can't he?
Published: September 29, 2008 1:42 PM
Michael Boldin
While I assume that this is only a short-term "victory" I'm still happy that something positive actually happened in D.C.....not too often that we hear of such things.
Now if they'd just allow for monetary competition.
A guy can dream, can't he?
Published: September 29, 2008 1:43 PM
Caveman (intellectually-speaking)
Definitely good news for now, but we're already hearing the new justification from the pro-bailout forces: "Look, the Dow is crashing! This proves we need a bailout." I agree with Pat and fear that once a few consumer sweeteners are added to the bailout proposal we won't see the same kind of opposition from the public. The politicians and their Wall Street cronies know the bailout isn't necessary to "save the economy" and thus they have no reason not to ask for the stars now and later accept the moon. Nonetheless, the "no" vote will buy some more time for Austrians and others to make their case against intervention.
Published: September 29, 2008 1:48 PM
GBL
Pat, a new legislative proposal may be ahead, but the best thing about this defeat -- besides the symbolic "sticking it to the MAN" -- is it buys time. One week from today, credit markets may be functioning relatively smoothly. And even if they're not, we're not likely to see the cataclysmic meltdown. The Dow is only off 4.9% as I type, hardly a doomsday reaction.
Published: September 29, 2008 1:49 PM
Michael Boldin
Caveman:
Good point - and that's because most people don't realize that a lowering of prices across the board is a good thing, as the process of correcting malinvestment. They simply don't know that artificially propping up the markets now is just going to make the crash worse later on....
Published: September 29, 2008 1:51 PM
Ron
Can someone post a link to the actual vote tally, so I can find out how my Congresscritters voted on the bill?
Published: September 29, 2008 2:00 PM
Carl
Lewrockwell.com is overloaded and has crashed. Score one for liberty!!
Published: September 29, 2008 2:04 PM
cinderskenney
http://clerk.house.gov/evs/2008/roll674.xml
Vote tally.
Keep calling your Reps and Senators...as they will surely retry this monster in sheep's clothing.
Published: September 29, 2008 2:10 PM
Caveman (intellectually-speaking)
How they voted:
http://clerk.house.gov/evs/2008/roll674.xml
Published: September 29, 2008 2:10 PM
kurt
http://clerk.house.gov/cgi-bin/vote.asp?year=2008&rollnumber=674
Published: September 29, 2008 2:12 PM
AP
I too, am very pleased that efforts of Joe Taxpayer have resulted in not giving a blank, revolving check to the very same people that are either incompetent, or lying, or both.
Anyone could see that if they really wanted to help the people, they would have re-established rates. Instead, it became obvious to even the most casual voter that this bill was merely perpetuating the justification of hyper-leveraging, nothing more than privatized profits and socialized losses.
Three cheers for America. For someone as cynical as I am, to see this was rather inspiring.
Wall Street trying to impose financial blackmail on the public, and I am impressed as many people like me came out against the inherently flawed legislation!
Published: September 29, 2008 2:17 PM
Chad
Look at the BILL TITLE on the link provided above for the vote tally:
"To amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes"
So, does the $700 billion bailout of investment banks count as the "other purposes?" That title seems pretty disingenuous to me. Those who voted against it will likely now be characterized by their political enemies as those "heartless" representatives who hate the uniformed services, volunteer firefighters, and Peace Corps volunteers!
Published: September 29, 2008 2:21 PM
jp
"Definitely good news for now, but we're already hearing the new justification from the pro-bailout forces: "Look, the Dow is crashing! This proves we need a bailout.""
Maybe the next campaign that should be organized is a buy-the-Dow campaign. If it gets pushed up a coupla hundred points the pro-bailout folks won't have anything to say ;)
Published: September 29, 2008 2:21 PM
Yancey Ward
Unfortunately, the glorious moment is going to be a fleeting one. The wheels are already in motion to bring forward a different but identical bill.
Published: September 29, 2008 2:29 PM
Robert Williams Jr
Good news on the bailout bill. I am against it not because it is Big Business receiving the bailout, it is built on a fallacious econ argument. Now if we could get the same Congressional response when it comes to bailing out consumers, maybe we could get this ship moving in the right direction....
Published: September 29, 2008 2:35 PM
Caveman (intellectually-speaking)
Chad: I noticed the title also. Amazing. Politicians can't bring themselves to be honest even when they know everyone knows what they're doing. I suspect the bill's title was a hedge against the bill's failure. When the "aye" vote shows up on their record it will look like they were voting for tax breaks for worthy constituencies.
Published: September 29, 2008 2:36 PM
Wilson's Ghost
QUESTON:
Are you sure this isn't a scam? What if they are going to collapse the economy anyway, and when they do they will claim it was because they didn't get their boondoggle?
Published: September 29, 2008 2:43 PM
Caveman (intellectually-speaking)
Wilson's Ghost, if the government doesn't do anything the economy won't collapse. It would only be further intervention that could cause a total economic disaster.
Published: September 29, 2008 2:48 PM
Curtis
Seems a whole lot of people are trying to contact their congressmen, that site has crashed.
Published: September 29, 2008 2:49 PM
anon
National Review is just downright disgusting these days. One wonders what has happened to that magazine and its online premise. I know many here probably haven't had nice things to say about it for years, but my objections to it have been more muted. But it just goes to show that for some, political loyalty trumps reason. I actually had emailed Manzi to applaund him for the post you mention, at least from the perspective that it was the first at the Corner to demonstrate even a moment's recognition of the bill's problems. (At the time everyone else at the Corner was still talking about the pig/lipstick bunk.) But in the end, even he is just betting on doing something is better than doing nothing. It's not because he has any knowledge that he's right. And yet there's no humility. No, I'm willing to take this gamble on action, but let's be honest we are shooting in the dark here. Instead, when the house votes it down, Manzi calls them irresponsible and that they are playing games. This from a man who calls this bill the most irresponsible thing in decades!
Bottom line: assuming they had any credibility left, K-Lo and the rest of her crew have proven themselves to be just one thing: idealogues. Sad. So sad.
Published: September 29, 2008 2:51 PM
Glen
Is this a win for freedom that is actually a defeat? Many of those who seemed to lead the bailout's defeat simply pushed for its defeat because they weren't the evil behind the bailout. Remember, most of the congress critters just choose sides based on if they (or their 'friends') benefit.
Published: September 29, 2008 2:56 PM
Caveman (intellectually-speaking)
Glen, I don't think any of us really believes that the bill was voted down because 228 members of the House believe government intervention, per se, is a mistake. Nonetheless, the bill didn't pass and that was all we could hope for today. As others have already stated, the bailout's failure at least buys some time for the case against it to continue to be made.
Published: September 29, 2008 3:05 PM
Bill
There was at least 1 positive thing that I saw. The DOW dropped 600 and OIL DROPPED 10.40 per barrel. This is great. The socialist financial world is punishing the country but failed to stop one of the most significant drains on the economy in the price of oil in particular and energy more generally.
The drop is good so Wall Street can accurately value their assets instead of this weirdo world of fiat currency and Main Street is better off at the pump.
Published: September 29, 2008 3:05 PM
Todd
Paulson has stated that he "will use all of the tools at his disposal to protect our financial markets and economy". I am afraid we will see an end run on this bill and a power grab like we haven't seen since FDR's New Deal days. Paulson has even said "raw capitalism is dead". Where in the heck did this guy come from before Goldman's?
Published: September 29, 2008 3:31 PM
Bruno
I thought I would never say it, but I will: Thank you, Congressmen of the United States of America.
Truly, there is nothing stronger than an idea whose time has come.
Published: September 29, 2008 3:34 PM
J Cortez
I realize that the bill was shot down because of political reasons and not economic common sense, but still, I am elated. Happy Birthday, Mises.
I know this seems like a far off dream, but nonetheless a good one, I think: A future Mises' birthday where the Fed or the IRS is abolished.
Keep fighting the good fight. Try to educate yourself and as many others as possible.
Published: September 29, 2008 3:35 PM
Ron
Just got off the phone with my Congresscritter's office, and my suspicions were confirmed. Although he did vote against it, he did so for a lot of wrong reasons. I did my best to point out a few reasons he should oppose the bill in any form. Let's hope enough people call to do the same.
Published: September 29, 2008 3:45 PM
Daeran Zemaitis
I generally don't believe in moral victories - but this is a moral victory. This will pass most likely, but it's nice to see that with enough push congressmen can vote the right way.
Published: September 29, 2008 4:22 PM
Franklin
Forgive my pessimism, but there still is no roadmap on how we lay the groundwork for more liberty. This is not articulated by anyone in the mainstream news markets. Sadly.
The framework and the genius of the US Congress is "compromise." (This is sometimes good and sometimes bad, and it will not change.) A compromise will indeed occur. The sin is impending ("we're just haggling over the price...."). As I travel, I encounter scores of souls that say to me, "So much for deregulation...." It's frustrating. Whether we like it or not, the nonsense notion that there was a free market has taken hold. Listen to the blowhards like Bill O'Reilly: "I am for a free market to a point..." Folks, this is the consensus of most of the country.
There is a long-standing (and dare I say eternal) belief that government must prevent the excesses of laissez-faire. Sure, many folks hate Congress, but they still think they should do something about Wall Street. And that is why I am pessimistic.
Anyway, here's my fantasy scenario, my dream:
For the next two weeks, we watch the Congress claw in gridlock without "success", and meanwhile we simultaneously watch the markets struggle, fall, rise, wade through volatility, suffer, implode, rise again, hiccough, have ups, downs, ups, downs.... and then begin to come to some equilibrium in a matter of ten or fifteen days!... upon which everyone would say, "You no-good, do nothing, self-serving Chicken Little "sky is falling," CYA lying, scumbucket Congress, moronic President, incompetent Feds, the whole damn lot of you(!) were about to write up a $700B check because you said the Earth was going to blow up like a supernova! And all along we could have weathered through this storm!!!! Stick your dire warnings of the End of Financial Days alongside your WMD!" And then we would watch the polls put Congress' and the Pres' favorability into single digits. It would be a psychological revolution.
Maybe then people would turn inward, look to themselves and firends and colleagues, and understand that we will survive and thrive, that we did survive and thrive, without the alarmist bell-ringers. Then liberty might hopefully begin to shine in the not-too-distant future.
But I fantasize. A bailout is coming; the O'Reilly believe-in-free-markets-to-a-point crowd will win the day, and fifty years from now our descendants will read stories of how the government saved our asses, "just as FDR did...."
Pity. Well, at least I got to laugh at Congress screaming at each other some more, covering their asses some more. Sadly, they will soon be stealing from the taxpayers some more.....
Thank God I got my front porch, NFL football, and my family to distract me from Alice-in-Wonderland Washington DC.
Cheers,
F.
Published: September 29, 2008 4:59 PM
MattYoung
Thank you Mish for your work on killing this. It is better that we restructure the system then prolong the agony,
Published: September 29, 2008 5:04 PM
David Livingston
Franklin, you do know that the government invented the NFL and MLB to keep the people distracted so they could plunder in secret. The NBA was just a cheap copycat.
Published: September 29, 2008 5:23 PM
Franklin
Ouch! David reminds me of my witless participation in bread and circus! Nevertheless, I will still watch tonight's game, consoling myself that at least I feel guilty. : )
Published: September 29, 2008 5:38 PM
Li
"For the next two weeks, we watch the Congress claw in gridlock without "success", and meanwhile we simultaneously watch the markets struggle, fall, rise, wade through volatility, suffer, implode, rise again, hiccough, have ups, downs, ups, downs.... and then begin to come to some equilibrium in a matter of ten or fifteen days!"
That would definitely be really something. The thing is many people that blame the free market are doing so out of ignorance/default and not necessarily ideoogy. This sort of proof positive that laissez-faire does not equal unchained chaos as they are constantly told will push many to a new way of seeing things.
Published: September 29, 2008 6:09 PM
Vince Cook
Over the past couple of weeks, the Federal Reserve system has increased its total credit by about a third, much of it being financed by the U.S. Treasury. That is, we have had a reverse monetization, where Paulson has been selling bonds and depositing the proceeds in the Fed so that the Fed will have the cash needed to buy junk assets or make loans that are collateralized by junk assets.
With this vote, that game appears to be over. The Treasury is probably up against its debt limit. To keep the system afloat, the Fed has no choice but to print the cash itself. Such a move will destroy whatever confidence is left in the system. While the Fed might try to save the Establishment by running the printing presses, the Chinese may well dump their vast holdings of dollar-denominated Treasury & GSE bonds before the inflation can proceed much further.
Published: September 29, 2008 7:11 PM
andy
Won't the socialists just come back this week and pass the monstrosity anyway?
Published: September 29, 2008 7:31 PM
Ball
You've got to be kidding me.
The reason the bill failed is because people called their congressmen and demanded they vote NO on a 90-to-1 basis. The Reps simply didn't see why they should fall on the sword (get voted out of office). The bill will pass when Wall St. creates enough slush funds to tilt the vote the other way. I can see it now: WANTED: Secretary with D.C. experience. $100mil. No attendance necessary. Wink wink. Chase.
As for those who called their congressman, many are Eat the Rich types, like many who protested Thurs. on Wall St.
What SHOULD have happened is the Mises Institute should have joined the protest with their own massive banner! That's the only way to win this contest!
Published: September 29, 2008 7:36 PM
a Chinese student
Thank godness. The billout was dead. As long as everyone act, there always be hope.
Published: September 29, 2008 7:46 PM
Jack's Pipe
You can bet that the fact that these Congressman are hearing it from their constituents was directly behind this bill's defeat. The switchboards have been ringing and mail is flooding in. It was reported tonight that a dozen democrats were 'given permission' to vote against the bill because they fear their ability to get reelected. (Why else would democrats vote against socialist idiocy?)
The message is clear: keep the pressure on, keep bugging your congressman, and don't let up.
Published: September 29, 2008 7:54 PM
Frodo
Humans 1
Orcs 0
Victory for now- at least by today's score. But the vote was only a margin of 13. Scary that the biggest heist in history was only narrowly defeated. Sauron's evil hordes will be back, for sure, dressed in sheep's clothes. (Next time the metaphor will be 'lipstick on the fascist pig')
Published: September 29, 2008 9:58 PM
Lance Rucher
For those who believed in HOPE - Congratulation
Published: September 30, 2008 5:03 AM
Tom Waller
Fantastic news. I also credit my rep - Ron Paul for the defeat.
It was a great victory, but the fight remains. Be vigilant. The elites won't stop trying to force their socialism upon us.
Published: September 30, 2008 12:11 PM
Franklin
Now MSNBC is covering the Senate session with Obama quoting FDR.... Could this be any more sickening?
The bailout is impending.
Most troubling is that the consensus will be, after the bailout is approved, the government had to step in and fix this; otherwise, Mom and Pop stores and "regular guy" citizens won't be able to get credit, ATM's will stop working, and we will all die.
And like the historical legacy of FDR (not that I buy it), the "Main Street" consensus will be that free markets do not work.
Too bad.
F.
Published: October 1, 2008 4:19 PM