$700 billion bailout failed

well, the $700 billion bailout failed in the house of representatives, despite having the full support of the bush administration and the congressional leadership of both the democrats and the republicans. the bush administration and the congressional leaders had been meeting behind closed doors to hammer out a deal, which was achieved over the weekend, and it was simply assumed that if the leaders of both parties were behind something, the rank-and-file members would go along with it, at least enough to get a simple majority. well not so fast! over 99% of the messages members of congress got from their constituents regarding the $700 billion bailout expressed opposition to it, and less than 1% of the messages to them expressed support. both left-wing activist organizations and right-wing activist organizations mobilized campaigns against the $700 billion bailout, rallying both the ultra-liberal activists who volunteer for democrats and the ultra-conservative activists who volunteer for republicans against the “paulson plan”. the political base for each party was firmly opposed to this plan. liberal bloggers and conservative radio talk show hosts were all denouncing it. still, congress came very close to passing it, due to the diligent effects of party leaders, especially the efforts of house speaker nancy pelosi. the leader of the house republicans, john boehner, also claims to have tried really hard to get the bailout passed, although house republicans rejected the plan by more than a 2:1 margin, completely rejecting his overtures. senator john mccain of arizona, who had “suspended” his campaign to go to washington, d.c. and help fix the economic mess, but did not know at first whether to support or oppose the bailout, was apparently closely working with the house republicans, although it is unclear whether he actually supported the bailout or not. he claims to have tried to get the house republicans on board supporting the $700 billion bailout, but in friday night’s debate, he publicly took the side of the house republicans, who had been leading the opposition to the bailout. so john mccain, as usual, is completely incoherent and has no clue what he is doing. now the leaderships of both parties have accused each other of being behind the failure to pass the plan. but the real culprit in causing this deal to fail? the american people, who voiced their opinions loud and clear, and were heard by enough politicians in our nation’s capital to succeed in defeating the bailout... for now. the bailout may return, in the same form or a different form. and only time will tell if the majority of the public is correct on this issue, or if they are misguided and are going to completely ruin our economy with their stubbornness. i, for one, honestly do not know what to make of this bailout package, whether it is a good idea or not, whether it should be implemented or thrown out as a fatally flawed policy. i am not an economic expert, and for me to be commenting on something so far out of my field of expertise would just show my ignorance in this area. on the other hand, i did take enough economics in college (4 courses, which i did quite well in) to learn that economics is based on very oversimplified models of reality where a huge number of assumptions are made, some of them ridiculous. one of the most ridiculous assumptions behind capitalist economics is as follows: people and businesses act in their own rational self-interest. this is clearly not the case. the vast majority of people are highly irrational, and that is the cause of our current economic crisis. what is the solution? i don’t know... no change in government policy would change the fact that we are all fundamentally flawed human beings who are almost incapable of thinking or acting rationally. and i am not just talking about one group of people and not others... i am talking about the entire human race, including me, you, and everyone else. our brains are just not built for this stuff. maybe if we put computer chips in people’s brains to handle logical reasoning, it might solve some of the fundamental flaws of human nature. but i doubt even that would work, because logic is no good if it is based on faulty assumptions, and the entire field of economics is based on faulty assumptions like assuming people are rational. mostly i think people make their decisions based on emotions, and i think that is exactly how almost everyone decided what they felt on this bailout issue. were they afraid of the consequences of not acting by enacting the bailout? were they angry at wall street fat cats being given what seemed to be a blank check instead of being punished? or were they worried that the bailout itself might make things worse instead of better? generally people make decisions on political issues based on emotions, not logic; logic is used to rationalize and justify the decisions people already made based on their emotions. this is true both of us common folk and of the politicians. it is why space aliens, if they encountered our species, might not consider us a form of “intelligent life”, but would look upon our reasoning abilities the same way that nobel prize-winner dr. ivan pavlov looked upon the reasoning abilities of dogs. so, in summation, i do not know what to think about this $700 bailout, because i do not have enough information to have any sort of educated opinion on what its merits are and what pitfalls it might have, or how it compares to either doing nothing or a number of other possible plans that could possibly be proposed to fix the economy. i have followed the news quite closely recently, but i still know next to nothing about this bailout plan, and it seems like nobody else has a clue either. even the news reporters and politicians are all clueless. ESPECIALLY them. it seems the more you know about this plan, the less you understand it. so naturally, the people who understand it best would be those who know the least about it, given that logical axiom. however, that is a ludicrous conclusion, bringing the entire system of logic into suspicion. and so, without logic, all we know is what we have learned through empirical observation of reality. since all of this empirical observation took place in the past, this means nobody has any idea what will happen in the future, except by predicting that things will follow some sort of pattern that was observed in the past. some patterns observed in the past are very good predictors of the future, such as the laws of physics, but even these prediction mechanisms are flawed; why else would we need a large hadron collider if not for a lack of understanding of certain aspects of physics and a need for more empirical observations? economics is not a hard science like physics, but a “social science”, which is to say, it is not a science at all. experts in economics disagree on fundamental aspects of economic theory, so it is impossible to get a consensus among economists either for or against things such as the $700 billion bailout proposal. sure, you can find a bunch of economists on one side of the issue, and organize them together to all sign the same letter explaining that side, but then a bunch of economists on the other side could likewise organize together and sign their own contradictory letter. i am of the opinion that the field of economics was invented by politicians to come up with ideas for them (since the politicians didn’t know what to do) and then take the blame if anything goes wrong, while letting politicians take credit if things turn out well. economics did not really exist as a field of study until the 1930’s, i believe. basically economists create mathematical models of reality that are based on lots of faulty assumptions and are incredibly oversimplified, and then they use those mathematical models to make predictions about what different results different policies would have, and then use this as justification for those policies. and since you can get economists to come up with economic models to justify almost any economic policy, the entire field of economics is rather ludicrous. as for the stock market, it is gambling, pure and simple, and people should not expect a guaranteed return on their investment. as for borrowing money, i am of the opinion that borrowing money is almost always a bad idea, because if your ideas on what to do with the money really were profitable, you would almost certainly be able to profit off those same ideas without having to rely on borrowed money if they actually were profitable ideas. it is a shame that so many people and businesses rely so heavily on borrowing money, because this exposes them to undue financial risk without a sufficient amount of financial reward to justify it. so having the government borrow $700 billion to buy up mortgage-backed securities and other bad investments at inflated prices seems like a very bad idea, at least as far as the government’s finances are concerned, and down the line, it would be bad for taxpayers too, once the government has to pay back its debt. but with so many private-sector firms in financial crises due to their own mismanagement, perhaps having the government bail them out is a necessary evil in order to prevent the complete collapse of our economic system and another great depression. however, even if a bailout did succeed, it would be rewarding bad behavior, the guilty people responsible for creating the mess would make money off it, and we taxpayers would have $700 billion to pay back in debt. plus interest. to quote albert einstein, “the most powerful force in the universe is compound interest.” and with our government and ultimately us taxpayers paying the interest, it looks like a bad deal for us. but if it is the only way to save the economy from complete collapse, we have no other choice, since doing nothing would be an even worse deal for us. it is quite a difficult conundrum. if only we could bring franklin delano roosevelt back from the dead and have him put in charge of this whole thing, we would have nothing to worry about except finding enough brains to feed him, since he would be a zombie. anyway, with regard to the $700 billion, the government should just give me all the money. i promise to do a very good job spending it to stimulate the economy.