So the $700 billion bailout is off the table for now, as 95 Democrats and 135 Republicans in the House surprised everyone and defied what looked like a fait accompli. The bill wasn't a perfect beast, and plenty of lawmakers on the right and left had signaled their substantive opposition before the vote. Still, its passage seemed manageable. So what happened? A lot of fingers are pointing at House Speaker Nancy Pelosi, whose prevote speech was a galling display of partisan taunts rather than serious urgency.
Particularly inappropriate was her characterization of the Bush administration's "anything goes" economic policy, which supposedly resulted in the financial crisis. Here's how Pelosi summed it up: "No regulation, no supervision, no discipline. If you fail, you will have a golden parachute and the taxpayer will bail you out."
I'm hardly a defender of Team Bush's economic policy. It's been a schizophrenic hodgepodge of gross spending and highly specialized, inadequate tax cuts. But most reasonable people seem to agree that a big cause for our current predicament—certainly immediately, and many would argue structurally—was the collapse of Fannie Mae and Freddie Mac.
Back in 2003, Treasury Secretary John Snow tried to do something to reform these government-sponsored mortgage gamblers and was quickly rebuffed by Republicans and (mostly) Democrats in Congress. I've written a fair amount about this, but for a fine display of how Congress acted then, check out this short YouTube clip of a congressional hearing. (Yes, it's overly rah-rah Republican, but not by much.) And when you're done, think again about Pelosi's comments about "no regulation, no supervision, no discipline."
Pelosi's catastrophic handling of the House so far has been one of the few bright points for conservatives in Washington—with her in charge, neither the Republicans nor the Democrats in Congress have managed to muck up things too much. Today, she proved again why she's her opponents' most dependable friend.