What can we learn from the bailout plan initial rejection by the Congress?

I was thinking about the $700 billion bailout plan by the US Congress to stave off an economic standstill. US banks are just stuck where they are without the lifeline from Congress. While the Senate did approve the Bailout plan, now called the Emergency Economic Stabilization Act of 2008, the House of Representatives rejected it earlier on.

My first thought was whether the folks in the HoR knew what they were doing? The world, not only US, but THE WHOLE WORLD was facing a tough economic situation ahead if this plan was not approved. Yet they went ahead to reject it. That was surprising.

Another thing was, who was going to foot the bill? US taxpayers? The US government? Who was raising all that money and who was going to handle it? The Treasury? The Fed?

These were tough questions. But while everyone looked at the bailout plan rejection on Tuesday morning, and it got through Senate on Wednesday evening, there was another side to this coin. It is this:

The government system in the United States actually worked for the people. As Lincoln put it, a government of the people, by the people and for the people.

Why do I say that??

Initially the whole plan was slopshod. Indeed, there needs to be an initial draft and Henry Paulson, the Treasury Secretary, recognize the threat of the credit crunch. I'd give credit to Mr. Paulson for putting the plan up because if the first step did not come from him, Mr. Bernanke would not have made a move.

Wall Street and the Federal Reserve would have let the banks die and other banks eat the dead banks up. But there were just too many investment banks falling, Lehman, Bear Stearns, Merrill etc. This needed government intervention.

The plan was initially criticized as too expensive with abstract planning but as people started to realize the enormity of the consequence of continued bank slowdown, congressmen (and women) went into motion to work together to come up with a plan.

While the government provided the stimulus, Congress came up with the plan and voted on it. Day and night they toiled, until there was a workable plan. And while they thought this plan was 'workable', it was rejected by the HoR in a very close vote of 208 - 225. This was a very strong implication.

It meant the US system of elected representatives actually worked and was very alert.

The system set up by the forefathers was such:

Each state would have 2 senators. No matter how big or how small, the states had their 2 senators.
Each state would have an x number of representatives, depending on the size of the state. Bigger states more, smaller states less.

While this is the simple explanation, it showed that at the grass roots, people were still being represented. Either the representatives really thought the plan was not clear enough or they were afraid of losing their re-election due to voting for this plan because it did not benefit taxpayers.

Whichever it was, they voted and rejected it. Until that time, it was all the big shots who were appearing. Nancy Pelosi, Harry Reid, John McCain etc. but at the moment of voting, it was really the small guns who counted.

Though the initial HoR vote was rejected, it went back to the backrooms for a revision, and finally adopted by Senate. Now, it should be able to pass the HoR.

In retrospect, one realizes that it has shown how efficient, quick and transparent the governance of the United States can be if they have to. The Executive branch took the lead for government intervention, providing safety nets and coming up with a plan, and then getting the Legislative branch to help fomulate a more detailed and transparent act.

Most of all, when something did not seem right, they voted in their belief and principal that it should not be accepted. They rejected it. And in their rejection, came more co-operation and drafts, not retribution and punishment.

I believe that other countries that use this structure of governance should realize that this is the principal that guides the utilization of such a structure.

I wonder, are there any other countries out there that make use of this 3-tiered government structure of a Legislature, Executive and Judiciary?

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