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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Updates...

Ya, i know. I am a really lazy blogger..No one has told me that, because i don't have much to write here.

A lazy blogger - Is that an oxymoron, like an honest thief or a rich beggar?

Are bloggers suppose to update very frequently. I am really guilty of being low on inputs to my blogspot. I think I should write more frequently. There's so many things...

But i guess some updates are due from my end..

1. Dog. My house has a dog now. He is still a puppy. He came to us on 1st September at 6 weeks old. So now he should be 10 weeks old and is growing. Everyone in the family is having fun with him. He is called Caesar and he likes to run around. He is a very sociable dog. I hope he grows big. I don't like little display doggies and doggies that don't grow big. Currently he is busy trying to find ways of mosey-ing into the house. We keep him in the open compound to give him space to run about, but he is trying to smuggle himself inside to the living room. Well, like they are, he was very shy when he first came to stay with us, but now after 4 weeks he is getting into the routine.

2. Mooncake Festival. Twas a great Mooncake Festival. Went for a pot luck (if you don't believe in luck, then count your blessings and call it pot bless). There were loads of people, from the young...around 8+ to the not so young.. 50+ carrying lanterns and having a night of fun walking around.

There were loads of food too especially yummy sphagetti and poh piah (made by mother and daugher, as they say...a chip off the old block). Here you can see powerful Poh Piah Aunty wrapping the stuff.

Ya, and it was also a birthday party for me. I carried a Nemo lantern that I am sure will bring back lots of memories. Thanks to all who contributed in the purchase of this nice little fish. And especially to the Spaghetti Girl who was also the same person who ran around the streets in the rain carrying the Nemo lantern at the risk of being noticed by Penangites.

Joce & all...thanks!

3. Palm Palladium. Apartment is finally ready. I don't have good quality photographs, but this site has some tremendous photos on PP and other upcoming projects.

http://www.apartment-penang.com/2008/01/palm-palladium-condominium-penang.html

Had to put RM5000 for the sinking fund though, but now informed that it has been reduced to 10% of maintenance fee. That's great. So took some friends out for lunch and bought a new wallet. I can re-invest the new $$$ or pay up more for the housing loan. Makes me feel very poor already.

I NEED THIS!!

4. Gold. Prices are fluctuating thanks to the recent economic turmoil. But since I went into the Public Bank Gold Investment Account, I have made a turnaround of 10%. Much better than the Fixed Deposit rates harboring around 3.1%-3.7%. Now I feel a bit richer. A BIT.

5. 916. The event not the gold. Disappointed nothing came of it. End of story. What was he thinking?

"Apakah pelan sekarang?"

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