Inconceivable!

CNBC reports thats the markets are up because they know that Congress will look at yesterday's markets and realize they have to pass the bill.

Umm, why? I know that every bank president with bad paper is telling Washington that the national interest regrettably requires the government purchase those investments at a premium, and that every portfolio manager with a long position repeats the message. But the whole point of our Constitution is that these people don't choose the legislators. Congress "had" to pass the bill yesterday, and didn't, because the electorates don't want to hand Wall Street money for screwing up, and don't want the Democrats settling in as the country's de facto Credit Committee. Fancy that.

Yes, they'll suffer if the economy stagnates while the banking system rebuilds and recapitalizes, but will those losses be larger than the taxes to fund a government recapitalization? And won't the absence of this bailout prevent Wall Street from enriching itself in future with government subsidized leverage? The core of the country's business and earners will slow, but it will be the first to resume credit as things recover. Why should the prudent underwrite the losses of a credit expansion that they need less than anyone? If the best marketers in the country can't sell this thing, doesn't that say something about whether it actually makes sense?

Somehow those hicks have managed to choose legislators who don't identify their interests with the prominent and well-positioned. That was kind of the point of the House of Representatives.