Gary North

October 9, 2008

One House member has gone public with the truth. Before the House vote on Monday, the House leadership threatened that a refusal to pass the 100-page bill would cause a collapse in the stock market. This would lead to martial law.

See his statement here:

The bill failed. The Dow fell 777 points. Then the Senate passed the pork bill. The House passed the 451-porker on Friday. Saved!

Not quite. The stock market continues to fall. The law failed to reverse the decline.

The FED has announced two policy moves since then: (1) funding the CD market; (2) a coordinated international rate cut by central banks. Both moves failed to calm markets.

We are now saddled with a huge increase in debt, and the world's stock markets are falling.

The reality of the recession is taking hold in investors' plans.

The $700 billion bailout helped New York City banks. It has not reversed the slide into worldwide recession.

There will be more bailouts ahead. What will the Congressional leadership threaten members with next time? When will Congress catch on?

I think the voters already have. But they had no clout in the first bailout, despite an election within five weeks. What clout will they have over the next Congress? Not much.