My mind is reeling as I type these words, words that I record with great apprehension for what the future may hold. We are nearing the close of a momentous Monday. The date is September 29th, 2008. It is the first night of Rosh Hashanah,1 the Jewish New Year that doubles as the Jewish Day of Judgment.2 And let me tell you, buddy, it couldn’t have come at a worse time...
This day will go down in the history books as “Black Monday,” or something to that effect, and why not? The U.S. stock market fell more than 7% today, with the Dow finishing some 778 points down. They are calling it the largest single-day loss in the market’s history, and the TV pundits all seem to agree that the stock-market's free-fall is directly attributable to the failure of Congress to pass a bailout measure of unprecedented size and scope. The market had been falling throughout the day, as rumors of the bill’s likely defeat made their way to Wall Street. When the final word came, at approximately 3:00 PM ET, the market took a final plunge before closing to record losses.
Suze Orman is pissed. CNN has her answering viewer questions during both Larry King Live and AC 360, presumably to calm viewers who believe the day of the apocalypse is upon us. But Suze is not as reassuring as usual. She sounds alarmist and angry, and she insists that congress has made a huge mistake. And you know what? I agree with her. This market crisis has been anticipated for over a year now: I have read dozens of articles and op-eds on the sub-prime mortgage mess that specifically worried that credit might dry up. The $700 billion dollar federal buy-in was a last-ditch effort to inject what economists refer to as “liquidity."
The bailout plan was put forth by the Bush administration, and was vigorously supported by both Secretary of the Treasury Hank Paulson and Ben Bernanke, the chairman of the Federal Board of Reserve. Both parties’ presidential candidates were outspoken in support of the bill’s passage, although as senators they were forced to watch from the sidelines while the bill sank.
Actually, John McCain did try to jump head-first into the house negotiations last Wednesday, temporarily “suspending” his presidential campaign less than 40 days before the election in order to address the issue. The congressional negotiations were promptly buried under a hail of media coverage, yet it might be suggested that it was precisely this sudden surge of media coverage that galvanized millions of voters to contact their congresspersons in vigorous opposition to the bill’s passage!
When pundits opine that the problem boils down to a failure of leadership, what they mean is this: The people who failed to lead were the hundred or so congressmen who caved to the pressure from their constituents and voted against the bill in spite of pressure from the president, the secretary, the chairman, the speaker, the minority leader, and both presidential candidates. A segment of the Republican caucus had maintained opposition all along on the basis of free-market principles, but many others were simply fearful of defeat in the approaching congressional elections. The tail can sometimes wag the dog. But is it ever truly smarter?
There is a funny problem underlying today’s turmoil. Legislators had made today a deadline for action for a specific, albeit unpublicized, reason: There will be no meetings in congress tomorrow because too many Jewish members will be away for High Holiday Services. Barney Frank says that he won’t be able to work on this tomorrow because of Rosh Hashanah, although he goes on to invite his colleagues to continue working on the bill. Anderson Cooper is flustered and confused. I can’t wait to see what Jon Stewart will have to say. Or will he even be on tonight? He may well be taking the holiday off…
In fact, Pelosi acknowledged the Jewish members of her caucus during her speech from the floor of the house earlier today.3 You also have to wonder what will happen tomorrow morning. When the gentile investment bankers in New York City show up for work, many of their Jewish co-workers will be absent. Let’s just say that there’s more than a kernel of truth to stereotypes about the number of Jews in finance. So what effect will their absences have on day-after functioning of the market?
There has been little commentary on the role of the Jewish holiday in today’s events. However, Pelosi’s speech generated quite a bit of controversy after Republican Minority Leader John Boehner suggested that its “partisan rhetoric” had prevented as many as 12 Republicans from voting for the bill. Barney Frank points out later that by some feat of “numerology,” 12 is exactly the number of additional Republican votes that was needed to pass the bailout package.
The House Democratic leadership held a press conference at 3:00 PM to announce the bill’s defeat. After a few brief comments from Speaker Pelosi and Frank, who is the Chairman of the House Finance Committee, the first question is addressed to Speaker Pelosi. A reporter asks her about Boehner’s accusation that her speech had sunk the vote. Frank answers for her, ridiculing the notion that Republican lawmakers decided to “punish the country” because their “feelings were hurt.” The line ends up in every network’s coverage of the night’s lead story, along with quotes from the Speaker’s speech and the Minority Leader’s response.
Notes: 1) The year is 5769 on the Jewish calendar, meaning that there have now been five thousand seven hundred and sixty-ninth years since the moment of creation, according to Jewish tradition. 2) Yom Kippur, which follows in a week and a half, is properly regarded as the Day of Atonement, when we attempt the have any bad verdict overturned on appeal, so to speak. 3) I caught a re-run on C-Span, which marked the time of the speech as 12:20 PM ET.
