Politics and bailout aren’t mixing well

Former Rep. William Frenzel (R-Minn.) said the bailout plan failed to pass in Congress because of the “real struggle between the hard right and the hard left,” at a discussion held by the Bookings Institute. He said there is “an extra level of animosity” between political parties, which made bills “doubly difficult” to pass.

Frenzel said that the bill will have to contain more “goodies” for it to be passed. In order to get the necessary 12-15 more votes to pass the bill, it will have to “move to the right” in order to get Republicans to vote for it next time. He was adamant the bailout would be passed because there was a small group of Congressmen that will change their vote.

Senior Fellow at the Brookings Institution Alice Rivlin said that the economy will recover when the United States “gets credit flowing again.” She supported the bailout bill, saying it will “probably work.” Rivlin said that if the U.S. does nothing, it could result in “a financial meltdown around the world.” She added that if we can successfully rescue failing banks and companies, that there is no reason to think there is something “fundamentally wrong” with the U.S. economic system.

Professor of Entrepreneurship at MIT Simon Johnson said that while we are in a dangerous situation, the U.S. government is ahead of all other industrialized countries in economic expertise. He said that while the bailout plan is needed, we must take a comprehensive look at how this happened. He said we will “continually have problems if [the U.S.] relies on stopgap measures.”