House to vote on bailout today; please, God, let the Republicans show that they have a spine!

WASHINGTON — The House braced for a difficult vote set for Monday on a $700 billion rescue of the financial industry after a weekend of tense negotiations produced a plan that Congressional leaders portrayed as greatly strengthened by new taxpayer safeguards.

The 110-page bill, intended to ease a growing credit crisis, came after a frenzied week of political twists and turns that culminated in an agreement between the Bush administration and Congress early Sunday morning.

The measure still faced stiff resistance from Republican and Democratic lawmakers who portrayed it as a rush to economic judgment and an undeserved aid package for high-flying financiers who chased big profits through reckless investments.

The New York Times offers, albeit unintentionally, one more reason why Congress should not permit the tax-payers to provide support to the powers of economic centralization:

“Citigroup Buys Banking Operations of Wachovia”

Citigroup will acquire the banking operations of the Wachovia Corporation, the Federal Deposit Insurance Corporation said Monday morning, the latest bank to fall victim to the distressed mortgage market.

[. . .]

The sale would further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Citigroup. Together, those three would be so large that they would dominate the industry, with unrivaled power to set prices for their loans and services. Given their size and reach, the institutions would probably come under greater scrutiny from federal regulators. Some small and midsize banks, already under pressure, might have little choice but to seek suitors.

[All emphasis mine. – Nathancontramundi]

Three banks absolutely dominate the banking industry and the sprawling Federal government finds (Constitutional t)reason to exercise even more power. Ladies and gentlemen, sharpen your pitchforks: The troops will be positioning themselves on native soil and our fearless leaders commit acts that may incite uprising, which the troop shall, doubtless, be prepared to defeat. God. Bless. America.

Update: President Bush admonishes Congress to support the bailout, as “difficult” as the vote may be.

Bush acknowledged that the vote will be “difficult” in the face of opposition from taxpayers and voters but necessary to protect the economy.

“A vote for this bill is a vote to prevent economic damage to you and your community” by stabilizing financial markets and renewing the flow of credit, Bush said, attempting to undercut arguments that the proposed legislation bolsters Wall Street at taxpayers’ expense. “This is a bold bill that will keep the crisis in our financial system from spreading through our economy.”

My own two cents: Part of the fundamental problem is that we incline, all too easily, to think in macroeconomic terms, of “the economy”, rather than of our myriad local and regional economies. Daniel noted, a few days ago, that “[s]mall banks are functioning and even thriving as deposits have started flooding into them, and credit from these banks does not seem as if it will be drying up.” I suspect that the owners of First Farmers Bank and Trust and the First National Bank of Monterey, back in North Judson, even if the woes of “the economy” have hit home (actually, at least as of May, they had, for the better), probably have much less to fear than the shareholders of Wachovia had. These small banks, which serve the people who know the owners and employees of the bank, which serve as an important life-blood for countless small businesses across the country, help to drive our economies; the “too big to fail” banks drive — or wreck, as it were –“the economy”. Our purportedly conservative president wishes to “secure the economy” (to employ the present defensive jargon), rather than to allow our economies to function naturally, without fear (Yes, I apologize, I’ve anthropomorphized things as abstract as the economies.) of disaster caused by intervention. This, Mr Bush, is decidedly un-conservative, as has been most of your presidency.

(Hat tip, on the internal occupation: John Schwenkler)

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