A failure of public confidence

One thing may be said with certainty: Monday's defeat of the $700 billion Wall Street bailout plan was a victory for representative government.

The bill failed the House by a vote of 228-205. A recent Associated Press-Knowledge Networks poll showed 45 percent of Americans opposed the plan, with just 30 percent in favor and 25 percent undecided. News reports said lawmakers received a flood of angry phone calls in recent days from constituents opposed to the bill.

When the Founding Fathers wrote the Constitution, setting the terms of representatives at two years, they ensured that members of the House would continually have an eye toward an election, making them more responsive to public opinion. That is particularly true when an election is five short weeks away. The votes of Utah's three representatives demonstrate this. Rob Bishop and Jim Matheson, both of whom face re-election in November, voted against the bailout. Chris Cannon , who lost in his party's primary, voted in favor.

Far less certain, however, is whether the defeat of the bill was a good thing. Boiled down to its basics, the bailout was built on the assumption that bad debts, primarily from mortgages, are clogging banks and financial institutions and choking off credit, and that the best way to alleviate that is for the government to buy that bad debt. In time, the government would sell those assets — at a profit, with any luck — and earn back the investment of tax dollars.

That's clear enough. What is murky, however, are the details. How would the treasury secretary determine the purchase price for the bad assets? How much unfettered power would the secretary have to make these decisions?

On Monday, the failure of the president and congressional leaders to sell their plan, on its merits, to the American people proved decisive. The public may not be sophisticated when it comes to economics, but the nation's leaders have a duty to clearly demonstrate that the bill was not an example of the powerful helping the wealthy, without regard to the masses.

A recent CNN/Opinion Research poll showed 79 percent of Americans believe the economy would worsen without government action. However, 77 percent said they felt a bailout would reward those responsible for the downturn.

That is the gulf politicians have to bridge if they want their constituents to buy into government intervention.