It’s Main Street That Will Suffer

For the sake of $700 billion that might never have been spent and might well have turned a profit for the federal government, the Congress destroyed over $1 trillion of private wealth as the stock market plunged yesterday.

More importantly, they voted to sharply tighten the availability of credit for local merchants, small business owners, homebuyers and other citizens. They voted to weaken the financial stability of local banks. They voted to put payrolls and jobs in jeopardy.

Without this economic stabilization measure, we have no lender of last resort at a time when the capacity of the commercial banking system is being stretched to the limit as evidenced by the takeover of Wachovia last weekend.

The normal borrowing that corporations do to fund their businesses stopped when the commercial paper market froze after the failure of Lehman Brothers. That makes commercial banks all the more important as a source of funds. They need to be able to lend confidently and trade assets for cash in order to help local enterprises meet payrolls, make loans and carry on ordinary business.

Any congressman who cast a no vote put the economic viability of Main Streets all across America in serious jeopardy. Bailout is a misnomer. Wall Street as we knew it is already gone. The only remaining question is whether Main Street will be next.

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