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“I would amend that statement,” added Rep. John Shadegg (R-Ariz.). “The last time I saw the phrase 'act now' it was advertising one of those time-share condo deals that lock you in after a free trial period.”
”Did you try it?” asked a reporter.
”No!” Shadegg laughed. But he didn't line up with Pence against any bailout.
The presentation had no notable impact on the debate in Congress. As the Republicans spoke, a few cameramen snickered audibly. When Bachmann called the bailout “the enslavement of the American people,” the snickering reached its loudest pitch. And on the way out, Pence offered reporters more proposals that would probably come to nothing, such as a suspension of the capital gains tax by executive order. "There are learned legal scholars who think that's within his purview as president," Pence explained.
But enough Republicans are ready to support the bailout to make all of this moot. Rep. John Campbell (R-Calif.), an Ayn Rand fan and potential future head of the RSC, conceded that his party is divided. “People are struggling with it around here like you can’t believe,” he told me on Tuesday. “This proposal is anathema to everything I believe. I’ve voted against million dollar bills, and here’s a $700 billion one. But to do nothing—that really threatens a massive expansion of government.”
How so? Campbell doesn’t shy from comparing it to 1929. “If John Q. Lunchbucket doesn’t understand this stuff, and waits in line for a block to get into his bank, and then is told ‘we don’t have your money,’ he will respond to any proposal to prevent that in the future. Any populist who says ‘I’ll make sure these guys never get your money again’ will have his ear.”
There is an external reason for the division of Republicans right now. They don’t control Congress. The Democrats run both houses and are negotiating with the executive branch. They own the agenda. But it is striking how free-market economics have no place in the current debate. They are not seen as a credible response to a Wall Street crisis, even by the presidential nominee of the Republican Party, who is angrily attacking the "greed of Wall Street." Contra Naomi Klein, an economic shock has sent Republicans skittering away from free-market theories; the last thing the party of small government seems interested in letting markets work. The current political debate, not just between Democrats and Republicans but even among Republicans, is not whether the government should take over mortgage firms, but how effectively it can manage them.
“Nobody trusts Republicans on these situations,” said Fred Smith. “For good reasons.”
David Weigel is an associate editor of reason.