The Republicans who voted against the Paulson plan may have been responding to their grass roots constituency who opposed the “bailout”. It is likely that their constituents do not understand that this is a liquidity crisis first and a bailout second and even then it is less of a bailout than a stabilization effort in a panicked market.
But it is also likely that they have very legitimate concerns about a huge amount being spent in a way that is in absolute conflict with their basic principles of governance, and being rushed to do so because of a crisis that few people understand.
The money is not being spent on bonuses and entertainment. It is being used to buy assets at very distressed prices. Some of the guarantees the Treasury is making are in exchange for preferred stock. Much of the $700 billion is likely to be recovered and a profit is even possible. The alternative is a credit crisis and a big chance of a 1929.
The Republicans should not be voting to allay the fears of a constituency that doesn’t understand the urgency or depth of the problem. Leadership in such a crisis requires you to act as you see fit even if it is not understood by your voters and even if it is not popular.
If all we needed was to poll the voters for solutions to such a crisis we could replace our leaders with 900 numbers and let them call in like voting on American Idol.