Too bad it's an election year
I'm not going to assign blame for the bailout collapse. The whole thing is just so depressing. But let me make one point: as readers of this blog know, I've been agitating for entitlement reform for years. Unfortunately, politicians are caught between the "will of the people" and what's best for the country, often leading to paralysis. In the case of Social Security reform, everybody in Washington knows the system can't go on at its current rate, but nobody is willing to cut a popular program. So nothing happens.
In the case of the bailout bill, nobody in Washington wanted to bail out Wall Street (due to populist or conservative principles) even though they knew it was the right thing to do for the overall economic health of the country. So nothing happened.
I'm reminded of a quote by Winston Churchill: "It has been said that democracy is the worst form of government except all the others that have been tried."
Extra – Christian Science Monitor: "Why the bailout bill went down"