The House conservatives who sank the bailout didn’t do so because they were listening to loud and angry voices. They sank the plan by accident. They were trying to double-cross the Democrats. First, they wrung lots of concessions out of Democrats at the negotiating table as the price for delivering 80 votes. Then, by not delivering 80 votes and forcing Pelosi to pass the bill as a partisan Democratic bill, they were going to wage a demagogic anti-bailout campaign. But Pelosi refused to be played for a sucker and so the conservative inadvertently sank a bill that, all evidence suggests, they actually wanted to pass. They just wanted to vote “no” on it for short-term political gain.
Getting rolled by Nancy freaking Pelosi is the final indignity for the GOP. If Matt's right with this, I mean.
And of course playing political chicken with financial armageddon in the balance is probably in poor taste. That said, I'm glad the bill died on Monday, since by all accounts it really is a big giveaway that won't solve the fundamental problem--see Yves. Of course Paulson's going back to try and get this particular bill done again, without explaining what the problem is (of course not, then he'd have to come up with a plan that wasn't a giveaway.)
By the way--I've always been curious if hedge funds contribute anything of real value to the economy, or if we'd even notice if they and their gallons of wealth disappeared. I guess we find out tomorrow!