If conservative purists opposing the Paulson plan were to be consistent in their market fundamentalism, they'd work Ron Paul-style to eliminate the Federal Reserve and just accept depressions as the cost of doing business in a capitalist system, as we once did in the 19th century. We weathered the depression of 1893 -- fueled by the bursting of a railway bubble that devastated the banks -- so why can't we grin-and-bear-it through another one?
House Republicans will get the blame if the Paulson plan isn't saved. When the bill was brought to the House floor on Monday, 133 Republicans and 95 Democrats voted "no." That's a lot in both caucuses, but Democrats delivered a majority of their members in favor. Yes, House Speaker Nancy Pelosi was harshly partisan throughout the process. But that's not a good excuse. Too many Republicans followed the siren song of ideological fixity.
The financial crisis is so disturbing exactly because finance is so centrally important. Our sophisticated financial system -- inherited from the British -- has been one of the glories of Anglo-American capitalism. "The Bankers, accountants, investors, traders, and corporate officers whose joint efforts brought this system forth have changed the world far more profoundly than virtually any of their contemporaries," writes Walter Russell Mead in his book "God and Gold: Britain, America, and the Making of the Modern World."
Without this system, Britain and America wouldn't have risen to global pre-eminence, and consumer capitalism as we know it -- dependent on credit -- wouldn't exist. We may be about to find out what happens when it is rocked to its foundations.