The $700 Billion Bailout: A Public-Choice Interpretation
42 Pages Posted: 21 Jan 2009 Last revised: 14 Sep 2014
Date Written: January 19, 2009
Abstract
On September 29, 2008, the House of Representatives voted to reject HR 3997 (known as the original $700 Billion Bailout Bill). On October 3, the House reversed course and voted to approve the Emergency Economic Stabilization Act of 2008 (EESA). This paper applies a political voting model to these two House votes - the rejection of the bill on September 29 and its passage on October 3. Both economic conditions and PAC contributions matter in explaining the two votes, but their effect is attenuated by legislator's power. PAC contributions from the American Bankers Association appear to matter for explaining the legislators who switched. The role of ideology in explaining either the September 29 or October 3 vote is limited.
Keywords: Bailout Bill, voting model, power rankings, Emergency Economic Stabilization Act, big banks, PAC, event study
JEL Classification: D72, E44, G14
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Can Special Interests Buy Congressional Votes? Evidence from Financial Services Legislation
-
The Political Economy of the U.S. Mortgage Default Crisis
By Atif R. Mian, Amir Sufi, ...
-
The Political Economy of the U.S. Mortgage Default Crisis
By Atif R. Mian, Amir Sufi, ...
-
A Simple Explanation for Why Campaign Expenditures are Increasing: The Government is Getting Bigger
By John R. Lott