The U.S. House of Representatives has passed the revised version of $700 billion bank bailout plan intended to bolster the ailing U.S. financial system.
The House rejected the original bill on Monday, sending stocks tumbling around the world.
But lawmakers approved the rescue package, backed by U.S. President George W. Bush and Treasury chiefs, Friday after the U.S. Senate passed it by a large majority on Wednesday.
Congress voted 263 to 171 in favor of the bailout bill, which will now go to President Bush to be signed.
Wall St, after climbing nearly 300 points before the bill was passed, slipped slightly after the successful vote as the market tried to take in the news.
But the bill also includes some odd sweeteners -- so-called "pork-barrel legislation" -- such as an excise tax exemption for a very specific type of arrow used by child archers, a $478 million tax incentive scheme to encourage movie companies to continue producing films in the U.S, and measures to allow employers to provide benefits to employees who commute to work by bike.
The next question is, will it be enough? Frankly, the odds are not good. There are plenty of signs that the credit crunch has spread out of finance into the real economy. Another 159,000 off US non-farm payrolls in September is just one. If corporations, encouraged to take on too much debt in good times by those same banks, now find their access to credit limited, they will seek to reduce borrowings, delay investment and lay off workers. Those workers, and everyone else worried about their jobs and houses, will stop spending.
Those corporations see falling sales, whether of consumer goods or of their components " note the abrupt fall-off in demand reported this week by Wolfson, which makes chips for iPhones, for example " and lay off more workers. Meanwhile, more entrepreneurial smaller firms, which have traditionally provided much of the impetus for economic growth, are even more constrained by their bankers. This is how it goes, down and down in an endless spiral.
At the end of that spiral there are two futures. One is Götterdämmerung, a financial catastrophe that does indeed bear comparison with the aftermath of 1929 " and please, disregard anyone who claims we are there, or anywhere near there, yet.
The other is a sadder, shabbier world perhaps more comparable to Britain in the 1950s, where luxuries were just that, mostly inaccessible, a step up the housing ladder meant years of penury ahead and credit was almost unheard of. Worry if you work in finance, estate agency, retail or other vulnerable areas, or if you are unable to trade out of your debts on your existing salary.
Anyone looking at the bail-out package as the salvation for the banking system or the U.S. economy is dead wrong. The problems in the economy and the banking system have gone far beyond what the package can fix.
Will the bail-out package fix the economy?