This is the state of mind I have been in since the votes came down short of approving the bailout package. This is a monumental day in our economy and our country. What we are witnessing now is the result of a chain of events that have been years in the making. Yet, where we are at today is not because of greedy Wall Street executives or consumers who don’t know how to save. Today, politics is the sole culprit of the collapse of the modern global financial system, and it’s the policymakers that orchestrated this collapse who deserve the blame.

Assuming you’re not living under a rock, you already know the bill failed and the fact that a few Congressmen kept the much needed bailout package from happening. We’ve already gone over the backstory and the media will fill you in on how all of this happened. But, what I want to do is talk about what really happened and how this atrociously harmful outcome was allowed, when it could have been prevented.

The most disconcerting thing about this issue to me is that it boils down to politics. A few members of Congress prevented the bailout package from taking place, and as a result, the markets have plunged beyond imagination. What I can’t understand, though, is why a small group of people that really don’t understand what exactly is at stake and certainly don’t know how to solve the problems we’re facing on their own, were allowed to weild power over those people who have been selected to ensure the stability of our economy.

You see, monetary policy is not a democratic process. It isn’t up to voters to ultimately decide what policies are best to inject stability into our economy and financial markets. The reason for this is because they don’t understand how to do this. And, I’m not just saying this as an economist or financial professional; I am saying this because I can assure you the far majority of the country does not understand what is best for our markets to operate efficiently. This is why most people do not save effectively or invest productively. And, the ones that do hire people to manage their finances for them. That’s why people like me are here: to help make sure this portion of our country is represented by the knowledge it takes to manage this complex machine.

But, somehow, this group of people who are driven by one thing, which is politics, were able to drive a wedge in the stability of our economy, for the purposes of making an ideological point. These members of Congress who voted against the package decided to let their constituents be the monetary policymaker in this country, instead of Ben Bernanke and other appointed officials who have been mandated to manage this economy. People that don’t have any clue what is truly at stake were allowed to interject politics into a process they had no business being in. And now, they will all suffer.

What people don’t understand is that this bill doesn’t just affect rich Wall Street bankers and finance types. In fact, all of these people will be just fine. Who won’t be fine is the small business owner that won’t be able to meet payroll because there is no credit; or, the person nearing retirement who’s retirement decreased 25% in value in one day.

But, the people on the Hill opposing the bailout think there is some sort of principle they’re making. They think that they are true fiscal conservatives and they will restore conservatism in this country, even if they have to wipe everyone out and start from scratch. That’s the logic that these people made today.

So, I asked this to someone else earlier today, but what will it take? 1000 points? 5000 points? How many businesses will have to go under because they can’t meet payroll? How many bankruptcies will have to be filed? How many people will have to lose the value of their home or see their retirement depleted? What will it take for these people in Washington to realize what is at stake and that the dangerous game they are playing is costing our country in every way possible?

Don’t be mistaken, we are paying for this right now. The country is weaker today that it was yesterday and certainly weaker than it was last year. Everyone wants to blame the Bush Administration for Hurricane Katrina (and everything else under the sun), but this Administration stood up to take action, only to be shot down by the blowhards on the Hill who thought their power superceeded the markets. These people thought they control the markets and their point should be made, the cost to the people be damned.

Well, here we are. The market closed more than 700 points down, and there’s no sign this will improve. The credit markets remain in shambles and uncertainty runs through our economy like a parasite. The markets have no stability and widespread systemic risk has come to fruition, now to the point of full-scale panic. I don’t come from the gloom and doom school of economic thought, but today, I realize economic doomsday is here. The question isn’t what will we do; the question is what can we do.

NOTE: This post was originally published on my blog at www.marktomarket.typepad.com.