Never under-estimate the ability of Congress to muck things up. In the 1930s, the US Congress did a lot to turn a financial crisis into a depression by passing the Smoot-Hawley tariff act. Have America’s politicians just done it again, by rejecting the Paulson bail-out?

I suspect not – but only because I think that the market reaction last night was so strong that Congress will have to re-think and pass some version of the bail-out soon.

The Congressional naysayers, it seems to me, were motivated by three emotions: political fear, political pique and genuine ideological or practical reservations. The first two motivations will have been undermined by the collapse in the Dow after Monday’s vote. The huge fall in the stock market made the point that there is indeed a connection between the fate of Wall Street and the fate of Main Street in a much more eloquent fashion than any American politician has so far managed. Congressmen who feared being punished at the polls in November, if they voted for the package, may now have to recalculate.