Last week the Retailer Industry Leaders Association (RILA) called on Congress to act and come up with a financial rescue bill for the nation's banking system.
At the time, Sandy Kennedy, president of the RILA, said, "For our member companies and for our customers the implications of continued instability in the financial and lending markets are dramatic. Sagging consumer confidence and borrowers unable to access credit foreshadow devastating declines for retailers small and large. Therefore, on behalf of retailers nationwide, their employees and the millions of customers they serve, RILA urges Congress and the White House to act in a bipartisan manner to expeditiously solidify the financial markets and return stability to our economy."
Over the weekend, leaders of the Republican and Democratic parties indicated they had reached a compromise on a revised version of the Emergency Economic Stabilization Act proposed by the Bush Administration and the Secretary of the Treasury Henry Paulson.
On Sunday, Secretary Paulson praised members of the House who he said "were focused on the right things - creating an effective program that can be implemented quickly and effectively, and doing everything possible to protect the taxpayers."
He said passage of the bill would send a "signal to investors large and small, here and abroad, that we are committed to taking the necessary actions to protect our financial system and our economy."
Yesterday, by a vote of 228 to 205, the House rejected pleas from the White House, business leaders and others to pass the bill. The result was the largest single-day point decline in the history of the Dow Jones Industrial Index, 778 points. In total, the stock market lost $1.1 trillion in value for the day.
As might be expected, retailer stocks took a big hit along with the rest of the market.
Discussion Questions: How will the defeat of the Emergency Economic Stabilization Act affect retailers? What can the retail industry do to get Congress to address the financial crisis facing it and the nation?