According to Time Magazine, the $700 billion financial bailout package failed because most Americans wanted it to fail. Before the vote, members of Congress were getting calls 100 to 1 against the bill.
From the article:
The question is: why? It’s easy to see why bailing out rich bankers doesn’t feel super, but why, despite all the efforts of all of the country’s leaders to fill them with fear of an economic apocalypse, did Americans not see a failure to act as a serious threat to their livelihoods?
Traditionally, human beings are not great at assessing this kind of risk — a peril that has not yet arrived and that is, in any case, hard to viscerally imagine. Witness people’s reluctance to evacuate before hurricanes, and weather forecasts portend a danger far easier to comprehend than failing investment banks.
But there are methods of communicating risk in a way that stills the heart, with words that inject dread into the populace. And Treasury Secretary Henry Paulson Jr., Fed Chairman Ben Bernanke and President George W. Bush used none of them. “
The case wasn’t made as to why the little guy needs this,” says Paul Slovic, author of The Perception of Risk and a psychology professor at the University of Oregon. “The numbers and vague warnings are too abstract.”
The most effective warnings are like the most effective TV ads: easily understood, specific, frequently repeated, personal, accurate, and targeted. Paulson and his grim reapers managed only to repeat themselves frequently. They were not easily understood, partly because the problem is so complex. They did not personalize or target their warnings.
And, as they themselves admitted, they did not know if their warnings were necessarily accurate, due to the novelty and unpredictability of the crisis.
But their biggest mistake was a lack of specificity. They never clearly told the American people what might happen if Congress did not act. “If you want people to support an action,” says Dennis Mileti, an expert on risk communications who has studied hundreds of disasters of the more conventional kind at the University of Colorado, Boulder, “you need to link the action to cutting people’s losses. And that link isn’t in place.”