The U.S. House of Representatives' vote yesterday to reject the $700 billion bailout is not just making news on Wall Street, but in UC Berkeley classrooms as well.

The House voted 228 to 205 against the plan, which would have effectively allowed the government to buy mortgage-based securities from financial institutions that have recently become devalued or difficult to sell.

Since the plan was proposed by Treasury Secretary Henry M. Paulson, Jr. on Sept. 19, it has been the topic of discussion in classes ranging from political science to business.

Last Tuesday during his class about Congress, political science professor Robert Van Houweling showed a

15-minute live broadcast of the Senate hearing in which Paulson and Federal Reserve Chairman Ben Bernanke argued in favor of the bailout.

Van Houweling said his decision to show the hearing was not meant to focus on the bailout plan itself, but to show how politicians reacted to it.

"High stakes issues like this illustrate the dynamics of Congressional politics, specifically how members of Congress respond to electoral pressures," he said. "One of the reasons it was rejected is that it was unpopular in terms of what members of Congress are hearing. Their constituents are calling to say they don't like the bailout and neither party wants to take the exclusive blame (if it passed)."

U.S. Rep. Barbara Lee, D-Oakland, was among the legislators who voted against the bailout plan yesterday. She said that it would have done little to remedy the foreclosure crisis, which she called the underlying problem.

David Robinson, a senior lecturer at the Haas School of Business, said he took 40 minutes out of his undergraduate marketing class last Thursday to give an explanation of how the nation got into the economic crisis that it is in and how President George W. Bush is trying to fix it.

Robinson said many students sent him e-mails saying they were grateful that he discussed the situation.

"They were fundamentally interested in why all of a sudden this is such a crisis when we knew about these bad loans for awhile," he said.

Pete Chromiak, a graduate financial engineering student at UC Berkeley, said he is concerned with what the failure of the plan, as well as recent bank takeovers, will mean for the financial engineering job market, though he personally has secured an internship for the fall.

He said his courses have helped him better understand what is happening now and what might happen tomorrow.

"We have had classes where we had the lecture kind of thrown out the window to talk about recent events,"

Chromiak said. "I wouldn't know what was going on right now six months ago, but now I understand the situation really well."

Tags: FINANCIAL CRISIS