Time To Bail Out The Bailout

It should be abundantly clear now to most folks that John McCain, who lied about suspending his campaign to deal with the economic crisis, has only served to inflame the situation-- after remarks from Barney Frank and Chris Dodd outside the Capitol at 10 pm tonight, an agreement on the bailout seems even further away than it did this morning before Brother John arrived in town.

I have no doubt that, in McCain's world, politics are more important than the economic necessities of the bailout. The only urgency seems to be that McCain be seen as the architect of the bailout deal. Brother John, who admitted on Tuesday that he hadn't even read the 3-page Paulson plan, arrived after everyone else for the White House summit today-- and according to several sources, barely registered as a presence during the meeting.

McCain, who started the day campaigning in New York city, must have thought that he would be the proverbial "last to arrive at the party" and ride out of town as the "white knight". But he instead found himself presiding over a revolt within his own party. While the White House and Paulson had been working all week to reach a deal (and by all accounts were very close to one),
a maverick group of House Republicans remained opposed to any type of federal bailout (likewise Senator Richard Shelby). If you think I sound jaded, get a load of what Politico had to say:

A high-profile White House meeting on Treasury’s $700 billion Wall Street rescue plan ended Thursday on a sour, contentious note, with no joint endorsement by the two presidential candidates, Sens. John McCain and Barack Obama.

Democrats complained of being “blindsided” by a new conservative alternative to the plan first put forward by Treasury Secretary Henry Paulson. And the outcome casts doubt on the ability of Congress to move quickly on the matter, even after leaders of House and Senate banking committees reached a bipartisan agreement Thursday on the framework for legislation authorizing the massive government intervention.

It was McCain who urged President Bush to call the White House meeting attended by House and Senate leaders as well as Obama, his Democratic rival. But the candidates left without commenting to reporters outside, and the whole sequence of events confirmed Treasury’s fears about inserting presidential politics into what were already difficult negotiations.

Wall Street had posted a gain of 197 points earlier in the day, buoyed by hopes of an agreement. The markets had closed by the end of the White House meeting, but Friday could bring turmoil, and there will be immense pressure now by Treasury to get back on track before Monday.

Amazingly, according to a CBS news report, McCain himself proposed a new alternative after the White House meeting that involved (surprise) fewer regulations and more corporate tax cuts. Bob Orr reported that McCain's "privatization" plan angered and surprised Democrats like banking chairman Chris Dodd who later said he thinks the White House summit was more of a political stunt for McCain.

Here's a later posting from Politico on the sorry state of affairs. No word yet on whether John McCain attended this evening's emergency meeting. But the House Republicans apparently sent only a junior-ranking member who wasn't authorized to negotiate on their behalf-- which tells you how seriously they are taking the whole situation.