An idle political question about the bailout

Posted By Daniel W. Drezner Thursday, September 25, 2008 - 4:11 PM Share

The New York Times reports that, "Lawmakers indicated Thursday that they were close to hashing out an agreement on a proposed $700 billion bailout of the financial system, hours before a meeting at the White House to complete the deal." Here's my question -- given how McCain has played this, doesn't he have a massive incentive to prevent any consensus out until, oh, say, after Friday's debate? Ah, sure enough, we get to this paragraph:

Speaking at a gathering in Midtown Manhattan, Senator McCain, in comments that ran counter to those of Congressional Democrats, said on Thursday morning that no consensus had developed among lawmakers to support the bailout plan.

Of course, a consensus puts McCain in a real bind -- he can't claim to be exercising leadership if a consensus is happening without him. On the other hand, he can't exactly block consensus, cause that would look kind of political. The very interesting question of the day is what the Bush administration and congressional Republicans will do. Developing.... UPDATE: Ah, great minds think alike.... and then there's me and James Pethokoukis. He asks a similar question:

How the bailout turns! If John McCain came out against the Paulson Plan, effectively killing it, would he not a) likely vault back into the lead vs.Barack Obama by opposing a trillion dollar bailout—maverick style!—that voters hate even if they think it somehow necessary, b) lock up working-class, "Sam's Club" voters in places like Michigan, Pennsylvania and Ohio, and c) send the base into Palinesque waves of ecstasy since Newt Gingrich/Rush Limbaugh/ Conservative Blogosphere have been ripping the bailout to shreds? But wouldn't McCain also risk a) forever alienating wealthy economic conservatives in Manhattan and Connecticut, b) looking like he is stabbing the White House in the back, and c) sending the markets into a death spiral?

I have to think that last point is the one that matters. I don't doubt that the bailout is unpopular, but I'm betting that death spiral capital markets will cause a pretty rapid shift in public opinion. UPDATE: Politico's Martin Kady II reports on an agreement on "principles." This quote stood out:

Sen. Robert Bennett (R-Utah), the top GOP negotiator in the Senate, said, "We have a plan that will pass the House, pass the Senate and be signed by the president, and bring certainty to the markets."

Has McCain arrived in DC yet?

EXPLORE:POLITICS, BAILOUT, JOHN MCCAIN

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ERIC (THE ECON DUNCE)

4:50 PM ET

September 25, 2008

OK. Um, here's a dumb

OK. Um, here's a dumb question, is the proposed $700 billion bailout really the only way to save the financial system? No alternative strategy possible? Is the only choice really to do this our face the collapse of Western Civilization?

I find that really hard to believe. Aren't there other ways of putting liquidity in the markets, say, give everyone in the whole country a nice big tax free $5000 IRA? It'll cost the same, and markets would get their cash? What am I missing here? Is there some deep economic theory for why some version of the Treasury's plan is the best or only choice, or is it because this plan was the only feasible option politically and debate over issues like accountability precluded discussion of alternative strategies?

APPALLED MODERATE

5:18 PM ET

September 25, 2008

What a difference a few days

What a difference a few days (and a different news outlet) make. Here's Harry Reid from a few days ago, demanding that McCain get on board the Straight Bailout Express. And, you know something, if you read the NYT story, you learn that there is a consensus among Democrats. If I understand the reporting correctly, McCain is supposed to sign on so that the GOP won't walk away from the deal, making the dems look bad. So, basically, McCain is supposed to help the Democrats not look bad, but if he dares to put his stamp on the proposal, he's engaging in a stunt.

I'm sorry Letterman had a big gaping hole in his lineup last night. I'm sorry Obama has to come back to Washington and talk to a President whose IQ is exponentially less than his. But the only way to a deal is that everyone agrees. Obama, McCain, Pelosi, Reid, GOP Congressfolk that listen to Newt, Dem Congressfolk who listen to Boxer. So, if everybody is now happy and the session in DC is now entirely pro forma, well, yippee. I know Barney Frank will graciously accede to sharing the credit for the bailout, as long as he has to share the blame for enabling the fannie freddie mortgage meltdown that started all this. And I'm sure McCain will say nice things -- insist that he made sure the legislation had the principles he enunciated on the campaign trail, and go down to Oxford and scare us to death with his foreign policy views. If the stories are not true -- then, maybe its a good idea that everyone work through Friday night, hm?

*Sigh* It's really very hard to say nice things about anyone in this election year.

MATTJ

7:33 PM ET

September 25, 2008

Dan- By the same argument,

Dan-
By the same argument, don't Dems in the Congress and Senate have a strong incentive to get this deal done before McCain can show up and get to look like a leader? By giving them two days notice that he is on his way to 'help', doesn't he force them to try to wrap it up before he gets there, if they think a deal will happen at all? Maybe this was his way of pushing them into getting it done quickly; Tuesday it was sounding like it might take until next week, if it happened at all.

DON STADLER

2:04 AM ET

September 26, 2008

McCain probably delayed the

McCain probably delayed the settlement by a day. He rides in like the Lone Ranger to save the day - so of COURSE the Congressional Democrats are put off their feed, and between that and the Ron Paul wing of the GOP are enough to stop it for now. Once it's been properly estabished who is who; that Barney Franks plays Batman and McCain is cast as the Joker in this edisode - the plot of the film will move on.

APPALLED MODERATE

12:46 PM ET

September 26, 2008

Hm. Looks like no deal,

Hm. Looks like no deal, because of Conservative Republicans. Wonder if McCain is going to call them out if they don't agree to a deal? He bloody well ought to. Wonder if mcCain has the boldness to go to the debates for the express purpose of calling out the people who are obstructing the deal? Hey, it makes a good threat, and who is going to tell him to shut up?

Also, if I were to use the language of Daily Kos and the Obama campaign, Frank and them were lying when they said they had a deal. of course, the Dems would not dare to play politics in this situation. Only Republicans would do that.

I think there needs to be a bit of bipartisanship to the cynicism here. A hardball game of politics is being played along with the bailout, and it is not clear who the winner is yet.