Looks as if the negotiators had a deal going in to the White House meeting that McCain demanded and didn’t have a deal coming out. McCain, having just flown in from his photo-op at the Clinton Global Initiative, presented some new proposals (which Sec. Paulson said were “unworkable,” and were reportedly based on this nonsense from some of the wingnut House Republicans) but no specifics.
I guess the idea is for McCain to create a crisis and then step in to solve it, like a firebug starting a fire so he can be a hero by putting it out. And the Republican leadership on the Hill seems happy to help with at least the fire-starting part of the program. Dodd and Frank both seem convinced that something is needed, and they both have enormous credibility with their colleagues, but it can’t be Paulson, Dodd, and Frank against the rest of the world, and they know it. Dodd is apparently peeved, calling McCain’s proposal “a rescue plan for John McCain.”
The deeper problem here is that the wingnuts have been stoking the fires of right-wing populism for so long that Republican Congressmen are terrrified to vote for the bailout. They have systematically destroyed the capacity of what used to be called the Establishment to get things done at moments of crisis. If all the news media and all the academics and all the bureaucrats say we need a bailout, doesn’t that just prove that it’s a plot of the Liberal Conspiracy? The analogies with immigration reform are striking. On the other side, the systematic lying of the Bush Administration has created an equally deep distrust among Democratic voters.
The money-cons are in a bind. On the one hand, they want McCain to win. On the other, some of them are terrified about a genuine credit crunch. And at this point, with McCain on the pubic teat, it’s not even clear that they can threaten to cripple his campaign by withholding money, though they could wreak havoc at the RNC.
It seems to me that one person who might have both the power and the motivation to credibly threaten McCain with bad consequences if he continues to act up is Hank Paulson. If he were to complain about McCain’s behavior, that would hurt. The same might be true of Warren Buffett.