Tick-tock on a train wreck

How John McCain snatched disaster from the very jaws of success, double-crossing his own colleagues in the process.

Here’s what seems to have happened today, as best as I can piece it together from the NYT and Politico accounts, which are mutually consistent:

John McCain, having “suspended his campaign” because the financial crisis was so dire and his leadership (which no one had actually asked for) so badly needed, didn’t show up in Washington Thursday morning while the Treasury and the Congressional leadership were trying to finalize a deal. Instead, he took his photo-op at the Clinton Global Whatever, jetted in after noon, met with House Republicans (who were scheming to torpedo a deal, or perhaps decided at their meeting with McCain to try to torpedo a deal) and then showed up just in time for the White House meeting that he had suggested, Bush had called, and no one else wanted.

In the meantime, McCain had rejected Barack Obama’s proposal that the two of them issue a joint statement of principles that would have allowed the negotiators to know what the two Presidential candidates would, and would not, accept. That was the one constructive thing the two candidates could have done, since neither of them has been close enough to the bargaining, or the issue, to make detailed suggestions. (That’s aside from McCain’s apparently not having bothered to even read the Paulson plan, such as it was.)

Going into the afternoon meeting, the White House, the Treasury, Senate Democrats, Senate Republicans, and House Democrats were all on board for a modified Paulson plan. As of 1 pm, Sen. Robert Bennett (R-UT) publicly announced that a deal was in place. The negotiators thought they had the House Republicans with them. McCain, who had met with House Republicans but no one else, knew the House Reps weren’t prepared to deal but didn’t tell the others.

At the meeting, John Boehner surprised everyone but McCain by saying his caucus wouldn’t go along, thus repudiating the senior Republican on House Financial Services, Spencer Bachus. Boehner presented a new plan that had never been discussed at any of the previous hearings or meetings, and which Paulson immediately dismissed as unworkable (as it is). McCain sided with the House Republicans against the deal that everyone else wanted.

Afterwards various House Republican aides told reporters that part of the reason was that they suspected the Democrats of trying to rush through a deal in order to cheat McCain out of the credit he was trying to steal.

Then everything broke up in acrimony. At a meeting tonight that just broke up, no one was present who could speak for the House Republicans.

It seems overwhelmingly likely that if John McCain had kept from flapping his jaw, we’d have a deal by now. Current odds: not so good.

The chart below represents InTrade trading on a contract that pays off if there’s a bailout by Sept. 30. In the hours before McCain’s sneak attack on Obama at 3:30 Wednesday (the 24th) the contract traded at between 80 and 85 percent. It dipped immediately thereafter, soared this afternoon after the pre-White-House negotiation ended with everyone smiling and announcing a deal, and has since collapsed to about 60%.

If a real crunch arrives, remember whom we have to thank. And in the end I don’t think McCain is going to benefit from it politically; he may succeed in wrecking the economy, but not in winning the election. If I were booking one of the Sunday shows, I’d want to book Spencer Bachus or Robert Bennett and see what they have to say about their party’s Presidential nominee. And if there really is a disaster, look for Paulson to resign and go public.

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Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com