It's a lovely late autumn morning. The birds are singing, the air is wonderfully cool and seems clean as you breathe it in, the coffee gurgles in the coffee maker, Washington Mutual has gone under -- the largest bank failure in history -- and guys in suits are really freaking out on cable news. The financial wonks are climbing the freakin' walls -- "Where's the bailout?" they ask. "Where's the bailout?" And somewhere in Washington, John McCain quietly craps his pants.By pretending to be the president and to take the reigns of the economy, McCain set himself up to fail. He doesn't serve on the Senate Banking Committee, so he can't actually help draft an agreement, all he can really do is vote or not for the final bill. He has no real input on a draft. Not only did McCain pretend he was going to do something super-important to fix the economy, but he pretended he could.
I don't know which is worse for John McCain, the truth or the perception. The perception is that House Republicans threw out an all but closed deal in order to help McCain, who managed to show up in Washington after the deal was announced. The truth is that House Republicans, swamped with anti-bailout letters and calls and emails, threw the deal out to help themselves. With the exception of those who've announced their retirements, every single GOP House member is up for re-election in about a month. So they did what Republicans do in a crisis; they panicked.
The House GOP offered their own plan -- two, actually, including one that TIME's Justin Fox calls "a joke."
[The plan from] the House Republican Study Committee, seems to be a joke. It calls for a two-year suspension of the capital gains tax to "encourag[e] corporations to sell unwanted assets." But the toxic mortgage securities clogging up bank balance sheets are worth less now than when they were acquired. Meaning that no capital gains tax would be owed on them anyway. If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere. Seriously, where do these people come up with this stuff?
Typical GOP. Use the crisis to push for some kind of tax cut. They seem to be especially attracted to those cuts that don't actually do anything constructive. Another plan, from Republican chief deputy whip, is called "more reasonable-sounding if still pretty vague." That's the advantage of vague. That one calls for the feds to insure more mortgages instead of buying them. House Republicans, no doubt seeing the word "socialist" applied to them more often in a week than they have in their entire lives, seem to believe that nationalizing loss a different way isn't really nationalizing loss.
All of which leaves John McCain pretty much screwed. He thought it would be a good idea, a real masterstroke of political genius, to grab onto this cinderblock of a market and swan dive into the pool. Instead, he finds himself royally screwed. McCain, a man who once said "Economics is not something I've understood as well as I should," seemed to believe that there was the possibility of a solution to this that everyone would like. There's not. The average American doesn't want the bailout at all. The investor class who funds his campaign wants it very, very badly. If there is no bailout, he's screwed. If McCain is credited for a bailout, he's screwed. It doesn't matter whether or not it works. And, although some economists say a bailout isn't necessary, being the man who bravely did nothing doesn't look a lot like leadership.
Hovering over all of this is tonight's debate -- which may or may not happen. Some think that skipping this debate was McCain's plan all along, but the subject was foreign policy and national security. In that debate, McCain did have the most to lose, but few believed he'd actually blow it on those subjects. This should be the debate McCain doesn't want to miss -- the one where he has some idea what the hell he's talking about.
On the subject of the debate, McCain sounds optimistic. "I believe that it's very possible that we can get an agreement in time for me to fly to Mississippi," McCain said. "I understand how important this debate is and I'm very hopeful. But I also have to put the country first."
"Country first" is looking more and more like a slogan. SurveyUSA has been polling the subject of the debate since McCain's big ride to the economy's rescue and public opinion is not trending pro-McCain. Originally, 50% thought the debate should go on. Yesterday, it had risen to 75%. 50% now say they have "no confidence" in McCain on the issue of the economy.
This is what happens when you pretend to be able to do something you can't. John McCain, whose stride had been broken by stumbles at the beginning of all of this, is simply trying to build some econ cred. But, being an economic dope, he's managed only to dig himself in deeper with his bumbling cluelessness.
I wish I could think of more to add here. This was a gross miscalculation on McCain's part, a fumble of epic proportions -- you'd think there would be more to say about it. But I guess the most spectacular explosions are easy to describe -- "It went BOOM!" I could add a bunch of useless words to match the grandeur of McCain's mistake, but all I'd really be doing would be pouring gravy over "he blew it."
-Wisco
BREAKING AS I PUBLISH: McCain backpedals on his original position that he wouldn't leave Washington until a deal was reached. The debate is on.
