25 September 2008

On McCain's DC Appearance and the Bailout's Progress

So this morning, Republicans and Democrats agreed to the bailout plan's framework before Senator McCain even landed in Washington DC:
McCain's "Straight Talk Air" landed at National Airport just after noon, and McCain's motorcade sped toward the Senate. But by then, senior Democrats and Republicans were already announcing that a deal in principle had been reached.
Things looked so promising that the Dow shot up today. Now? Despite an initial bipartisan, albeit tentative, agreement, things aren't so clear:

By midday today, congressional leaders said they had reached the outlines of a deal. But that optimism vanished after the White House meeting.

Democrats and Republicans said that prospects for a deal vanished after McCain tried to prod his fellow Republicans in another direction. (The Guardian)

It seems that Senator McCain's appearance in DC has effectively derailed the deal: ABC is claiming that it may well be dead after several Republicans objected, vociferously, to the plan earlier today. You got it--politics has well and truly interfered with the negotiating process, and the matter looks ever more like a game of chicken.

In response to the renewed instability, you can expect the Dow to plummet tomorrow.

Update: According to Ben Smith at Politico, the deal has become "a partisan standoff, with House Republicans walking away from the Deal." That's right. All that bipartisan progress? Gone. Now what could have happened between this morning's optimism and agreement and this evening's bipartisan breakdown? It's just inexplicable. . . .it all just fell apart at the White House meeting. David Rogers writes:
The whole sequence of events [at the meeting] confirmed Treasury’s fears about the decision by Bush, at the urging of McCain, to allow presidential politics into what were already difficult negotiations. And while the markets were closed by the time the meeting ended, Friday could bring turmoil, and there will be immense pressure now by Treasury to get back on track before Monday.
I'm just as against a corporate bailout as the next guy or gal, but we have to do something, and quickly. It's gobsmacking that any politician stall this effort and turn it into a political showcase, sadly, it looks like several have done exactly this.

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