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Go Home How Mccain's Gambit Could Work

SEPTEMBER 26, 2008

How Mccain's Gambit Could Work

BY EVE FAIRBANKS

Everybody here is saying McCain's bailout gambit was a failure. (When I offered the observation "It does seem to have gone badly" in a colleague's office this afternoon, I was guffawed out of the room on account of understatement.)

The whole thing definitely seems ridiculous to me. But here's the new spin on it that Minority Whip Roy Blunt just gave on CNN (transcribed approximately):

John McCain came down here and said, "Wait a second, I think the House Republicans are on the side of the taxpayers, and I'm with them." ... They [Democrats] can do this without us. They have the votes. And virtually all of my colleagues can go home to their constituents and explain what was wrong [with the bill] ...

To translate: McCain understood the anti-bailout-bill sentiment outside of Washington and then gave House Republicans the political backup to buck the pressure to compromise. In a vacuum, it's an appealing populist narrative, and in a vacuum I even think it works -- witness the success of the Republicans' "we understand what the country really wants, unlike you Democrat stuffed suits" posturing on oil drilling this summer.

It doesn't work if Democrats point out -- again and again and again -- the 180 degree turn this represents from McCain's original, anti-populist rationale for going to Washington: to support the compromise and to lend his expertise at bipartisan, smoke-filled-room negotiations, not to undermine them on behalf of "the taxpayers." McCain's motivational switcheroo -- and the reporting that he passed Bush's "summit" yesterday with Paulson in silence, obviously unsure what the hell he really wanted out of this whole damned thing -- ought to cement his reputation as a chaos-creating, erratic, back-and-forth decisionmaker. Barack Obama needs to hammer the contrast between McCain's Wednesday statements and his supporters' Friday spin home tonight. No Mr. High Road.

Update: Mike notices the same emerging GOP storyline, above, but recommends Obama de-engage rather than hammer. Honestly, the political dance on this has turned into such a speed jig it's hard for me to know what impression Obama ought to be giving off.

--Eve Fairbanks

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14 comments

That's not change we can believe in.

- BHLnyc

September 26, 2008 at 2:34pm

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Maybe the pols should stop dancing altogether and get back to some basic, simple principles:

1. Do not grant sweeping, emergency powers to federal officials on the basis of those individuals' scaremongering and unfounded assertions of "unknown unknowns" or alleged financial weapons of mass destruction.

2. Use lessons learned from previous crises. (Hint: the bankruptcy approach, involving a) deleveraging and b) recapitalization by new owners who wipe out the old ones, works fine. See today's takeover of WaMu by JPM).

3. Listen to the people, for once. We know this plan is a piece of shit that stinks to heaven. SLOW DOWN, and calm down. Demand that Paulson and Bernanke back up their assertions with hard evidence. Explore alternatives and listen to other experts like Calomiris of Columbia B School. There are far better, far less risky plans available. Let's hear them and explore them in an open, transparent manner.

- teplukhin2you

September 26, 2008 at 2:58pm

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One road map:

1. A deal still gets done --or effectively done--today in principle based in part on the house republicans' alternate plan, and seen to be done under McCain's aegis;

2. McCain flies in tonight triumphing that;

3. And McCain says to Obama now let me show how to lead as to foreign policy.

- basman

September 26, 2008 at 3:43pm

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Well? Its an argument I guess.  Not a bad one even.  I think McCain does go in to tonight in a strong way, in the end people like melodrama in elections and who is a bigger drama queen?

As long as he keeps his temper and breaks even tonight, I think it should be a draw for both of them.

- Wandreycer1

September 26, 2008 at 4:13pm

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The danger for McCain is that Obama can ram it home that he wanted to drop everything and go to DC to pass some emergency legislation, which his running mate described on TV as the only thing that would prevent a depression, but when he got there he started playing politics witih the Republican House members in order to torpedo said legislation.

That looks like someone who is winging it in lots of different ways, rather than someone who has a vision for restoring economic and fiscal sanity to the system.

- ironyroad

September 26, 2008 at 4:22pm

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Exhibit A

Shadegg Update  

“For the first time since the potential crisis confronting our nation’s banking system arose, I am cautiously optimistic.  The proposal initially offered by Secretary Paulson was irresponsible and woefully lacking in safeguards for American taxpayers.  Thanks to intervention by Senator McCain, both the White House and Congressional Democrats appear to be moving toward a more responsible rescue plan.”

- basman

September 26, 2008 at 4:46pm

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Exhibit A

Exhbit A

Shadegg Update  

“For the first time since the potential crisis confronting our nation’s banking system arose, I am cautiously optimistic.  The proposal initially offered by Secretary Paulson was irresponsible and woefully lacking in safeguards for American taxpayers.  Thanks to intervention by Senator McCain, both the White House and Congressional Democrats appear to be moving toward a more responsible rescue plan.”

- basman

September 26, 2008 at 4:47pm

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basman, huh? do you really think they are going to sell the Dems are going to reduce Capital gains taxes?

Paulson got down on bended knee to Pelosi, not McCain.

- blackton

September 26, 2008 at 5:15pm

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tep, you've lost your effing mind for sure this time. Moments ago, I responded to a similar, albeit less well structured (< sarcasm), rant of yours in Chotiner's thread, Are The Dems Really In Trouble? Thusly:

"tep rails:

'It was foolish of Dems to panic and grant such sweeping powers to Paulson. Shows more than anything else their financial illiteracy.'

Wait a minute! I distinctly remember your praising Paulson to the skies mere days ago, that we should thank our lucky stars he had command of the situation and we *need him* to get us through this crisis and not some Bushie twirp. Now you say Dems were stupid...excuse me, financially illiterate...and now are fools for buying Paulson's plan???

As you are wont to say, WTF!"

- tomeg

September 26, 2008 at 5:21pm

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"And we're going to have another encore."

 __William Pearce, former Boston Pops Announcer(deceased)

Wachovia (WB Quote - Cramer on WB - Stock Picks) has reportedly engaged in discussions with Citigroup (C Quote - Cramer on C - Stock Picks) about a possible tie-up between the two, according to The New York Times, which cited sources familiar with the matter Friday.

However, the talks are in very early stages, and no deal may come from the discussions, these people told the newspaper.

The Wall Street Journal named even more potential merger partners for Wachovia, in addition to Citi, reporting that it's also holding talks with Banco Santander (STD Quote - Cramer on STD - Stock Picks) and Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks).

Amid worries about its financial health, Wachovia saw its shares plunge nearly 40% during the trading session following the failure of Washington Mutual (WM Quote - Cramer on WM - Stock Picks) and the subsequent sale of its banking operations to JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks) late Thursday.

Wachovia was reportedly in discussions last week with Morgan Stanley (MS Quote - Cramer on MS - Stock Picks) about a possible merger. Those talks apparently ended earlier this week after Morgan changed its status to a bank holding company and said that Mitsubishi UFJ (MTU Quote - Cramer on MTU - Stock Picks) agreed to take a 20% stake in the firm.

- tomeg

September 26, 2008 at 5:43pm

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..basman, huh? do you really think they are going to sell the Dems are going to reduce Capital gains taxes?

Paulson got down on bended knee to Pelosi, not McCain..

I'm just pointing out one scenario. I don't pretend to know how it will go and appear over time.

Also I don't get the point of your post. It is oddly stated.

All the bended knee stuff is crapola. We'll just have to wait and see how it plays out.

- basman

September 26, 2008 at 5:50pm

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blackton this is where I first saw the analysis of this one scenario, fwiw: www.dickmorris.com/.../the-brilliance-of-mccains-move

- basman

September 26, 2008 at 6:08pm

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Today&#39;s been busy, between the bailout machinations and debate news, so we&#39;ve decided to roundup

- Anonymous

September 26, 2008 at 6:54pm

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But the danger to McCain is that he understands the politics of his own move far better than he understands the bailout, as he and Palin were passionately for it (the bad Paulson version) up to Wednesday and now he's the hero of its demise?  The opening that Obama has is that McCain wanted to dispense with thes campaign in order to involve himself in a process in which he apparently did nothing except change his mind from one day to the next.

However, basman you're right to the extent that the underlying strategy is, as far as I see it, to de-legitimze the debates so that the Palin disaster will be seen as taking place in some area that nobody except Democrats care about.  This is probably the only way to approach it, short of causing a power outage two minutes after the VP debate gets started.

- ironyroad

September 26, 2008 at 6:56pm

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