I think we all need to suspend partisanship for maybe a couple of days.  We need to give Paulson, the administration, McCain, and Obama the benefit of the doubt.

We are in a crisis.  Essentially this is a financial 9/11.  Maybe time will prove it to be not as bad as we think, or worse than we know.  But, none of us does know right now.

It would be good for the nation to see Obama and McCain stand together in a patriotic and bipartisan demonstration that when we are all faced with a great threat, we can work together.

The election is still about 6 weeks off.  If the debates are delayed a few days, it will not change the ultimate outcome.  And a debate at this juncture, might indeed seem irrelevant or clueless.  

This is a crisis unlike anything experienced in almost 80 years, so give McCain the benefit of the doubt.  Of course, McCain's campaign was going nowhere as long as the financial crisis is dominating the news, so he has nothing to lose by "suspending" his campaign.  But do McCain and his advisors really believe that pumping $700 billion into the financial system will "cure" the mess so he can go back to talking about the threat faced from the terrorists.  Not gonna happen.  The financial crisis isn't going away, and most likely will get much, much worse.  So where do McCain and his advisors expect to get a boost to his campaign.  Does McCain intend to play the role of an economic expert upon his return to Washington?  No, he has already revealed his approach by attempting to decapitate Cox.  McCain the economic populist?  Stranger things have happened, and he did select the queen of the populists as his running mate.  We are all populists now!

It seems like a debate on how we go forward is exactly what the country needs right now at this time of uncertainty. My inclination would not be to suspend the debate, but for Obama to suggest changing its focus to economics. If McCain doesn't agree it only goes further to show how ill-prepared he is, how he can't manage his time and how he's hiding from the biggest election issue of the year.

ChanRobt said:  "I think we all need to suspend partisanship for maybe a couple of days.  We need to give Paulson, the administration, McCain, and Obama the benefit of the doubt."

I agree.

Good post, btw.

I have noticed that McCain is running not just against Obama but against the libertarian wing of his own party. I have a feeling that they don't want him to win. They are afraid that if he wins he will take the Party back to its pre Goldwater era which is to sayto  its non-libertarian conservative mode.

Absolutely, cease all partisanship until we can at least fix the _process_ for addressing this mess. Paulson is a bright man, but he must not be allowed to singlehandedly determine the fate of the nation's financial future.

Slow it down, put aside politicking, and figure out what exactly are the dimensions of the mess-- how much in derivatives is out there, what the real default rate is likely to be, how much wheat there will be along with the chaff, what accounting principles to apply etc etc etc.

We are not Russia or Brazil ca 1998. Fix this prudently and carefully, in a democratic and transarent manner.

Jon,

The smartest thing for Obama to do is double down on the debate. Announce his own proposal to *lengthen* the debate to include a segment dealing with the economic crisis.

This kind of positive reaction - as opposed to merely McCain's gambit a "stunt" - would negate any sense that McCain is the bigger man, brimming with responsibility and self-denial.

Sorry Chan and jackson, but the unilateralism of this announcement gives the game away.   Sincere bipartishanship and love of country were simply not the principal motivating factors here.

McCain could have called Obama and asked for a delay, followed by a joint press release.  If Obama disagreed, McCain could have said, "Look, I'm putting country first.  What's Obama doing?"

Instead, McCain just announces that he's suspending campaigning and essentially dares Obama to do the same.

Whether silly or brilliant (I lean toward the former, but who knows?), this is a transparently political ploy.

What should Obama do? If he worths anything and minimally stands for everything he has been saying this last year, he should go to Washington and reject the bailout. Completely.

For the reasons I''ve given on another thread (sorry, cross posting):

«For Paulson (perhaps the last true believer in "supply side"...), if you arrange things for the zillionaires in Wall Street everything will flow from there...

Well, perhaps some will be happy for some (limited) time. Particularly traders, real estate sellers, owners of expensive sushi reastaurants, explorers of expensive resorts in the Maldives... Until every last cent has been burnt, they will be happy...

But simultaneously, you´ll be keeping the American economy on the kind of opium it has been living in these last years: dollars for no production.

Indeed, instead of stimulating actual productive and skilful activities (and inherently resortful and virtuous citizens), you'll be stimulating the kind of activities in which one gets money for nothing (trading shares, selling luxury imported cars, mediating real estate,  opening restaurants...).

And, if you approve this plan, you'll also be loosing an opportunity to send a clear message according to which an economy (and a society) depends ultimately not on it's (very apparent) "financial soundness" (apparent since it will be a "bailed out" soundness) but in the actually existent resortfulness and virtuosity of it's citizens. And the success of a nation will ultimately depend on that (not on paliatives that may work for a short period of time...).

Not to mention an opportunity to spend money (if you're going to spend public money), not on financial wizards, but on things that America is desperately in need of (infrastructure, good public education, energy renewal, etc.) and in inherent creation of ACTUAL JOBS for ACTUAL WORKING PEOPLE.

And I'm not going to say again how morally repugnant this plan sounds to me (...). But indeed, you'll be rewarding the villains. You'll be doing what the American Founders would consider unthinkable: to use Government (in this case massive Government means), not to promote the virtue of citizens but to reward (and consequently promote) it's very opposite (the irresponsible management of money in financial "schemes" that resemble Casino activities...).

So perhaps Paulson is a good man thinking that he is doing the right thing (although the political tactics, probably imagined by the likes of Cheney and Rove, are repugnant, since they are the politically equivalent of pointing a gun at the head of Congressmen). But you simply cannot be, once again, deceived by ideologically inspired and misinformed people. By people that think they are doing the right thing to the point of fanatism, but are actually doing it's very opposite.

So, reject this plan, pure and simply. The sky will not fall over your heads.

And if, perhaps, you'll be choosing the hard way in what concerns the most immediate future, I'm sure it will be the right way in what concerns THE FUTURE THAT MATTERS. Indeed: you have to think about the America you want to leave younger generations: is it a totally unproductive America, addicted to Wall Street gambling and to Main Street consumption (of "made in China" unneeded "stuff")? An America that lasts until the dollars is completely discredited worldwide (see todays op ed on the NYT about the very fragile position of the dollar...)?

So, this once, do the right thing. Thank Mr. Paulson for his efforts but reject his plan. Totaly and completely. If you do it, that will actually mean "a fresh start for America"»

.....

«This is not about "class" (...). I don't fucking care if those Wall Streeters have "golden parachutes" and "stock options". As long as they play by the rules and assume their resposibilities and risks, they can keep their money. And if I were a marxist, I wouldn't be worried. I would be feasting on the spectacle of capitalism showing it's contradictions and following it's path to ruin.

This is about ideological fanaticism (masqueraded as "economic science") witholding all moral and prudential judgment. This is about putting the strange and unsustainable logic of supply side economics (supposedly "flowing" from Wall Street to Main Street) over any other consideration, including very important moral and political considerations that constitute the basis of the American polity.

This is about feeding and rewarding in a massive scale the absurd unproductive logic in which American economy (and American society) has been living: gambling, making money out of nothing, borrowing, downgrading the dollar, destroying all credibility. This is about bailing out Wall Street and promising Main Street no sacrifices and perpetuation of excesses.

And this is about living once more the political atmosphere that anticipated the Iraq War: push everything to the limit, withhold all judgment, watch the spectacle, expect to keep and upgrade the unproductive, consumption "American way of life" for ever.»

McCain's announcement is another cheap stunt, if you ask me. If Obama follows, he looks like someone who can't lead; if he doesn't, he risks looking passive. In all honesty, neither Obama nor McCain are in leadership positions in the Senate (not like Harry Reid, anyway), and neither can do anything in DC that the other members of their party can't. (I would understand if they declared a short truce to go to Washington to cast their votes, but that would probably last a day or less.)

Obama's best move: turn the tables again. Accept the truce, but insist the debate go on as scheduled, maybe changing its focus to the economy. If McCain declines, show up in Oxford anyway, and use the 90 allotted minutes to wonder aloud why McCain is ducking the debate.

OH MY GOD!  I actually agree somewhat with ChanRobt and Jacksondyer.  Time for both candidates to act in a bipartisan manner (oddly enough, Obama was the first to extend the hand too, no?)  But I don't give that snake McCain any benefit of the doubt that he is doing this on altruistic motives.  By choosing to run this divide the country into the false elite vs. hick dicotomy and by choosing that mental midget Palin to be a heartbeat away from the presidency, McCain will forever will be a traitorious selfish egotistical dog in my book.

Nevertheless, because this traitorious selfish egotisitcal dog wants to take off his Republican hat and put on his bipartisan hat to gain crass political advantage, the only thing for Obama to do is to join him or do him one better.  So I think Obama should suspend his campaign too (of course after mentioning the fact that he, unlike McCain, can walk and chew gum at the same time) and join McCain in Washington DC and then kick McCain's ass on actually getting good legislation passed.  Shouldn't be too difficult since McCain doesn't know that much about the ecomony and all his advisors are allergic to the government regulations that need to now be put in place to prevent this disaster from reocurring.  

McCain is full of gimmicks.  I wonder what is the next to come out of his ass.

P.S.  I'm surprised I never heard a Democratic say when McCain went into that spiel about taking off his Repubican hat and putting on his American hat in response to Gustav that we Democrats never take off our American hats.

This is a pure political ploy.

I thought McCain's statement was the most cynical, grandstanding ploy I have yet seen. The two campaigns could have arranged a joint meeting announcing a suspension, like they both met at 9/11 and didn't campaign that day. I am livid at this stunt. What the hell is McCain going to do, auction off one of his houses? No, he is just going to grandstand in Washington this week. Well, fuck it. No deal. Make the deal revenue neutral, force Bush to pay for it with taxes on the rich instead of borrowing it from the Chinese, and make McBastard eat it too.

Put aside politicking? This ain't Japan attacking Pearl Harbor, this is Republican mismanagement of the economy (or does the buck no longer stop at Bush's desk.) Typical, the Republicans set fire to the house and expect Democrats to help put the fire out.

I actually agree with one of the commentators at the National Review. Pump a hundred billion in and see how it takes, throwing 700 billion is bound to produce tremendous waste and fraud.

timcrim nailed it. If Obama agrees with McCain, McCain becomes the proactive one who showed leadership during this time of crisis. But if he disagrees with McCain, he opens himself up to the charge that, unlike McCain, he puts politics first and country second. It's a Karl Rove move if there ever was one.

However, if he recommends lengthening the debate, he avoids these equally bad alternatives, because he can say that this is a unique opportunity for the two of them to invite the country to join them in a dialog about what the country should do moving forward. No more closed door negotiations and talks. This is an opportunity to have an open, face-to-face conversation about our economic future.

In short, it's a time for both of them to lead, i.e. lead the country by talking to them, communicating the stakes to them, and recommending resolutions.

Put off the debate. Paulson himself couldn't even assess the crisis accurately-- in March he said everything was fine, and now he seems to be going to the other extreme, without any better evidence-- so why on earth are we allowing him to dictate a solution without opening the books, examining alternatives, reviewing carefully the implications of this? And also soliciting the input of Buffett and Bill Gross and other brilliant people unconnected to Goldman or Morgan Stanley?

The man does have some stones!

Er, if McCain was really going to suspend and be bipartisan, he would have gotten agreement from Obama first before going public. He's playing politics and the fact that he gets to dodge a debate which he was going to lose makes it a twofer...

dbhuff, even if what you say is true, you, and the rest of us have to get out of campaign mode for a little while.  

Our ship has been torpedoed.  the crew and passengers have to either figure out how to keep the ship from sinking or we'll all be floating in lifeboats far from shore.

The entire Congress should be in the Capitol focused on this debate and this great issue.  Once we've made a decision on how to proceed re Paulson/Beranche recos, then everybody can return to the hustings.

If McCain was going to lose the debate on Friday, then he'll lose it a week or two after Friday.

But, based on the last sorta debate at Saddleback, I'm not so certain Obama is such a slam-dunk.

I doubt the debate could be re-scheduled, and in any event it would be a very different debate. It takes a lot more than two candidates, the press corps, and good will (which I think is clearly lacking on the McCain side) to not game this.

In fact, there is no crisis, not even a declaration of war, or such as this one, that politics doesn't factor in, whether you like it or want it, or not. It's there and must be planned for, even when the goal is to keep politics out. This is going to be a very good test of how each candidate conducts himself in the next few days, and the American people will be watching, as closely or more than they will when the debate proceeds. If a President is intent on doing the best thing for the country, s(he) will have done the necessary political homework in order to make maximally possible a successful completion.

One  demerit I'd already give Obama for the way he's handled this moment, is going for consensus and unanimity over taking the right action when it's time, consensus be damned. I think that would be McCain's thinking, too.

Score a minus for "aggressive negotiation." There is always the possibility that the other side will catch you flatfooted, and your initiative is blunted; your timing is off (and off-base). I hope Obama learns his lesson from this, otherwise, how can he hope to make any headway counting on the likes of Assad, or Dr. A.?

The televised "debate" format is itself a joke, but these soundbite and gotcha duels, applied to such a sprawling and complicated problem as this-- which we don't even have enough data to even define accurately at this point, let alone intelligently discuss alternatives in any meaningful detail-- is certain to be a complete circus.

Just imagine Charlie Gibson asking about Goldman's derivatives exposure, or Katie Couric seeking to trip up the candidates on their understanding of the credit swap market yield curve.

If it's true, as they say, that a pol's campaign tells us something about how he'll govern, we'd be in for a very reckless four years with McCain at the helm. The dude is all impulse-satisfaction, decisions that give him a rush, politics as a Craps table (www.time.com/.../0,8599,1819898,00.html). I am more confident than ever that we need to keep his sick, sick mind out of the Oval Office.

Obama should go to Washington, work with his Senate colleagues and go to the debate on Friday night.  A president has to be able to do many things at once; he needs to be able to focus concurrently on domestic issues and foreign policy issues.  This is a great test of the candidates' ability to do this.

McCain - coward.

Excuse me -- I can't believe I'm reading some of this stuff here.  Intelligent people have known for months at least (if not years) that there is something rotten at the heart of our financial system and the people who let it drift are the same party, if I recall, as John McCain and thus putting him in the White House will extend their disastrous administration for another four years and put a cliché-spouting nincompoop one heartbeat away from the presidency.  McCain is the candidate, if you recall, who admitted a few months ago he knew nothing about economics.  His particular presence is going to be invaluable on the Hill to sort out the financial issues?  Beg to doubt that.

Bipartisanship.  You don't think a bipartisan approach to major national problems was possible two weeks ago?  Or three months ago?  Or six months ago?  Suddenly, when the numbers are looking bad of McCain, he wants to close down the campaign.  You don't think trying to wrong-foot your opponent in public after he makes an offer of a private meeting is also "politicization"?  Do you imagine that politics (like, you know, war, foreign relations, that kind of thing, the rest of the effing world!) stops when John McCain feels like he has too much on his plate?

If McCain simply refuses to be in Oxford on Friday, I agree with Biden and Palin stepping up for the debate.  Let's see what they are made of.

Um Tep, Buffet just made a $5 billion investment in Goldman, based largely on the belief that the Paulson plan would be passed.  Look, I'm not sure what the best/right answer is here, and neither do you.  I do know that the Banking committees of both houses of Congress are working this.  I don't think adding two more giant egos to the room will help things, and that's why McCains announcement is such a shameless ploy.  He is fully aware that there is very little he can "do" in Washington.  If McCain had announced that he was suspending the campaign so that he could focus on the competing ideas and try to get a grip on the problem and consult with experts on the Hill and on his staff, I would applaud McCain.  But he didn't do that.  Instead, he decided to pretend that he is taking "action" by returning to DC where he can, and will, do almost nothing in the situation.  It makes for a good press story, but it is sorely lacking in actual leadership.

tep, you may blow your stack for my zooming in on politics while Wall Street burns, but somewhere in the back of his mind, for his and everybody's good, he should not have waited on McCain until 2:30. In the present context he should have called McCain again at noon and said "Wtf is taking so long? Look, I'm going live in 10 minutes, s**t or get off the pot." Then go live in 6 minutes because you know the dude is stalling.

The bailout plan will probably be scaled back . Henry Paulson agreed to support limits on executive compensation

Given that Paulson announced around noon today that he could agree to the limits on executive compensation, and given the public statements of both the D and R Congressional leadership, it looks increasingly like a consensus was emerging in Washington earlier today.  Granted, the devil is always in the details, but it would seem that the outlines of a resolution were developing, one that had support (and detractors) on both sides of the aisles.  That makes McCain's gambit all the reckless (if he didn't know this) or shameless (if he did).  If McCain was aware that a deal was imminent, than he is, quite frankly, full of shit when he says he's trying to put country first.  This is all about putting himself first; fly in, take credit for something that was done without you and blast your opponent for "failing" to lead.  Brilliant politcs, but awful policy.

Economists debate.  

This is where what's left of Wall Street's head is right now BTW - they do not care a whit about McCain, debates, any of it - people who can are working round the clock trying to help in concrete ways that will make us financial safer.  My husband is an economist and he's been living at work:

Http://blogs.ft.com/wolffirum/

tomeg - who is "he"?

Here's Martin Wolf, probably the best economics journalist on the planet, from Wandrey's article:

"What then do I conclude? Yes, there may well be a place for intervention in the market for toxic securities. But this is a costly and ineffective way of meeting today’s deepest challenge. What is needed, still more, is a clear and effective way of deleveraging and recapitalising the financial sector, ideally without using taxpayer funds. If such funds are to be used, they must also be injected in as carefully targeted and controlled a way as possible. Comprehensive action is essential, as Mr Paulson has decided. But let the US take the time to make that comprehensive action right."

Nb. "deleveraging and recapitalising the financial sector" most likely means that lots of the most highly leveraged institutions ie Wall St firms will die, and fast, while the conservative commercial banks in the heartland will do fine.

If ever there was a clear political dimension to this crisis, this is it. Don't crucify the rest of us to save a heavily-leveraged Wall St model. It's finished. Let it die.

tep - oops, he Obama

ChanRobt  said:

"Our ship has been torpedoed."

I know you think you meant the country, but it's pretty obvious that you mean the McCain campaign.

What do you (tep, anybody) make of Robert Reich's contention that the proposed bailout will not halt anybody's losses, since there are so many loans, sm. business, consumer, auto, etc. that remain under pressure that continues to grow. Hence, more and more delinquencies and defaults on "good" loans will pick up from left-off when the proposed bailout is completed.

Is this a legit concern or just a incidental criticism? Reich is an Obama econ policy adviser, so naturally he says what will still be needed is what Obama said:  middle class tax cut etc.

hellx writes, "...A president has to be able to do many things at once; he needs to be able to focus concurrently on domestic issues and foreign policy issues."

Yuppie mult-tasking bullshit.  A president does not have to address a nation threatening crisis and engage in a formal debate, just because it was scheduled.

McCain and Obama ought to be in Washington earning their  senator pay and their presidential chops.  

Sometimes there are bigger things then one night of a campaign.  People here ought to be able to multi-task and change gears when required.

ChanRobt - This is no nation-threatening crisis.  The only thing under threat are a few banks.  If the banks go under, there will be economic dislocation and even probably recession.  So?  We have had recessions before and we will have them again.  It is part of the normal business cycle.

Paulson wants this bail-out to save his reputation, personal wealth and maybe even his liberty given his tenure at Goldman and the reputation, personal wealth and liberty of his friends on the Street.  The only crisis is that there may be some rich investment bankers who become much less rich and maybe even go to jail.

If Congress does nothing, a few banks will go insolvent. We have perfectly good bankruptcy laws in America and highly able administrators and liquidators to handle this.  There is no crisis and in fact the best result would for Treasury and Congress not to do anything at all.

"A president does not have to address a nation threatening crisis and engage in a formal debate, just because it was scheduled."

McCain isn't a president, and right now it's looking a bit dubious that he'll ever be one.  He's a U.S. senator, as is Obama, and if they really need to be in DC for a vote, as Barack says, they have planes to get there.  Beyond that, presidential elections are not a hobby we engage in to fill a boring evening, they are the way we confer the right to lead the country for several years.  It's quite possible that McCain would like to get this irritating debate thing buried fast, partly to protect Palin, but I doubt that many Americans feel that way.

irony writes, "...Beyond that, presidential elections are not a hobby we engage in to fill a boring evening..."

What's the problem, irony, is Oxford booked the rest of September and October?  Why can't they just move the debate back a few days until the current crisis is resolved?

A debate about foreign policy is going to fall on deaf ears while everyone is fixated on the Great Liquidity mess.

gennitydo writes, "This is no nation-threatening crisis.  The only thing under threat are a few banks.  If the banks go under, there will be economic dislocation and even probably recession.  So? "

Well, gennity, you must know something not known to the entire Congress or to Jack Welch and all the business media guys writing about this.

they seem to think it's more serious than just a few banks.

"Well, gennity, you must know something not known to the entire Congress or to Jack Welch and all the business media guys writing about this"

Not all "the business media guys". From what I've heard many (probably the majority) are saying: NO DEAL.

Besides, since when does American democracy withholds all moral and prudential judgment and accepts the naked authority of priests? Yes, priests, since those economists are nothing but fanaticized priests of a mumbo jumbo economic order...

And Americans should know by now that their advise can be dead wrong. We have the example of "tax cuts for the rich". What happened? Surely not general welfare. WHat we had was overseas investment, Wall Street gambling and some mad Main Street consumption.

Now they want to apply the same formula. But these once it will be even more scandalous: since you won't just be giving Wall Streeters tax cuts. You'll be giving them tax payer money after they've ruined theirs...

this is just POSTURING on the part of McCain..  an attempt to change the subject on a day when we get the news that Obama is up by nine points in the polls...  and I think what Chait says might very well be true, that with folks more worried about the economic crisis folks won't pay too much attention to a debate focused on foreign policy (I don't think one-issue debates are such a good idea, by the way);  I also think Obama's right: this move on the part of McCain intimates he can't walk and chew gum at the same time; this coupled with his age (and his very inept VP nominee) I think reinforces the notion that the McCain ticket is not ready for prime time...  on the whole a BAD move on the part of the McCain camp, but hey, bad moves on the part of the McCain camp is good news to me....:)

Is McCain going to debate tomorrow night? My initial reaction to McCain's announcement was that he's

luispc writes, "Not all "the business media guys". From what I've heard many (probably the majority) are saying: NO DEAL."

I've heard some of those arguments, luispc.  And obviously with 700 million on the line, concerns are real.

The actual question is, must we act as quickly as it is assumed to prevent a meltdown that will be irreversible?

If yes, than we must move quickly, if imperfectly.  And could not mechanisms be left in place to make corrections?  the 700 million will not be spent in three days.

If the answer is no, we don't have to move so quickly, the problem is, no one is sure about that.  So it appears to be less risky to move precipitously than to take the chance of deliberating for a few weeks.