The Meltdown is McCain's...Dems Rush to Stop Hedge Funds Collapse Oct. 1

If anyone doubted that John McCain will do anything to get elected -- including picking an inept fundamentalist to be his Veep because it could energize Republicans-- his sabotaging of the bailout talks by political grandstanding should settle the question. He inflamed the revolt of the hard-right House Republicans, and as Marc Ambinder points
out:

During the White House meeting, it appears that Sen. John McCain had an agenda. He brought up alternative proposals, surprising and angering Democrats. He did not, according to someone briefed on the meeting, provide specifics.

One of the proposals -- favored by House Republicans -- would relax regulation and temporarily get rid of certain taxes in order to lure private industry into the market for these distressed assets.

That approach has been rejected by Senate Democrats, Senate Republicans and, to this point, the White House. During the meeting, according to someone briefed on it, Sec. Henry Paulson told those assembled that the approach was not workable.

Before the White House meeting, Democrats and Senate Republicans were on track to get legislation to the floor by tomorrow. Democrats say that, at best, they hope for half of Republicans in the House to go along. At worst, the vote in the House becomes partisan and then Senate Republicans get shaky and then...

What conservative Republicans want -- including many of the GOP voters McCain is hoping to energize -- includes easing taxes and regulation to encourage private investors to come to the rescue. That's the same philsophy that got us into this mess to begin with.

But before his grandstanding, fake "suspension" his campaign, McCain didn't even bother to read Paulson's three-page bailout plan, despite how McCain claimed his immediate presence in Washington was so essential.

Fortunately, there are two sharp analysts who help us better understand how we got here and how McCain's political allies and the GOP brought us to the brink of financial collapse. Bernie Horn, a senior fellow at the Campaign for America's Future and author of Framing the Future, heads the progressive group's "War Room" - and he explained last week on the radio show I co-host how greed and deregulation brought us chaos. And he offered suggestions on ways Obama could sharpen his message in ways that could appeal to independents.

Yesterday, James Davis, a Maryland Assistant Attorney General (speaking as a private citizen) who worked on resolving the original S&L crisis, explained on the show how corporate scheming evolved both during the S&L crisis and today's mortgage-backed securities meltdown. (He followed a savvy 15-minute take by political analyst Ian Fried on how McCain's flailing on the economy is hurting in key swing states. ) Most importantly, Davis explained a likely hidden reason for the rush by Treasury Secretary Henry Paulson to pass the bailout : fending off a rush by rich investors to redeem their investments from shaky hedge funds, even though they're not going to be directly bailed out by the Paulson plan:

HEDGE FUNDS NEED NOT APPLY

Initially, the Treasury proposed buying assets only from companies based in the United States, but Paulson laid out the case for a broader mandate to ensure credit was flowing.

"If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," he said on the ABC program "This Week."

The Treasury chief confirmed that hedge funds -- investment vehicles for the wealthy -- would not be eligible.

Davis also pointed out that the real reason why there is such a clamor for a bill, and a rush to get it passed is that there may be billions of dollars pulled out of the hedge funds...money that is due on October 1. This may be the famed October surprise, but one that nobody figured was coming. If that money is due and the hedge funds can't pay, they will collapse.

But Paulson's Wall Street pals are clamoring for help to clean up the mess that their irresponsible lending and greedy practices brought us, with McCain only pouring fuel on the fire he and his GOP deregulatory cronies helped start.

As Chris Hayes of The Nation pointed out on a recentKeith Olberman show, McCain has placed an "all-in bet on the stupidity of the American public." This Friday's debate should help us discover if he's going to win this desperate bet -- a theatrical, Hail Mary bailout plan for the McCain campaign. To paraphrase one of his slurs of Obama, John McCain has shown that he would rather lose an economy than lose an election.

How irresponsible is McCain? See The Nation's Chris Hayes gives his take:

The answer? Pretty damned irresponsible.

Comments

[SplendidMarbles]

McCain would not even know where to purchase a clue as to what can be done to solve the financial disaster that is brewing and stewing on Wall Street. He is actually the one who is completely out of touch with the concerns of the average voter. He is the elitist, living a sheltered life in seven homes; wining and dining with those with the dough to affect how we all live.

By snaring Palin, he can ingratiate himself with middle and upper middle class Republican conservatives. But, they too should be aware that if their party wins, they will suffer the same miserable fate as everyone else. Yes, their cherished moral values will be upheld, but they will be fighting for low-paying jobs while they watch their net worth sink as home and stock prices fall further into the abyss.

Tonight, he will be on the national stage all by his himself. And the American public will see that this man truly has no clue when it comes to solving the largest crisis in American finance since the Great Depression.

[joanVA]

I have neighbors like johnn who are also bitter about Hillary losing the nomination It's sad that they would vote against their own principles because of revenge. The more we learn about McCain, the more we know he will be a disaster as president. Do they not believe that?

[jayded]

this looming hedge fund collapse sounds pretty damn scary

[JayInDallas]

So I still don't understand how Republicans can still be behind McCain when it's obvious that the man not only will do anything to get elected, has been proven to be a compulsive liar, is obviously not putting country first, instead putting his own self-interests and those of the PACs and other special interest groups ahead of those of the American people and is completely in disregard of his own party. I defy anyone to defend this man. We stood at the brink of reconciliation on this bill and the "Maverick" shows up uninvited and manages to piss all over everything. How does this demonstrate sound judgment? How does this foster the confidence that he's the one ready to lead the nation. Johnnn is completely misguided in voting for McCain out of "spite", and I sincerely hope that his nihilistic view isn't shared by very many others, however, the light in his post is that Kennedy did inherit the Cuban Missile Crisis and America survived it to go on and achieve incredible goals. I, for one, am amazed and proud to watch another chapter in history being written right before my eyes.

[hsm121]

** Sorry, that comment was supposed to be in reply to Johnnn, not as a separate comment in response to the article.

[Johnnn]

Don't bother responding to me. I'm just venting. (Whatever it is you said).

[hsm121]

Obviously, it hasn't posted yet.

[Johnnn]

Yes, I'm still angry Hillary is not the nominee. No, I'm not letting it go. Yes, I will never give money to the Democratic Party again ( and they still keep calling). Yes, I'm voting for McCain out of spite. BUT, you can all rejoice because I am pretty sure Barack Obama will be the 44th President of the United States. It now appears that President Obama's first order of business will be to deal with THE GREAT COLLAPSE OF 2008. The useless Congress will blow this. There will be no deal in time. Obama will
find an economic crisis fall into his lap the way President Kennedy had the Cuban missile crisis
suddenly fall into his. Good luck President Obama.

[Dynamohum]

Such anger and resentment is not good for one's health. But if one feels that they need to take their revenge and resentment out on everyone just to supply their bloodlust, well that is just ignorant, irresponsible and illogical. Remember one will have to live in the country Obama is running and to wish ill on anybody is just shortsighted and, well, childish. Baby!!

[Johnnn]

I can still hear Chris Matthews and his 12 pundits - Andrea Mitchell, Clarence Paige,
et al - expressing their opinions that the Hillary people will come around if Obama manages to win the nomination. They and the Democratic Party take us older folks for granted. So I should reward them by voting their way? Let them campaign for their man Obama to make up for losing us with their smug arrogance.