Yesterday Democrats provided most of the votes for the failed financial stabilization bill. Obama supported it. So it's ironic that whatever political benefit flows from its failure will accrue to the Democrats -- and specifically the Democratic presidential ticket.
The bailout package is deeply unpopular with voters. Voters understand correctly that the cause of the America's current economic woes are policies that have benefited the tiny sliver of our population that is super-rich -- including of course the "masters of the universe" who have made fortunes speculating on Wall Street.
The meltdown of the financial markets flows directly from the right-wing economic philosophy and its belief that regulation should be gutted so the "invisible hand" of unfettered market competition can look out for the public good. Unfortunately, as we found in the Great Depression, this economic theory -- which also happens to bolster the short term interests of the very rich -- is a fantasy.
Most everyday Americans have seen their incomes drop, prices rise and jobs outsourced while speculators and CEOs made googobs of money and flew around in private jets. The last thing they favor is using public money to bail out their recklessness. As House Speaker Nancy Pelosi said, they do not support "privatizing" the upside and "socializing" the downside. Their view is that if speculators wanted to be free to make as much as they could on the way up -- they should be free to loose as much as they can on the way down.
All of this makes a great deal of sense, except that if the financial system completely freezes up -- collapses in a heap -- it will be normal Americans -- who got none of the "upside" -- that will lose the most. They will be the ones who get laid off, whose home values plummet and whose pensions disappear.
That's why Democrats -- most of whom agree that Bush's "trickle down economics" has caused the problem -- have been willing to work with the White House to fashion a clean up of the financial mess that helps prevent meltdown in the rest of the economy but allows taxpayers to benefit directly if markets recover and prevents CEO's whose companies fail from profiting through "golden parachutes".
Without doubt Obama and the Democratic Leadership are correct in trying to stave off financial collapse. Anything else would be completely irresponsible. In fact, of course, it was the right-wing Republicans who prevented the success of yesterday's vote -- and ironically, it will be the fortunes of the right that suffer most as a result. Here's why:
* First and foremost, continued economic instability works to benefit Democrats -- and particularly Obama. The meltdown completely ended the post-convention "Palin, McCain the Reformer" narrative that had briefly vaulted the Republicans into the lead. It refocused swing voters on their economic concerns and need for fundamental change in Washington. Even if the immediate financial bleeding is staunched in the next few days, it has served to highlight once again what most voters already knew: that the fundamental underlying problem is not just bad mortgages. The problem is trickle down economics that have siphoned all of the economic growth of the last eight years to the top one percent of the population. The problem is the reality that people's incomes have not increased in the face of rising prices. The problem is the fear that their kids will not live more prosperous, successful lives than they have. The more they focus on those economic concerns, the less prone they are to vote for McCain who has supported the Bush program 90% of the time and who thinks that "the fundamentals of our economy are strong."
* It served to completely undercut McCain's fake narrative that he had "suspended" his campaign in order to "bring the parties together" to solve the problem in Washington -- that he's the guy who "takes charge and gets things done". McCain, of course, did not really suspend his campaign; sat silently through most of the White House meeting called at his request to "solve" the problem; did not play any significant role in the negotiations; and finally claimed to have delivered House Republicans and then failed to do so.
* Continued economic instability makes voters even more uneasy about Sarah Palin. In the face of continued economic instability the last thing voters want at the helm is the candidate they saw Katie Couric interview at the end of last week.
* McCain has lurched from one approach to the crisis to another. That has served to highlight the fact that he is an erratic, unpredictable, gambler that is prone to throw "Hail Mary's" -- a clear contrast to the consistent stable leadership that we've seen from Obama. That is especially important because it undercuts the Republican argument that Obama is "risky". In fact, the crisis has made it clear that McCain is the risky choice - both because of his support for the Bush economic program and because of his personal penchant for risky behavior.
* A sense that things are on the wrong track always intensifies the desire of voters to "throw the bums out". But this melt down does more. It completely undercuts the right wing economic narrative. If this crisis were just about higher unemployment and lost jobs that would be bad enough. But the Republicans at least have their "cut taxes" supply side narrative to address that kind of crisis. They have no narrative to address a melt down in the financial markets brought on by precisely the "deregulation" policies that are central to right wing ideology.
That's the problem facing many right wing members of the House -- and one of the reasons McCain has lurched around to find his footing. If they vote to support a bail out they are acknowledging that their core belief in deregulations and "markets uber alles" has failed. If they vote no, they allow that philosophy to continue failing in plain site for all the world to see.
And remember that throughout his career -- from his days involved in the Keating 5 scandal -- and as Chair of the Senate Commerce Committee -- McCain has been deregulator-in-chief. In fact, his campaign is managed by the lobbyists who helped engineer the very deregulation that caused the crisis.
As Obama has made clear, this collapse is the final report card on the failure of the Bush-McCain economic policy.
From the standpoint of the welfare of average Americans we should all hope that some deal is struck to prevent complete collapse of the financial system. But the fact is that the longer that right-wing Republicans hold up a solution, the more it is likely that Obama -- and many other Democrats -- will be swept into office.
When they do, the top order of business must be to relearn the lessons of the Great Depression with a complete overhaul of the regulatory structures for financial markets, and the adoption of a new bottom up tax and economic program that will increase middle class incomes and invest in the long term prosperity of everyday Americans.
Robert Creamer is a long-time political organizer and strategist and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on mazon.com.