My Tank is Fight

Or was it "My Economy is Tank"?

Today the house rejected the $700bn bailout plan. The majority of Democrats voted for, and the majority of Republicans voted against. More Republicans voted against than Democrats voted for.

I'm not an economic expert, but I personally think this is a good thing. I wouldn't have been terribly upset if it had passed, but the bill moved far too quickly through the system to have been properly vetted. As a corollary to Obama's excellent point from the debate, "$700bn is really freaking important."

In any case, the aftermath of this is going to be huge both economically and politically. Economically you might have noticed the 500 point dive on the Dow. Personally, I think investors are far too jittery; instant communication is not doing the economy any favors today. Politically, just wow.

Both Obama and McCain stand to be hurt by this. Obama may not have been quite as gung ho as McCain, but the general impression he has been giving is that of support for the bill. That won't help his image in the eyes of many people I know who opposed the bill. Similarly, the surprising lack of Democratic support (a full 40% of Democrats voted against) could count against him among those who supported the bill. The McCain camp has already made accusations to that effect.

However, McCain stands to lose a lot more than Obama. He made a huge show last week of returning to Washington to fix this, and has been worked hard all weekend to establish his role as a key figure in making this happen. That it didn't happen, and the way in which it didn't happen, destroys and corrupts this narrative.

That 65% of Republicans, his party he was supposed to bring in line, voted against the bill undermines his credibility as a leader in his own party. As much as he might complain about Obama's inability to do better with the Democrats, the total failure of the Republicans to support their candidate's crusade for a resolution is going to sting McCain and hard.

You might speculate that Pelosi intentionally gave a partisan speech hoping for just such a result, and malicious intent or no she deserves a serious "WTF" for thinking that was a good idea. Still, it was Republicans who stabbed McCain in the back. It's going to be more than difficult to blame the Democrats for failing to support a bill they outvoted Republicans on by a 2-1 ratio.

McCain is now in a very perilous position. He gambled, and lost, on this bill. When and if it passes, even if it were later today, the narrative of McCain as the leader and diplomat is shattered. He may even be seen as at fault for the failure by bringing in the disruptive influence of presidential politics into the mix. Whatever the consequences of his crapshoot, the economy will continue to be the #1 topic for the rest of the week at least as Washington scrambles to revamp the bill for a second go. Biden and Palin will face off Thursday which, barring a miracle or some extreme spin, will likely be less a debate and more of a massacre.

The most amazing thing about this is that McCain's campaign will continue, and with gusto. It always strikes me how little such enormous failures affect people's choices and considerations. Obama wouldn't be where he is now if this wasn't so. McCain's campaign will easily weather this fiasco and be strong as ever come the second debate, if the economy holds out that long.