The proposal seemed to be a dead cert after Bush gave a do or die speech to the American public earlier this week, saying the $700bn will save the economy. For once the man spoke some sense.
Because it will. It will free up the illiquid markets, it will banish the sub-prime mortgage debt that got us all in this mess in the first place and it will eventually lead us back to financial normality. And if it goes to plan, the $700bn will be paid back in full, and some.
Alas, there is a fly in the ointment. The election.
John McCain has decided that he doesn’t like the plan. But Barak Obama, all-American grinning superman says he likes the plan. But he says he likes the plan because McCain doesn’t like the plan. And McCain probably deep down doesn’t like the plan because Obama likes the plan.
The bailout has been delayed by a petty partisan squabble that was reported to have descended into a “contentious shouting match” in Congress, and reportedly led to Treasury secretary Hank Paulson literally going down on one knee, desperately begging democratic politicians to not say anything that might blow up the precarious deal.
Everyone knows US politics and especially US elections are a farcical circus. And we love to keep up with the show, but now the show seems to be creeping into our lives in the most uncomfortable way. Because if the naysayers do succeed in scuppering the bailout, it could have a disastrous effect on our economy.
Bush is remaining stoic, promising that the bailout will go ahead. But Bush has all the clout of a fruit fly nowadays. It is Obama and McCain in the driving seat and they aren’t looking at the road in front of them.
This is about votes. It is about McCain getting the working man on his side. Oh, how he hates these blood-sucking Wall Street fat cats who funded him throughout his primaries. And to a lesser extent it is about Obama looking holy-than-thou but ultimately trying to decide how he can get a few more votes.
But these aren’t our votes that are deciding our fate. We don’t get a say in who wins the White House next month. We will just feel the fallout. We will just see Libor shoot up, and wholesale markets continue to stagnate. While McCain tinkers with the world in an attempt to swing a few votes, more Brits will be turned down for a mortgage.
We can harangue Darling, Brown and King until we all lose our voices but today has shown that whatever we do, whatever we say, our vote counts for nothing compared to the uber-drama playing out in Washington.