That's the bottom line on this "bailout."
You, the American taxpayer, are being given the opportunity to do what J.P. Morgan did during the Panic of 1907. No one is buying valuable assets. Step up to the plate, buy enough to liquify the market, and you can make a killing.
You are offering cash for assets that are worth far more than the cash, because you have the time to wait for a return. That was the Morgan way. You, the American taxpayer, now have the opportunity to do what Morgan did, and feel what Morgan felt. I find that opportunity delicious.
The bankers are scared. Screw them to the wall. Offer just enough for the assets to set a floor price and then, as the prices rise, sell back at your leisure. Make it Wall Street's contribution to the Iraq War, a stupidity tax to take back some of what Bush gave them.
Unfortunately (because I don't like him) Jim Cramer (left) is right on this one. The leftists who fear that this is a way to keep bankers rich can get the protection they need in the deal now being negotiated. The rightists who hate this deal in their bones are, frankly, unnecessary. There are certainly 10 Republican Senators who would refuse to filibuster, and the House Republicans are irrelevant.
That's the real reason John McCain has rushed back to Washington, to try and get some leverage. My advice. Don't give him any.
While claiming he's all for the current package, McCain plans to bring his own caucus together and threaten a filibuster unless he gets concessions back. The Democrats would then have to either grant some concessions, making McCain a hero, or call the Republican Party's bluff.
My view? Call the bluff. Don't throw him a single bone.
The first thing to do would be to schedule a cloture vote. Obama and Biden would be available to vote "aye" on moving to a final vote. If it looks like the Republicans can hold 40 votes against even considering the package, then demand they stage a real filibuster. Stay up all night, stay up all weekend, and play "Mr. Smith" on them, only with their allies on Wall Street playing the part played by Edward Arnold in the movie, piling on the pressure for them to capitulate.
In that debate emphasize what Cramer did today. This is an opportunity to make a profit for the Treasury. This is an Invest in America plan, not a bailout the bankers plan. This is a necessity if we're to have liquid markets that make mortgages and college loans and offer credit cards. This is an absolute necessity to keep the global economy afloat, to maintain America's financial leadership in the face of a growing threat from Dubai and China.
Screw the Republican Senate to the wall. Screw McCain to the wall. Force him to make some hard choices, on TV, to twist the arms of his own allies, to debate an issue on the floor overnight if necessary. Remember, the Republican base is split on this. The grassroots hate it, the Wall Street crowd knows it's necessary. By standing for the deal (and making the deal as good as we can get) Democrats will win the loyalty of Wall Street. Which is essential if you're to build a governing coalition that lasts.
People forget this about the FDR New Deal coalition. There were bankers in there. There were Wall Street bankers and regional bankers, men like Jesse Jones (right) who actually made a profit on the $10 billion FDR let him lend through the Resolution Trust Corp. during the Depression, before taking a bath on the $40 billion more that had to go out to beat Hitler. Or Joe Kennedy, a stock swindler in the 1920s who then helped build the rules that worked until a-holes like Phil Gramm decided to trash them. It's vital we make that clear. It's vital we re-learn our history. This is a teachable moment.
My guess is that McCain will fold like a cheap suit. There are, as I said, Republicans who are facing re-election and who know they can't win just on the right-roots. Senators like Norm Coleman and Gordon Smith and John Sununu and Elizabeth Dole are anxious for a deal, desperate for a deal, and they won't stand on the principles the far right wants them to stand on. My guess is a cloture vote would pass on the present deal, even with John McCain voting "no."
It probably won't come to that. I think the Wall Street pressure is already building. I think Wall Street is ready to take the deal on the table. I think Wall Street is going to make that crystal clear to Mr. McCain by this time tomorrow.
If it comes to a real filibuster, we can put Sen. Biden in the chair for a while and have Sen. Obama request a colloquy with McCain on why he's holding up the deal. That's the debate that will be remembered. After knocking the old man about for a while, the gentleman from Illinois might offer to throw him a bone, a small one, a meaningless one, a face-saving way out. And we all win.
Like I say, I don't think it will come to that. I don't think McCain can get enough loyalty out of his caucus to defy Wall Street and the markets.
But that's how the chess match will play out, those are the moves you have to anticipate as tonight's moves are made.