Congressional Democrats Play Politics with Rescue Package & McCain

As the details of last week's maneuvering by various parties in Washington became known, it is apparent that the Democratic Congressional leaders- Frisco Nan, Harry Reid Co.- lied to the public when they claimed that a deal was already virtually done.

They did this, it became clear on Friday morning, because they badly wanted to discredit McCain's conscionable action of leaving the campaign trail to actually do some of the work for which he is paid, i.e., contribute, as one of 100 Senators, to discussions involving what the administration felt is, and described as a very important situation in the financial services sector.

You can debate whether or not McCain was grandstanding. But, regardless, the House Republicans piped up by late Thursday and announced that nobody had been listening to, or even talking to them.

Apparently, Barney Frank (God, will someone fix that idiot's speech impediment? Or does he always sound drunk because he is?) thinks he's a senator now, since he didn't seem to bother conferring with Republicans on his own committee.

In fact, the House Republicans have an excellent idea which is actually far better than Paulsen's plan. They have floated the concept of the Federal government selling a sort of ultimate CDO credit default insurance to banks holding said paper. This way, rather than ladling money out, the Feds will collect insurance premiums on CDOs with questionable mortgages underpinning them.

What a concept!

All that need be done is actuarially price the insurance to account for an expected default level. Then, with the insurance sort of 'stapled to' the CDO, the latter can be sold in the market at its insured value. Problem solved!

In the meantime, maybe the rest of the Congress will actually stop, think, and listen to the House GOP delegation.

The best line I heard all last week was when one Republican Congressman said something to the effect of, in reference to some Democratic Senator's remarks about the House GOP being obstructionist,

'Last time I looked, we didn't have a unicameral legislature in Washington.'

Just so.

Looks like Harry Reid and Frisco Nan are running scared now. Very scared. Too scared to pass the big $700B bill without Republicans on board.

They probably- justifiably- worry that such a fiasco could mean losing both House majorities in one fell swoop in November.

And that would be justice, indeed.