Jacob Sullum

"Without immediate action by Congress," President Bush warned last week, "America could slip into a financial panic." Instead, Bush wanted a political panic. The only way to avert "a long and painful recession" in which "millions of Americans could lose their jobs," he said, was to send the Treasury Department on an unprecedented Wall Street buying spree.

But Treasury Secretary Henry Paulson was premature in thinking the administration's scaremongering had produced "a bipartisan consensus for an urgent legislative solution." A bailout bill that reached Congress on Monday, just 10 days after Paulson first proposed using taxpayer money to relieve financial institutions of their bad investments, was narrowly defeated in the House. Still, the specter of blind bipartisanship, which may yet prevail, should give pause to anyone who hopes electing a Republican president will curb the excesses of a Democratic Congress.

The issue has hurt John McCain in more obvious ways as well. The Wall Street bailout focused voters' attention on the economy, an area where, rightly or wrongly, they trust Barack Obama more.

McCain looked like a grandstanding doofus when, trying to gain a political advantage, he melodramatically "set politics aside" and rushed to Washington, where he vainly sought to broker a bailout deal. After saying Friday night's presidential debate would have to be postponed, for the good of the country, until an agreement had been reached, he discovered the country could spare him for a few hours after all and flew to Mississippi, where he achieved the bipartisanship that had eluded him in Washington.

"We are going to have to intervene; there's no doubt about that," said Obama. "We have to move swiftly." McCain sounded even more panicky, saying there's "no doubt about the magnitude of this crisis." Unless Congress does something to "fix the greatest fiscal crisis in our time," he said, we will see "failures on Main Street, and people who will lose their jobs, and their credits, and their homes."

McCain added, "the first thing we have to do is get spending under control in Washington." Right after letting the Treasury Department spend $1 trillion on the lousiest assets it can find. (Rounding up the number seems reasonable given the arbitrariness of the official $700 billion estimate. "It's not based on any particular data point," a Treasury Department spokeswoman told (SET ITAL) Forbes (END ITAL). "We just wanted to choose a really large number.")

Jacob Sullum

Jacob Sullum is a senior editor at Reason magazine and a contributing columnist on Townhall.com.
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