According to ABCNews the so-called "deal" in principle on the bail-out is unraveling. Both sides are blaming each other. Paulson apparently told Democrats not to "blow this up," while Representative Frank and Senator Dodd, both Democrats, say that the White House meeting was simply a charade to boost McCain's visibility. I imagine that both sides are right in blaming the other. The Republicans are likely blocking a deal in order to allow McCain to grandstand, and the Democrats are hoping that a quick agreement will emerge so that McCain will look irrelevant.
I have already argued that both sides are guilty in this matter, and I stand by that proposition. Frank and Dodd are captured by the industry and they, along with Obama and Clinton are among the biggest recipients of Wall Street campaign donations this year, while the Republicans have for a long time enjoyed a status as favorites to big business. Their tax cuts have augmented a budget deficit, which, though not the cause this current financial unrest, makes it difficult for the government to contribute resources to solving this economic crisis and tackling other social problems. Stay tuned, as more drama will likely unfold.
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