On Sunday, after untold hours of negotiation, House speaker Nancy Pelosi and Banking committee Chris Dodd emerged to front a press conference, and say that they had come to an agreement on a bailout bill — 110 pages which was immediately put up on the internet — that would be voted on on Monday.

The bill is a substantial transformation of the Paulson/Bush three-page plan which had basically consisted of “give us your money … erm … that’s it”, which put in several strict, and almost entirely useless strictures on CEOs golden parachutes, etc. But it also has a provision whereby the government has a right to buy back in to the shares of the companies its taken over, at a preferential rate, and then sell them back on, thus generating an overall profit on the deal.

The significance of the deal is that it’s been negotiated with Republican senator Judd Gregg, senior GOP member of the Banking committee, who will now be charged with rounding up his party colleagues to get behind the thing.

There’s a whole lot more back and forth about what was given up — Democrats sacrificed some provisions that would have helped out low-income defaulted mortgagees for example — but both Obama and McCain have given their cautious endorsement.

So now only one question remains — will the House Republicans go for it? If the whole of the Democrats are onside they are not required for a simple majority, and the Senate Republicans are onside. But if “conservative” Republicans — the term for those renegade fantasists who believe the US is somehow based on free enterprise, and its success built on those values — could form a sufficient block to vote against, then they will have a chance to transform themselves into the “representative of the people” bravely resisting Wall Street socialism.

That would be a big gamble. People are now sufficiently panicked by multiple organ failure in the financial sector — the collapse of WaMu (Washington Mutual) a bank which had presented itself as the cuddly, friendly people’s bank, really focussed minds — to be persuaded that delaying a bailout might have serious consequences. Recent polls showed that despite the noise of the anti-bailout crowd — and hey I’m one — three quarters of Americans support the idea, so coming out against as the pillars of the temple crash around us could be a reallllly bad idea.

On the other hand, if the House Republicans can destroy the notion of a consensus and present the Democrats as thieves and fools, they may well be able to take some political capital away with them from the whole experience.

The Democrats know this, which is why they have been so desperate over the last days to get some sort of bipartisan “all go down together” thing going on and share the blame. The strategy may well work. Pelosi, Dodd and the redoubtable Barney Frank have emerged of late as the de facto leaders of the country, in the vacuum created by, well, the vacuum of Bush, and the bizarre antics of McCain.

The projection of Democrat authority appears to be paying off in the polls, with Obama now leading by a 5% average across all polls — and that’s including obviously fixed stuff like the Fox News poll, taken chiefly among the blonde airheads who comprise its on-air staff.

Despite the fact that Obama has still failed to really sell a narrative of what he would do — i.e. that he would not be a Republican and f-ck things up — the bad odour of the GOP is attaching to McCain like sh-t to the proverbial. McCain knows this — that’s why he’s been trying all these loony “game-changers” like suspending his campaign blah blah — and he and his team basically agree with the Obamist argument that Mr Change has another 3% or so in newly registered voters, thus pushing his lead up to around 8%, and delivering around 330 electoral college votes.

For team McCain there is potentially nothing but pain on the horizon. Thursday’s vice-presidential debate is being contemplated with nothing but pain by Republican loyalists — neocon hack Bill Kristol said he wouldn’t be watching it, because he didn’t enjoy humiliation comedy — and conservative columnists like Kathleen Parker are already suggesting that Palin should resign for the good of the ticket.

That may be a systematic lowering of expectations of course. Joe Biden is quite capable of f-cking things up with his prolix lovable Irish bullsh-ttery, and if Palin has been properly drilled, she could undercut him effectively. But if Biden is on form, he may well destroy her.

If that happens — if there’s a real Palin meltdown — then this is 98% over. I’ve met three McCain sympathisers in the past week who say they’ve changed their vote because of Palin. The McCain campaign couldn’t have anticipated just how monumentally stupid this woman is. I mean most of the stuff she was tripped up on was stuff she could have learnt by rote in the past three weeks. 

The Katie Couric interview — released in instalments by the liberal media at its best — showed her up as just not up to it, and then there was that most amazing thing, a second Saturday Night Live Palin sketch, with Tina Fey, in which a significant chunk of the hilarious dialogue was actual transcript of the divine Sarah herself.

But hell, it’s Sunday in Washington. Tomorrow when the bill goes to Congress, and the whole circus starts up again anything could happen. Obama could still, with his diffidence, his professoriality, his shrinking from the killer blow, could still lose this — lose Ohio by 10,000 votes, and fail to gain enough southwest states to offset it — and if anyone can, it’s he.

Nevertheless nevertheless nevertheless. Nevertheless.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey