Tuesday, America woke with a heavy political hangover, and took a look around the proverbial living-room. Boy, they thought. we really wrecked the joint, didn’t we? It was fun at the time but now …

President Bush addressed the nation at 7.45am, a clever strategy to make sure even fewer people would tune in. He said nothing but the standard platitudes about wanting Congress to work together on behalf of the blah-blah …, according to the reports. Waking up, or staying up, to watch George W Bush at 7.45am is, as the man said, a bit above my pay grade.

Though Congress was technically in session, much of the day was taken up with meetings between various factions, often across party lines, with the bailout forming two temporary de facto pro and anti parties. Left Democrats such as Dennis Kucinich, who want to load in tens of billions worth of protection for defaulted mortgagees, are working with Republicans up for re-election, who want to strip the bill down, or replace it with a mortgage insurance proposal and a capital gains tax holiday, or abolition.

It’s a weird game of chicken — while the pro-bailout party can work together on a common proposal, the antis are working together only so far as they can strike the bill out. After that, it’s open season and a free-for-all.

To forestall this, the Senate — where the bill has broad bipartisan support — has brought the thing to the vote as an amendment to another bill. The idea is that Senate support will bolster the House to do what allegedly needs to be done. But it’s hard to say if anything will persuade Republicans in marginal districts to come in, because the whole issue has become a very interesting game-theory model.

Consider this — if the bill passes, the economy is kickstarted again (they hope) and the panic is over — but for many Republicans, voting against it will nevertheless make them local heroes, standing up to those Wall Street fatcats, elites or — south of Nashville, and east of Santa Fe — them rich Jews.

However, if they vote against it, it fails and the economy really tanks, people would start to ask whether it might not have been a good idea.

So, it is in the political interest of House Republicans for the bill to pass, but in the interest of no actual Republican to vote for it. Delicious n’est-ce pas?

So no-one really knows what the hell is going on, again. If the bill passes the Senate on Wednesday and then fails to pass Thursday, then … (insert picture of cartoon man tearing out hair, shouting using the top line of the keyboard, shifted). Effectively, both sides will have to come up with substantially different models and put them to the House floor.

From the left (it may gain support from sections of the right) a scheme which established a public holding company to take on the mortgages bundled into the traded securities and ensure that no-one except the most dilatory defaultees — the 1% or 2% who never intended to pay a cent of their mortgage ever — lost their shirt, might be acceptable. The problem is, of course, that there is no longer a hard-and-fast division between the share-owning class, and the rest of us — overwhelmingly because trade-union pension funds are invested on the open market.

So on it went. But the great event of the day was the continuing unravelling of Sarah Palin, a show that may run longer than Cats, and in that respect the return of lizard king James Carville to the punditry circuit, reminding us once again how politics is done. While other talking point hacks do the full lung-burst — try to get a hundred words in, hitting six issues including Barack Obama’s friendship with Bill Ayers, his dope-smoking, his kindergarden essays, when the question is “is your microphone working” — Carville sits back like a sensei master or a cottonmouth rattler, waiting to strike with a few words.

He’d hit on a simple but killing line, which he used on the Campbell Brown show, Larry King and elsewhere. After Republican pundit X had banged on about John McCain coming in to help maverick this, that, etc, Carville leaned in and said — “and what does Sarah Palin think of this bailout?” — and suddenly his opposite number was mortally wounded.

Bay Buchanan, Palin’s greatest defender (and before that a stern critic of mothers working full-time) tumbled out of the sky like a peppered partridge going “well uh erm up we’ll find out on Thursday but I know whatever she thinks she will stand with the American people”. Buchanan knew that Palin was on tape standing against the bailout, and she knew she couldn’t lie and say she’d spoken to her and she was now for the bailout, in line with her Presidential candidate John McCain — because no-one’s spoken to Palin for the past three days except those who are drilling her furiously about, you know, how a bill becomes law, that the separation of powers is not an episode of Heroes etc etc. It’s bloody marvellous to watch because no-one expected it — Carville clearly held it back to use it on one single day.

Simple? Obvious? Yes of course it is. But that is the supreme art of this sort of politics. Remember Hawke’s “you can’t put your money under the bed — that’s where the Reds are”, Keating’s “I want to do you slowly”, Reagan’s “there you go again” and Clinton’s “it’s the economy, stupid?”. Oh that last one was actually Carville, and if he’d agreed to work for Obama and Barry had hired him, I reckon he’d be eight to ten points clear of Walnuts and the Warrior Princess, across the board.

But man, the McCain/Palin thing is now officially in deep sh-t. The conservatives who have now come out against her include Charles Krauthammer (uber neocon), David Frum (Bush speechwriter), most of the National Review, and most recently George Will, a true conservative elder. But the death-blow went to middle-of-the-road, okay liberal, Fareed Zakharia who pointed out that it was not that Palin couldn’t answer very well in interviews, it was that “she clearly didn’t understand the questions. This is a level of incompetence we have not seen before”.

Indeed, and that all makes Thursday’s VP debate just about the most important in history. If Palin can somehow hold her own and be effective, then it will be one of the most stunning turnarounds in history, and the whole anti-elitist thing will be retched up, like, a billion notches.

It would be good to give back McCain another three points. But if she fails, it’s all over, and an announcement that the duties of caring for a special needs child are more than I etc and thus with regret I am withdrawing from etc will be seriously on the cards next week — and Romney, or f-ck, Huckabee will be on the ticket.

You wouldn’t hold out much hope, if you were a conservative. The most recent clip released from the Katie Couric interviews — which has now become cruel, like getting body parts of a kidnapped child through the mail in instalments — is Palin, on what she reads. The answer: pretty much nothing at all. As Celine Dion once said “I don’t need all that extra information in my brain.”

God it’s cruel. God it’s funny. God it’s cruel. If they put these interviews together on a DVD, damn, that’s my Christmas list nailed.  

Peter Fray

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Peter Fray
Editor-in-chief of Crikey