> The issue right now is the potential collapse
> of the banking system. This is a time scale
> of weeks vs. one of years.
As chairman Mao used to say, politics takes command. To that, I'd just add the clause "sometimes." This is all very uncertain and risky, but first and foremost the defeat of the reworked bailout plan is a huge political mill wheel hanging on the neck of the Republican party. Yes, it does increase the risk of a Japan type of depression in steroids, but it was mainly a Republican failure. In Congress, it shows their disunity and disarray. That's all good as the election approaches. After suspending his campaign to save the economy, McCain said he could participate in the debate because the negotiations were well advanced. And now it's clear he didn't save anything. Bush, of course, couldn't look weaker. If Obama plays his hand moderately well, it may turn out for the better. Given what can be done in Congress now by the Pelosi Democrats, the political defeat of the Republican party may be worth the risk.