Standoff Continues as Chaos Reigns

America awakes Friday with no more hope that a bailout deal can get done than there was three days ago. Any way you look at it, we've got John McCain and a small group of House Republicans to thank for this mess. Just as it looked like a deal was done early Thursday afternoon, here come House GOP lawmakers, essentially declaring war on a president from their own party. Even worse, John McCain, who dramatically suspended his campaign to come to Washington like a knight in shining armor, sat at a White House meeting he called for and said nothing for most of it.

So just what's going on here? A skeptic who follows politics might argue as follows. McCain and House Republicans saw a mutually beneficial opportunity to inject themselves in the bailout process. McCain, for whatever reasons, didn't want to participate in tonight's scheduled debate with Barack Obama. His friends in the House would seemingly rather watch the nation slide into depression rather than intervene in the "free market".

So they collaborate. They decide they don't like the bailout, then scramble to come up with an alternate plan that involves insuring bad debt rather than buying it outright. They even accused Treasury Secretary Paulson (what, another Republican?) of not giving them the information needed to draft their plan.

McCain seemed to glom onto this insurance approach. He certainly played his hand close to the vest for the better part of Thursday. The White House meeting reportedly descended into shouts and recriminations. McCain sat largely silent. Why? He needs the constituents conservative House Republicans represent. However, as happens sometimes, another event intervenes, one that could change the stakes.

Washington Mutual got itself seized by the FDIC Thursday night. WAMU isn't a small player. It's the largest savings and loan in America. Virtually all its assets were sold to JP Morgan Chase. Will this put pressure on Washington politicians to get off their ideologies and get something done?

You tell me.