Calling Bullshit, and Explaining the Need for a Bailout

Jeffrey Toobin calls bullshit on the "suspension" of John McCain's campaign.



TPM also has word that McCain's ads will begin airing again on Saturday, deal or no deal—proving once and for all that this has been nothing more than a silly stunt, the only likely consequence of which is to scuttle a sorely-needed compromise on some sort of bailout.

Bloggers, who tend to consider themselves experts on everything, have by and large talked themselves into a completely incorrect position on this. I'm by no means an expert on the economy, either, but at least I understand the basic principle: the economy is an engine and the credit market is the oil. Run your engine without any oil and the thing will seize up.

This is not a joke, a scam, or a Bush Administration lie. What we're seeing in the markets is the real consequence of an environment in which banks are afraid to loan anyone, including each other, any money. Washington Mutual failed tonight—by far the largest bank failure in American history. This is a serious crisis. It may not require $700B+, and it certainly won't require the no-rules giveaway that Paulson favors, but it's going to take massive government intervention to keep the credit market afloat, and time genuinely is running out.

Luckily for me, I've never had a real job, so my non-existent 401(k) will be just fine. But if the economy seizes and the stock market tanks, and the country slides into the sort of severe economic downturn that the experts are warning us about, a lot of people will be broke and a lot more will be out of work—and you'll know exactly who's to blame for it.