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Joe Scarborough and John Heilemann Dissect the Bailout Fight: How It Might Sink McCain — and Help the GOP

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Every day until November 4, a series of writers and thinkers will discuss the election over instant messenger for nymag.com. Today, New York's John Heilemann and Joe Scarborough, former Republican Congressman and host of MSNBC's Morning Joe, discuss the parallels between the rejection of the bailout bill and the Gingrich revolution, what Sarah Palin still has to offer, and how these couple weeks “might very well be remembered by history as the fortnight when Obama won the election.”

J.H: So this morning I had the pleasure — and a pleasure it always is — of joining you on the air, and you were fairly exercised about the abject failure of all concerned parties regarding the bailout bill. You also mentioned your time as a member in the Gingrich house of representatives on a number of occasions, which got me thinking. Putting aside the stupidity (or at least ill-advisedness) of Pelosi's speech yesterday, doesn't this whole thing remind you a little of the 1995 government shutdown — in which you and your fellow Republicans acted in a fit of pique and both helped to reelect Bill Clinton and cost your party seats in 1996?

J.S.: Perhaps, but the shutdown was owned by Republicans alone. Democrats remained lock-step in line with their president. This is a failure that is owned by both parties. I suspect that neither will be helped by the fact that America was focused on the institution of Congress intently for the first time since the vote to authorize the Iraq war. Both parties will soon long for the day of 15 percent approval ratings.

There is a parallel in that Republicans were willing to stare down a president, the press, and the smartest guys in the room based on deeply held beliefs. That move in 1995 may have helped reelect Bill Clinton but it also made many Republicans heroes in their districts.

J.H: The ones that survived, that is!

J.S.: All 60 of us. Enough to irritate the D.C. press corps!

J.H: In addition to deeply held beliefs, there was also political calculation involved, both then and now. A democratic strategist friend of mine used the phrase "politics as masada" — the Gingrichian notion that somehow blowing the whole system up rebounds to the GOP's advantage. Which hasn't worked out so well in the past, I might note.

J.S.: Do you note that, John? Also note (he says, laughing out loud to no one in particular) that Republicans regained control of Congress for the first time in, like, 1,000 years. Actually, we stayed in power another ten years for fighting for our beliefs. It was only when Republicans began spending like seventies-era Democrats that voters kicked them out. And the shutdown was not about blowing the government up. It was all about forcing Clinton to sign a balanced-budget bill. He did, eventually, and we balanced the budget back when Republicans still acted like Republicans.

J.H: Point at least half-taken — the balanced budget was a real achievement. And I agree with you that this bailout fiasco is a bipartisan failure, to a point. But isn't the political problem for Republicans that (a) voters broadly blame the GOP for the economic/financial mess we are now in, and (b) this was a Republican bill, designed by a Republican Treasury secretary on behalf of a Republican president, so (c) fairly or not, the GOP will bear the brunt of blame if we wind up in Great Depression II?

J.S.: There is no doubt that George W. Bush, Hank Paulson, and John McCain will be hurt politically by last and this week's actions. But I suspect the House Republicans will gain a great deal of the respect they lost when they started a spending spree that left America $10 trillion in debt. This is a win for the House GOP. They may be maddening to many of your readers, but this is a first time in a long time that they stood up to the president and stood for something. The base will be energized (even as Rome burns).

J.H: Let's run with your McCain point. He put himself out there on this bill, set it up as a test of his leadership abilities, bragged about how much he'd moved the needle, and was taking credit for its passage yesterday ... before it inconveniently failed. Strikes me as pretty bad for him, no?

J.S.: Very bad. And while Republicans attack Obama for refusing to take a position on the AIG bailout and the $700 billion plan, it seems that laying low was the smart political move. If McCain was going to insert himself into the process, he should have stayed there until the crisis was resolved. The bill's failure makes him look weak and ineffective.

J.H: Doesn't it tell you that House Republicans couldn't care less about their standard-bearer? Not that they did this to hurt him, but that they see him as irrelevant to their prospects politically and as not really one of them ideologically?

J.S.: House Republicans have been burned by George W. Bush time and time again over the past eight years. They have seen their friends and peers defeated after following him over the cliff. McCain has never shown a great deal of deference for House members, and once was memorably quoted as saying, "The House doesn't matter." This week it did.

J.H: So if you were advising McCain, would you tell him now to get back in there and reengage until a deal was worked out? Or to learn the lesson now that he didn't grasp a week ago and stay as far away as possible (like Obama)?

J.S.: It's too late for him to disengage. A bill is going to pass soon enough unless the markets continue to go up! So he needs to suspend his campaign (without calling it that) and camp out in D.C. The worst thing would be if he engaged before the bill failed and then watched it pass this week when he was nowhere to be seen.

J.H: That makes sense, though it will be mighty hard for him to reverse the damage already done by his performance since the crisis started. Yesterday it occurred to me that the past ten days plus the next few might very well be remembered by history as the fortnight when Obama won the election. Do you agree? Or am I going too far?

J.S.: You are not going too far. I sensed a shift after the debate and suspect the events of the last few days have only made McCain's victory even less likely. This was a campaign that had to play error-free ball for the next month to have a chance of winning in a big Democratic year. Last week was far from perfect for McCain. In fact, it was a disaster.

J.H: And one made all the worse by the fact that Obama is playing error-free ball. God knows I have been among those who've criticized him (and his people) for being excessively cautious in the past, but it seems to be working very well for them in the face of financial meltdown.

J.S.: I suppose everything could change tomorrow with a stunning news story, but we are rapidly approaching the point in this campaign where one could say that if Barack Obama and the Democrats can't win this year, against this candidate and his tired party, then Democrats were never going to win. Republicans have performed so horribly that I would not be surprised to see a repeat of 1964 in the presidential race and 1974 on the congressional side.

J.H: For McCain the challenge all along has been to keep this election from returning to equilibrium — because at equilibrium, Obama is ahead by three to nine points. So McCain and his people keep trying to shock the dynamic (the celebrity ads, Palin, suspension of his campaign, threat to blow off the first debate), and sometimes it has worked, albeit briefly. The problem is that such tactics have diminishing returns: Each one yields less shock than the one before. What's he gonna do next? Set himself on fire, literally, on stage at the next debate?

J.S.: I would suggest fireworks during the V.P. debate this Thursday.

J.H: Anything to distract from Sarah Barracuda! Speaking of whom, after the Katie Couric debacle, do you still think that, by and large, picking her was a good idea?

J.S.: I agree with Pat Buchanan that picking a boring GOP governor would have finished McCain off for good. Palin was a risk that I would not have taken but if she survives the debate, he may live to tell the story of how this Hail Mary pass brought home his base.

J.H: A big "if," to be sure.

J.S.: The expectations could not be any lower. That is an advantage that George W. Bush enjoyed in 2000 and 2004.

J.H: Agreed — though I can't help continuing to think that the Palin choice had two bad effects for McCain: (a) It made people think more about his age, and (b) made people wonder, Who is John McCain, really?

J.S.: The problem for McCain was that most conservatives knew who he was and didn't like him. It looks that this race is turning into a Karl Rove special — the person who turns out his base wins. McCain could not do that with a GOP base that had little use for him. Palin helps a great deal in this area, especially if the media keeps writing stories about how stupid she is. The age issue is also a concern for McCain, but his team obviously determined that voters would not hold that against him. I'm not so sure they are correct on that point.

J.H: Okay, so let me return to one of your previous answers and then we will adjourn. Let's say you're right about the scale of the wipeout that may ensue in November: Obama wins huge and Democrats emerge with an LBJ-sized congressional majority. Is it just me, or doesn't that just scream disaster in the making?

J.S.: It depends on Obama. Will he remain cautious and listen to advisers like Bob Rubin or will he try to be a darling of his base? George W. Bush was faced with that decision in 2001 and he chose his base. I suspect Obama will go a different way. Let's hope so.

J.H: I've known the guy for twenty years and I suspect he is more centrist than left-ideologue, despite Republican efforts to paint him as the latter. It also strikes me that, given the economy, he won't have much opportunity to be anything but cautious.

J.S.: Despite GOP efforts and his voting record, I too believe he is a centrist. Since he was running for president from the first day in office, he had to nail down his base with left-wing votes. He did that time and again and won the nomination because of it. I choose to believe (based only on my best guess) that he is not a left-wing ideologue. Though he will enrage social conservatives on many points, he will be more of a Clinton centrist on economic and national security issues.

J.H: Again, we agree — though we better not tell the Cheetos-fingered armies of the liberal blogosphere! Saying the president looked like a beaten dog on your show this morning probably means there's a contract out on my head from the right. No need to enrage the left the very same morning!

J.S.: Agreed. Divide and conquer.

Earlier: John Heilemann and Robert Reich on Who’s Winning the High-Stakes Game of Bailout Chicken

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