Almost every blog I read that deals even remotely with politics has remarked that McCain is being blamed for the failure in reaching a deal, and also seems to think this is a problem for him. I’m not so sure. My impression is that the bailout is quite unpopular with most everybody but economists and politicians, and even those two classes are not undivided on the subject. If McCain is seen as having blocked such a thing – and this seems to be accepted – I’m by no means convinced it’s a bad thing for him. If the truth were told, I’m not even convinced it’s a bad thing for the economy. After all I am myself neither politician nor economist, and thus not convinced that the Paulson plan is the only way to solve this thing. If the problem is a failure of credit, why not have the Treasury act as lender of last resort directly to commercial firms, cutting out the middleman of the banks? After all the current mechanism was set up a good eighty years ago. It might usefully be updated a bit for the twenty-first century.