My take on what has happened so far, and is now happening, in the financial crisis and its accompanying political stasis: we are seeing Washington operating as it was supposed to, the checks and balances forcing (or trying to force) real substantive debate out in the open. Most liberal responses that I’ve been following seem to have missed this in their consensus support for the Senate’s modified Paulson plan. But the House–BOTH SIDES–resisted the Senate’s coalition with the Administration, and are being drubbed as the spoilers. But if you listen to the opposition left and right, there is a lot of principled and sensible dislike for this fish-paper of a bailout.

The Paulson plan was rightly rejected by everybody, from New Gingrich on the right to everybody on the left. I wrote letters-to-Senators against it immediately. It was a disastrous and revolutionary coup d’etat in 3 easy pages (which, still, McCain apparently couldn’t manage to read for several days. But no matter.) The Senate quickly decided to do what they could to try and “save the state” from financial ruin. Rep. Barney Frank and Sen. Dodd worked night and day, it would seem, to get the Paulson plan into some kind of acceptable shape. And as the details and drafts came out, and the conviction that quick action was desperately needed filtered out into common public opinion, the idea that this retooled plan was workable, acceptable, worth trying, took hold and now still holds.

But the voices of opposition still kept shouting out to Congressional leaders. I’d bet their inboxes were so stuffed with hate mail this week that most of them had severe qualms about backing ANYTHING that bailed Wall Street out of its own stinky toxic mess of pseudo-securitied debt instruments. That’s what this boiled down to for many, and in fact still boils down to, IMHO: as Dennis Kucinich said on Rachel Maddow last night, this deal borrows money from banks to give to banks, at the expense of the taxpayer (probably something like $6900 per citizen). The Senate plan proponents are claiming that the bailout will not cost taxpayers in the end. That’s conceivable. But the plan language does not seem designed to require Wall Street to foot the bill. It’s debatable, and many are, quite reasonably, not biting on that claim. (See video.)

And on the right, Congressional Republicans are opposed to the plan on free market principles: this plan, in their view is nationalization and socialistic. And their constituents, I’d guess, are fuming and they’d like to get reelected. (Listening to them it’s also clear that they are bound and determined to turn this crisis into an opportunity to ram through some tax and spending cuts, and if possible maybe some spending re-alignments. This is of course in bad faith, since the crisis has nothing, in the short term, to do with government spending, so they should not be muddying the waters with their usual ideological priorities. Now it seems they’ve won something on this in the new bill, which apparently includes all sorts of tax cuts and other expedient deal-sweeteners to coax resisters onboard. The details remain to be seen. At least what I’ve read so far does not seem to reveal the extent or true nature of these additions.)

So the first bailout vote failed, to the shock and awe of everyone. But here is a case where fiscal conservatism and principled progressivism, both responsive to the electorate, produced a check on legislative haste that then provided the opportunity for real debate to emerge. What they blocked was a status quo economic elite idea: the Admin-and-Treasury had coopted the support of the Senate into believing that bailing out Wall Street was required to save global capitalism from a disaster of its own making.

But the outlines of a substantive debate emerges in the House dynamics. The right says, government shouldn’t intrude on the “free” market (and, as always, “cut taxes, and maybe food stamps!”). The left says, in essence, maybe Wall Street deserves its fate. Maybe the world economic system needs a collapse to snap it to its senses and allow some revolutionary energies to percolate up from the ashes. Maybe, just maybe, if Wall Street crumbles there might be some redistribution of wealth, some movements toward a greener civilization, at least some questioning of our market fundamentalism that everybody in the status quo accepts (cf. Admin-cum-Senate position) as the only rational way to organize human lifeways.

So now the Left in the House have, it seems, had a chance to put together some sort of progressive counter-proposal. And the Right had a chance to say what they wanted (capital gains tax cuts, their insurance scheme, maybe cut Medicare…predictable non-starter nonsense, mostly). It seems that the crisis nature of this thing is in the end not going to lead to any substantive epoch-changing legislation. But the debate has begun. And if I read Obama rightly, if he’s in office he is just liberal and intelligent enough to know the real stakes: energy independence, greening, economic justice, healthcare reform, rebuilding our tattered infrastructure, and education as a true national (security) priority. (I caught his Pueblo, CO speech on 9/29 on CSpan, can’t find the whole thing now, but here’s a snippet.)

Another way of putting the divide is expedient realism on the one side (attempting to maintain the status quo and save it from its logical and inevitable conclusion: global ruination), and ideological and idealistic debate on the other side, which is in normal circumstances occluded by business-as-usual and obfuscated by partisan rancor.

The last is still very much in place, and has taken hold on the mainstream soundbite culture with, for example, the presidential politicization of the bailout, the House Repub. initial knee-jerk blaming of Pelosi’s speech for their failure to vote on the bailout, John McCain’s continuing behind-the-eight-ball farce of taking credit for everything and nothing, etc. etc. All of this nonsense will of course play into the status quo’s hands, and we’ll probably get a retinkered Paulson plan, now bloated with ideological Trojan horses, any day now. The stock market will rebound, everybody will say the world has been saved, and our overheated false-credit-addicted consumer culture will continue unabated. Yeeha.

So there’s my take. We’ll see what happens….