Watching Bush on TV today, and the reactions to him, told me the Paulson+ plan is doomed. Nobody has confidence in anything Bush touches, Paulson can't sell this (he isn't Petraeus wearing a uniform with a bunch of ribbons and medals and using cool jargon -- uncool jargon, yes, cool jargon, no), and the plan depends on the public and the markets "buying" the notion that things are sound. Nobody is buying that. They are going to have to grind this out now, nationalize a big part of banking, and slowly rebuild confidence in the system. I think getting Obama in there would be a step forward -- people seem to trust, for whatever reason, Obama's ability to "handle the economy." Bush burned through that trust a long time ago, spending it on Iraq and Petraeus and Swift Boats and flag lapel pins and his carefully crafted image as a country bumpkin, and whatever else he blew his "political capital" on. Alas, that political capital isn't the only kind he's good at blowing.
There was a moment, I think, when this could have worked, when the image of both parties coming together to sell a politically unpopular piece of legislation might have convinced people Washington was capable of real leadership. But the first vote failed, and that moment, like Bush's "political capital", was squandered. And here we are.