* There is a serious financial crisis, which could potentially lead to another Great Depression; one of the main causes of this was deregulation.
* Something Needs To Be Done; but the politics of this are quite tough, since Something will necessarily involve funnelling taxpayer money to rich people, giving the taxpayers the sense that they're being screwed (which they are -- but the screwing was the deregulation, not the bail-out... unless the latter is done poorly).
* Since Something Needs To Be Done, a truly appalling plan is proposed by the Bush Administration, one with no oversight, no reregulation, no taxpayer protection, no bones thrown to "Main Street" (in the parlance of our times), and a wholly arbitrary sum of money -- a plan which, on top of everything else, may well not work. (Could even make things worse!) This plan is "sold" by frank lying on the part of its proposed Czar, Paulson.
* Lots of objections are raised to this plan. The objections to the lack of oversight are from all sides. The objections to the huge giveaway to the rich are from people all across the country who are neither in Congress or rich bankers. But the other objections vary, ranging from good to bad, to informed to uninformed, and including a fair amount of the anti-government sentiment that caused the problem in the first place.
* Ignoring various options that would be radically different in focus (e.g. bailing out homeowners not wall street firms, as various people have suggested), Congress comes up with a counter-proposal to the Paulson plan, which fixes some of its more egregious elements, but is still pretty bad... partly because the Congress is full of wimps, partly because they've all been bought off by Wall Street, and partly because a lot of the mistakes were already made (e.g. deregulation) and thus a fair amount of bad is unavoidable even in the best of fixes.
* Congress is, however, afraid to pass the Bad But Not As Bad As Paulson plan without bipartisan support, since the rage in the country means anyone who votes against it could be demagogued against. This fear is both unreasonable and reasonable: it's reasonable because if Congress weren't so damn corrupt and wimpy they could write a much better plan, one that might assuage a great deal of the populist anger in the country, but unreasonable because, again, Something Must Be Done and a lot of the mistakes are already made.
* The Right-wing of the Republican caucus, meanwhile, comes up with a plan that is even worse than the abominable Paulson plan, and departs from reality in a serious way. But it will let them tap into the (combination reasonable/unreasonable) anger over the plan (and generally over the situation... which they were a major cause of, given their backing of the deregulation that was a key factor in this mess).
* At the last minute, however, the Bad But Not As Bad As Paulson is derailed by John McCain, who parachutes in hoping to either A) vote against the Bad But Not As Bad As Paulson (on the grounds that the Even Worse Than Paulson plan should have been chosen), using such a vote to separate himself from Bush and tap into the populist anger about the entire mess (which he and his presumptive Treasury pick Phil Gramm helped enable with deregulation), or, perhaps, B) to vote for the plan and take credit for saving the economy. No one seems to know whether he was going to choose A or B... quite possibly not even McCain himself, who seems to be keeping his options open.
* So: the good news is the abominable Paulson plan and the Bad But Not As Bad As Paulson plan are both scuttled. The bad news is that nothing is going to be done, which could potentially lead to another great depression... since, all the scams and rumors of scams aside, the situation is really serious. (Problably. No one's quite sure.) And while the Bad But Not As Bad As Paulson was, in fact, bad -- compared to a lot of stuff that progressives would have wanted to add (even keeping the same basic structure), let alone the other ideas being floated, it was -- probably; no one's quite sure -- good enough to avert the potential Great Depression 2, while still being a whole lot better than the Abominable & Even Worse plans. (Although God and the Devil are both in the details here, and we don't know the details yet.)
Meanwhile, the fear of the financial collapse is still very present, and the Simultaneously Reasonable and Unreasonable anger throughout the country is still very powerful, and could easily attach to politicians who support good plans, or bad plans, or no plans. Or not. Certainly no one knows who will benefit from all this politically (I was going to add "or financially", but it seems like "rich bankers" is a safe bet on that last one: everybody knows the game is rigged here.)
One of the complexities here is that almost any move towards a good outcome -- in various directions -- moves through far worse outcomes (e.g. to get a good bill, which we need, we need first to scuttle the bad ones... which might mean none, which is worse; but to get a bill, which we need, we need to move towards it... which might well lead to a bill even worse than nothing.) So any given move might be great or terrible, depending on how things turn out later, plus a whole lot of factors that I don't understand (including many that no one understands).
For all that McCain is trying to gimmick this for a quick political advantage, his scuttling of the Bad But Not As Bad As Paulson bill could end up being a good thing... if it leads to a good bill (even though he would himself oppose such a bill, out of principle or politics or both); but it also could kick off GD2: the Empire Blows Back.
And, of course, in theory, even passing a good bill could politically redound to the benefit of those who oppose it -- due to the (reasonable) populist anger here -- therefore, potentially, to those whose ideology of deregulation was a key factor in creating the problem in the first place. On the other hand, passing no bill could lead to GD2... which could politically help... who knows. But in most ways it'd hurt us all. Very, very badly.
So: do I have that roughly correct? (That's actually a real question, not simply a rhetorical one.)
Update: Chris Hayes simplifies the politics of the central bill (Dodd/Frank, aka Bad But Not As Bad As Paulson, which seems to be the chief one on offer at the moment). Briefly:
1) The bailout is unpopular... 2) The crisis is terrifying to lawmakers... if you don't pass this, they're being told, you'll have the blood of another Great Depression on your hands. 3) Ergo: The optimal outcome for all lawmkers is to vote against the bill and still have it pass. That way you get to have your cake and eat it, too. But what we're dealing with is something akin to a massive prisoner's dilemma. Everyone wants to get into the decision quadrant of voting against the bill and having it pass, but of course if everyone rushes for that quadrant, then the bill doesn't pass and therefore, no one ends up in that quadrant....Unabridged (but still very short) version here.