Once key Republicans realized that a sequence of major bankruptcies on Wall St. could cost them the election, they decided that their best bet was to go ahead and ask for a naked bailout of their rich friends in the Banking sector, relying on their ability to create a Crisis Atmosphere to cow Democrats into compliance.  If the game works, the stock market will rebound and the electorate will be persuaded that the Republicans have already done something to fix the mess just before election day.

The downside risk?  Maybe, just maybe the Dems would balk and refuse to okay the bailout and try instead to focus the nation's attention on the Republicans' responsibility for running the economy into ground.  Since there was no guarantee that they could persuade the Dems to sign on to their welfare scheme for the rich, they decided that they had to start working the "time for us to all work together in a crisis" rhetoric, which they would then use to condemn the Dems if they failed to go along.

The payoff?  If their pressure works, then the stock market will rebound and immediate concerns about a meltdown will fade until after the election.  If it doesn't work, if the Dems refuse to give them the kind of money that Wall St. would like to see, then their strategy for the rest of the campaign will be clear: simply do everything in their power to define the Dems as those who are responsible for not fixing the economic crisis, even though they were not responsible for it developing in the first place.

The reality of the situation is that there really isn't a need for immediate action by Congress.  If Congress were to not pass the bailout that the Republicans are calling for, then the Fed would simply do for WAMU what it did for AIG, because it wouldn't have any choice.  The Fed is not about to allow the entire financial sector collapse as long as it has the power to intervene by buying equity in weakened companies.  It won't be able to do that indefinitely, but it could [and would] do it for some more months while Congress figures out how to put together a more comprehensive approach to fixing the banking industry.  Yes, Congress must do something to fix the mess, but it is not necessary that it implement a solution within days, or even weeks.

Congress may eventually figure out that it has options that the Republicans haven't mentioned, but it is not likely to be considering those other options in the next several days, while the Republicans keep the pressure on them.  What Congress can do is give the Republicans less of what they want, just enough to cover the next bailout or two, but not enough for Wall St. to take off on a giddy bailout high.  In the mean time, I hope they'll be pushing for a tax increase on rich people in order to pay for the cost of this bailout.