The worst financial crisis since the Great Depression has shattered the conservative illusions about deregulation and market fundamentalism. But the equally costly illusions about America’s role as an “indispensable nation” policing the globe go without challenge. We remain prisoners of war.

The markets were already indicating the plan from Treasury Secretary Henry Paulson was inadequate. Rather than making further compromises with the conservatives who simply don’t get it, Democrats should put forth a plan that is far bolder and that deals with the real problems.

The text of the "agreement on principles" that blew up yesterday is — like Treasury Secretary Paulson's original proposal — is breathtaking in its brevity. They are talking, after all, about authorization to spend $700 billion — or more, since it is a revolving fund. Meanwhile, the financial crisis grows worse.

Get ready for the steamroller on the $700 billion bailout of Wall Street.

Tuesday was the time for throat clearing. It started to get out of hand. Opposition to the plan grew through Wednesday morning.

Then...

It's gut check time. The attempt by Treasury Secretary Paulson to put a gun to the head of Congress and terrify them into forking over a $700 billion blank check to the Bush administration in 48 hours has failed. Now what? Most Americans would just as soon the Masters of the Universe were allowed to sink in their own folly. They had the party; let them clean up the mess. But, looking at sinking housing values and shaken retirement accounts, most Americans know something has to get done.

How did it come to this? The banksters issue a threat: Hand over $700 billion in taxpayers’ money–on top of the $600 billion already forked over–or we’ll take down the global economy.

There will be a lot of obfuscation—fingers pointing every which way—but the story is very clear.

Every American is told to ante up $2,000 – an estimated $700 billion in all – to bail out the banks from their bad bets, or they’ll bring down the entire economy. No bailout should go forward—at whatever cost—without meeting six minimal conditions.

The worst financial crisis since the Great Depression has shattered the conservative illusions about deregulation and market fundamentalism. But the equally costly illusions about America’s role as an “indispensable nation” policing the globe go without challenge. We remain prisoners of war.

The markets were already indicating the plan from Treasury Secretary Henry Paulson was inadequate. Rather than making further compromises with the conservatives who simply don’t get it, Democrats should put forth a plan that is far bolder and that deals with the real problems.

The text of the "agreement on principles" that blew up yesterday is — like Treasury Secretary Paulson's original proposal — is breathtaking in its brevity. They are talking, after all, about authorization to spend $700 billion — or more, since it is a revolving fund. Meanwhile, the financial crisis grows worse.

Get ready for the steamroller on the $700 billion bailout of Wall Street.

Tuesday was the time for throat clearing. It started to get out of hand. Opposition to the plan grew through Wednesday morning.

Then...

It's gut check time. The attempt by Treasury Secretary Paulson to put a gun to the head of Congress and terrify them into forking over a $700 billion blank check to the Bush administration in 48 hours has failed. Now what? Most Americans would just as soon the Masters of the Universe were allowed to sink in their own folly. They had the party; let them clean up the mess. But, looking at sinking housing values and shaken retirement accounts, most Americans know something has to get done.

How did it come to this? The banksters issue a threat: Hand over $700 billion in taxpayers’ money–on top of the $600 billion already forked over–or we’ll take down the global economy.

There will be a lot of obfuscation—fingers pointing every which way—but the story is very clear.

Every American is told to ante up $2,000 – an estimated $700 billion in all – to bail out the banks from their bad bets, or they’ll bring down the entire economy. No bailout should go forward—at whatever cost—without meeting six minimal conditions.

It's more than ten weeks before voters choose their next president, but progressives should start thinking now about strategy for a Barack Obama presidency. How do we make sure our priorities are Obama's priorities, and how do we get those priorities addressed in a political landscape where resistance to change will still be intense? For the next two weeks, we want you to join us in a dialogue on these questions that we hope will help us claim a progressive mandate for change after the election. The dialogue starts with this article, excerpted from the September 1 cover story in The Nation. Add your comments, and watch for other articles from our senior fellows and other progressive leaders.