As the bailout drama lurches on, America is looking back nostalgically to the days of FDR and Eisenhower, when Wall Street still invested in real things

A sepia-tinged crisis

If this is the time of reckoning, then it has been arriving in unnervingly muted fashion. The violence being done on Wall Street is grisly, and the atmosphere on Capitol Hill following the failure of the $700bn rescue package on Monday was deeply toxic. Yet beyond those two realms, there has been an odd, suspended quiet hardly befitting a nation supposedly on the precipice.

Partly, this is the product of fear - fear of consequences and sums so large that they seem to overwhelm casual commentary. Further muffling the alarm for many has been the awful confusion about what is behind it all, these credit default swaps and collateralised debt obligations that are, it is said, responsible for decimating one's retirement account and college savings. But there may be something else to the hush. There has been much talk about this being the end of an era, a punctuation of a realignment away from the free-market philosophy ascendant since the late 1970s, and towards something new. What if, though, the turn is in fact towards the old? There is in the apprehensive pause a sort of scared nostalgia, a shared recognition that the country has lost its way, that certain values have been sloughed off like a tranche of low-return securities.

Liberals brandish charts showing the eye-popping rise in the ratio of executive pay to worker pay, from 24:1 in 1965 to 364:1 four decades later. Cultural conservatives disassociate themselves by linking Wall Street's excesses to a general decline in responsibility: a lower national savings rate, fewer kids graduating from high school. The political heroes of the moment are from mid-century - FDR, of course, but also Eisenhower, who used prosperity actually to build something, the interstate highways. Self-critical capitalists say Wall Street went astray when it gave up investing in real things and companies for bits of paper. They wax on about the robber barons' railroads - sure, there was self-dealing, and those strikes weren't pretty, but at least the trains got you from St Paul to Seattle. The sepia tinge carried even into Monday's 777-point sell-off, when the only stock in the S&P 500 to gain was Campbell's soup. Makers of boxcars and gunnysacks had presumably limited their losses as well.

Barack Obama has maintained a deliberate, cerebral tone, helping lend a mid-century earnestness to the proceedings

The echo of a more solid and equitable past carries into the negotiations. Despite Monday's recriminations, there has been something anachronistic about the scrambling of partisan loyalties - lining up with President Bush and the treasury secretary, Hank Paulson, were Democratic congressional leaders as well as most Republican senators. Standing in the way were a minority of House Democrats and, most of all, a majority of House Republicans, who see in their opposition a chance to break with Bush for good and return to their own truer past, of staunch fiscal conservatism. Meanwhile, Paulson and Ben Bernanke, the Fed chairman, evoke the similarly sober and public-minded Establishment figures who held sway in the golden era. The talks themselves have a throwback quality - at one meeting, BlackBerrys were collected in a bin, to prevent leaks.

Helping lend a mid-century earnestness to proceedings has been the Democrats' new standard-bearer, Barack Obama, who has maintained a deliberate, cerebral tone on the trail and at the White House meeting called by Bush. Throughout this campaign, he has shown less interest than many Democrats in exacting full retribution for Republican failures. Some in his party have fretted that he is again failing to capitalise on economic woes, but polls suggest his equanimity has in this case worked. Voters may view this crisis differently from their employment and health-care woes - for those, they want to see some passion, but for this more abstracted emergency, they perhaps wanted someone who talked with the right people, and avoided any sudden moves.

John McCain had hoped, with his snap decision to return to Washington for two days to lead the negotiations, to set a more demonstrative example. This intervention did not go as hoped, and by Monday his campaign found itself seeking to claim credit for the package, only to see it collapse.

Meanwhile, the crisis was adding to the pressure on McCain's running mate, Sarah Palin. The week before, CBS's Katie Couric had asked Palin whether rescuing Wall Street made more sense than just giving $700bn to consumers. Palin's reply suggested the crisis had left her even more unsettled than most: "That's why I say I, like every American I'm speaking with, we're ill about this position that we have been put in. Where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy. Um, helping, oh - it's got to be about job creation, too . . . We've got to see trade as opportunity, not as, uh, competitive, um, scary thing, but one in five jobs created in the trade sector today . . ."

As Congress got a day off for the Jewish holiday on Tuesday, Palin's tutorials with advisers continued on.

Alec MacGillis is a staff writer for the Washington Post

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