Relevant and even prescient commentary on news, politics and the economy.

The BradAltman Effect?

Is gay the New Black? Note this partial list of companies who said No on 8:

Most of the state’s highest-profile political leaders — including both U.S. senators and the mayors of San Francisco, San Diego and Los Angeles — along with the editorial pages of most major newspapers, opposed the measure. PG&E, Apple and other companies contributed money to fight the proposition, and the heads of Silicon Valley companies including Google and Yahoo took out a newspaper ad opposing it.

There is one CA-based company conspicuous by its absence, despite loud declarations of being a gay-friendly place and holding Gay Days in its Florida-based theme park.

Dear Californians, you got f*ck*d by The Mouse.

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Win the Nobel Prize,* they publish you on Sunday instead of Monday

Krugman believes people want someone who is “serious”:

In a way, you can’t blame Mr. McCain for campaigning on trivia—after all, it’s worked in the past. Most notably, President Bush got within hanging-chads-and-butterfly-ballot range of the White House only because much of the news media, rather than focusing on the candidates’ policy proposals, focused on their personas: Mr. Bush was an amiable guy you’d like to have a beer with, Al Gore was a stiff know-it-all, and never mind all that hard stuff about taxes and Social Security. And let’s face it: six weeks ago Mr. McCain’s focus on trivia seemed to be paying off handsomely.

But that was before the prospect of a second Great Depression concentrated the public’s mind….

[T]he Barack Obama voters see now is cool, calm, intellectual and knowledgeable, able to talk coherently about the financial crisis in a way Mr. McCain can’t. And when the world seems to be falling apart, you don’t turn to a guy you’d like to have a beer with, you turn to someone who might actually know how to fix the situation.

UPDATE: Brad DeLong has more on this, with graphics (but without Annoying Videos).

Somewhere, McCain’s uber-handlers are trying to figure out why they didn’t go with Kay Bailey Hutchinson, who would not have been subject to this:

Meanwhile, the video of the night on November 4th should be this one (NSFSanePeople):

*Or its Economics equivalent

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The Original Bailout Bill, or Ms. Smith Goes to Washington*

by Ken Houghton

Prefatory Note: I wrote this several hours ago, but we had enough great posts this morning from Robert, Spencer, cactus, and rdan that I scheduled it instead of posting directly. In the interim, the House approved the second bailout bill, which I am already on record as opposing, for reasons similar to those of YouNotSneaky!:

So after voting “no” before, enough lawmakers might now vote “yes” on the new bailout plan because:

1. Mental health provisions in insurance plans.
2. State and local sales tax deductions.
3. Subsidies to rural counties
4. Relief for victims of natural disasters
5. Business tax breaks
6. Energy subsidies

…[W]hat 1-6 above have in common is that

THEY HAVE NOTHING IN COMMON WITH THE FINANCIAL CRISIS!!!!!!!

So, just for the record, I’m not posting this now out of “sour grapes.” Just so that we have a record of why the bailout was a bad idea to begin with.

I was wrong.

There are conditionals I could put around that, but, really, why bother? I read the press releases, and quick-skimmed through the bailout bill itself on Monday, trusted Paul Krugman’s “hold your nose and support it” analysis, and hoped for the best.

I forgot Daniel Davies’s Three Laws. (Well, actually, I didn’t, but I hoped Chris Dodd’s efforts weren’t in vain.) I forgot that the only exception to the “left the Bush Administration with a positive reputation intact” rule was Douglas Holtz-Eakin, (who just waited until he joined the presumptive Next Administration to go into the tank).

But I forgot the fundamental rule of economics: mechanism design has to be done well, or the idea will just be economic theory that “depend[s] on assumptions which no one claims are approximately valid.”**

Let’s review the assumptions under which the bill made at least some form of sense:

  1. There was only going to be $250B taken in the first round, which would (by Paulson’s own description) provide financial until the next Congress was in place and could readdress the issue.
  2. There would be oversight so that the Secretary of the Treasury (Paulson [GS], Gramm [UBS], etc.) couldn’t just reward his friends and punish his enemies.
  3. The bill required equity compensation for overpriced securities. (Not a great deal, but a gain from a poke in the eye with a sharp stick.)
  4. The bill included changes to the compensation model that (let’s be nice) encouraged risk-taking where the bill came due on the next watch.
  5. The compensation changes were also supposed to ensure that the current leadership—the people who drove these companies to the point of insolvency, that is—would not receive the monies and just pay themselves bonuses all out of proportion to performance.
  6. There was never going to be a direct $700B economic gain from the stimulus package. That the proposal came out of Treasury told us that. Some of the monies were going to go to “shoring up” firms that didn’t need it.
  7. Even with that, monies that did get allocated optimally would have a multiplier effect, so you should get more than $700B in stimulus from them alone. (Brad DeLong estimated $500B, but that was based on E(loss) around $100B. Even his worst case—$400B loss—would imply an $875B economic gain even in the event of a $700B government loss. It’s not good budgeting, but it is a stimulus)

That was the bill as presented.

Yves Smith discovered the reality, and, while I’m late to the party, I’ll join the piling-on:

1. The tranching is a mere formality, and the Treasury boys as much as said so. They could take the $700 billion max as soon as the bill has passed,

2. However, they do not plan any action immediately, will wait a couple of weeks. They want to focus their efforts on stronger companies but also made noise about protecting the financial system. This, by the way, is the Japanese convoy system all over.

3. There seemed to be a lot of tap dancing about what price they will pay for assets and no straight answer about their policy on warrants. They did say that if the amount sold was greater than $100 million, they would take warrants. FYI, the current draft allows them to pay up to the price at which the assets were initially booked (yikes) . I wonder if this is obfuscation, if they have an idea of what the plan to do but will not admit it in any public forum.

4. As the person who listened to the call stressed, DealBreaker wasn’t clear on the bifurcated process. If you come to the Treasury and you are in trouble, you get reamed. Bear/AIG style treatment, execs probably fired. But if you participate on a voluntary basis, the intent is to make it very user friendly. That is consistent with Paulson’s position during the negotiations.

5. The exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes. More detail on that point, but I don’t need more detail to get the drift of the gist.

and that reform to executive compensation only exists for the official time of the program:

Market mechanism: if sell over $300M into fund, some exec comp limits
come with it. For 2 years, the firm could not enter into NEW contracts
including golden parachute, for involuntary departure. And lose some
deductibility.

Well, that undermines completely assumptions 1-5 above, leaving us with a poorly-targeted bill that does nothing to address the credit crunch (in a positive way, that is; negative implications discussed below the fold).

Ms. Smith later noted that her readers argue, probably correctly, it will make things worse [numbering added to emphasize sequential nature of events]:

  1. Fed as only lender, in an attempt to keep the financial system from imploding;
  2. TARP needed to keep Fed balance sheet intact so that it can continue as only lender;
  3. Treasury will need to significantly increase the amount of Ts (public money) auctioned to fund TARP;
  4. Panic serves to encourage T. buyers, especially for bills;
  5. This represents a liquidity trap: TARP recipients of Ts will hoard cash to buy Ts: rinse and repeat.
  6. This results in drying up of lending to corporations/crowding out private capital – no new credit lines.

And that has become the groundswell opinion, with which the market appears to agree.

So, even initially, we were left with a stimulus package that won’t save any firms, will support those who don’t need it, may well remove liquidity from the market at a time when it is desperately needed, and where none of the reforms that would ensure that this wouldn’t happen again.

There’s nothing left. Follow the DeLong/Phelps recommendation and nationalize the lot.

*Its not, by the way, that I’m not still sick. It’s that when you can’t tell whether the character on the page is a dot, a carat (^), or a tilde (~), it’s time to take a break. Which has mean reading some blogs that didn’t fit the bandwidth a few days ago, with Firefox set to an increased text size.
**I could pick nits here and note that many of the theories can be considered valid if they are trivial, but is that really an argument for theory?

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How Not to Build a Bailout Proposal

Let’s see. There are a bunch of people ready to riot on the streets—or at least do the White Person version of rioting and vote Republican, mainly because of the lies of several House Republicans.

And there are a precious few people who believe action needs to be taken and—while they might prefer, say, The Swedish Model as both more efficient and more likely to succeed—are willing to give Paulson/Bernanke a chance to be immortalized, even knowing that the odds are rather higher than Brad DeLong hopes that the immortality will be of the James Buchanan/Herbert Hoover variety more than General George Marshall. (Daniel Davies Three Laws have not been repealed, but the wolf really is at the door.)

So what do we see from the Democrats who, one way or the other, are going to be credited blamed with anything that passes? Besides arch-idiocy from the “progressives”, there was the rumor that they might actually produce a bill that Democrats can vote for?

You know how this story ends.

Kathryn notes that the Senate bill is even more of a giveaway than the House version was.

[N]ews reports suggest that the plan to be voted on by the Senate involves tax cuts. Tax cuts have no place in a bailout plan of this magnitude. Instead, the repealing of Bush’s tax breaks to the wealthy and large corporation should possibly be part of such a plan. Somehow this has to get paid for.

She means reports such as this one:

“I’m optimistic that we’re going to have a significant bipartisan victory on the rescue plan here in the Senate tonight,” said Senator Mitch McConnell of Kentucky, the Republican leader, who Tuesday reached an agreement with Senator Harry Reid of Nevada, the majority leader, to add $100 billion in tax breaks….

“This bill has been packaged with a lot of very popular things to give it even more momentum,” said Senator Jeff Sessions, Repubican of Alabama, an opponent of the measure that is expected to easily clear the 60-vote threshold in the Senate, providing some momentum for the House vote now set for Friday.

But the new items also increase the burden on future taxpayers. The $100 billion in tax breaks, which offer incentives for the use of renewable energy and relieve 24 million households from an estimated $65 billion alternative-minimum tax scheduled to take effect this year, will not be offset by spending cuts or tax increases elsewhere.

and while Kathryn was optimistic about one part of the bill:

I do support some of the smaller scale proposals, such as raising the FDIC insurance level to 250,000.

The Devil in the details makes even this a c.f. of major proportion:

Moreover, the increase in federal deposit insurance will not be financed, as the insurance program now is, by assessing a higher fee on the banks that benefit. Instead, banks will get an open-ended line of credit directly to the Treasury Department — meaning, taxpayers.

and when a chance of sanity appears, the power of the Republican Party is, as usual, never to be underestimated:

House officials spent much of Tuesday considering their own changes, including an extension of unemployment pay and a $1,000 tax credit for less affluent homeowners.

But those plans are not likely to advance, given the Senate decision. While the Senate left the door open slightly to other additions to the bill, such revisions would need the agreement of the full Senate, and the House proposals were likely to be blocked by Senate Republicans.

Right. Because the unemployed and “less affluent” homeowners would actually spend that money and stimulate the economy, and, in turn, the financial services industry.

As it currently stands, the “bailout” makes no sense, especially given the other actions that largely made it unnecessary. (The Financial Services industry will be running no better, but at least they get to gull some investors for a while longer. And those that fail in such an environment have enough cash flow problems that propping them up is a waste of resources.)

Call your Senators; tell them to vote “No.”

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Republicano Delenda est *

by Ken Houghton

Brad DeLong lays out the breakdown.

When 2/3 of your party believes that taking the Dow down 600 750+ points is a Good Idea, claims such as “the party of fiscal responsibility”—or even the “party of Wall Street”—fail the free market test Big Time.

If I weren’t worried about the coming harvest, I would fully endorse the DeLong proposal.

UPDATE: John Boehner lies with impunity though Julie Hirschfield Davis of the AP wakes up later:

Republican leader John Boehner, R-Ohio, said he and other Republicans were pained to vote for such measure, but he agreed that in light of the potential consequences for the economy and all Americans, “I think that we need to renew our efforts to find a solution that Congress can support.”

Why is this a lie? As a correspondent who would probably prefer me not to link to his blog said, “Pelosi delivered about 60% of her caucus for the bill; Boehner
delivered about 30%. Is the House [Republican leadership] incompetent[?]“

Davis returns to reporting a moment later, identifying the party that deflected first:

In the House, “no” votes came from both the Democratic and Republican sides of the aisle. More than two-thirds of Republicans and 40 percent of Democrats opposed the bill. Several Democrats in close election fights waited until the last moment, then went against the bill as it became clear the vast majority of Republicans were opposing it.

So instead of maybe overpaying about $700 billion for assets over the next year, in the hope that banks will loan again now, the Republicans in the House—with John “we need to renew our efforts to find a solution” Boehner pretending to be the Voice of Reason—decided to knock $1,200,000,000,000 out of the stock market in a single day.

Talk about your multiplier effect.

Davis continues by quoting the Minority Leader and the Minority Whip both whining about how evil Nancy Pelosi is—and reporting the truth of the matter:

Republicans blamed Pelosi’s scathing speech near the close of the debate…for the defeat. It was not much different from her usual tough words against the president and his party.

“We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House,” Boehner said.

Rep. Roy Blunt, R-Mo., the whip, estimated that Pelosi’s speech changed the minds of a dozen Republicans who might otherwise have supported the plan.

So the Minority Whip might have been able to deliver almost 40% (78-120) of his party for this bipartisan effort—assuming we believe him—if not for the fact that Nancy Pelosi has a sense of history. Gosh, I’m really impressed now. As is Barney Frank, who notes that “country first” does not appear to be the motto of the Republican House members:

That amounted to an appalling accusation by Republicans against Republicans, said Rep. Barney Frank, D-Mass., chairman of the Financial Services Committee: “Because somebody hurt their feelings, they decide to punish the country.”

Presumably, because that worked so well for Newt Gingrich in 1995.

*Title change hat tip mregan in comments. (I’ve seen it both ways, and guessed wrong.)

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The WSJ editorial page slams…John McCain

by Ken Houghton

It was five degrees (C) warmer here this morning than the previous two days of taking the Eldest Daughter to her school bus.

Presumably, this is balanced out in part by record-low temperatures in Hell, as the WSJ editorial page (well, Thomas Frank, but still…) summarizes the McCain Position:

Last week, Republican presidential candidate John McCain called for a commission to “find out what went wrong” on Wall Street. It was an excellent suggestion: Public inquiries into Wall Street practices served the country well in the 1930s.

And Mr. McCain has a special advantage to bring to any such investigation — many of the relevant witnesses are friends or colleagues of his. In fact, he can probably get to the bottom of the whole mess just by cross-examining the people riding on his campaign bus. So the candidate should take a deep breath, remind himself that the country comes first, pull the Straight Talk Express over at a rest stop, whistle up his media pals, and begin.

Go read the whole thing.

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David Leonhardt needs to retire, having abdicated responsibility

by Ken Houghton

I don’t believe David Leonhardt is an idiot, but that’s not based on the evidence at hand:

There are really only two [questions]: What steps are most likely to solve the immediate crisis? And how can the long-term cost to taxpayers be minimized?

Everything else — reducing executive pay on Wall Street, changing the bankruptcy laws, somehow slowing the descent of home prices — is either a detail or a distraction.

Let me say this slowly, so even a NYT reporter can understand it: If you are taking an equity stake in a firm, one factor is how much cash the firm will have on hand. Cash paid to executives is not cash on hand, nor can it be used to produce future capital, investments, and free cashflow, or even “the miracle of compound interest.” So executive pay is very much a factor in equity calculations.

Changing the bankruptcy laws is more tangential, but let’s again explain this slowly. Mortgage-backed securities are, well, backed by mortgages. Their value depends directly on those payments. If it becomes easier to workout a mortgage in bankruptcy court, the holders of those MBSes are liable to (1) receive a higher value and (2) know sooner how severely their securities are impaired. So changing the bankruptcy law will, again, make the value of the assets clearer sooner. Which is especially important if we’re all going to pretend that this thing is going away after two years.*

Slowing the descent of home prices—well, that’s a second-order effect, so I’ll agree with him there. Or at least let it ride.**

His next paragraph, however, is incomprehensible:

Usually, it would be easy enough to dismiss these sideshows as the inevitable gear-grinding of democracy. This is an extraordinary time, though. The credit markets are nearly dysfunctional, leaving the economy at risk of falling into a downturn unlike any most of us have lived through, and the government is about to commit billions of dollars after only a week of political debate. There’s no time to waste. [emphasis mine]

Let’s be clear: the government (meaning here the Executive Branch and the Federal Reserve, controlled and run by Republicans) has already committed billions of dollars over the past six months. Maybe $900,000,000,000. During the entire time of which, Mr. Paulson was (1) certain the crisis was over and (2) working on the idiocy plan that he presented.

Leonhardt’s very next sentence undermines his previous paragraph.

The first thing to understand is that a bailout plan doesn’t have to cost anywhere close to $700 billion, so long as it’s designed well. [italics mine]

This is the plan that included absolute authority for the Secretary of the Treasury, and of which the Secretary of the Treasury said, “No, I’m not asking for absolute authority,” right? I would again invoke Daniel Davies’s Three Laws, but Leonhardt wants us to believe that this time will be different, if the plan is well-designed.***

Figuring out how much to pay for the assets is the first problem. The drop in house prices and rise in foreclosures have made it clear that these securities are worth considerably less than banks expected. But there is enormous uncertainty about how much less.

That’s why we have a market, no? (Clearly, the answer will be “no.”)

Based on the underlying fundamentals (like the current foreclosure rate and the one forecast for the future), many of the securities appear to be worth something on the order of 75 percent of their original value. But thanks to the fear now gripping the market — not necessarily an irrational fear, given that most forecasts have proven far too sunny over the last year — very, very few of those securities are trading hands. Among those that have, the sales price has been roughly 25 percent of the value. [I italicized, but he blocked it off in the first place; the bold is mine]

So the market has a price, but Mr. Leonhardt wants us to believe that these securities could be worth three times as much.

Assume I do. What should I be willing to pay for those securities? And what would I offer for them?

Now assume several of us believe that. What will be we do? Well, I’ll offer the current market price, Tom will offer 25.5, Robert will go 26, and pretty soon we’ll own all we want somewhere around 65.****

So where are the hedge funds and investment managers and new Vulture Funds? Who believes these securities are worth 75? Surely, they are willing to bid 25, 26, even 30. Mr. Leonhardt doesn’t tell us. In fact, the people who know the market best—Barack Obama’s classmate, Tom Marano, for instance—are retrenching, even after the first $900,000,000,000 in liquidity has been added.

Which price is the government going to pay?…[I]t probably can’t pay 25 cents. That might fail to fix the credit markets, because it would do relatively little to improve financial firms’ balance sheets. Firms might then remain unwilling to lend money to businesses and households, which is the whole problem the bailout is meant to solve.

Oh, wait. I thought that list of side considerations above were unimportant; now it turns out they’re “the whole problem the bailout is meant to solve.”

The most obvious solution is to pay more than 25 cents on the dollar and then demand something in return for the premium — namely, a stake in any firm that participates in the bailout. Congressional Democrats have been pushing for such a provision this week, and it’s one of the most important things they have done.

Well, that’s nice to know. Too bad it wasn’t in the original “well-designed” plan. I guess David Leonhardt believed Dick Fuld when he said he, er, gave at the office, too.

The government would then be accomplishing three things at once. First, it would take possession of the bad assets now causing a panic on Wall Street. Second, it would inject cash into the financial system and help shore up firms’ balance sheets (which some economists think is actually a bigger problem than the bad assets).

There’s a link to Krugman’s column on Monday omitted here. But let’s look at what Leonhardt has just done:

  1. He has admitted they are “bad assets,” while before they were just underpriced.
  2. He has declared that it would “inject cash into the financial system,” rather ignoring (again) the previous $900,000,000,000 than the Fed has “injected” in lieu of easing rates further.
  3. He has invoked “balance sheets,” for discussion of which I refer you to David Altig (h/t Felix)

But the best is yet to come.

And, third, it would go a long way toward minimizing the ultimate cost to taxpayers.

Overpayment is good because we’ll get more back. And I thought only Health Economics had an upward-sloping demand curve.

Why? The more that the government overpays for the assets, the larger the subsidy it’s providing to Wall Street — and the more it is pushing up the share prices of Wall Street firms. As Senator Jack Reed, Democrat of Rhode Island, notes, the equity stakes allow the government to recapture some of the subsidy down the road. It’s a self-correcting mechanism.

It’s a good thing Leonhardt opened his piece by noting that Congresscritters don’t know much about the financial markets, but, really, couldn’t we expect more from Economics writers?******

“Hey, Jack, if you pay me three times what this asset is worth in the market, I’ll give you an extra fifty cents six years from now.”
“Sounds like a great deal to me, Lloyd. And that writer in the Times thinks so too.”

So far, we have established that Paulson presented a plan that, if it had been well-designed, would be great. So who is at fault? Why, Congress, of course:

Instead of a laserlike focus on the big issues, though, Congress has been devoting a good chunk of energy to secondary matters. Some of the proposals, like changing bankruptcy rules to help some homeowners avoid foreclosure, are perfectly reasonable but just won’t do much to cure the credit markets. Others may not even meet that standard.

Let’s try this again. Homeowners who avoid foreclosure can, unlike those who don’t, pay their mortgage. Which monies flow to (wait for it) Mortgage-Backed Securities. Which then gain value and can be sold at a higher price. So, if you really want to reduce the cost of the bailout, keeping people out of foreclosure seems as if it would help. A lot more than seeing a stock price appreciate later, as was suggested in that well-designed plan by Chris Dodd, Barack Obama, and Congress.

And then Leonhardt just outright jumps the shark:

One of the fashionable ideas of the week, supported by both Democratic leaders in Congress and John McCain, is to limit the pay of top executives at any Wall Street firm that sells assets to the government.

Not even CNN fell for that one completely, despite their idiotic headline:

“Contrary to the lies told by the McCain campaign, it was John McCain who followed Sen. Obama’s lead in laying out principles that call for strict oversight and accountability, protecting taxpayers and cracking down on CEO pay. We only wish he had adopted those same principles over the last 26 years rather than cheerleading for the deregulation agenda that helped produce today’s crisis and repeatedly opposing limitations on the obscene compensation given to failed CEOs.”

And it doesn’t take a long use of The Google (well, I just went to Brad DeLong’s site) to find, from Sunday night:

Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them. [italic mine]

That’s rather clear, no? Not to Leonhardt, who tries one last time:

And in a frenzied week, any time spent on talking about C.E.O. pay is time not spent on designing the toughest possible bailout package.

Give you a hint, David. Pass a large portion of the firm’s revenues to Dick Fuld or Hank Greenberg or Vikram Pandit and there won’t be any effing stock appreciation for you to claim to have “reduced the cost” in the end. Even the Chamber of Commerce knows this.

*Brought to you by the administration that expected its Iraq Adventure to last six days, maybe six weeks at most.
**In the context, I’m inclined to argue, under that same “two year” timeframe, that they should want to accelerate the decline in prices. As a current seller, I object, though.
***For starters, it was designed to be initiated and run by a man who is unlikely to be in that same position six months from now. That this might be an elementary design flaw seems to have escaped Mr. Leonhardt.
****The extra ten is because we are not so stupid as Mr. Leonhardt, on whom someone pulled “75″ out of his backside. No, we bid 65 because we know there is substantial uncertainty in that “75,” and we pulled “65″ out of our backside.*****
*****Robert is now trying to figure out a correlation matrix for this.
******Ben Stein and Robert Samuelson always excepted.

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Chris Dodd knows how to play Chicken

by Ken Houghton

I had the same reaction to his “we have to do something” comments on Sunday as Dr. Black. But we both, clearly, forgot the game that was being played.

Monday is a day of work, and Dodd has clearly prepared well:

Sec. 1. Short title; table of contents.
Sec. 2. Authority to purchase troubled assets.
Sec. 3. Considerations.
Sec. 4. Oversight.
Sec. 5. Rights; management; sale of troubled assets.
Sec. 6. Maximum amount of authorized purchases.
Sec. 7. Funding.
Sec. 8. Limits on review.
Sec. 9. Assistance to homeowners and localities.
Sec. 10. Maintaining insurance parity.
Sec. 11. Minimizing foreclosures.
Sec. 12. Termination of authority.
Sec. 13. Increase in statutory limit on the public debt.
Sec. 14. Credit reform.
Sec. 15. Annual financial reports and audits.
Sec. 16. Conflicts of interest.
Sec. 17. Executive compensation.
Sec. 18. Studies and reports.
Sec. 19. Disclosures on exercise of loan authority.
Sec. 20. Special inspector general for the troubled asset program.
Sec. 21. Definitions.

Dodd, having played along with the “this is urgent” call has now presented the “if this is so urgent, show us what it’s really worth to you” card.

All the players may not yet be ready to go all-in, but the stakes are getting higher, and the planned abstention from the McCain campaign may soon look as if it is lack of leadership.

So I’ll end on a sad note. As Brad DeLong said in an earlier post:

Dodd looks like a plan I can get behind–a serious attempt to solve the problem, preserve accountability, and balance the equities. Too bad he isn’t the VP nominee.

But someone who opposed the bastardisation of FISA would have energized the base, and we can’t have that in Democratic politics.

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The Safest Senator

When calling Congresscritters tomorrow, especially for those in NY State, please feel free to remind Senator Schumer’s office that he and Barack Obama were the two people [in contested elections] who finished with the widest margin of victory in 20062004 [h/t to my Loyal Reader and Kohole in comments]—about a 50% margin in both cases.

A few fewer dollars from Hank Paulson’s brethren four years from now aren’t going to cost him anything but bragging rights.

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