Bailout Deal Reached

Story here. Unfortunately, one can’t really tell what to think about it because given the overall contours of the bill that we’ve been talking about for days it really all comes down to the details and the coverage I’ve seen doesn’t really go into the details. This looks to me like a meaningful improvement over Hank Paulson’s initial offer, but not by any means the bill I would like to have seen. Also unclear is the extent to which congressional Republicans will actually support this thing. Insofar as Democratic leaders compromised on substance in order to secure a large number of GOP votes, they may have at least managed to cover their own asses. But if votes from conservatives aren’t forthcoming, then it seems like progressives really should have written a better bill — something on the Swedish model.

Meanwhile, even if this passes the new administration is going to inherit a slumping “real” economy and a housing market whose decline threatens to create an anti-bubble of irrational pessimism. There’s going to be a need to do a lot more to get things back on track.