I’m not going to pretend that I spent last night and this morning scrutinizing the detailed legislative language of the Paulson/Frank/Dodd proposal, but I have been scrutinizing emails from people who’ve been scrutinizing the detailed legislative language and the consensus among people I trust is that, in its current form, the plan is far superior to the one Hank Paulson initially put on the table and that it’s worth supporting.
At the same time, there’s a lot of skepticism that this is really going to work. Among other things, there’s just no way to get around the fact that the Bush administration will take the lead in implementing this legislation. And while the administration did cave on a couple of key points and allow in language that permits Treasury to take on equity in bailed-out firms and to do some mortgage modification, it seems likely from the differences between Paulson’s proposal and the Dodd-Frank counteroffer that the person who’ll be in charge of implementing this doesn’t really believe in doing that stuff. Under the circumstances, it looks like a bill that’ll be good enough to stave off collapse of the financial system, but probably won’t wind up addressing the full extent of the problem. This subject is going to have to be revisited after the election. But the unfortunate reality is that the current configuration of power in Washington still leaves the conservatives whose policies and ideology is largely responsible for the collapse in command of too many levers of power to simply implement a solution that’s not tainted by their misconception of the problem.