President Paulson Down In Flames?

I'm trying to get a read on the contours of this debate over the Authorization for the Use of Financial Force, as Paul Krugman called it today, and it does look like cooler heads are starting to prevail. The fact that conservatives are revolting against the Paulson plan doesn't hurt, obviously, because without them I don't think there's any way you can patch together a coalition.

The AP is reporting that Congress and Bush have reached agreement on adding mortgage help to the bill. The two sides are sparring overkey issues, however.

Democrats demanded that the measure limit pay packages for executives of companies helped by the biggest financial rescue since the Great Depression. The administration was balking at that, and also at a proposal by Democrats to let judges rewrite mortgages to lower bankrupt homeowners' monthly payments.

President Bush prodded Congress during the day to pass the rescue plan quickly, declaring, "The whole world is watching."

The whole world's watching you, pal. If you want to hold up your precious bailout because you believe super-rich people should get to make off with billions after destroying the global financial system, go ahead.

Then there's the Dodd bill, which is the working piece of legislation as it stands, and which is a serious response to the crisis.

The key feature, I believe, is the equity participation: if Treasury buys assets, it gets warrants that can be converted into equity if the price of the purchased assets falls. This both guarantees against a pure bailout of the financial firms, and opens the door to a real infusion of capital, if that becomes necessary — and I think it will.

Can this be done? Can the Paulson juggernaut be stopped? I’m starting to think yes. Paulson displayed a lot of arrogance here — he basically marched in and said Daddy knows best, don’t worry your pretty little heads about the details. He offered no, zero, zilch explanation of how the plan was supposed to work — just “it’s a crisis and we need to act now.” And he overreached, especially with that demand for immunity from any review.

Dodd's bill can be seen as part of a public markup on a wiki put together by the Sunlight Foundation. You can dive into it yourself and see what you might actually get for your money.

Meanwhile, if your head just hurts too much, you can head over to BuyMyShitpile.com and tell President Paulson what worthless piles of garbage he ought to buy from you. I have a bunch of old DC comic books that I can't get a nibble on, maybe he'd like them.