I for one welcome our new socialist overlords

Looks like Comrade Bush is pulling the trigger.

WASHINGTON -- The U.S. government is expected to buy stakes in the nation's top financial institutions as part of a wide-ranging effort to restore confidence to the battered banking system, following similar moves by European governments that sent global stock markets soaring.

As part of its new plan, the government is set to buy preferred equity stakes in Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp., Merrill Lynch, Citigroup Inc., Wells Fargo & Co., Bank of New York Mellon and State Street, according to people familiar with the matter.

Not all of the banks involved are happy with the move, but agreed under pressure from the government. All told, the moves tie the banking sector to the federal government for years to come. The comprehensive approach rivals the breadth of the government's response to the Great Depression. As a result, taxpayers now have a direct stake in the future of American finance. Along with the government's involvement come certain restrictions, such as caps on executive pay.

This puts the US firmly in line with the rest of the world in their response. The FDIC is offering unlimited lending insurance as well. There is no reason for banks not to lend to one another at this point, with the government on the hook, and if they don't now, they deserve to be liquidated.

That said, while this is the right move, it is economic malpractice that Bush and Paulson resisted it for so long, wasting valuable time and lots and lots of taxpayer stock holdings. For a time the whole world was united but our Treasury Department emperor:

House Democratic leaders, including Speaker Nancy Pelosi (D., Calif.) and House Financial Services Committee Chairman Barney Frank, held a closed-door session Monday with 11 economists and other advisers, including Nobel laureate Joseph Stiglitz, to discuss the financial crisis. The group threw its weight behind Treasury's decision to inject capital into the banking system, in exchange for equity stakes.

"The consensus was so strong towards direct equity injections that there was literally no dissension on the point," said one of the invited economists, Jared Bernstein of the liberal Economic Policy Institute. "The only head-scratching is, why did it take us so long to get here?"

Better late than never. The tools are in place to do this properly, but considering Paulson's dithering, it's not reasonable to have any faith in him to pull this off.