What Bush Left Out

"I didn't hear the personal appeal from the president that I thought was needed. I also didn't hear the memorable one-liner . . . that people will remember and repeat tomorrow. It was a largely topline explanation of the problem that didn't really explain why the average person should support the Paulson plan. The president didn't do any harm with this speech, but I'm not sure he moved the needle either."

Dean Baker blogs for TPMCafe that "it is extremely difficult to trust this administration. It was good to hear President Bush say that he doesn't want the CEOs that wrecked their companies profit from this bailout, but does anyone believe that he will structure the bailout to ensure that this does not happen? Similarly, he has gone along with the idea that the government will get an equity stake in financial companies in exchange for buying their junk, but does anyone believe that we will get as good a deal as Warren Buffet did when he bought a stake in Goldman Sachs?

"There can be no presumption of good faith from this administration. Unless the conditions are written in stone, for example specific rules that limit executive compensation using the same type of language that CEOs use when they sign contracts with their companies, there is no reason for the public to believe that they will get a fair deal in this bailout. The public should also demand that some genuine outsiders, representatives of labor, consumer groups and other non-Wall Street segments of society, have a direct oversight role in this deal.

"If these demands are too extreme for the Bush administration, then they are not telling the truth about the financial crisis. If the risks are really as great as President Bush claims, then he should unhesitatingly agree to guarantees that will prevent the incompetents from profiting further from their incompetence. We shall see."

Robert Kuttner writes for the American Prospect that Congress should take a few weeks before acting: "Paulson's tactic of demanding instant action because impending catastrophe recalls how the same Bush Administration rushed through the USA PATRIOT Act. But there are two key differences. After 9/11, American citizens were terrified and willing to give the Bush administration whatever it wanted. And Congress totally caved. This time, citizens are frightened -- but not gulled. Congress is hearing from constituents that the Paulson plan is an outrage. . . .

"For a lot less than $700 billion, we could refinance every mortgage in America that is at risk of foreclosure. Along the way, we could keep people in their homes and shore up the collapse in housing prices. Paulson's plan does neither. Markets would begin loosening up, as in Paulson's plan, but the route would be bottom-up rather than top-down. Homeowners would be the primary beneficiaries rather than the incidental ones. With Paulson's approach, the wave of foreclosures continues, reducing the likelihood that the government gets its money back."

And Yet, a Deal Is Close

Lori Montgomery and Paul Kane write in The Washington Post: "Treasury Secretary Henry M. Paulson Jr. said the White House would drop its resistance to lawmakers' demands for limits on executive compensation at companies that accept taxpayer money. Rep. Barney Frank (D-Mass.), the committee's chairman, called that a 'big step forward' and said he would push next year to apply those limits more broadly.

"Frank said Democrats in the House and Senate had reached agreement on a bill that would include an oversight board to monitor the bailout program, requirements that taxpayers share in future profits of companies that seek assistance and new powers for bankruptcy judges to modify home mortgages for distressed borrowers. Lawmakers also discussed doling out the money in segments, Frank said, adding, 'It's not going to be a straight $700 billion.'"

Gosselin, Simon and Reynolds write in the LA Times: "Frank explained the political logic of the situation this way: 'Whatever you think about whether or not there was a need [for a bailout] . . . once the president, secretary of the Treasury and chairman of the Federal Reserve have announced that if you don't do this, there will be a collapse, there's probably going to be a collapse if you don't do it.'"

Germans Take Issue

Eric Pfanner writes in the New York Times about how Europeans are bristling at Bush's assertion that an influx of foreign money into the United States was one of the root causes of the credit crunch.

"Peer Steinbrück, the German finance minister, countered in a speech in Berlin that the conditions that gave rise to the current turmoil in the markets were allowed to develop because of a reckless pursuit of short-term profit and huge bonuses in 'Anglo-Saxon' financial centers -- along with a lack of political backbone to stand up to what he characterized as bankers' greed."

Why the $700 Billion Figure?

Where does that $700 billion figure come from? Bush certainly didn't explain that last night. Maybe because there is no good explanation.