THE CONCESSIONS.

Via Kevin Drum, Henry Blodgett says that the executive compensation provisions of the bailout bill are about as toothless as I figured they'd be:

The plan ostensibly prohibits golden parachute payments to CEOs and other "C-level" execs at bailed-out companies. However, it really only prevents payments on severance deals that are struck AFTER the bailout (specifically, it prohibits these deals completely). There is nothing about cancelling the severance payments that the executives are ALREADY contractually entitled to. What this means in practice is that bailed-out companies will have trouble hiring the best talent...because why would you work at Bailed Out Company A when you could go across the street and get a fat severance deal? It also doesn't mean the companies can't pay their CEOs $500 million a year. IN ADDITION: There's another absurd section that makes all compensation above $500,000 for the three highest paid employees at the company not tax-deductible for the company. This is LUDICROUS. It means the company can pay the executives anything it wants and that the penalty for this will be exacted on the company and its shareholders.

It's basically a symbolic provision. Instead, the important concessions seem to be these: Taxpayers get serious equity for direct bailouts. The plan authorizes $700 billion, but in stages, and Congress can cancel the final $350 billion. The Treasury Secretary's authority expires at the end of 2009. If the government loses money on the deal, there's a provision forcing the president to substitute legislation at the five-year mark that details how the government will recoup its investment in the financial sector. The Treasury Department has to publicly release how much they're paying for bad assets, and since Congress can stop the program, this might act to make Paulson careful about what he pays. The big disappointment, I think, is that the homeowner provisions look relatively weak. What the Treasury Department owns will be dealt with patiently, but there's little in the way of broader help. All in all, nowhere near a perfect, or even particularly good, bill. It's a "better" bill, but I'm increasingly convinced that Paulson has read the behavioral economics around "anchoring" and offered an absurd and frankly insulting first proposal so a mediocre second proposal would look pretty good in comparison.