Paul Krugman seems to be speaking for most of his economist colleagues when he pronounces the compromise bailout bill "a lot better than the proposal Henry Paulson first put out — sufficiently so to be worth passing. But it’s not what you’d actually call a good plan, and it won’t end the crisis." Fair enough. Politics is compromise, and if we do need to act quickly, and House Republicans continue to inhabit the role of the stubborn toddlers of the United States Congress, then maybe the argument is that this bill is the best we can get in the necessary timeframe. I'd like to see that argument more clearly made, but I trust Krugman here. More importantly though, no one seems quite pleased with the bill as it's written. But nor is anyone being terribly clear on how displeased they actually are. In other words: How much better, operationally, would a perfect bill be? The various proposals are being judged on a lot of dimensions, including ability to disrupt a credit crisis, fairness to taxpayers, politics, future incentives for risktaking CEOs, oversight, etc. Would a better bill be an improvement across all metrics? Just some metrics? Would it be likelier to short-circuit a meltdown, or simply fairer for taxpayers? On some level, you have to give the House Republicans their due here: They came up with an alternative proposal, and forced it into the conversation. It was a wacky proposal that made them look like irresponsible fools, but it was a proposal. The Left, possibly because Democrats control the Congress, have been much quieter about alternatives, and so fairly few radical options -- like nationalization -- have enjoyed serious consideration. If this bill shoots through Congress in the next few days, we may look back on that as a mistake.
