Boy, that’s pretty dumb. It sounds like there’s a good chance the restrictions on CEO pay contained in the Stimulus Bill is going to get pulled out in the final bill. Why? Because it might increase the total cost of the bill.

So we need these folks to make millions to help us balance the budget.

I just heard Sen. Hutchison (R-TX) refer to the last time we tried the ‘bad bank’ model. And she said that was the Resolution Trust Corporation after the S&L Crisis. Well, that’s not a ‘bad bank’ in any way that has any relevance. The RTC took over assets of S&L’s that went under, bankrupt, kaput. It then sold off the assets, recouping a lot of taxpayer value but still requiring a lot of government money.

There’s not a direct parallel. But the RTC is much more like what’s being advocated by those who say let the banks go under and have them temporarily taken over by the government before being sold to private investors. Again, not a perfect analogy since this wouldn’t be a liquidation — at least not entirely — but more a financial reorganization.

But the fundamental point is the same. The government takes over ALL the assets, good and bad. And after the institutions go under.

Martin Wolf on Geithner’s plan …

Has Barack Obama’s presidency already failed? In normal times, this would be a ludicrous question. But these are not normal times. They are times of great danger. Today, the new US administration can disown responsibility for its inheritance; tomorrow, it will own it. Today, it can offer solutions; tomorrow it will have become the problem. Today, it is in control of events; tomorrow, events will take control of it. Doing too little is now far riskier than doing too much. If he fails to act decisively, the president risks being overwhelmed, like his predecessor. The costs to the US and the world of another failed presidency do not bear contemplating.

I’m not sure I agree 100% because I still see this fundamentally as a punt. And as some point out there are kernels in here of what could be a good plan. But I think the fundamental point is right on. Bank bailouts are catastrophic in political terms and much more important, in the Paulson/Geithner model, probably won’t work either. That’s a bad combination. At some point, Obama owns this.