I’ve just spent most of the afternoon watching what I’d expect 1929 would look like if we had CNN back then, and attempting to form some vague kind of educated opinion on the whole mess. Have to say, I’m still largely flummoxed.

As best as I can tell, the timeline of the bailout plan is as follows:

1. The White House: the markets are in desperate need of liquidity, so give us up to $700 billion to spend as we see fit.
2. Congressional Democrats: we don’t trust you, so we’ll make modifications to the plan¹ to make it more palatable; with these modifications, we’re still not thrilled about it, but it’s better than doing nothing.
   1. The White House: alright, if that’s what we can get, that’s what we’ll take.
3. Congressional Republicans: forget it, because:
   1. we have strong political beliefs in opposition to this kind of big government intervention in the marketplace, and/or
   2. our districts are 90% red-meat Red Staters who think Medicare is socialism, and there’s no way in hell that we won’t get our butts kicked in five weeks if we agree to this.² Therefore:
   3. we want to use a private insurance fund instead.³
   4. John McCain: I agree with the House Republicans.⁴
4. White House and House Democrats: WTF?
   1. 1/3rd of House Democrats: Look, if the other guys aren’t getting on board, I’m not exactly happy with the faxes I’m getting today either….
5. Bailout collapses.

   ¹ Still pretty unclear to me exactly what these modifications were, as none of the media I’m reading will tell me with specifics, except that they have something to do with equity stakes and protecting homeowners. How, exactly, remains a mystery as these facts aren’t fit for widespread consumption.

   ² Electoral Armageddon inferred from reports today of Congressional offices being “flooded” with requests to vote against the bailout. I’m inferring that some politicians, based on their constituencies, are more vulnerable to this than others.

   ³ Which won’t work, for the same reason that you can’t buy insurance when your house is on fire.

   ⁴ According to this story in the Washington Post.

What’s left out of the whole thing so far, despite my reading around 1,000 pages of “news” about the bailout, is a compelling argument that I can get behind. I’m still not entirely sure if I’m rooting for Barney Frank, George Bush, or John Boehner. And really, that’s a rare state of affairs.

So far, the best I can come up with in terms of an informed opinion is this:

1. The markets need an infusion of liquidity to prevent a 1929-style meltdown. The problem is wide enough that the usual players don’t have the money to buy out bad debts on good terms, so only the debt-saddled government is able to magically go further into debt in order to put more money into play.
2. The problem, as I see it, is that if it were a private entity making these purchases, they’d do what capitalism dictates: that is, rape the hell out of the companies with their backs against the wall, buying their assets at steeply discounted prices over their true values even in today’s market, because you don’t cut a break to companies who are desperate to deal.
3. The bailout plan as proposed by Paulson doesn’t really imply that the government will act in the same way that private companies will act. In other words, we’re likely to overpay for these assets, because that’s the only way to get capital into the markets. And “overpaying for assets” sounds a lot to me like “let’s screw over the public, since they’re unlikely to understand how bad these deals are.”
4. The normal alternative way of putting capital into markets is to simply buy stock or entire companies, which strikes me as pretty much the fair way of putting government money in play. Apparently this is the Sweden formula. Apparently, also, we can’t do this in the US, because it’s somehow bad when the government invests in business the way most people do, rather than just hand out money.

And that’s as far as I’ve gotten. I’d be somewhat further along if, for example, there were a viable Democratic alternative on the table (as opposed to Democratic tinkering with the One True Plan), which laid out the aspects of Sweden-style or nationalizing methods they have in mind. Or, alternately, if there were more debate about these issues in the stories about the bailout—most of what I’ve written here comes from link-surfing off Paul Krugman and Brad DeLong’s blog postings, without which my barest understandings of the issues would be reduced to a tiny glimmer.

What I really learned came from watching four hours of CNN today, starting with Wolf Blitzer having near-orgasms on live television as he got to bombastically announce that today was the worst point drop in history (I rather had the impression he was rooting for it, so he could say it), to Lou Dobbs saying that this is all the Democrats’ fault for not using their majority to rubber-stamp the Bush proposal. That’s when I turned off the TV.

In all that time, I heard nothing that added to my understanding of the crisis, the bailout, the alternatives to the bailout, or that allowed me to form an opinion about what would be better for the country. I did get to hear hours of debate about whether the Pelosi speech scotched the deal. Maybe I’d care about that more if I had the slightest clue as to whether that was preferable.

Maybe the reason we’re so deep in the shitter is that this is what passes for news and informed debate, and has passed for such in the years leading up to today.