A key quote in this morning's Senate hearing about the Paulson bailout is worth repeating. This comes from Ohio Sen. Sherrod Brown, a Democrat:
I'll state the obvious: Members of Congress aren't generally in the habit of passing historic and spectacularly unpopular legislation five weeks before election day. Republicans in Congress hate this bill, and I'm unconvinced the Democrats in Congress will take a bullet, figuratively, for the most unpopular president since the final days of Nixon. (Trivia: Henry Paulson worked in the Nixon administration.)
"Like my colleagues, my phones have been ringing off the hook. The sentiment from Ohioans about this proposal is universally negative."
Not "overwhelmingly negative." Not "deeply suspicious." Not "extremely upset." Universally negative.
Watching the Paulson-Bernanke hearing on CNBC, this struck me as news: the suggestion by Sen. Charles Schumer (D-N.Y.) that instead of granting one giant bailout, Congress might instead break it into smaller pieces, giving the administration permission to begin buying securities, but with an initial budget of far less than $700 billion.
In other words, let the Treasury go out and buy $50 billion or so worth of mortgage securities and see how it works before granting the authority to spend a trillion dollars or so.