Stimulus, Yes; Bank Bailout II, No

[Mass]

Somebody else who gets it.

http://www.huffingtonpost.com/robert-kuttner/stimulus-yes-bank-bailout_b_165058.html

You can say one thing for Sen. Susan Collins of Maine. She is performing the service of giving bipartisanship a bad name.

Maine's current $6.1 billion budget has a revenue shortfall of $830 million, and Maine is facing the same kinds of layoffs and program cuts as other states. But Collins thinks it's clever to cut from the recovery package by some $40 billion in desperately needed to aid the states, in order to....what? In order to show that "moderates" can force the Obama administration to bend? I hope the lady's phone is ringing off the hook from bewildered constituents.
...
While the compromise bill has too many concessions to tax cutters in both parties, at least the administration has the basic concept about right. The bill is clearly not just meant as a one-shot, but a down payment on more adequate social outlay and 21st century infrastructure. As the recession deepens, if Obama does his job he will mobilize public opinion and isolate Republicans who would rather sink the economy than give a Democratic president legislative success. The current recovery bill is a good first step.
...
Obama's problem is that his key economic appointees are averse to radical solutions to a radical crisis. Geithner and National Economic Council chief Larry Summers have both been quoted saying that governments "make poor bank managers." Geithner's own track record as point man for the rescue efforts of the Bush administration certainly proves his point, at least as far as his own work is concerned. But in fact, the Federal Deposit Insurance Corporation, which does take over failed banks from time to time, has an excellent record of sorting out their balance sheets, nursing them back to health, and then returning them to the private sector. The Treasury lacks this competence. This is all the more reason for government to build up the necessary expertise and then take over failed banks, rather than just pumping in money and intervening in fits and starts.

There is time to add more money to the stimulus package if the first attempt falls short. But time is fast running out on the more urgent need to get the banking system functioning.