There seemed to be a lot of movement today among progressives to the point that maybe there isn't an economic crisis at all.  Maybe there is no need for a bailout.  Or at least not one right now. 

I'm
not a financial expert.  So, I'm not qualified to judge whether there
is or is not a crisis and whether it requires immediate action or not. 
I just don't have that ability. 

But I did have some free time today to read Chris Dodd's proposal for
a buyout, and it occurs to me that it isn't particularly important if
the crisis is as big or pressing as it has been made out to be by the
Treasury.

Dodd's plan requires 5 things that are important in my view:

1.  Oversight of any buyout program with frequent reports to Congress.
2.  The public takes a share in any company that accepts public money.
3.  Restrictions on CEO compensation for companies that participate.
4.  Restructuring of mortgages and a preference for keeping people in their homes.
5.  A shorter time period than the Paulson Proposal, such that all authority under the plan is terminated on Dec. 31, 2009. 

Now,
we hear that Paulson/Bernanke don't like the executive compensation
limitations because they say that it will discourage participation.  Of
course, if a CEO is willing to let their company collapse instead of
taking a paycut, something is seriously wrong with their thought
processes and they shouldn't be in charge of a Dairy Queen. But let's
assume that Disaster Twins are right and it will discourage some participation.

Now, let's say that the equity shares section
works as it is supposed to.  Namely, we the taxpayers get a part of the companies that are doing poorly, and when they recover, we benefit from
the rising tides. 

If these two things are working well, then
only those companies in the worst position will participate.  This will mean that even though Congress might authorize $700 billion, our actual
outlays will likely be significantly less--that is if the CEO pay
aspects actually disincentivize participation.  But on the other side,
we will benefit from the participation of poorly performing companies
since we will make some money when they recover.  So, these two aspects
will work to minimize costs to taxpayers while maximizing return.

Meanwhile,
we get to restructure some loans so that people aren't thrown out in
the cold, and the authority shuts down in a year. 

The only
real question mark is the oversight.  Oversight is supposed to be
performed by the Fed chairman, the Treasury secretary, the FDIC
chairman, and two non-governmental employees appointed by Republican
and Democratic delegations in Congress.  I don't know if this is sufficient.  It's giving oversight authority to the Disaster Twins--Bernanke and Paulson--but potentially could be balanced out by
the bipartisan appointees and the FDIC chairman.  (Anyone know who he
or she is?)

So, here's the point:  If Dodd's proposal works as
planned, does it matter if the crisis is smaller than estimated?  Are there large outstanding downsides that I'm missing?  Wouldn't it be ok
to pass this and see what happens?