Once again Bush tries to invade Mexico after being attacked by the Japanese at Peal Harbor.

Wow, what a week. If there is a common thread for the Bush administration, besides hubris, its incompetence. This week we got to see just how we got into this banking mess by watching the knuckleheads who helped us get into it, try to shaft us with a plan to “get er done”. As I understood Handout Hank’s plan, we were supposed to hand him the keys to the treasury and he would hand out cash to the people he used to work for.

To understand how this is sending money to exactly the wrong people you need to understand what is happening a little. Firstly, there are a lot of mortgages out there that are being foreclosed on. Half of the home sales in southern California last month were due to foreclosure. That’s a lot. These mortgages were previously packaged up and sold as a group to investors by investment banks. Aka a CDO. Those are… not performing as expected. *cough* *cough*. So investors are seeing them as crap, or as Atrios calls it the big shitpile. What Bush wanted to do was buy these loans, now packaged as CDO’s from the investors and investment banks. Whew! Rich guy is now off the hook. Meanwhile back at the ranch, the foreclosure is still happening and another whole batch of CDO’s are going stinky, better buy them too, etc, etc. This helps out pudgy white Wharton MBA grads, but this “bill” did absolutely nothing for the home owner.

Clearly a smarter move is to help the home owner keep their house, either by adjusting the interest rates or having the Government negotiate with the Bank holding the home mortgage. This way the CDO still has value, probably more value than if the Fed walked in and bought the debt in a fire sale, like they were proposing, or as Prof. Krugman was calling it “Cash for Trash”.

Now that deal is dead. Killed by John McCain’s theatrics, Bush’s panic mongering and some foolish moves by Rep. Barney Frank (?, don’t ask I have no idea what he was doing.) and not surprisingly by the Republican rank and file who I guess just wanted to remind people they are not named “conservatives” for nothing. Handing out billions of taxpayer money for free was crazy talk as far as they were concerned.

My biggest concern this week was the crazy assed rush to solve this, this week! Go, go, go! Threat level bravo!

If the $700 billion was supposedly because Paulson thought he would need $50 billion a month, well, why not just give him $50 billion and punt the ball a little. Let the markets calm down a bit. Why the all fired rush to solve this entire $700 billion dollar problem all by November 5th… oh wait… This problem has taken some time to develop, lets try and put some calming influence into what is now a new market, instead of trying to freak everybody the f*ck out. These strategies of the Bush administration are getting tired and predictable. On to the debates!