I've been working on some longer posts about the financial "crisis" but the events keep unfolding.

For now let me just ask how stupid, colossally stupid, fool me once; fool me over and over stupid are the Democrats?

After 9/11 Bush called them cowards and we wrote him a blank check. End result? Iraq.

A month ago, "the fundamentals are sound". This week "crisis!!!!". And here were are again, with Democrats writing another blank check.

Banks are failing but how many Americans can explain why in any detail? This is happening so fast, people haven't had a chance to breath. Democrats arent explaining the problem or looking for root causes or helping everyone see who should be held accountable. Bush says "Boo!" and Congress pees its pants.

Let me reassure you, Hank "Mr Wall Street" Paulson is not doing this for you; he is bailing out his buddies but the real problem is that this plan of "unprecedented power" will not stave off the crisis. This crisis is the result of actions over many years and spending a $1T may delay the day of reckoning but it is not going to fix anything.

The crisis is an alcoholic experiencing painful delerium tremens. The bailout plan is a beer. Its going to feel good but we will be back in the same place soon.

Taking Stock: U.S. Should Trade for Aid

By MARK GONGLOFF

Wall Street Journal

Warren Buffett is getting something tangible for his investment in the financial sector. Why shouldn't taxpayers?

Federal Reserve Chairman Ben Bernanke told Congress this week that, to bail out banks, it might buy hard-to-sell mortgage-backed securities not at current market prices but somewhere closer to "hold to maturity" prices. That means, roughly, what banks think the assets will be worth when the principal is recovered on the underlying mortgages. This price is much higher than the market price.

But many of the underlying mortgages have already defaulted or are in foreclosure, and many more are headed that way. Unless housing prices return to bubble highs and erase the risk of foreclosure, the day of "maturity" for many of these assets will be more painful than puberty.

"In structured securities, there is no coming back," says Joshua Rosner, managing director of Graham Fisher Co., an independent financial-services research firm. "Once the underlying collateral defaults, you'll never have recovery."

The market realizes that, which is why it's not interested in anything close to "hold to maturity" prices. While suggesting the government shouldn't overpay, Mr. Bernanke also suggests higher-than-market prices are necessary to get credit moving again. Otherwise banks' books will remain burdened. But this will also artificially reflate these assets, making the future day of reckoning uglier.

A better way is to get real prices for these assets now and use government money to cover the balance-sheet damage -- in exchange for an equity stake. That's the model Sweden used successfully during its crisis in the 1990s.

There are ways to do this that limit the risk of dilution to existing shareholders. Len Blum, managing director at investment bank Westwood Capital, suggests the government could take preferred shares and warrants to recapitalize banks that aggressively write down toxic assets. The Senate Banking Committee has proposed the government buy the assets and take an equity or debt stake in banks only if the assets fall in value.

Some suggest equity stakes would punish banks and keep them from participating in the bailout. But it's hardly punishment to give banks the capital they desperately need.

Buffett is one of the few people I still trust but he is wrong with this Pearl Harbor metaphor -- we didn't bomb ourselves in Pearl Harbor...