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Be scared. Be very, very scared

The rush to rescue banks brings flashbacks of war and if the sequel goes the way of the original, we're in trouble.

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Be scared. Be very, very scared. Congress, sign on the dotted line quickly before the world ends. I’ve seen this movie before and if “Bush-Cheney: The Sequel” goes the way of the original, we’re really in trouble.

While I don't quite get the fine print of the $700bn plan to take over "troubled" assets - if I did I'd have 13 cars and too many houses to count - I know this: If the government steps in, I'd be on the sell side. That's because the premise of the bailout is wrong. There are buyers for the bad stuff. It's just that the bad actors in this debacle don't want to take pennies on the dollar.

I understand the mentality. I have a 401(k) that's been almost completely invested in Time Warner Inc stock over the last 15 years. Much of it was bought north of $75. It's now about $14 - but not until I sell it! Like Morgan Stanley, I'd be delighted if Treasury secretary Henry Paulson would take this off my balance sheet at a price higher than the market will bear.

Paulson, crowned "King Henry" in the latest issue of Newsweek, is a smart, level-headed banker from Goldman Sachs Group Inc. Still, he's put forward a plan that massively favours bankers. Unconsciously, he may be dancing with the one that brung him, his feet tapping to music only Masters of the Universe hear. He insisted on a "clean" bill, by which he means a quickie, no-fault divorce in which one party gets custody of whatever assets are left without assigning blame.

Paulson says there's time to point fingers and fix the "flaws and excesses". For now, he doesn't want the bailout to be "punitive and difficult". Why not? For the sake of the children? For the sake of the chairman of Goldman Sachs, who made $68.5m last year? He knows the bill won't pass if CEOs have to take a pay cut.

As the Treasury proposal ran into resistance, vice president Dick Cheney emerged from his undisclosed location, attacking the wrong enemy as he did after 9/11, when he waged war against Iraq and pushed through troubling emergency legislation like the Patriot Act and Department of Homeland Security.

Then he went to Capitol Hill to rail against Republicans for not rolling over on command. His tactics are familiar: frighten people out of their wits with visions of a financial mushroom cloud and then declare martial law.

The plan has Cheney's keystrokes all over it: "Decisions by the secretary," it said, "are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." It's enough to make Vladimir Putin blush.

But Republicans might not fold so easily again. Politico reported that congressmen left the meeting calling it an "unmitigated disaster". Cheney asked them to go against their free-market principles, but more importantly, against their principle of getting re-elected.

The public sees that with the current plan they lose and the big guys win. Even when a Wall Streeter fails, he succeeds. While many Lehman Brothers employees carried out family photos and limp plants in cardboard boxes, CEO Richard Fuld will walk away with millions.

The deposed chairman of American International Group Inc, Maurice Greenberg, is still massively wealthy, a pillar of New York society, with enough cash to give Yale $50m. Former secretary of State Henry Kissinger expressed the prevailing feeling that if a Wall Street executive has suffered at all, he's suffered enough when he said that for someone of Greenberg's stature to be pushed out of his job "is the worst punishment anyone could inflict".

Really? Drive through the suburbs of Cleveland with "For Sale" signs posted on lawns grown weedy in almost vacant neighbourhoods. The premise of the bailout puts equal and sometimes more blame on the hapless homeowners who've poured their life savings into houses they have to vacate. No one should sympathise with the speculators and house flippers. But surely there's more fault at the feet of sophisticated lenders and mortgage brokers who convinced people that for no more than they were paying in rent they could own a three-bedroom split level with room for a swing set.

No matter the winners and losers, Wall Street will collect large fees to oversee a massive transfer of cash from the taxpayer to financiers. And where is the money coming from? President George W Bush and senator John McCain were against spending to extend health care for children or increase benefits for veterans. Suddenly, we have $700bn.

Barack Obama wants strings attached - killing the golden parachutes, equity for taxpayers, help for homeowners, new regulations and oversight.

McCain, no matter whether he ends up supporting a bailout, will run against Washington for adopting it. Calling McCain's behavior "operatic", conservative columnist George Will wrote, "It's arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency".

Crises create opportunities, especially for the powerful. It's one reason Washington rarely fixes anyone's roof when the sun is shining. Washington is riding to the rescue, but who are they coming for? What makes this sequel so scary is that no one really knows.

Margaret Carlson is a Bloomberg News columnist. The opinions expressed are her own.

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