The big problem with the bailout in its originial form was that we were buying bad debt with little security. The new draft woud offer Ability to take equity when real money is at stake.

The whole plan should be recast to mirror the bailouts Paulson has already put in place--loans and/or equity infusions--but the addition of equity stakes is an improvement.

This is smart and important.

Note, however, that Paulson would probably only use the equity stakes with banks that have admitted that they are on the verge of bankruptcy (e.g., WaMu). And what bank is going to admit that when the government will otherwise pay them for the privilege of hauling their trash away