Perhaps the only positive thing about the Wall Street bailout bill was its inclusion of the Wellstone-Domenici Mental Health Parity and Addiction Equity Act. Here's a statement from Wellstone Action, the progressive center for training and leadership developed founded to honor the legacy of Paul and Sheila Wellstone:

This bill is a major achievement, one I know my dad would be proud of," said David Wellstone. "This bill will go a long way to ease the pain and suffering of those with mental illness and addiction, and I am proud to have been part of this effort. It's a great day." David Wellstone is the co-founder of Wellstone Action, an organization that has been mobilizing support for the bill.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 is a major step forward to end discrimination in insurance coverage for people with mental illness and substance abuse disorders. The legislation states that insurance plans may not place arbitrary and discriminatory restrictions on mental health and addiction coverage as compared to medical/surgical coverage. Millions of individuals and families have been affected by the inability to access equal coverage for mental health and addiction care.

The late Senator Paul Wellstone championed this issue during his time in the Senate, passing the 1996 groundbreaking parity law. He firmly believed that equal access to care was at its core a matter of fairness and justice and he never stopped fighting to improve the law. Passage of this legislation will save countless lives, and is a fitting tribute to Wellstone's legacy.

The final legislation was weakened somewhat—most notably, business with fewer than 50 employees (almost a third of all employees) are allowed to continue discriminating on the basis of mental illness when providing health insurance. The Americans with Disabilities Act, by comparison, applies to all businesses with 15 or more employees.

It's ironic that the Wellstone Act was ultimately signed into law as part of a larger bailout bill that Wellstone himself would have almost certainly fought and voted against. But that shouldn't keep us from celebrating the step forward the Wellstone Act represents.

I've been pretty disappointed by the responses of a lot of liberal thought leaders and policy organizations to the bailout plan. They all admit that the plan stinks, but very few of them actually oppose it. Sound familiar?

Could they have changed the political climate by forcefully opposing all versions of the plan? I guess we'll never know. But none of the them seem to grapple with the possibility that they might, you know, have influence, seeing as how they're political leaders.

And there's very little thought being given to the deal's political drawbacks. I doubt Congress will have the spirit for hashing out another stimulus/relief package anytime soon. Nor will it be eager to face an angry and skeptical public again when it comes time for the second bailout, which most experts seem to think is necessary. And the budget politics will be made worse. In the long-run, the money might be re-cooped, but in the short-run the deficit will grow tremendously. How much will this run up the deficit next year? How many deficit-wary politicians will this scare?

And plus, a bailout maintains both the economic and the political power of Wall Street. These are the folks who oppose judges having the authority to readjust mortgages, one of the keys to dealing with the bursting housing bubble. They may still have the outsize political muscle to back it up once all is said and done. I question how much will this change under a different administration.

For both the sake of the economy and our democracy, the financial sector should shrink. Harvard economist Kenneth Rogoff says what I wish more liberals had the confidence to say:

Does such nitpicking fail to recognise the urgency of fixing the financial system? Isn’t any plan better than none? I, for one, am not convinced. Efficient financial systems are supposed to promote growth in the real economy, not impose a huge tax burden. And the US financial sector, in greasing the wheels of the real economy, has been soaking up an astounding 30% of corporate profits and 10% of wages. Thus, unlike in the 1930s, the US faces a hypertrophied financial system. Isn’t it possible, then, that rather than causing a Great Depression, significant shrinkage of the financial sector, particularly if facilitated by an improved regulatory structure, might actually enhance efficiency and growth?

Jonathan Chait tracks down Palin's Reagan quote:

Palin's final quote was from Ronald Reagan, warning that without vigilance, "you and I are going to spend our sunset years telling our children, and our children's children, what it once was like in America when men were free."

In fact, Reagan was not warning about a general lack of vigilance about freedom, he was warning what would happen if Medicare was enacted.

Why do we need to bailout banks that primarily do investment to keep the credit markets from seizing up? Investment banks aren't the only kind of bank that makes loans. If more of them failed or were integrated into other banks, there'd still be plenty of commercial banks around to make business and consumer loans. Why not target those banks?

And why does everyone keep saying the credit markets will "seize up?" This is a price issue- what might happen is that credit will get more expensive. It's not like everything will just stop working.

And what's the connection between the stock market and credit? People seem to be under the impression that the bailout will prop up the stock market. Why? Won't the stock market keep going down because we're in a recession, which, incidentally, tends to raise the price of credit?

In testimony provided last week for a Joint Economic Committee hearing on poverty, conservative Robert Rector of the Heritage Foundation provided the standard summary of conservative talking points on poverty and the evils of the welfare state. Among his points:

• The welfare state is "enormous" and "the product of steady incremental growth in spending" since the beginning of the War on Poverty.
• "Most of America’s “poor” live in material conditions that would be judged as comfortable or well-off just a few generations ago. ... Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation."

One can, of course, dispute Rector's data, but I think it's more interesting to assume that he's absolutely correct on both of these points, and then take his argument one step further by connecting the dots between them. In essence, instead of the increase in poverty, deprivation, and pathology chronicled by Rector's fellow conservative Charles Murray in Losing Ground, the "steady increase in spending" on the welfare state produced something rather less counterproductive: a bottom fifth with a standard of living akin to that of the middle class in the 1970s.

Of course, the 1970s middle class wasn't without pathology. If you didn't have the good fortune of living through through that era, the Carvers and Hood families in The Ice Storm provide a good depiction. But if today's bottom fifth have it as good as the Carvers and Hoods did in 1973, one can only conclude that the welfare state performed admirably over the years.

Think Progress has the story and the rebuttal.

I guess it's not surprising that the right would blame the usual suspects, but I wonder if it will have more resonance because the dominant media narrative focused on the subprime housing market, which I think led much of the general public to in part blame working class folks for the downturn.

One other important thing to note about the Pastor paper Matt mentions in his last post: it's the only paper of nine "on the most promising poverty-reduction strategies for the next decade" that mentions the importance of strengthening collective bargaining:

I may be in agreement with some and in disagreement with others when I insist on supporting policies and investments that make unionization easier, facilitate the development of community benefits agreements, and generally shore up the progressive organizing that both empowers communities and improves income.

Meanwhile, there are 93 mentions of marriage in the nine papers (I put them all in a single PDF and did a word search). This is a good example of how, despite recent economic events, contemporary expert discourse about poverty remains oddly disconnected from increasingly mainstream thinking about the imperative to reform labor market institutions to reduce inequality and promote more broadly shared prosperity. As long as anti-poverty research and advocacy remains in this disconnect, it will be marginal rather than part of the kind of movement that helps bring about real change.

Prof. Manuel Pastor of USC made a valuable contribution to yesterday's Brookings event that I wanted to highlight. The paper he submitted is here. It's partly an argument for recentering the poverty debate on economic growth- not in the hands-off, pro-business sense but in a hands-on, pro-worker sense. In his words:

But part – and maybe a large part – of our efforts should be aimed at helping the economy grow in a way that allows both the poor and the near-poor to step up to the middle class. This is partly for pragmatic reasons: it is best to move individuals and families more permanently out of harm’s way. It is partly for political reasons: a staircase that extends upward can build political consensus by giving an insecure middle class a way to understand that they too will be helped when they need it. But it is mostly for analytical reasons: those who are concerned about poverty need to be engaged in broader debates about the economy and the sort of jobs and opportunities that set the context for advancement.

What does this imply for policy? I would argue that the first step involves framing. In this regard, we need to create and/or fortify a new set of constituencies, particularly in business, that understand that leaving a large share of the population behind is actually bad for economic growth. We also need to have a frank conversation about race, ethnicity and generational change in America and the impact that this has had on the public will needed to make poverty history. As part of this, we need to face squarely the challenges of immigrant integration in an increasing diverse society.

Of course, this leaves policy per se. In this regard, I will stress engaging in debates about overall growth strategies in order to highlight their effects on opportunities for low-skill and low-income workers; focusing on “second chance” strategies that will allow adults slipping in the labor market, including immigrants who often enter at the bottom and young people stranded in poorly performing high schools, a way to retrain and reenter; and adopting a new metropolitan approach that understands the changing geography of poverty and the challenges and opportunities this presents.

I also think he's right about immigration, and I was pleased to hear Mary Jo Bane talk about prisoners in the context of poverty, too. I'm increasingly convinced of the need to get more specific about social outsiders and economically-oppressed people right here in America, land of opportunity, home of the melting pot. Maybe this isn't pragmatic in the short-term, but somebody's got to make an argument for economic and social integration or there won't be progress in the long run.

The rest of the papers are here.

Joseph Stiglitz on how to do the bailout right:

The administration is once again holding a gun at our head, saying, "My way or the highway." We have been bamboozled before by this tactic. We should not let it happen to us again. There are alternatives. Warren Buffet showed the way, in providing equity to Goldman Sachs. The Scandinavian countries showed the way, almost two decades ago. By issuing preferred shares with warrants (options), one reduces the public's downside risk and insures that they participate in some of the upside potential. This approach is not only proven, it provides both incentives and wherewithal to resume lending. It furthermore avoids the hopeless task of trying to value millions of complex mortgages and even more complex products in which they are embedded, and it deals with the "lemons" problem--the government getting stuck with the worst or most overpriced assets.

Finally, we need to impose a special financial sector tax to pay for the bailouts conducted so far. We also need to create a reserve fund so that poor taxpayers won't have to be called upon again to finance Wall Street's foolishness.

If we design the right bailout, it won't lead to an increase in our long-term debt--we might even make a profit. But if we implement the wrong strategy, there is a serious risk that our national debt--already overburdened from a failed war and eight years of fiscal profligacy--will soar, and future living standards will be compromised. ....

Beckett was relatively unperturbed by yesterday's 778 point drop in the Dow.