The verdict on the Paulson plan is in and it’s resounding: take this bailout and shove it. Krugman lays out the chief technical deficiency here. The Politico runs down economists’ objections here. Dean Baker provides progressive conditions here, and the fine folks at CAP give their scathing review here.

Two things I’ve learned in my year in Washington.

1) If the Wise Old Men all agree on something it’s almost certainly a bad idea.

2) Whenever interpreting Bush administration actions, one must force oneself to select the most cynical, uncharitable interpretation of their actions. This is the most likely to be correct.

In this case, that means that it’s quite possible, indeed I’m operating under the belief, that this is nothing more than an attempt to use panic and fear (much of which is warranted) to transfer a gobsmacking amount of public money into private hands. That’s the only way the Paulson proposal makes any sense.

So what next? Now this becomes a game of legislative chess. Democrats need to issue their own plan so that they can tell the White House and Paulson not just no, but hell no.

This really is a crucible for the Democratic party. This is the authorization to use force vote all over again. Barack Obama has an opportunity to show leadership here and make sure Wall Street doesn’t get a blank check. Let’s see what he’s made of.