Remember when I was for the bailout?

Remember when I said I was for the bailout? I'm still for the bailout that I said I was for. Not so sure that I'm for this bailout, though:

Treasury may capitalize banks by end of October. Buying into the banks makes no sense to me. I know that it's what lots of economists say would make more sense, but the logic of it just doesn't work for me. I think it was Nancy Pelosi who said that people shouldn't think of this is as a "bailout" but a "buy-in." When I heard it, in the early days of the bailout discussion, I thought: "Yeah, that's right!"

But buy in to the banks (and etc)?

I see three problems with buying in to the financial industry:

1) You can't directly improve the terms of mortgages. Whether the government directly bought mortgages or the securities that held them (the former is better), it could change the terms of those mortgages, giving consumers much more stability, insuring a more even flow of money back into those securities and greater stability across the board. It would be great for homeowners and the rest of the economy. If we just give banks some money, well, who knows what they will do?

2) We won't ever get our cash back, even if the securities make money.

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