In The Wake of The House's Defeat of The Financial Rescue Bill

Today's defeat of the financial rescue plan by the House is a landmark event. And a good one.

It seems to me that the GOP House members showed uncommon valor and brilliance in both devising their insurance idea, and fighting for its inclusion in the bill.

That Frisco Nan seized the floor before the bill's passage to castigate Republicans and the current administration shows why she is such an inept Speaker.

I honestly do not know why any of the rest of the bill is needed beyond a Federal offer to sell credit default insurance to holders of CDOs. This alone would allow those holders of structured financial instruments for which there are no actively traded markets to, instead, immediately mark them to economic, mature value, by dint of the purchased credit insurance.

This would remove the downward spiral of these instruments, allow banks to record them at full value, less defaults, and, thus, minimize counterparty risk, which has been the bar to credit extension.

Despite the Democrat's attempt to spin the defeat of the bill as Republican obstructionism, the House GOP actually has the idea for a much better bill than is currently on offer.