What to do with that $700 billion?  To answer this, he sat down with his friends, the leaders of the largest financial institutions in America that got us into this mess.

Namely, Ken Lewis, CEO of Bank of America; Jamie Dimon, CEO of J.P. Morgan Chase; Lloyd Blankfein, Paulson's successor at Goldman Sachs; John Mack, CEO of Morgan Stanley; and Vikram Pandit, CEO of Citigroup. 

These men have shown themselves to be far more interested in preserving themselves than in stabilizing the general economy for American citizens. And it's a safe bet (probably the safest out there) that their philosophy remains intact. 

And it turns out that Paulson's Plan B is not to completely abandon plan A.

So far, he has decided to spend $250 billion of that $700 billion to buy equity stakes in banks whose future losses are still unknown. The rest could conceivably be used to buy up toxic assets. These, and other related decisions are to be made, in large part, by Paulson's former protégé at Goldman Sachs (and now interim assistant treasury secretary) Neel Kashkari.

Kashkari described the equity purchase program as "voluntary and designed with attractive terms to encourage participation from healthy institutions." But encouraging participation hardly seems an issue. There's not a bank around that wouldn't want its stock price boosted by a Treasury purchase of its bleeding shares.

Equally, every bank has a bunch of toxic assets good to go. As Paulson waffles on action and plans, always weighing Wall Street demands first, European leaders are taking more decisive action with their coordinated capital-injection moves.

But it remains to be seen whether these will work. Perhaps their actions are an admission of responsibility; British and European institutions also made reckless bets with inadequate capital backing them. 

Hank Paulson & His Wall Street Cronies Move to Plan B