I figured this out in a moment of clarity, why it is that the Bush Administration is pushing for $700 billion for bailouts. That’s a very specific number for a situation that is not at all straightforward, so why $700B rather than $500B or $850B or $1 trillion?
There is a concept in poker called the “value bet.” When you get to the final betting round, all the cards have been dealt or drawn and now the probabilities have all collapsed into what hand you actually hold. If you are convinced you have the best one, you make the value bet, which is a bet you want called. You are sure you are going to win this hand no matter what, so you want to get your opponent to commit the maximum into the pot. You don’t want to bet too little because then you aren’t exploiting this fully but you don’t want to bet so much as to make them fold because then you get nothing additional. The ability to feel out this number is a key part of the advanced game that the pros work on.
Why is Bush asking for $700 billion? Because he’s got a few more months to try to transfer as much money from the public coffers into the hands of his peers in the privileged “ownership society” class. This is George W. Bush’s real legacy. It’s a value bet.
Update: I knew it. My intuition is confirmed. Thank you, good night.