I know what you're thinking -- the big rebound for the Dow today is a sign that the Wall Street bailout bill is a sham! But that's the wrong indicator, folks. You need to be watching the credit markets, not the stock indices. Start with LIBOR, an index of what banks charge one another for loans. As Investopedia put it, LIBOR is "the rate at which the world's most preferred borrowers are able to borrow money" (emphasis added). It hit an all-time high today, at 6.88 percent for an overnight loan. Ponder that for a bit -- nearly 7% interest on an extremely short-term loan to a blue-ribbon borrower. Ouch.

Reps. Peter DeFazio (D-OR), Marcy Kaptur (D-OH), Lloyd Doggett, (D-TX), Donna Edwards (D-MD) pitch DeFazio's No BAILOUTS Act (Photo by Mark Wilson/Getty Images)

Anyway, the stock market's steady climb today may have been buoyed by hopes that Congress would take another stab at the bill. Lawmakers have done plenty of that today, floating alternatives on the left and the right. They're pretty similar, actually -- both revolve around a new self-insurance effort. There's also a renewed effort by some Democrats to provide more help to borrowers, and a push by Republicans to eliminate a provision that would steer a portion of any profits realized from the sale of assets acquired during the bailout to an affordable housing trust fund controlled by state and local governments. The GOP's concern is that the money would actually go to a low-income housing and community organizing group, ACORN, that Republicans despise. See this CBS News blog post, which seems a bit hastily written but gets to the heart of the matter. I'm with the GOP on this, not because of the shadow of ACORN, but because it's ridiculous to parcel out profits from some asset sales when taxpayers could take a beating on others.

Meanwhile, back in sunny California, supporters of AB 1830 are still licking their wounds over Gov. Arnold Schwarzenegger's veto. You can't blame the Gubernator for the subprime mortgage meltdown, but you can certainly fault him for not doing his part to prevent the next one. AB 1830 would have gone further than the Federal Reserve's new Truth in Lending Act rules ("Reg Z") to crack down on the excesses that fueled the housing bubble, particularly the damn-the-torpedoes, full-speed-ahead tactics by mortgage brokers and specialized lenders that proliferated as the market lost steam. Among the provisions of 1830 were a ban on loans that allowed subprime borrowers to grow more deeply in debt over time, and a prohibition on financial incentives that induced brokers to steer borrowers into more expensive or riskier loans.

In his veto message, Schwarzenegger said the measure would put state-licensed brokers at a disadvantage when competing with federally chartered banks that made subprime loans. A disadvantage in what respect -- having less ability to mislead gullible consumers, or to steer them into products that aren't in their best interests? Yup, that's a problem. The governor also complained that the bill would allow consumers to enforce its provisions through lawsuits, and would allow them to recover their legal fees if they won -- but wouldn't allow lenders and other defendants to recover their fees if they prevailed. "This provision will likely lead to increased litigation based on de minimis violations as plaintiffs attorneys will have much to gain and little to lose," Schwarzenegger wrote in his veto measure. The California Supreme Court disagrees on that point -- see Ketchum v. Moses ("Because a prevailing party will receive attorney fees only if the case is successful, there is little or no incentive to pursue nonmeritorious cases.") Besides, the Truth in Lending Act has a similar benefit for prevailing plaintiffs, as does the California covered loan law and numerous other consumer-protection laws here. Sounds like the governor was searching for a pretext, rather than finding legitimate flaws in the bill. (Full disclosure -- the editorial board pushed hard for the measure.)

Three cheers for the Vatican. Here's the Catholic church practicing what Pope Benedict XVI preaches about conserving energy and the moral obligation to live an eco-friendly life. The photo shows a worker for a German company attaching a solar panel to the roof of Paul VI hall at the Vatican yesterday. According to the Associated Press:

A total of 2700 panels will be placed to provide 300,000 kilowatt hours which will be used to illuminate, heat or cool the building where the pontiff holds his general audiences in the winter and in bad weather. Concerts in honor of the pontiff are also staged in the 6,300-seat audience hall. In the background St. Peter's Basilica.

Photo: Riccardo De Lucca/AP

The Times' editorial board and columnist Jonah Goldberg typically view the world in very different ways, but they see eye-to-eye today on the House vote against the Wall Street bailout plan. The board blasted the White House, top administration officials and congressional leaders for failing to sell the public on the urgency of the credit crisis and the necessity to take extreme measures. Goldberg spends a bit more time on the roots of the crisis -- not surprisingly, he sees regulatory excess where Democrats see regulatory failure -- but he, too, spreads blame widely for the plan's demise:

The bill failed on a bipartisan basis, but it was the Republicans who failed to deliver the votes they promised. Some complained that Democratic Speaker Nancy Pelosi drove some of them to switch their votes with her needlessly partisan floor speech on the subject. Of course Pelosi's needlessly partisan. This is news?

Elsewhere on the op-ed page, children's librarian and teacher Regina Powers laments the state public school system's fixation with rating books by how hard they are to read -- a straight-jacketed, enthusiasm-sapping approach to literacy. And Ted Nordhaus and Michael Shellenberger, co-founders of the Breakthrough Institute think tank, argue that Democrats hurt their own chances in November by heeding the greens' opposition to expanded oil drilling:

The most influential environmental groups in Washington -- the Natural Resources Defense Council and the Environmental Defense Fund -- are continuing to bet the farm on a strategy that relies on emissions limits and other regulations aimed at making fossil fuels more expensive in order to encourage conservation, efficiency and renewable energy. But with an economic recession likely, and energy prices sure to remain high for years to come thanks to expanding demand in China and other developing countries, any strategy predicated centrally on making fossil fuels more expensive is doomed to failure.

The editorial board also welcomes Attorney General Michael Mukasey's appointment of a special prosecutor to investigate the decision by his, shall we say, detached predecessor, Alberto Gonzales, to fire nine U.S. attorneys. And it calls on Gov. Arnold Schwarzenegger to sign four bills passed by the legislature: AB 2447, which would limit development in fire-prone areas; SB 974, which would impose a container fee at the ports to help clean up their emissions; AB 1945, which would bar health insurance companies from retroactively canceling policies to avoid paying for care; and SB 375, which would allow state transportation funds to support plans to limit sprawl.

Photo: Jin Lee/Bloomberg News

Each week, Letters to the Editor receives thousands of e-mails, dozens of letters through the good old U.S. postal service, and even a few faxes here and there.

After we cut out spam, obscene mail, letters addressed to more than one recipient, letters that seem to be the fruit of letter-writing campaigns and letters with attachments (which gum up our computer systems), we are left usually with several hundred eligible items, from which we select the somewhere around 100 that get published in the newspaper.

Last week was a busy one.  Thanks to the bailout and the presidential campaign, we received 1602 usable letters, 1258 of which were in our Top Five Topics:

The bailout: 680 letters, many dismayed by the size of the proposed $700 billion rescue for Wall Street;

Gay marriage: 220 letters, responding to this Op-Ed by David Blankenhorn;

Presidential election: 181 letters responding to articles about John McCain, Barack Obama and the campaign;

Sarah Palin: a respectable 117 letters (but not enough to maintain the vice presidential candidate's three-week domination over the Letters Top Five); and

Metrolink: 60 letters, reacting to Times coverage of the Sept. 12 rail crash in Chatsworth.

Before Monday's report on the firing of nine U.S. attorneys, Alberto R. Gonzales was forgotten and gone. He's back in the news with a finding by two Justice Department watchdogs that the former attorney general (and his deputy)  “abdicated their responsibility to safeguard the integrity and independence of the department…”

Gonzales' AWOL management style was perhaps not foreseeable in 2005 when he went before the U.S. Senate for confirmation hearings. But other problematic qualities were obvious -- notably his chumminess with George W. Bush going back to Texas and his compliant attitude toward cutting corners in the war on terror. So how did he win confirmation on a 60-36 vote?

One clue came in the opening statement of Sen. Arlen Specter, the chairman of the Judiciary Committee in charge of Gonzales' confirmation: "Judge Gonzales comes to this nomination with a very distinguished career; really a Horatio Alger story. Hispanic background, of seven siblings, the first to go to college, attended the Air Force Academy for two years and then received degrees from Rice and Harvard Law School" (emphasis added).

Not for the first time, a nominee successfully played the race -- or ethnicity -- card. Supreme Court Justice Antonin Scalia was confirmed with plenty of votes from Democrats who overlooked his conservative philosophy because he would be the first Italian-American to serve on the court. Justice Clarence Thomas may have owed his much narrower confirmation to his race -- and his rags-to-Republican resilience.

"I've overcome a lot of obstacles in my life to become attorney general," he told reporters. As Sarah Palin may also demonstrate, an inspirational biography is not necessarily a qualification for public office.

It's against the law to use a hand-held cell phone while driving. A new state law bans text-messaging while driving. But it's OK to have any sort of live animal in your lap while you drive?

Gov. Arnold Schwarzenegger vetoed a bill that would have said, sensibly enough, that pets--remember, unpredictable, moving animals that can go bonkers if they see another moving animal, or fly into the driver's face in the event of a short stop--can't be held in the driver's lap. Incomprehensibly, the governor's reason for this was that he sure had a lot of bills to sign and veto.

But there might yet be hope here. Schwarzenegger got enthusiastic about restrictions on cell-phone use in cars when his own daughter began driving. Maybe the kid needs a Great Dane.

If you Google the news on gay marriage, you'll find something you might not have expected -- Google on gay marriage. The company officially took a stand against Proposition 8, the measure on California's November ballot that would ban gays and lesbians from marrying, or having their marriages recognized by the state.

The reasoning given by co-founder Sergey Brin, though, was especially interesting. Because so many of Google's employees would be affected by such a ban, he said, the company had decided to take a political stand, a rarity for it.

Since most people probably see a lot more of Google than of, say, "Lost," it will be fun to see whether Google uses its visibility to its advantage. Given its penchant for playful decorations to its logo, does this mean the two little Os will be topped by matching tophats or veils? 

This much is already known: Over-the-counter cough and cold medicines don't work for young children. Or, rather, they do work. They just don't work better than a placebo, which actually works pretty well with children a lot of the time.

But if a medicine can't do more than a placebo, why continue to give the medicine, which can have side effects, aside from that OTC pediatric meds are a big money-maker? (Speaking of which, one woman actually developed a placebo for kids. They make the chewable flavored pills to seem like candy, and she makes a chewable flavored pill to seem like medicine.) When parents don't see the medIcine working, they tend to think they didn't give enough and overdose the child; toddlers 2 and under have been espeCially likely to end up in emergency rooms over this sort of thing.

Seeing which way things were going, the manufacturers voluntarily yanked their infant formulations, but an FDA medical panel wants to take it further. Saying the meds clearly don't work for kids younger than 6, they want those off the market, too. The FDA is holding a hearing this week, trying to figure out which way to go on this.

The medicines were approved years ago, under much weaker standards. The question the FDA has to ask itself is, now that they're here, and a billion-dollar industry to boot, should they be thrown out?

The Op-Ed page focuses on the presidential election today, starting with Rush Limbaugh biographer (and admirer) Zev Chafets' piece about the role the "Excellence in Broadcasting" kingpin is playing on behalf of John McCain -- a candidate Limbaugh ridiculed during the GOP primary season:

A satisfied Limbaugh means an enthusiastic Limbaugh, and an enthusiastic Limbaugh could be the difference in a close race. Between 14 million and 20 million people listen to him every week, by far the largest audience in talk radio. His show energizes the Republican base, but, even more important, it appeals to a great many conservative Democrats and independents of the kind McCain needs to win swing states.

Pollster and author Douglas E. Schoen talks about the very real potential of third-party candidates Bob Barr, Ralph Nader and Cynthia McKinney to tip the outcome in either McCain's or Barack Obama's favor. And columnist Gregory Rodriguez, noting the McCain camp's attacks on the New York Times, wonders if conservatives no longer value truth over relativism:

Conservatives may have a point that the traditional media are slanted to the left, but it is also clear that they aren't content with simple ideological balance. What they want, as we have seen, is their own biased media, in the form of Fox News and the Washington Times.

The upshot, ironically, is that conservatives -- those who generally embrace the idea of absolutes -- have put the final nail in the coffin of truth.

Over on the other side of the seam, the Times' editorial board urges Congress to let troubled homeowners reorganize mortgage debts in bankruptcy court. It argues that customs agents shouldn't have the power to rummage through the contents of laptops at the border. And it calls on the federal government to renew subsidies for border-state hospitals that care for disproportionate numbers of illegal immigrants:

[I]t should be noted that citizens, not illegal immigrants, make up the bulk of poor patients whom hospitals could turn away if not for the federal Emergency Medical Treatment and Active Labor Act. But poor Americans who meet income guidelines are eligible for Medi-Cal, and hospitals are reimbursed for their care. Illegal immigrants are not, so hospitals that care for them fulfill their ethical and legal obligations at the expense of their financial health.

The bailout cartoon is by Matt Davies of The Journal News (New York).