I mostly agree with a new OpEd from the people over at Peterson Institute. Here is the crux:
The Treasury should abandon plans to buy troubled assets (this can be handled by Fannie Mae and Freddie Mac, as necessary) and keep the full $700 billion from the Troubled Asset Relief Program for financial-sector recapitalization if needed. Congress should amend TARP rules so the full $700 billion is available at the discretion of the president.
There is so much more leverage from recapitalization, and so much uncertainty around valuing toxic assets, that this seems (mostly) sensible to me. My guess is we are going to end up (at least) doubling up anyway as assets tumble further at the big banks, so we can save ourselves the Congressional trouble by simply refocusing the TARP monies towards a more defensible use.