US Treasury Secretary Henry Paulson signaled a significant shift in the plan to turn over hundreds of billions of taxpayer dollars to Wall Street, announcing Friday that the Bush administration will invest funds directly in financial institutions, rather than buying mortgage-backed securities.

The change is driven in part by the rapid deterioration of global financial markets, which makes the bailout as initially proposed by Paulson—a complicated process in which banks will offer their toxic securities for purchase by the Treasury in reverse auctions—far too slow to funnel vast amounts of cash into the financial system.

In an additional effort to speed up the bailout, Paulson directed Fannie Mae and Freddie Mac, the government-chartered mortgage giants that were taken over by federal authorities last month, to begin immediate purchases of mortgage-backed securities using the $100 billion apiece appropriated by Congress in July—a sum on top of the $700 billion authorized in the bank bailout legislation passed by Congress October 3.

There was also concern that the overall size of the bailout was now inadequate for the scale of the catastrophe, following the worst week on global stock markets in history. According to a report in the New York Times Sunday, “Treasury Secretary Henry M. Paulson Jr. has refused to say whether the capital infusion program for banks would be bigger than the original plan to buy troubled assets.”

When Paulson indicated that he was now in favor of the Treasury buying either common or preferred shares of stock, the Times reported, “Industry executives quickly told Mr. Paulson that they liked the idea, though they warned that the Treasury should not try to squeeze out existing shareholders. They also begged Mr. Paulson not to impose tough restrictions on executive pay and golden-parachute deals for executives who are fired. Mr. Paulson heeded those pleas.”

Bringing up the rear were the congressional Democrats and Democratic presidential candidate Barack Obama, who will embrace whatever measures are proposed by the Bush administration and backed by Wall Street. Senator Charles Schumer (Democrat of New York), the chairman of the Joint Economic Committee, said Paulson’s proposal to inject federal money into selected banks “is gaining steam.” He added, “I am hopeful that tomorrow the Treasury will announce that they’re doing it. And they have to do it quickly… markets are waiting.”

Has anyone noticed that the bi-partisanship that all candidates want seems to happen when it is coming to the assistance of the wealthy. No one has such cooperation when the people need it.  Why?