Yesterday, Republicans held firm against bailouts to big banks and Wall Street. They held firm against creation of a super regulatory bureaucracy. They held firm against a massive government intervention in our economy. All in all it was a good day.

But a word to the wise: DO NOT SNATCH DEFEAT FROM THE JAWS OF VICTORY.

Republican leaders have been making noises about a compromise measure for a week. Now is not the time to get weak.

The Democrats continue to deny the bill is a bailout. But they are slowing losing that battle.

NPR said:

“A vote for reform is a vote to put a stop to taxpayer-funded bailouts,” Obama said in his speech in New York on Thursday.

I cannot find any experts — of any party — who are willing to agree with Obama on this one.

“We’re not seeing a very forceful step on the too-big-to-fail problem,” said Carmen Reinhart, an economist at the University of Maryland. “If there’s any doubt that the crisis may be systemic, we will bail out again.”

So, if a major bank says, “Hey, save us or the economy will go under,” the government’s going to save the bank. Full stop.

The New York Times said:

Unfortunately, the leading proposals would do little to cure the epidemic unleashed on American taxpayers by the lords of finance and their bailout partners. The central problem is that neither the Senate nor House bills would chop down big banks to a more manageable and less threatening size. The bills also don’t eliminate the prospect of future bailouts of interconnected and powerful companies.

Too big to fail is alive and well, alas. Indeed, several aspects of the legislative proposals sanction and codify the special status conferred on institutions that are seen as systemically important. Instead of reducing the number of behemoth firms assigned this special status, the bills would encourage smaller companies to grow large and dangerous so that they, too, could have a seat at the bailout buffet.

But even without any bailouts, this bill is a behemoth that creates new bureacracies and empowers the government right down to the level of monitoring individual consumer’s transactions. This is a fight worth having. Republicans must hold the line. Democrats need to hear the message: American’s have had enough of bailouts, handouts and takeovers. The government is not the solution.

Let Dodd and Obama rattle the sabers. Republicans achieved a great win yesterday. Now, lets don’t win the war and lose the peace.