A bad-asset bailout that only private equity could love.

Put your money on the pessimists here: Yes, some "toxic" assets really might be undervalued in the current credit crisis. The private-equity partners—the folks who are supposed to be doing the government a favor—will do very well with those. But others will turn out not to be. And on those, which will likely make up a fair portion of the Treasury's near-trillion-dollar loan guarantees, the government will eventually have to make good.

There are investors out there who wouldn't mind the chance to scour through the sale racks of bad mortgages and damaged derivatives. They just haven't had any way of figuring out which ones are worth salvaging. Now the government is saving them the trouble: The gains on the few assets that turn out to be good will be big, the losses on the worst of them ... those could be big, too, but they won't fall on those nice private-equity folks who are doing us a favor.

In the short run, then, the plan will give the financial world a much greater degree of certainty. If the auction works as planned, banks will no longer be stumbling along, hoarding their capital for the worst-case scenario. And private-equity firms get to gamble on the assets on attractive terms.

For the government, however, what the plan gets us is long-term uncertainty. We may not know for years just how high the price tag will be. Don't be surprised if, as with almost every number that has come out in this crisis, it turns out to be higher than anyone budgeted for.