The only thing more disspiriting than imagining Hank Paulson with a blank check is observing the sheer gracelessness with which members of Congress are pursuing their “oversight powers.” Yes, there probably should be some oversight; yes, various proposals for government equity ownership may make some sense; yes, there probably should be some compensation guidelines for the new entities).
But honestly. To think that Chris Dodd and Barney Frank, who were freaking *owned* by Fannie and Freddie, suddenly know what they are doing after years of ineptitude–doesn’t that strain credulity? To hear Steny Hoyer talking about who should be paid what? How on God’s earth would he (i.e., his staff) know?
The whole scene reminds me of a recent comment by one of my more mordant and reclusive friends, appropos of another situation in which elected officials were trying to tackle a complex issue. “You know what this is like?” said my friend. “It’s like going down the the bus station, rounding up all the bums, and saying ‘fellas, we need you to run air traffic control today.'”
One thing McCain has right: there actually should be some sort of very serious commission that will recommend new regulatory structures to the new Congress. Maybe, just maybe, having the draft of a framework come from outside the House would actually insulate it from the corrosive influence of the various financial services lobbies. This should happen in the first hundred days or so of the administration.
In the mean time, I say let Treasury have carte blanche. Nibbling at Paulson with rushed, arbitrary, or–far worse–lobby-driven additions and deletions will almost certainly run afoul of the Law of Unintended Consequences. Perhaps I’m belaboring the obvious, but a body of 535 politically ambitious human beings–every one of whom is playing to the folks back home–is not exactly optimized for crisis management.
Oh, and one further note to Congressional Democrats: Damn-the-torpedoes affordable housing was *your* baby. Fannie and Freddie were largely *your* whorehouse. It might not be the worst idea to keep your heads down.