Treasury Secretary Henry Paulson, Fed Chairman Ben Bernanke, and Treasury Staff have been working five weeks non-stop through weekends and away from wives and family to attempt to resolve one of the most complicated and interwoven nests of pit vipers ever conceived. First there was Bear Sterns, then Fannie Mae and Freddie Mac, then Lehman Brothers and Merill Lynch, followed immediately by AIG, and now what looks to be a rash of capital deficient investment houses and banks. Critics are everywhere and are second guessing their every move with front page news and breaking news reports on the crises entertainment channels. Our candidates for President, in spite of their economic illiteracy are formulating “plans” which, while having no bearing on reality, are spot-on to their philosophical leanings: Obama — we need more regulation and more government; McCain – we need to reform Wall Street as well as Washington.
But the best out of Washington comes from Congress. Both Republican and Democrat ranking members are a bit put out that Paulson has not included them in discussions and strategy plans to resolve the crisis. (A crisis they are largely responsible for.) It should be obvious to most that Paulson and Bernanke are a tad busy to put up with the posturing that would result, and have excluded them largely for the same reasons that generals exclude them during the execution of a battle plan.
Senate Majority Leader Harry Reid has indicated Wall Street is a problem — “a multi-trillion dollar issue.” But this requires study and can’t be done on an unrealistic timeline. House Financial Services Chairman Barney Frank and Senate Banking Chairman Chris Dodd both want to consider the problem, but believe that there is insufficient time to consider the issue this year, i.e., before they adjourn for the autumn political campaigning season. Dodd has postponed the Banking Committee meeting.
So while the evil Bush administration appointees are working in the worst pressure cooker of the century (so far) attempting to resolve a difficult set of problems, Congress is more concerned about the election, and would rather not perform any action that might be construed to be a position on the crisis that might affect their standing in the polls. In other words, … business as usual.