Why are the foxes fixing the henhouse?

As Congress and the president meet to try to craft a bailout bill, I can't help but wonder why I'm seeing Barney Frank on TV. (I assume Chris Dodd is on TV as well, though I haven't seen him yet.) Frank was on last night, saying, "This was allowed to happen, that was allowed to happen, and now we have to fix the mess." Well, who allowed it to happen? Dodd and Frank were chairs of the relevant committees for the past year and a half. I realize that some of these problems--the ones with Fannie and Freddie in particular--had their roots in the 1990s, but come on. Why are the guys who failed to stop the catastrophe the ones in charge of fixing it?

I guess the best answer is, well, that's what Congress does. I mean, who else is going to fix it? It's a very good point, and there's no way of excluding Congress, or Dodd, or Frank from the process. I suppose, though, that I would have liked to have seen the following: 1) President Bush convenes a bi-partisan panel of non-governmental experts who were in no way involved in, enriched by, or otherwise compromised by the lending practices and subsequent mortgage "securitization" that got us into this mess; 2) they craft a bailout plan; 3) Bush works out the bugs with the Fed, Henry Paulson, and anyone else in his administration he trusts and needs to consult; and 4) Bush presents the package to Congress and says "take it or leave it."

Footnote: Is anyone involved in this at the federal level going to be held accountable? Highly doubtful. Sometimes I really wonder about this system...

Comments

[Michelle]

Here's an interesting opinion piece from the NY Times.

http://tinyurl.com/economic-opinion

The author notes that the members of Congress have very little understanding about the issue. He also points out what Congress should be focused on. It's not limiting executive pay.

But I like your plan better.

(Did you see that over 100 economists have asked that they take their time with this plan?)