Ahhh, Politics.
Sheldon Richman 
almost feels bad for Paulson...almost. But in the end, not really. I certainly don't. It's a pretty simple display of the politics of intent going awry...quite easily and quite predictably.
1. Paulson grandstands by selling Congress an impossibly and foolishly ambitious bag of goods about how he can somehow intervene with billions of dollars and bailout the financial industry from its debacle.
2. Congress grandstands by lapping up the rosy intent of his plan which none of them seem to understand amounts to getting a dog to meow with a stick of gum and a bullhorn.
3. The plan is then not working as planned (what a surprise) and Congress grandstands by lambasting and scolding Paulson for not being able to realize the intent of his foolishly arrogant and infeasible plan.
4. All the while, the nobody takes seriously the idea that Paulson could never deliver what he said he could. You mean Paulson can't tame a hurricane with a conductor's wand? But he said he could!!. Shame on Paulson. Says Sheldon:
Did these and other members of Congress actually think one man, no matter how many “expert” advisers he had at his side, could know how to spend $700 billion of other people’s money in order to plan the restoration of a $15 trillion economy that is integrated into a global marketplace? Maybe if these congressmen knew something about economics they wouldn’t have had such idiotic expectations. I don’t really feel bad for Paulson. He led Congress to believe he could do the impossible. So he has no one to blame but himself.
. Amen, Sheldon, Amen. I'm reminded of my number one lesson from Hayek:
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." (The Fatal Conceit, p. 76)
Unfortunately, far too many modern economists who sneer at Hayek's self-imposed humility and prudence take the task of economics as seeing how they can possibly, perhaps know in limited simplistic models and take that knowledge as gold and confidently employ it full-tilt in the real world with little concern from how much they leave out or cannot possibly know. Astronomy becomes Astrology and Astronomy gets the black eye.
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Comments :
Amen....
The first Hayek commandment. That almost has religious overtones. :)
Savant Ron Paul gave a little speech to Bernanke, yesterday, praising the foresight and glories of Austrian economics and the meaning of money, asking specifically if at the international level any central bankers were talking about returning to a monetary based in gold. Bernanke's answer was a curt no. I was amused.
These are extraordinary times. Just throw all the old rules out the window because they seem to have become inoperable.
I'm only half stupid
Just do something
That's the spirit that drives Congress in general, especially ahead of an election.
It also seems to have been the spirit behind the bailout, with the logic being that a promise of money would stop the bleeding and prevent more dominoes from falling even before any actual money was spent. Which is fine, as far as it goes.
However... there are lots of ways to do something, and now that it's clear the original plan to purchase the toxic assets isn't happening, at least not in the manner then envisioned, it would be good to get some sort of structure imposed on the bailout, lest we drift from reactive spending to reactive spending with no real coherent plan.
Maybe it won't "work" as promised, but there are still pros and cons associated with different ways of spending $700 billion =)
(I like your closing, by the way.)
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson