Growling Pays

But back to Capitol Hill. There, the two leading lights on the Senate Finance Committee, Sen. Max Baucus, D-Mont., its chairman, and Sen. Charles Grassley, R-Iowa, the ranking minority member, wrote (as quoted in the Times), "Americans are being asked to back a brand-new kind of transaction, to the tune of tens of billions of dollars. Congress has a responsibility to look at whether the taxpayers will lose money here."

Senators, you already know the answer to that. Of course, the taxpayers are going to lose money. At this point the details of the deal–especially what assets the Fed took as collateral, how they were valued and what they might really be worth–are state secrets.

Meanwhile, Treasury Secretary Hank Paulson defended the deal. "The Federal Reserve's recent action should be viewed as a precedent only for unusual periods of turmoil," he said in a speech last week.

He also pooh-poohed calls for stronger regulation of Wall Street firms and investment banks in light of what has gone down since the subprime crisis started to brew. My feeling, however, is that if they're playing with our money we should know what they're doing with it.

Meanwhile, no one in the Fed or Treasury seems to have much interest in the plight of homeowners whose finances got out of control. Perhaps they agree with Sen. John McCain, who railed against bailing out homeowners facing foreclosure because "speculation" was rampant among home buyers in the past few years.

Could it be that we've got it all wrong? Maybe Bear didn't speculate after all. Maybe virtue was the reason for its rescue.

Come on, even senators know better.