With the markets in crisis Congress is being asked The Fed and Treasury are demanding that Congress act. NOW. In my opinion, if there is anything in the bailout bill that should make the American people sit up and pay attention, it is this snippet:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

No checks an balances. No oversight. No accountability.  No transparency.   I don’t like it. In fact, I fear it. I am reminded of any number of tyrants, from Napoleon to Mugabe who have risen to power by promising to solve the crisis of the day if only they were given the power to act. There is no surer way to drive the situation from crisis to catastrophe than to allow blind panic to guide policy.

This liquidity crisis is not an act of God, it is the result of a long series of decisions that have been observed and remarked upon by intelligent, informed people who were ignored by the authorities which should have known better. Economists, as might be expected, have been very busy these last few days writing up all kinds of analysis and prescriptions; it is their job, after all.  Some of them even make sense, some don’t.

How will all of this affect the housing market, property values and our personal economic situations?  Wish I could tell you.  The best solutions will probably be painful, which is why they are not likely to be implemented.  Probably we will be offered something that looks easy that will be disastrous in the long term.  Congress is deeply involved, after all, and what’s worse, they aren’t telling us the kinds of details we most need to know.  Worse, it will be played for partisan advantage rather than the common good.