The real work is done by the staffers behind the scenes. And the staffs of the various committee members range from truly excellent to incredibly clueless…

I am a fan of Spitzer, even though he can be overbearing and unduly press oriented. He is a badly needed countervailing force against the fact that the deck these days is stacked in favor of corporations. I try to be a bit evenhanded in the posts because otherwise the Spitzer haters feel compelled to weigh in.

As for the testimony, fighting back to preserve Federal incursion into state regulation, which has been occurring on an ongoing basis is reasonable, particularly since in the case, the Feds have no insurance regulatory apparatus and couldn’t be helpful until too late.

It’s just the idea of even mentioning that they might stump up $10 billion (even if in the form of a loan) is odd. If they provide any funding, they are going to want to play a role. Not having heard the Q&A, it seems inconsistent with the entire thrust of the testimony. People seldom write checks without expecting some measure of influence.

nick,

Thanks for the clarification, and glad to learn Alabama has the occasional competent legislator. Having spent time there in the run-up to an elections, what you see is pretty scary.

Not hard to reconcile when one remember Spitzer, as as NY State AG, tried, in concert with a majority of his counterparts, to reign in the abuse in lending practices in 2003.

http://economistsview.typepad.com/economistsview/2008/02/state-level-pre.html

The response from the Bush Administration was truly shocking: let the greed take over everything that has to do with common sense.

No wonder Spitzer has nothing but contempt for the “federales”.

Is it 2009 yet?

Never underestimate the stupidity of politicians from Alabama. Eeek.

I’m not saying the $10 billion line of credit is a bad idea, but one has to presume that Spitzer and Dinallo coordinated their remarks. I’m sure that what Dinallo said was sincere, but effectively the response was a request for a lot of dough, which is hard to reconcile with his boss telling the Feds to butt out (in terms of regulation).

In the Q&A, Dinallo did say that a $10B credit line from the Feds would probably put the problem to rest, and if the Feds saw fit to do so that other private capital would probably participate in a recapitalization.

In response, the dopey head of the committee asked if the banks could use their access to the FHLB to fund such an investment – and noted that he would support such an effort. This was after he proposed that the Federal government insure all of the outstanding muni bonds in existence!

Watching Congress go about its business yesterday convinced me that if every American were required, once a year, to watch a congressional hearing on a topic with which they were even remotely familiar, that we would have a much smaller government. There are some truly witless people in the House. It certainly convinced me that Nancy Kaptur’s inability to distinguish Bernanke from Paulson was no fluke.