Sunday we heard from Hank Paulson, the Treasury Secretary, our own U.S. Sen. Chris Dodd,  House Republican Leader John Boehner, R-OH about how close our economy was to economic meltdown. To hear them tell it, it was a combination of 1929, 1987 and the Savings and Loan debacle all rolled into one and sold as a security. They offered no details, just generalities that within the oak paneled walls of high finance, the leveraging, overvaluing and bundling had all come due.

It is quite a tale with no chapters, just a beginning and end. Now, the Bush administration wants the Congress to become full managing partners in the economy to sort it out, to pick up the pieces, get what they can for the bad paper, appoint some really smart people to sort it out and hold a fire sale and hope our children won’t live choked in a permanent haze of stagflation and doubt about the capitalist system.

Ronald Reagan used to say be careful about having the government offer a cure to a problem, sometimes the result can be deadly.

Newt Gingrich, as always, has kept his head about this and cautioned against writing a big check before we get to the bottom of how this bubble came about, who should walk the plank and how to not reward those who simply bet wrong

Boehner looked very statesmen like in his interview on ABC’s This Week, saying any Congressional action should not be an excuse for members to tact on their favorite piece of pork or tax credit. It would be nice to think that could happen, but it won’t. Democrats and some Republicans can’t help themselves and any bailout bill will be so large no one will figure out what they pass for months. We are talking about the Congress – Charlie Rangel, Barney Frank, Don Young, etc. – in an Election year.

Something like this also makes it clear you would have to have your head examined to vote for Barack Obama.

Barack Obama decided to wait until days past and then basically said trust me and my Clinton economic adviser’s. After all, they had all that economic growth. But many of the fraud, feather-bedding and unleashing of the credit markets happened during the Clinton reign and was nurtured after as Clinton cronies massaged Fannie Mae and Freddie Mac to further grease the economic skids.

John McCain got caught saying what is true, the American economy is vast and strong and can withstand just about anything, including massive fraud and speculations that undermines the very system that has given us plenty.  And he was right to call for the head of Christopher Cox, who sat on high at the Securities and Exchange Commission and never sounded a meaningful warning shot.

Sen. Dodd was his usual useless self. He said the situation was serious and demanded action and bipartisanship. He all but signed onto Paulson’s plan after of course, those wonderful hearings that Dodd loves to hold. You wonder why we have Sen. Dodd at all, except to show up on Sunday talk shows to prove his Teddy Kennedy days are behind him and he can get up for an early taping. Dodd was in Iowa when the banks started folding. He was baffled when it got worse and now, Dodd is giving Hank the high sign to the Bush administration to make it all go away.

Most, if not an overwhelming majority of Members of Congress don’t have a clue about economics. Since many members have no business background, they don’t understand capital, risk or loss. They do understand reward and think markets always go up, or should.  This is a perception shared by our culture where everyone gets a medal now for playing Little League baseball even when they can’t hit, field or run the bases.

When they become adults, they think the world owes them a living and they take this misplaced arrogance into the markets.  There are too many people wandering around Wall Street with Harvard MBA’sthat never worked through a recession or saw a stock drop through the floor. They thought they could get bundle bad debt, securitize it. Convince some Pension Fund manager to buy it and tie it’s vaue to the assumption that real estate will always go up.  Now these geniuses are busted out, or cleaning out their desks. Some people got hurt and some people got swindled. There are ways to deal with that. But when you take your money out of the mattress and give it to strangers to manage, these things happen.

Newt’s right – let’s get an accounting before we set the place on fire.