These thoughts were provoked by reading Kimberly Strassel's nice profile of Paul Ryan, which makes me admire him, but also makes me wonder whether the cost of avoiding Depression II is accepting socialism. Not a pleasant choice. At least Ryan tried to address this in a different manner, but Bush and Paulson painted conservatives into a corner, and so here we are. From the profile:
House Republicans spent this week justifying their positions on the failed bill, invoking taxpayers or credit markets or electoral pressures. Here's a better way to analyze votes: There were a few conservatives who for years took unpopular positions against the government-inspired credit mania, yet this week had the guts to act to calm the markets. And there were many Republicans who for years aided and abetted Fannie Mae and Freddie Mac, yet this week ran for political cover.
Mr. Ryan is among the former. As early as 2000 he was warning in House hearings that Fan and Fred were rushing into subprime loans and mortgage-backed securities, growing and concentrating their risk, and putting taxpayers on the hook. He's so vociferously called for more supervision that he was once stalked by a Fannie Mae lobbyist.
In 2002 he co-sponsored legislation that would have put these beasts under SEC accounting standards. Fan and Fred, and their congressional enablers, killed it in committee. In 2005 he signed on to a bill that would have subjected the giants to modest reform. The Fan-Fred alliance speared it in the Senate.
In 2007, Mr. Ryan opposed a proposal by Texas Republican Randy Neugebauer to gut systemic risk protections for the duo. It passed 383 to 36, with 162 Republicans voting for the companies. Many were the same members who this week thought it too politically risky to stabilize a market rocked by the very Fan-Fred privileges they granted.
The congressman was no fan of Mr. Paulson's plan, and initially rallied conservatives around a rival approach. When it became clear that the administration's approach was the only thing going, he spearheaded negotiations to rid it of its worst liberal elements and to include more taxpayer protections.
As credit spreads widened, he said he also realized this was a "Herbert Hoover moment, where he sat by and let a Wall Street crash turn into a Great Depression . . . There are times when free-markets stop and rational thinking goes out the window. It then isn't enough to be a laissez-faire conservative and let Rome burn . . . This bill is not perfect, but doing nothing is far worse than passing this bill."