Garrett Responds to Paulson

Representative Scott Garrett had this to say over on the Hill Blog:

I believe it’s imperative that the United States Congress closely examine the recent plan presented by Secretary Paulson. Increased federal regulations are not the answer to our nation’s current economic concerns. Like most Americans, I want market discipline—but the Congress cannot create that by needlessly empowering the Fed.

Despite the new ideas offered by the Department of Treasury I believe it’s critical that Congress focus first on the Fed’s recent actions to involve themselves in the Bear Stearns bailout. Without a thorough review of these measures, we will not be able to adequately review the Treasury plan.

I want to be assured that the Fed’s action will not leave our nation’s hardworking taxpayers on the hook. I look forward to the opportunity to question Secretary Paulson and Chairman Bernanke about the actions leading up to Federal Reserve’s decision to intervene.

We should appreciate the fact that Garrett is one of the only Republicans calling this bailout a bailout. It should be interesting to see how this all plays out, but I'm a little skeptical. Like I said in a previous post, Garrett doesn't want regulation for anything.

Back in 2006, this is how he described the hedge fund industry, and those relying on derivatives.

I would call your attention to the improvements of the hedge fund industry risk management function, improvements that were recommended in that study in 1999.

Counterparties and financial institutions have taken affirmative steps over the past 6 years now to mitigate exposures to risk through innovative financial products and the allocation of greater resources toward a dedicated risk management role.

We should all be genuinely concerned, based on his own comments, that the motivation for Garrett's skepticism is rooted in the idea things are hunky dory in the financial system at the moment.