While clearly Wall Street found yesterday’s failure of bailout legislation after a mere week of consideration and a day of debate to be a Bad Thing, I wonder if it’s not a good opportunity. The trend in the Bush administration to pass sweeping legislation under a CRISIS!!!! mentality hasn’t been exactly wonderful. Just like moving a patient with a spinal injury, the impulse to Do Something!!!! can backfire if you don’t really know what to do. Let’s review:

The PATRIOT Act: Passed without most even reading the bill, with off-the shelf Clinton-era wishlists for an expansion of the Justice Department’s abilities to spy on Americans without review from the courts has resulted in exactly zero arrests that have relied on PATRIOT Act laws. It has created one of the least efficient mega-agencies of all time and resulted in local municipalities forming SWAT teams and buying armored personnel carriers. Oh, and it mandates that all copies of the Constitution be used as toilet paper.

Sarbanes-Oxley: Got a little more debate, but again, most people hadn’t even read it, and there are suggestions its provisions have contributed to the current crisis. Growth afterwards has been sluggish; among other things, it prohibits a company from providing free software updates to hardware it sells if it results in new functionality. It’s not exactly a good example of reckless deregulation, to say the least. It is a good example of reckless regulation, passed long after the market had already executed the offending companies that prompted calls for it.

The Emergency Stabilization Act of 2008: It might not even work, and there are alternatives that would put the punishment squarely on the banks who undertook risky securitization and not punish, say, you. Maybe they wouldn’t work either, and none address the ratings agencies that were complicit (much like the accounting companies in the Enron scandal); let’s try something crazy like a another week of hearings and a debate.