The Bush administration's Homeland Security regime, a massive anti-terrorism overkill that continues to burden Americans with excess regulation (and Canadians with border paralysis), may not be cost effective, but it appears to be the model for the U.S. government's assault on the financial markets.
In the wake of 9/11, George W. Bush had the U.S. government consolidate scores of agencies into one big Department of Homeland Security. The result, by most accounts, has been a dysfunctional operation that, among other things, created an expensive bureaucracy that may or may not have been instrumental in securing U.S. borders. The indirect economic costs -- in lost border trade and efficiency -- would far exceed the direct billions spent screening trade and travel.
If it didn't work well the first time, let's try it again. Treasury Secretary Hank Paulson plans to bring the same thinking to police financial markets as Homeland Security brought to policing terrorism. Hit the problem with massive regulatory intervention, consolidate scores of existing agencies, and build a new, costly and more interventionist regime.