The plan, which is still being hammered out with Congress, raises a number of red flags. First and foremost, unlike the process then, there’s no accompanying re-regulation of the financial services industry.

"We educated ourselves enough — we were able to build a competent structure,” says Donald Riegle, who chaired the Senate’s Banking Committee at the time. "We built a legislative package that worked quite well. FIRREA (Financial Institutions Reform, Recovery and Enforcement Act) included creation of a regulator as well as the RTC.”

Though history shows the S&L crisis was resolved successfully, there was considerable skepticism about the FIRREA law, the new regulator it created, the Office of Thrift Supervision, and the bailout entity, the Resolution Trust Corp., at the time of their creation.

It also wound up costing less than many expected.

In the current rescue plan, the absence of regulatory reform is no small matter, given the size of the problem and the complexity of investment instruments today.

by 1999 Phil Gramm--who had entered the Senate only a couple of years after McCain and become friends with the Keating Five maverick--put forward the Gramm-Leach-Bliley Act. This act passed out of the Senate on a party-line vote with 100 percent Republican support, including that of John McCain. (To be fair, the bill eventually passed again with a wide margin following revisions in the House.)

This act repealed part of the Glass-Steagall Act. This may sound like a bunch of Congressperson soup, but the gist of it is that Glass-Steagall was put in place in 1933 to control the rampant speculation that had helped cause the collapse of banking at the outset of the Depression, and to prevent such consolidation of the banks that the nation had all its eggs in one fiscal basket.

Gramm-Leach-Bliley reversed those rules, allowing not only more bank mergers but for banks to become directly involved in the stock market, bonds and insurance. Remember the bit about how S&Ls failed because they didn't have the regulations that protected banks? After Gramm-Leach-Bliley, banks didn't have that protection either.

Gramm wasn't done. The next year he was back with the Commodity Futures Modernization Act, which was slipped into a "must pass" spending bill on the last day of the 106th Congress. This act greatly expanded the scope of futures trading, created new vehicles for speculation and sheltered several investments from regulation.

As with both Gramm-Leach-Bliley and Garn-St. Germain, large parts of this bill were written by industry lobbyists. This included the "Enron loophole" that exempted energy trading from regulation, and was written by (big surprise) Enron lobbyists working with Gramm. Not coincidentally, Senator Gramm, the second-largest recipient of campaign contributions from Enron, was also key to legislating the deregulation of California's energy commodity trading.

"Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."