In my 30-plus years in Washington, I've lived through some very bad pieces of legislation.

George H.W. Bush's betrayal of his "read my lips" promise with the 1990s tax increase.

Bill Clinton's 1993 tax hike, which OMB admitted 18 months later was a failure.

All sorts of bad policies under George W. Bush, starting with the no-bureaucrat-left-behind education bill.

A blizzard of bad policy in Obama's first two years, including the fake stimulus, Dodd-Frank, and Obamacare.

Is U.S. productivity low because would-be entrepreneurs are focused on the wrong work?

But the most depressing experience was probably the TARP bailout. In part, it was depressing because bad government policy created the conditions for the crisis, so it was frustrating to see the crowd in Washington blame capitalism (in effect, a repeat of what happened in the 1930s).

Far more depressing, however, was the policy response. Thanks largely to the influence of Treasury Secretary Hank Paulson, the Bush Administration decided to bail out the big firms on Wall Street rather than use "FDIC resolution," which would have bailed out depositors but at least shut down big institutions that were insolvent.