Today begins the televised political theatre that Barney Frank has been waiting months for: the first public meeting of the House and Senate conferees on the two financial regulation bills. While there are a handful of important differences between the House and Senate bills, these differences are overshadowed by what the bills have in common. The most important, and tragic, commonality is that both bills ignore the real causes of the financial crisis and focus on convenient political targets.

As our financial system was brought to its knees by an exploding housing bubble, fueled by government mandates and distortions, one would think, just maybe, that Congress would roll back these distortions. Despite their role in contributing to the crisis and the size of their bailout, however, neither bill barely mentions Fannie Mae and Freddie Mac. Except, of course, to continue their favored and privileged status, such as their exemption from a proposed new “consumer protection” agency. What we really need is a new “taxpayer protection” agency.

Nor will either bill change the government’s meddling in what is probably the most important price in the economy: the interest rate. Given the overwhelming evidence that loose monetary policy was a direct cause of the housing bubble, one might expect Congress to spend time and effort preventing the Fed from creating another bubble. Not only does Congress ignore the issue, the Senate won’t even allow GAO to look at the Fed’s conduct of monetary policy.

Instead of spending the next few weeks gazing into the camera, Congress should stop and gaze into the mirror. This was a crisis conceived and born in Washington DC. The Rayburn building serving as the proverbial back-seat of the housing bubble.