Legalities aside, it certainly seems as if Paulson and Bernanke are doing a bang-up job of dealing with the roiling financial crisis. It's adhocracy, to be sure, but at least they're insisting on extraordinary measures for extraordinary times. And if they're making mistakes, they're at least insisting on making new ones, rather than repeating historical follies.
I just hope that at some point, in a calm moment after the acute phase of this crisis subsides, some reasonable legislation will get passed to address the underlying causes of this crisis. I worry that if we get through it, we'll either go back to policymaking inertia, or that one group or another will use the crisis as an excuse the ram through a bunch of legislation that they already had in the hopper before all this began that in fact does little to address the fundamental issues (e.g. Sarbanes-Oxley after Enron).
It's important to bear in mind how much various self-interested actors often regard crises as opportunities to achieve goals that they've long held in mind that in fact do little to nothing to deal with the actual causes of the crisis. Detroit's success in getting $25B handout yesterday is a case and point, as is the oil companies efforts to get drilling permits in response to high oil prices.
The paradigm of policy-making opportunism is a point Small Precautions has emphasized before, but it's worth repeating. It remains, for example, the single best explanation for Bush's foreign policy in his first term. Neocons had long harbored an ambition to roll back Saddam and the ayatollahs, and the various other oil-producing enemies of Israel -- a plank they promoted vocally they throughout the 1990s. The crisis atmosphere produced by 9/11, despite having nothing whatsoever to do with Saddam and the ayatollahs, simply gave the neocons the excuse to push the policy through. Likewise, progressives used the Depression and World War II in much the same way -- to push through legislation that had long been their dream (e.g. union recognition, social security), but which they hadn't had the political capacity to do. The lack of union recognition and social security had little to nothing to do with the onset or continuation of the Depression, of course, but the crisis atmosphere (or, more precisely, FDR's consummate ability to harness his political-policy agenda to the crisis atmosphere) provided the cover for the realization of these long-cherished policy objectives.
You can argue about the merits of war in Iraq, union recognition, or social security, but the point here is that none of those policies dealt with the causes of the crisis that created the political conditions that allowed them to get passed. Such legislative opportunism is already taking place in today's crisis, and is perhaps inevitable. Let's just hope that this opportunism doesn't end up displacing later efforts to deal with the fundamentals that led to this crisis.