Treasury Secretary Henry Paulson will formally unveil his blueprint for financial reform Monday. The new plan would vest vast new powers with the Federal Reserve, though at The Wall Street Journal, Greg Ip warns that the Fed is “being asked to do a job that may be beyond anyone’s ability: Identify and avoid a crisis in advance.” At Time, Justin Fox warms to the idea of a business-conduct regulator, arguing that “financial products, in particular loans, are useful but potentially dangerous things,” and that a well-run, agressive agency could limit damage from “financial markets’ inevitable episodes of insanity.”

One commentator who unsurprisingly opposes the whole proposal is investment adviser Michael Shedlock of Sitka Pacific. Shedlock, a longtime proponent of returning to the gold standard, says the Fed has created a series of financial crises through its easy money policies. “In the long run, the only solution is to abolish the Fed, end government sponsorship of the ratings agencies, and return to sound monetary policies in Congress with a currency backed by hard assets instead of promises,” he writes. “Instead, the proposal is to give Fed increased authority to watch over additional henhouses. And if there’s one thing worse than the fox watching the henhouse, it’s the Fed watching the henhouse. A quick look at history should be enough to convince anyone of that.”

Alan Greenspan keeps on cashing in. The former Fed chief is joining hedge fund Paulson & Co. as an adviser. The move, which comes on the same day that Merrill Lynch (MER) and Citi (C) raise some $21 billion in new capital to offset losses tied to the collapse of the housing bubble, puts Greenspan on the advisory board of the firm that has been among the biggest winners in betting against subprime mortgage-related securities. Greenspan, who has also been busy promoting his book, already advises bond shop Pimco and Germany’s Deutsche Bank, The Wall Street Journal points out.

At Naked Capitalism, Yves Smith is not impressed, comparing Greenspan - who is blamed by some for allowing the credit bubble to inflate through unusually low interest rates - to the man who brought you Watergate. Unfavorably, to boot. “It’s one thing for Greenspan to sell books and give speeches to try to salvage his reputation,” Smith writes. “Nixon did that too, with more success and less profit. It is quite another for him to benefit in a far more direct fashion from the devastation he created, by hooking up with the fund that scored the biggest kill from the worst aspects of the negative real interest rates that Greenspan put into effect.”

Unsurprisingly, Paulson & Co. founder John Paulson believes the Greenspan-bashing is overdone. “It’s easy to look back and do Monday-morning quarterbacking,” he tells the Journal. But Greenspan’s comments in an interview with the Journal won’t quiet those who view him as an apologist for the fast-mortgage crowd. His 2004 remarks in support of adjustable-rate mortgages, the newfangled loans that helped to fuel the runup of housing prices earlier this decade and now threaten a rash of foreclosures, still wrankle in some quarters. Four years later, even the Maestro is having second thoughts. “It turns out … that housing and housing prices are a critical factor in the determination of market values,” Greenspan says now. Who knew.