So much of what the administration rails about as causing the current crisis is exactly what they’re now hailing as its solution. According to this wisdom, banks should lower rates and lend more, and credit card companies should do the same. Richard Posner rightly notes in today’s Wall Street Journal that the Fed preaches fiscal discipline while being the most undisciplined of all. It reminds me of the argument for government-funded methadone for addicts; that somehow this will make the situation better.
Despite screaming headlines and a daily roster of bad news, accountability, either in the government or the private sector, has yet to really occur. And a big part of that is the administration’s stance on stimulus, Fed policy, who survives and who doesn’t (Detroit and other politically connected friends in many cases), which, as we expected, is only prolonging the reckoning that will (and should) come. It’s been beaten to death, but so what, I’m going to beat harder; for all the President’s talk of change, his policies and the behavior they encourage are exactly the same.