But at least the central bankers are keeping the financial system stable, right? Hardly. Although the Drudge Report is again reporting that the Paulson plan is on go-ahead, this time with some added provisions that are supposed to make the deal more palatable to American politicians, if not American taxpayers, the reality is that whatever is being done almost surely will not avert the coming economic cataclysm for long. This injection of liquidity into the system may alleviate the symptoms temporarily, but since the core problem was caused by excess liquidity in the first place, it cannot possibly be the solution. Still, a crash tomorrow is arguably better than a crash today; it's understandable if the politicians facing re-election in five weeks time would rather not face an electorate more in the mood for pitchforks than polls.
The only thing the Congress should be doing about this is sitting on its hands. Let these idiot bankers who made all these dumbass loans fail. They deserve it, and it's healthy for the financial system. This bailout is like going through your corn crop and cutting down everything but the plants that are full of worms and rot. Whichever CEOs and directors decided to make policy based on providing loans to people who have no business getting loans should end up destitute. In fact, I sincerely hope every single one of them ends up living under a freeway overpass somewhere with everything they own in a shopping cart.
But no, the Republicrats and the Demopublicans will bail their banker buddies out somehow. Hide and watch it happen.