Hank's Bad Gamble

"All we've created is dead banks, not true value in their stock," said Paul Miller, a banking analyst with FBR Capital Markets.

Of course the government just buying common equity stakes wouldn't be so great either, unless they were going to get serious about taking an active stake in management, and forcing increased consumer lending.

But then, what exactly would we be left with? Not a private free market, that's for sure. Almost makes one pine for New Deal-era direct consumer lending programs and work programs.

There seem to be no good solutions -- no matter what Hank does, there are very serious (if not fatal) flaws with the plan. And by continously shifting plans, even more confusion is added, which is toxic to the market. Hank and Ben seem to want to do a little bit of everything, without really committing anything, which seems to be a horrible recipe for success.

Or maybe its just that every intervention is a bad intervention. Is this all really better than just letting the system fall apart so something new can take its place? As far as the list of things we were trying to prevent, the stock market has already collapsed (though it could go further), mortgage lendering is still too constrained for most people (given prices), and consumer lending is still being choked off. What exactly are we gaining from all this intervention and "official" uncertainty?