Despite the government's implementation of a $700 billion bailout bill and the unprecedented lowering of interest rates, "the world’s markets hardly seemed comforted," the Times observed this morning. Less comforting is the fact that the Treasury does not exactly appear to have a solid Plan B — except maybe nationalizing banks — and that the language they are using regarding the economy has begun increasingly to resemble the rhetoric surrounding the Iraq War. We thought we detected a certain eau de quagmire in Henry Paulson's comments at a press conference yesterday, for example: "Patience is also needed because the turmoil will not end quickly and significant challenges remain ahead," he said. "Neither passage of this new law nor the implementation of these initiatives will bring an immediate end to current difficulties.''
But they told us the credit markets would greet the bailout as a liberator!
Fed officials increasingly talk about the challenge they face with a phrase that President Bush used in another context: “regime change.”
This regime change refers to a change in the economic environment so radical that, at least for a while, economic policy makers will need to suspend what are usually sacred principles: minimal interference in free markets, gradualism and predictability.
"Suspending sacred principles." Also not so comforting, as it frankly reminds us that this administration doesn't really have sacred principles.
But. Ahem. Let's assume the best here, and remember that patience is not bad and that an essentially bipartisan vote got us to this place, and imagine for a moment that the implementation of warlike language by the administration is actually like a subtle tribute to FDR's pledge to treat the task of overcoming the Great Depression "as we would treat the emergency of a war."
Yeah, okay, maybe too subtle, because all we're hearing still is a bunch of phrases we associate with the worst policies implemented by this administration and it's freaking us out a little.
U.S. May Take Ownership Stake in Banks [NYT]