Last month, in his big speech to Congress, President Obama argued for bold steps to fix America\u2019s dysfunctional banks. \u201cWhile the cost of action will be great,\u201d\u009d he declared, \u201cI can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.\u201d\u009d<\/p>\n
Many analysts agree. But among people I talk to there\u2019s a growing sense of frustration, even panic, over Mr. Obama\u2019s failure to match his words with deeds. The reality is that when it comes to dealing with the banks, the Obama administration is dithering. Policy is stuck in a holding pattern.<\/p>\n
Here\u2019s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.<\/p>\n
Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again.<\/p>\n
Why do officials keep offering plans that nobody else finds credible?<\/p>\n