The Wall Street Journal today, November 28, reports Rescue Plan Strained by Lack of Staff.
We’ve criticized the government’s response to both the domestic mortgage crisis and the larger global confidence crisis since it–that which became TARP–was first proposed. (We use the singular “it” because we’ve not heard any government official decouple the problems either in their initial panic or in the intervening months.)
Since mid-September, other than times when we were too busy to write, our criticism as been consistent, harsh, and steady: (1) initially the government officials, led by Treasury Secretary Henry Paulson, overreacted. That hysteria–or maybe it was (indistinguishable) hyperbole–exacerbated the situation and created real panic and extremely high volatility, which remains. (2) Their solution–which, as Treasury officials now implicitly admit did not meet the definition of a plan–was poorly constructed and destined to fail. And (3) as we wrote nearly two months ago, in Even A Perfect Bailout Will Fail, “What Hope of Success with Typical Bureaucratic Efficiency?”
The article cited above provides evidence of that “Bureaucratic Efficiency,” by which of course we meant inefficiency. (We should have included “ineffectiveness,” too, but it seemed like overkill at the time.) The key line in today’s article: “The current Treasury has so far struggled to keep up with the task of hiring enough people to handle the $700 billion financial rescue package…”
Would any reasonable person expect any more (or less) from a massive, centralized bureaucracy? In that regard, is the federal government’s response to this disaster or catastrophe any different than its response to Hurricanes Katrina and Ike? (Ike has escaped national attention due to the more destructive financial crisis and the recent Presidential election.)
Thus, our government seems to be unable to deal with either large-scale natural or man-made disasters. However, while Michael Brown, the Director of FEMA at the time of Katrina, could never be blamed for causing Katrina, can the same be said of Mr. Bush’s financial appointees in the current crisis?
