The one thing Paulson and Bernanke have not done is dawdle. Or make small plans. Ben Bernanke, who made his academic reputation studying the causes of the Great Depression, was not about to repeat the mistakes of the Fed in the 1920s, and Henry Paulson wasn't going to follow the lead of the Hoover Administration and make only small, tardy reforms. Both have responded to a major crisis with major moves.
The dynamic duo may be faulted on the result of each individual remedy they adopted to stem the panic, but not on the energy with which they've moved. Whatever criticisms can be made of their management, this is scarcely proving a do-nothing administration. Now if it can just get this do-nothing Congress off its earmarks.
Remember Paul Volcker? He was the head of the Federal Reserve during the Reagan administration who defied conventional wisdom, rode out a recession, and began the long-lasting economic comeback of the 1980s. For some time he's been urging a new version of the Resolution Trust Corporation, the outfit that stepped in to stem the savings-and-loan collapse of the 1980s.
The RTC took over the assets of failing savings-and-loans, and held them till they could be sold at a more realistic price. Lest we forget, there are real assets - houses and buildings - under all that now over-valued paper the market won't touch now.
There is a much earlier precedent: the Home Owners Loan Corporation of the 1930s, one of the first of the New Deal agencies. It wasn't clear that the experiment would work (it did), but Franklin Roosevelt was determined to try one new tack after another to get a stalled economy moving again. He was not going to just drift, complacent in the face of mounting disaster.
In the meantime, the New Deal would keep hope (and therefore credit) alive. FDR realized that he was presiding over a country rich in capital, both human and material, despite all those who proposed to ride out the storm, even at the cost of letting everything go under.
FDR was not afraid to change course from day to day. Till something worked. He tried bold experimentation in the face of emergency. So should we. Each generation, it seems, has a rendezvous with destiny.