What Will We Learn From the Stress Tests?

Now in fairness, the Administration is in uncharted waters in this economic crisis, and has launched a number of new programs to try to restore a measure of health. We've lambasted just about all the bank program as being based on the flawed premise that asset prices are temporarily distressed, rather than the recognition that a tremendous amount of credit was given to people who even at the time could not have realistically serviced the debt, plus another group that would be money good only if the economy kept running in high gear. But rather than accept the new reality, they are instead trying to prop up asset prices to restore status quo ante.

Aside from content, a second problem has been process. Despite Team Obama's desire to be more consistent than the often improvisational Hank Paulson, they seem to be suffering from the same syndrome, of not being able to think enough moves ahead.