The Treasury plan unveiled today will never rein in free-wheeling markets because it isn't intended to, Paul Krugman writes in the New York Times. President Bush, who for 7 years has slashed at regulations, ignores how well they harness deposit-taking banks. And he denies that "non-depository" banks like Bear Stearns need them too.
The new plan can only "succeed in confusing the issue sufficiently to stand in the way of real reform," Krugman writes. “To reverse course now, and seek expanded regulation, the administration would have to back down on its free-market ideology, and it would also have to face up to the fact that it was wrong. And this administration never, ever, admits that it made a mistake.”