Economic turmoil

Each day, it seems, we're greeted with more harrowing news about our economic situation. While our government can't really affect outcomes very much in such a large and diverse economy, they can provide direction and leadership. Here's how I see the leadership thus far.

We were first assaulted with banking troubles weeks ago. Our government's initial response was to tell us the economy was sound, direct from the MBA president himself. Next, AIG, the insurance firm that only hired the best, was found to have invested in risky securities and was technically insolvent. A bailout package was put together for them. On the heels of that news, Lehman Brothers declares itself insolvent and our government chose to let the market run its course. Quickly following that, Goldman Sachs, the revered Wall Street firm, began to teeter. Our treasury department, made up of prior Goldman executives, couldn't let that collapse, so Goldman declared itself a bank and received emergency funding from the discount window. Have they opened any bank accounts for anyone yet?

In the meantime, Washington Mutual and Wachovia failed; institutions that were supposedly too big to allow to fail. With so many assets losing value, lending has screeched to a halt. The treasury proposed and Congress approved a bailout plan (yes, it took two tries) to purchase mortgage assets to keep the downward spiral from accelerating. Then, treasury decided to buy equity stakes in banks. Then it said that it wasn't really going to purchase the mortgage assets after all. Where is the leadership here?