The Good President (continued) -- Responding to Crisis

The general consensus is that President Bush has opted out of trying to solve the current crisis in the financial system, leaving the problem for Obama to deal with. And, as usual, the general consensus could not be more wrong. Roger Kimball notes that vigorous action by federal officials in recent weeks has had several positive outcomes [not that you would learn about them in the MSM].

In the past 8 weeks or so the following events have occurred:

• Bank solvency has been largely addressed

• A template for shoring up weakened banks is in place with Citibank

• Financial liquidity (bank to bank lending) has been restored

• The LIBOR/T-Bill relationship is getting close to historical norms

• Depositors have stayed put as a result increased deposit insurance

• Money market funds have been stabilized through similar measures

• The commercial paper market is flowing via the Fed

• A $200 billion facility to enable consumer debt securitization is in place

• The Fed is purchasing $500 billion of high grade mortgage paper to free up that market

• The Fed has begun to purchase impaired assets — a hint of what may be coming

• Interest rates are effectively zero

As Kimball notes, there are still a lot of problems ahead, but a lot of things are going right thanks to decisive action on the part of the Bush administration.

Read it here.