We usually think of the Fed as operating quietly behind the scenes to help keep the credit-based economy lubricated. Not this time, though. The central bank has had to come out in the open, mainly because the troubles it has been trying so frantically to paper over are as visible as the plague of weathered “For Sale” signs on our neighbor’s lawns. Given the extent of our credit woes, and the rate at which they have begun to metastasize, the Fed is no more able to work behind-the-scenes than a surgeon is able to treat systemic cancer non-invasively.

Now, the last thing in the world the Fed wants to do while it goes about its business is stir up a sense of drama. And yet, that is exactly what it has been doing, unavoidably so. A drum roll precedes Bernanke’s every move these days simply because so many millions of us, your editor included, are unable to imagine how the central bank is going to jump-start the weakest real estate market since the 1930s; or for that matter, how the bankers will “prevent” a bear market that is both inevitable and too scary to contemplate. We sense in our bones, however, that the so-far half-point cut in the discount rate is not likely to trigger a buying stampede, nor even the sort of mortgage re-fi binge that might be expected to prop up a consumer economy that is poised to topple into a potentially bottomless recession.

Paulson’s Clumsiness