Everything that Bush suggested Friday morning to address the subprime woes seems sensible to me. It may not be enough and it comes late in the process. Only now are we asking Hank Paulson to look into what happened? Sheesh.
We could have done that at the beginning of August. But better late than never. There's nothing here that will, in the end, stem the tide of foreclosures that's coming but at least Bush is taking some sensible steps here, especially allowing the FHA to insure homes for delinquent borrowers.
The real action is in Bernanke's hands. I've long argued, before the subprime crisis, that he could cut rates. He should. It won't send inflation into orbit. If it's coupled with tougher regulation of the subprime market it won't send a signal to the markets that they can always expect a bailout.
Hard to tell from his speech in Wyoming Friday exactly where he's heading. The statement that the Fed stands ready isn't the same thing as a cut. But let's hope it is.