Op-Ed Columnist - Time for (Self) Shock Therapy - NYTimes.com

For too long the government has been taking the banks at their own words, which is one reason we keep getting surprised with demands for more bailout cash. The Treasury needs to be doing its own brutal, burn-down analysis of every major bank’s balance sheet — and then acting accordingly.

In recent years, “whenever other countries — Russia, Thailand, Indonesia, South Korea or Mexico — got themselves into an economic crisis, we lectured them about how they had to adopt ‘shock therapy,’ ” said Moisés Naím, editor of Foreign Policy magazine. “

But now that we are the ones in crisis and in need of shock therapy, everyone is preaching gradualism.”A stimulus package that does not also unclog the arteries of our banking system will never stimulate sufficiently. Mr. Obama should take the pain early, blame it all on George Bush and then reap the benefits down the road. Postpone the pain, postpone the recovery.

Op-Ed Columnist - Time for (Self) Shock Therapy - NYTimes.com