Well, that didn’t take long. Just four months ago, the Financial Accounting Standards Board wisely knuckled under to Ccongressional cajoling and decided to ease its market-to-market valuation rules. But now FASB Chairman Robert Herz and his obscure accountacrats in Norwalk, Conn. are enthusiastically re-embracing “fair value.” They want to expand their application as never before, to include all financial assets, even loans.

All that, despite evidence that the change made back in April enabled banks to claim billions in additional first-quarter earnings (more than $3 billion at 45 large firms) and helped instill a needed dose of confidence into wobbly markets. Thus this new effort by Herz & Co. represents a triumph of ideology — that transparency trumps all — over practicality and experience. What if an upgraded mark-to-market standard forced slowly healing banks to set aside huge sums to cover paper losses and further crimp lending? Not FASB’s problem.

Now in a Greenspanian dream world of perpetual economic moderation, a mark-to-market may well be the ideal one-decision regulatory approach. Just set it and forget it. Whereat’s the risk in a pro-cyclical policy, after all, when the business cycle seems stuck firmly on “gentle”?

But stormy economic times can turn fair value into foul policy. Great Depression-era regulators, according to a 2008 Securities and Exchange Commission report, abandoned mark-to-market in 1938 because of “serious concerns” over how it was affecting systemic financial stability. And had money center banks in the 1980s been forced to mark those loans to market prices, argues former FDIC chairman William Isaac, “virtually every one of our money center banks would have been insolvent.”

Now let’s be clear. Fair value didn’t spark America’s financial crisis. Rather, as Warren Buffett aptly put it, mark-to-market was “gasoline on the fire.” (Though, as a purely historical matter, it should be pointed out that mark-to-market coincided nicely with two major U.S financial panics.) As such, a mid-crisis reevaluation of the standard should have been an easy call for FASB. It clearly wasn’t.

Not true for others, though. Earlier this year, the Group of 30 – an international body of banking and academic biggies – recommended that “fair value accounting principles and standards should be reevaluated [when] dealing with less liquid instruments and distressed markets.” Paul Volcker, himself a member, questioned the suitability of “across-the-board application of mark-to-market accounting,” which sounds exactly like what FASB is proposing. Even the International Standards Accounting Board seems hesitant to go as far as its American cousin.

But neither historical precedent nor present-day analysis seems to much matter to the Gnomes of Norwalk. The changes to mark-to-market didn’t further destabilize shaky credit markets. And those toxic asset-laden “zombie” banks are slowly earning their way to health, needing neither nationalization nor more government money.

Yet none of this has prompted even a tacit admission by FASB that every few generations rules may need to be massaged just a wee bit. Fair value is neither good nor evil; it’s just another tool in the toolbox, appropriate for some economic times perhaps and not for others. And with fragile credit markets still in recovery mode, now is not the time for FASB to try and bring it back with a vengeance.