-James Saft is a Reuters columnist. The opinions expressed are his own-
A dilemma at the heart of the response to the financial crisis is that the antidote to so many ills actually causes the symptoms to worsen.
Take for examples bank capital levels and the chaos surrounding home mortgage foreclosures.
Both issues are the fruit of the same tree: the desire to do things quickly, cheaply and with minimal safeguards.
And both, if you want to fix them, are probably going to slow the economy and lower asset prices in the short term.
So over the long term, paradoxically, the economy will slow and asset values fall anyway.
Being in possession of a hammer and sighting a nail, Governor of the Bank of England Mervyn King put it bluntly on Monday: “Of all the many ways of organizing banking, the worst is the one we have today.”