Prolonging the problem

At least some of the wiz kids at the Fed seem to dimly understand that rewarding foolish economic behavior is likely to result in more of the same silliness that got us here in the first place:

The US Federal Reserve's expanded lending to banks and investment firms to stem a credit crisis may end up creating more instability, two Fed officials said Thursday.

Philadelphia Fed president Charles Plossner and his Richmond counterpart, Jeffrey Lacker, in separate speeches expressed concern that the central bank's actions since the crisis began nine months ago could produce a so-called "moral hazard" by encouraging risk taking.