Inevitably, perhaps, the deepening financial crisis has spawned a search for scapegoats and quick fixes.
According to many Republican members of Congress, banking industry lobbyists and financial pundits, the Wall Street meltdown would not be nearly as bad as it is but for the baleful impact of "mark-to-market" accounting rules.
These are national standards, adopted in the wake of the savings and loan debacle of the 1980s, that require banks to carry certain financial assets on their books at the current market price. The idea is to give investors the latest and most objective estimate of a company's true financial condition - as opposed to a company's inevitably self-serving calculation based on original costs.
Now that the markets for mortgage-backed securities and derivatives have seized up, however, their market price is either distressingly close to zero or impossible to determine.
Critics argue that marking-to-market when there is no market artificially and irrationally depresses banks' balance sheets, since the assets would fetch near face-value under normal circumstances. Ergo, they contend, the way to shore up bank capital is to relax or eliminate mark-to-market - and it wouldn't cost taxpayers a dime.
The critics have a point. Undoubtedly the markets, out of irrational fear, are shunning some relatively solid assets as well as actual turkeys. Mark-to-market therefore does force banks to write their books in the panicky language of today's meltdown.
Perhaps, once the crisis is over, it would be wise for the Securities and Exchange Commission and the accounting authorities to revisit this "pro-cyclical" aspect of the rule. The recent bailout legislation included a provision requiring the SEC to study mark-to-market's impact. We see no harm in that.
But the critics' arguments against mark-to-market may prove too much. If the rule requires banks to accentuate the negative during bust times, then presumably it is also to blame for all those wonderful financial statements the banks were issuing during the boom.
We don't recall anyone demanding its suspension then. Actually, complaints about the rule probably overstate its impact, since financial institutions only have to use it for securities they intend to trade. Loans and securities held to maturity are not covered by mark-to-market; at big banks such as SunTrust, Wells Fargo and Bank of America, such long-term assets represent half or more of all assets.
Markets not only need transparent financial reporting, they need consistent financial reporting. To suspend or abandon mark-to-market now, in the middle of a panic, would simply deepen the confusion and suspicion that are already crippling the financial system.
No, today's financial meltdown is not some accidental byproduct of misguided technical rules. It happened because too many firms made too many bad financial bets with borrowed money. Pretending otherwise won't solve anything.