Infrastructure investments, tax cuts and new Fed policies that target lower mortgage interest rates will help spur investment and consumption, but without the recovery of credit markets--the brain of the economy-near-term prospects for growth will remain tentative at best. As distasteful as it is to those of us who worry about the long-term moral hazard costs of bailouts, the costs of not assisting weak banks are too great to avoid intervening. An activist consensus about financial sector policy is reflected in the impending approval of $350 billion in new assistance for the financial sector. But the government has yet to articulate the appropriate means of assisting banks in light of trade-offs entailed in various potential alternatives (which include purchases of preferred or common stock, purchases of toxic assets, and government guarantees limiting banks' losses on toxic assets). Nor has the government reached a consensus about the appropriate accompanying policies to attach to any of these forms of assistance.