At a conference earlier this month on the panic of 2008, a group of distinguished academics tried to puzzle out the meaning of the tumultuous events of the past year. Sitting in the Moot Court Room at the George Washington University Law School, I listened to people who possess more degrees than me struggle mightily to shoehorn the bewildering facts into the accepted model and theories that are supposed to govern our world. Efficient markets? Rational actors? Regulatory capture?

The actions in recent months call to mind nothing so much as the scene from "Apocalypse Now" in which Martin Sheen's Captain Willard confronts Marlon Brando's Colonel Kurtz:

WILLARD: "They told me that you had gone totally insane, and that your methods were unsound."

KURTZ: "Are my methods unsound?"

WILLARD: "I don't see any method at all, sir."

The absence of method has been most visible in the way policymakers have treated bondholders—the investors, traders and institutions who purchase debt issued by troubled companies and hold on in the hopes of receiving interest payments or, failing that, gaining ownership of the company should it go bankrupt. One moment, the government is solicitous of bondholders—ensuring that Bear Stearns's debt would be assumed by JPMorgan Chase, or standing directly behind the trillions of dollars in bonds issued by mortgage giants Fannie Mae and Freddie Mac. The next moment, the Feds tell creditors to go jump in a lake, as they did when Lehman Brothers was allowed to fail.