Former St. Louis Federal Reserve Bank President William Poole lambastes the Obama administration for what he calls an incompetent effort to rescue the financial system.

“Everyone agrees that the bailout regime cannot be allowed to persist, and yet federal authorities seem not to have a clue as to what our financial course is or should be,” he said in a recent speech.

“We are in a terrible situation right now, lurching from crisis to crisis with no direction as to where we are going.”

Poole says the bailout simply keeps zombie banks alive and rewards bankers who took excessive risk.

“The bailout regime in which we find ourselves is an affront to the market and an affront to democracy,” he says.

“Along with many citizens, I am angry, frustrated and worried.”

Poole doesn’t criticize all the government’s moves. “Bailouts of major financial firms were judgment calls and not obvious mistakes at the time,” he says.

“What is incomprehensible a full year after the Bear Stearns bailout is that there is still no plan for the future. We have a right to expect of our leadership a plan that will guarantee that we will never be stuck in this situation again.”

He fears that “Washington does not have a clue as to what reforms to put in place.”

Former Treasury Secretary James Baker agrees. He wrote in the Financial Times that we should

“leave the healthy [banks] alone and quickly close the hopeless.”