To some extent, the Fed still practices Hamilton's Rule (see below), however the Fed often
doesn't know how to appropriately value the collateral. So then we get all kinds
of mash-ups of policy (firms forced to acquire firms, new lending facilities, etc.)
It also seems that many of the New-Deal-like gov't programs have shifted somewhat from supporting Aggregate Demand to being thinly disguised vote-buying ( although the jaded will say it's always been about buying votes ). Like the authors, I'm still waiting for a general plan for dealing with the next crisis, or at least a good explanation why having a plan seems like a bad idea.
Treasury Secretary Alexander Hamilton, like Walter Bagehot and other central banking theorists after him, showed during the Panic of 1792 that the government can thwart a financial panic by lending at a penalty rate to all borrowers who can post good collateral. The collateral requirement ensures that only safe firms receive aid. The penalty rate ensures that firms borrow from the government only as a last resort.
According to an FDIC study, 26% of the 1,600 US banks that failed between 1980 and 1994 had CAMEL ratings of 1 or 2 as recently as one year before failure ( Bank regulators use CAMEL -- Capital, Asset quality, Management, Earnings, and Liquidity -- to evaluate banks on a scale that ranges from a high of 1 to a low of 5). The study concluded that "bank capital positions are poor predictors of failure several years before the fact".