Given the gravity of the current financial crisis, I wanted to do a bit of follow up on James’ last post on the Paulson/Bernake bailout plan.
One of our commenters tipped me off to a fabulous op-ed piece in the New York Times by Paul Krugman, called Cash for Trash. His piece gives a very good summary of how we got into this mess and why the current plan won’t work.
The main things that I picked up from the article were:
- Mr. Paulson is demanding extraordinary power for himself.
- If the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.
- This is a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out.
- Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency.”
- Krugman also gives a four step view of the financial crisis.
These are the highlights, but I highly recommend checking out the full article.
Miel
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