Monday, March 23, 2009

Bailout v. 3

Krugman: Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails — as it almost surely will — it’s unlikely that he’ll be able to persuade Congress to come up with more funds to do what he should have done in the first place.

I heard Krugman on NPR today, and he made 3 points I totally agree with:
  • This is a re-hash of the Paulsen plan that was discarded months ago
  • It probably won't work at all, and if it does anything, it will be because the government is so heavily subsidizing the investment
  • The mindset behind this type of plan continues to be "the toxic assets have more value than the market is assigning to them"
  • We should quit calling them "toxic assets"

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