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"