>Both parties voted to bail out corporations that >should have been allowed to fail.
I'm not sure why you think the main argument against letting banks fail is false. It is that the financial system as a whole could have collapsed if there was no intervention. There were measures that a panic and a bank run was about to set in. When the biggest insurance company in the world fails, then it is reasonable to assume that one's insurance policies have uncertain value. When values are uncertain, prudent people take the lower limit. If you look at measures of the uncertainty, like the spread in the interest rates with corporate AA notes vs. corporate AAA notes, or that short term T-bills started earning real negative interest (e.g. you paid money for the right to hold money there), one couldn't dismiss the real possibility of a full blown panic. As it stands, the estimate of the bailout costs are now down to $50 billion, as the government sells some of the assents it got in the bailout at bargain prices at a higher price. So, I'm really curious. Do you believe that the empirical measures that indicated a credit freeze was starting were false measures (e.g. the fact that companies with AA ratings interest rates went from 0.25% higher than AAA ratings to 6% higher, virtually overnight, has nothing to do with an unwillingness to lend) or do you believe that a Depression was just what the country needed, or that banks could fail without a massive downturn, or...? I'm honestly curious what you think would have happened if the government did nothing and just let the chips fall where they may. Dan M. _______________________________________________ http://box535.bluehost.com/mailman/listinfo/brin-l_mccmedia.com
