17 Mar. 2008

Bailing Out The Bastards

Brad DeLong asks whether the Bear Sterns executives jumped or were pushed. Josh Marshall suggests it could be a case of "the little-known 'sell your $%&#& company for what we say or it's off to Gitmo' law being invoked".

Paul Krugman offers a solution:
"Looking ahead, we probably need something similar to the Resolution Trust Corporation, which took over bankrupt savings and loan institutions and sold off their assets to reimburse taxpayers."
Err, maybe not:
According to Joseph E. Stiglitz in his book, Towards a New Paradigm in Monetary Economics, page 243, the real reason behind the need of this company was to allow the United States government to subsidize the banking sector in a way that wasn't very transparent and therefore avoid the possible resistance.
It's a pity that media giants like NYT don't have a bit more credibility at a time like this, isn't it?