The most lucid explanation yet of why just shoveling money at banks won't necessarily work....

... and why we're not Sweden, either.

Tyler Cowen, writing in the NYT, does an outstanding job of, well, making you feel helpless and doomed, especially when he concludes that neither shoveling tons of money or nationalizing the banks is liable to work.

Instead, our best strategy may simply be to throw a few band-aids at the problem and hope it gets better on its own:

THE BAND-AID METHOD A third approach to reform is to try to muddle through, with fixes here and there. The hope is that banks return to solvency over a few years, as markets improve. The results, though, are likely to be a lot of limping along, continued extension of credit to weak and ineffective banks, and not much resolution.

But because we don’t have a few trillion dollars to spend on bank recapitalization — with or without nationalization — this may be the best that the American political system can do for now.

The outlook is bleak. Perhaps true and irrevocable insolvency will force the hand of the regulators to act more decisively. In the meantime, the banking system will be very hard to fix.

[h/t Kids Prefer Cheese]

Comments

Anonymous said…

Giving the Zionist Banking giant AIG another 30 billion without interest is horrible! We gave them $150 billion (what did they do with that)? No more money for these zionist controlled banksters stealing the tax payers blind.

March 2, 2009 at 12:59 PM

A Libertarian Martin Luther King Jr. Day post

In which we travel into interesting waters . . . (for a fairly long trip, so be prepared) Dr. King's 1968 book, Where do we go from here: chaos or community? , is profound in that it criticizes anti-poverty programs for their piecemeal approach, as John Schlosberg of the Center for a Stateless Society [C4SS] observes: King noted that the antipoverty programs of the time “proceeded from a premise that poverty is a consequence of multiple evils,” with separate programs each dedicated to individual issues such as education and housing. Though in his view “none of these remedies in itself is unsound,” they “all have a fatal disadvantage” of being “piecemeal,” with their implementation having “fluctuated at the whims of legislative bodies” or been “entangled in bureaucratic stalling.” The result is that “fragmentary and spasmodic reforms have failed to reach down to the profoundest needs of the poor.” Such single-issue approaches also have “another common failing — ...

The Obligatory Libertarian Tax Day Post

The most disturbing factoid that I learned on Tax Day was that the average American must now spend a full twenty-four hours filling out tax forms. That's three work days. Or, think of it this way: if you had to put in two hours per night after dinner to finish your taxes, that's two weeks (with Sundays off). I saw a talking head economics professor on some Philly TV channel pontificating about how Americans procrastinate. He was laughing. The IRS guy they interviewed actually said, "Tick, tick, tick." You have to wonder if Governor Ruth Ann Minner and her cohorts put in twenty-four hours pondering whether or not to give Kraft Foods $708,000 of our State taxes while demanding that school districts return $8-10 million each?

New Warfare: I started my posts with a discussion.....

.....on Unrestricted warfare . The US Air force Institute for National Security Studies have developed a reasonable systems approach to deter non-state violent actors who they label as NSVA's. It is an exceptionally important report if we want to deter violent extremism and other potential violent actors that could threaten this nation and its security. It is THE report our political officials should be listening to to shape policy so that we do not become excessive in using force against those who do not agree with policy and dispute it with reason and normal non-violent civil disobedience. This report, should be carefully read by everyone really concerned with protecting civil liberties while deterring violent terrorism and I recommend if you are a professional you send your recommendations via e-mail at the link above so that either 1.) additional safeguards to civil liberties are included, or 2.) additional viable strategies can be used. Finally, one can only hope that politici...

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